The next bubble…
March 29, 2010
Whilst perusing my IM contacts today… the Founder has this as his IM status at the moment…
“Looking for the next bubble”
So I IM’d him and let him know the next bubble is already upon us… the vaunted “social media” craze that currently exists (to which is readily agreed.)
My theory is built around a few undeniable facts:
1) There are shitloads of wankers, liars and bullshit artists selling themselves as “social media experts” – DANGER DANGER WILL ROBINSON!
If this is not a warning sign to all…perhaps you should recheck your prescription (optical and/or medicinal) because to become an expert should take the sane person all of a couple of hours to come up with the basics of what their potential company should be doing and why.
Most of the charlatans out there will tell you that you need to invest in a variety of platforms and this should be “organic growth” (or some other bullshit phrase or terminology that is the current word de jour.)
In the immortal words of my good friend Chuck D. of Public Enemy — “Don’t believe the hype”
Social media is just a very small sub-sect of something somewhat commonly referred to as “customer engagement” – and it is vastly more complicated than just being on Facebook, Twitter or another SN wankfest. (Most of that you can get accomplished in under a couple of hours — and with FB they offer all the analytics you need to make a ROI justification so you can do it as a self-service job if you have half a brain.)
If you have real customer engagement — well you have something both valuable & tangible — but trying to justify developing social media strategies as the lone component in the equation is like saying because you can throw a paper airplane, you should be able to guide that A-380 with 500+ passengers on-board to Tokyo next week with no problem.
I know people I have both hired & worked with a lot of people who market/sell themselves them as a “SN expert” these days…and even if they are great people and may be a excellent person to grab a beer and have a chat about the local sports team — they don’t really know shit about the anything about the scope beyond their own small world viewpoint — a world that I could teach you out of an online tutorial in under an hour.
To ask them to actually understand the needs of a multi-national corporation and the requirements that the people in the senior roles within these companies face on a daily basis — well let’s just say you are playing in the very shallow end of the business gene pool when it comes down to brass tacks.
It is the same problem that vexes the agency world these days — a lot of tosspots who know fuck all about nothing trying to sell something to clients that they apparently desperately need (if you are listening to the drivel of the tosspots that is.)
Now I can see why it is like this of course — several current digital agencies pray on their unknowing clients this way — jack them up for huge fees and inflate incredibly complex and lengthy timelines or something that if the client knew how easy it all actually was — well let’s say that the agency and client would soon be parting ways with a flurry of lawsuits soon to follow.
2) For the most part, SN destinations are built on the premise that one day they’ll make money and it is great to get in on the ground floor while the opportunity is there…
This is the Bernie Madoff scheme way of thinking… i.e. there are several large monuments to this type of theory if you happen to visit Egypt…
When is Twitter going to start making $$$ exactly? If you read the reports of Biz Stone’s unveiling of the “@anywhere” platform at SWSX a couple of weeks ago (an aside –what the fuck is that actually supposed to mean?) — well to be kind it vacillated between “floating like a lead balloon” to “re-arranging deck chairs on the Titanic” — which is something like one apparently feels when Martin Sorrell speaks on any subject too…
As the Founder has mentioned here a few times before on various stories that have crossed the wires over the past few months — there are shitloads of small start-ups who rely on platforms like Twitter to build out their platform — which is like building a business on false hope if nothing else.
My current favorite is Four Square (4sq.com for the hipsters here) — or as I have dubbed it “Let me rob you of your valuable possessions while you are out making a scene somewhere…” sure “location-based services” (another phrase du jour) will someday be important….but at the moment, there is no business model that supports the bloody thing — other than making you seem like a self-important douchebag for being the “mayor” of your living room or getting a badge like you are some super-efficient boy scout…
I will go further about this (as there are several additional points one could add to validate the argument) but I’m sure you have all resorted to giving me the international “hand job” hand motion (if you have made it this far) and written me off as a cranky bastard while cueing up my “wrap it up” awards ceremony music…so I’m off to develop something sustainable for my clients… check you later…
(and I’ll try and not make it a month-plus before my next post — but can you blame me — there is only so much shit you can stand to shovel and the agency world produces way too much in proportion to its actual impact on society)
Update:
In a delicious bit of both irony & hypocrisy (and what would the ad world be without massive heaps of both) — you can sign up for my twitter ramblings (lots of swearing and bashing ensue) here:
http://twitter.com/ondownlow
Bigmouth Media and LBi merge – BDA’s still confused
February 25, 2010
London search engine marketing and advertising provider Bigmouthmedia is merging with Amsterdam-based online brand agency LBi, in a deal that pools €50 million for a beefed-up tilt at the sector.
Bigmouthmedia is taking €40 million in private equity from Carlyle Group, Cyrte and Janivo, and €10 million more due on completion in July, to create a new group, Obtineo; LBi is merging with Obtineo. LBi will hold 51 percent, Bigmouthmedia 25 percent and Obtineo’s new shareholders 24 percent. LBi says the reverse merger sale price is €107.6 million, €68.9 million of which is goodwill.
It creates what the pair call “Europe’s largest digital agency with a headcount of over 1,800 people … with a €50 million fund to strengthen its operations in the US, Asia and the Middle East.” paid content is reporting
Here is the problem, most of the BDA’s still don’t understand how this could be happening. There shouldn’t be Mergers and Acquisitions in this economy. The holding companies are showing all sorts of red on their balance sheet, how could this happen?
The problem is that the Advertising Agency Holding Companies balance sheet is filled with fluff and not enough assets that clients need. Hence why within 5 years the chances are a firm like LBi / Bigmouthmedia might be buying the scraps of WPP group.
Enjoy the new reality.
Why Pepsi dumped Ad Agency TBWA
February 2, 2010
Agency Spy has the article, but this tidbit completely makes the entire article.
It’s not just digital strategy and production that TBWA is lacking — but social strategy/execution, too. Proof of this, since the agency would never admit it, is in who they’ve hired to execute those portions of their business. For example, HUGE handled social media/site development and design, according to the Times. Sources tell us Chiat has also partnered with Undercurrent and MIR, too, though not on this project. It’s an all-too-common practice for bigger agencies.
Word on the street is Chiat tried to buy a smaller social media agency, probably in a bid to prevent Pepsi moving business away (WPP’s VML got the business, btw). But the deal went south, as did the relationship with that shop.
That’s a shocker… oh.. wait.. it’s not. They didn’t try to buy a search social marketing agency because they had forsight to head off the incoming problem (to put it lightly) they instead went half cocked trying to scoop up ANYTHING possible in the last 5 minutes to show Pepsi they had digital skills.
These big advertising agencies are completely clueless when it comes to search and social media. Personally I am amazed that they even are in business.
5 years ago I told you that this would happen
From the link directly above:
The problem however are these pesky SEO firms that seem to be growing faster than the ad agencies are, in fact many consider them the ad agencies of the future. This doesn’t matter for now as we can still make these expensive print media ads and still design sites in unspiderable ways for now. We figure we have at least 5 years left to rake in the cash.
Like clockwork it happened over and over again
You advertising agencies are amazing. You think it’s 1985.
You pride yourself in being creative… cutting edge.. but in fact you guys are a bunch of dinosaurs that even when told it’s happening you just ignore it.. until the client leaves you… and another.. and another..
Well since I was right on the last one… I am going to be right on the next prediction.
Within 5 years from today.. one large advertising agency (or holding company) is going to be bought and virtually dismantled by a search social marketing agency and raid whatever clients are still left. This company that will do it most likely won’t even be on your radar screen now… like how Google wasn’t on you radar screen before…
I am also willing to state that most likely it won’t identify itself as an “advertising agency” because honestly it has a sigma of being behind the times.
You holding companies should be buying every single search and social marketing agency with even a modest client list… it’s like do or die time.. and last minute “we’re gonna buy some tiny digital firm to say we know how to FTP into a website” isn’t going to cut it.
Because if you don’t do this now.. and I mean literally yesterday now.. your firm most likely will be bought and dismantled within 5 years… mark my words.
Mahatma Gandhi : Ad Agencies have come a long way
January 22, 2010
We’re going to start off this article with a well known quote:
“First they ignore you, then they ridicule you, then they fight you, then you win.” — Mahatma Gandhi
Then we’re going to follow the timeline:
“First they ignore you”
There are no mentions of “Search Engine Optimization” in Advertising Age Magazine in the whole 20th century.. all through the .com boom to .com crash of the 1990′s… not one single mention of SEO even though the industry was growing at an extremely rapid pace.
“then they ridicule you,”
“Every good techie knows that SEO personnel are just blowhards who couldn’t hack it in any real vocation. Calling their product snake oil really isn’t fair to snake oil manufacturers, as I believe snake oil is effective at oiling snakes.” Comment on Adrants July 20, 2006
then they fight you
I haven’t seen much evidence that digital agencies are ready to lead brands where they need to go, anymore than I’ve seen traditional agencies capable of leading their brands for at least the last 10 years. Sure, the digital shops get the technology, but the smarter ones will tell you that it’s not about the technology. Comment on Adage November 12, 2009
Then you win
WPP group bids for Icrossing – 1/01/2010
Yooter InterActive welcomes AOL as a client – January 2010
This list goes on forever.. especially in the last 3 months there has been an extreme uptick in SEO and Social Marketing Inquiries and new business. This is a dramatic change from above.
“First they ignore you, then they ridicule you, then they fight you, then you win.” — Mahatma Gandhi
You were right Gandhi … you were so right.
Ad Agencies have lost 14% of their workforce
December 28, 2009
Ad-agency jobs in October 2009 were down 14% from the recession’s December 2007 start — a loss of 26,300 jobs, according to Bureau of Labor Statistics data. Agency employment from January 2009 to October 2009 alone fell from 175,300 to 161,500, or nearly 8%. Adage is reporting
This is what makes it funny, those numbers are off. Way off. When digital firms file they generally don’t file as an advertising agency. Literally for example my firm is classified as a computer consulting firm… though well.. for the most part we are doing digital advertising.
Meaning that it’s possible the numbers are much closer to 25% … as digital firms have been hurt.. but not the extent traditional firms have.
Enjoy the funny count.
Microsoft puts digital ad agency Razorfish for sale
June 29, 2009
Microsoft Corp. plans to sell its digital advertising agency Razorfish and has appointed Morgan Stanley to find a buyer. The report was initially released by the UK based Financial Times
The French Advertising Agency Holding company Publicis Groupe – was cited as being interested in buying the digital ad agency.
This actually was the most interesting part of the report:
“One analyst valued Razorfish at $600m-$700m, based on sales of about $400m last year and profit margins for similar businesses of 12-13 per cent. “Much more than that would be overpaying,” the analyst said, adding that even in digital marketing, valuations had fallen since last year.”
Razorfish never made sense for Microsoft… and based on how Publicis runs it’s digital assets, it might not make sense for them either. Perhaps it would make sense to spin it off as a separate company.. Make matters worse was that Razorfish was pushing out Linux based websites for their clients… and being owned by Microsoft made it all so much worse.
Clearly the Holding companies never had much success in digital.. hell they can’t even define it yet.
Sapient buys traditional ad agency
June 17, 2009
In a big WTF, Technology consulting and interactive marketing company Sapient Corp (SAPE.O) is to buy Nitro Group LLC, an independent advertising agency, for about $50 million as it looks to spread its reach to the traditional advertising space.
“It marks the first time a large digital shop has gone the other way and acquired an above-the-line agency,” said Gaston Legorburu, executive director and worldwide creative officer at Sapient, in an interview with Reuters.
What he is saying is that these digital firms are going after traditional advertising agency clients, considering the advantage they have on the digital side and the overall perceived feeling that traditional is “cake” compared to digital. It looks like this is going to be a ground breaking moment, the moment when digital companies start to raid holding company clients.
The holding companies dragged their feet for so long that this was bound to happen, and with their extreme lag in technological innovation, but huge client list it will be an interesting few years.
New York-based Nitro brings with it an impressive clientele, which includes Mars, ConAgra Foods Inc (CAG.N), Volvo (VOLVb.ST), Nike Inc (NKE.N) and Foot Locker Inc (FL.N).
Story is developing………
WPP on Madison Avenue
Crispin Porter + Bogusky buys a daddy
June 11, 2009
Crispin Porter + Bogusky, Colorado’s largest advertising agency, said Thursday it has acquired Daddy, a Swedish digital agency, in a move to expand its European operations. States the Denver Business Journal
Then Mr. “I sell 3000 calorie Whoppers for Burger King, but I have a diet book” states “”We believe that digital is at the center of everything going forward,” Alex Bogusky, Boulder-based co-chairman of CP+B, said in a statement. “We’ve made digital the focus of our U.S. business, and with the acquisition of Daddy, it will now be the center of CP+B Europe as well. We’ve worked with Daddy a bunch over the past three years and are continually amazed at how smart they are.”
Well good for them, they still launch websites without Metas and Titles, I guess that is what the problem is with the definition of Digital Advertising.
Clock still ticking until CP+B goes into digital advertising, it’s only 2009, a full 15 years after this hit mainstream, because clearly we have seen your work.
Morgan Stanley : WPP Group plc is screwed
March 13, 2009
Morgan Stanley is on record for stating that WPP group plc will lose 12% of it’s revenue over the next 18 months. A 7% hit in revenue for 2009 and another 5% per cent crash in 2010, implying a deep and prolonged global recession. Nearly 1% decline per month over the next 2 years.
This will have profound repercussions throughout the company, as clearly they didn’t fire 12% of their staff, they didn’t cut back 12% in expenses and they didn’t invest properly in digital media .. in fact they spent money on the wrong assets leaving WPP group plc with a gaping hole the size of Texas for the skillset needed during a recession / depression.
They are firing people right and left now and refusing to go into higher ROI assets that could be key to landing new accounts. In other words they are really heading down the wrong path.
This is going to be a really ugly 2 years, really ugly.
WPP’s SEO division
Advertising Agency Arnold finds new billboards
March 10, 2009
Arnold has decided to do something quite interesting. In light of all the recent store closings, they have decided to turn them into digital billboard for Carnival Cruise Lines. Literally.
It’s not like they are not going to run out of space, the vacancy of the malls has hit the roof as many of them are now “ghost towns”.
If anyone has a photo of these, please send them over. We don’t know if we should laugh or cry at this new development. It’s great to have something there other than empty windows… the problem is how did those windows turn empty in the first place…. and that is the root of the problem.
Just imagine the level of foot traffic this mall is getting… all those cool stores open…
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