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Social Media: ‘Agencies Don’t Get It,’ Survey Says

March 13, 2008

“I think traditional ad agencies have very little contribution to make,” Bryan Simkins, a marketing specialist at FedEx, told TNS. “They are mostly driven by their compensation models which are made for closed media. Those models don’t apply in open media.”

Here’s the link: Here’s my take: Agencies aren’t really set up for this for two reasons. the first is compensation, the second is metrics.

The old style compensation works. While it’s rare for agencies to make 15% off the media, years of earning that have let them know what the cost of making TV, Radio and Print really is. They charge that price because they always have. So if the client calls and says they want a page on facebook, or a campaign on YouTube, it’s not just that they don’t really know what to do (and that is a big part of it) or that they think it’s below them to use these medium (again, that is part of it), the bigger issue is compensation.

In my opinion, this is why agencies probably aren’t throwing a lot of reseources to new media like social networking. From the article:

Nearly 50 percent of marketers said social-media efforts needed to be handled at an executive level with “significant” resources. Another 30 percent agreed social media is a “revolutionary opportunity.”

It’s fairly easy to upload a video to YouTube. The hard part is thinking about how to get people to watch it, and getting your client to pay you to get them to watch it. It feels more like PR, since it’s a promotion of a promotion. It almost seems like agencies need to rethink the way they are put together in order to deliver.

The second fairly obvious problem is in metrics. In the old style, you went after GRPs with your TV. These gross rating points were large enough that you didn’t have to quibble with the numbers. Want a million people to see your spot three times? Here’s how we’ll do it, and here’s the bill.

Now though, everyone can look at the number under the video. Or people can look at other numbers that show exact numbers. That number tells the client if their money is being well-spent. That number puts some pressure on the agencies. I think that this is a huge opportuniy for smaller agencies to grab some big business. Not because they can better execute a YouTube campaign, but because they understand the concept of sharing. Big agencies have never liked to share.

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