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Parallel Universe of the Ad Industry

Soon it will be Cannes time again which always leaves me thinking, "Love or hate the advertising industry, you have to give it credit for its self-perpetuation." It thrives in its own world, needing only a steady stream of funding from clients who have no place else to turn.

Just the other day, I read an exchange on LinkedIn where agency creatives were challenging Gary Vaynerchuk who'd wondered why Cannes was still giving out awards for advertising when no one was watching anymore.

"How dare he?" they blustered. "Our work is for BMW, American Airlines and Nike. We were on the Super Bowl."

Shocking, I know, advertising guys completely missing his point or anything else they take as a critique of their own work. Gary V was simply saying what we all know, just about every one of us, blocks, filters, fast-forwards through or simply ignores most advertising today; no matter the brand or the event. We don't care what the brand wants to say about itself. That's not how we make our decisions any more. Why don't agency guys get this?

The answer is simple, it doesn't matter to them.

The industry's design is masterful, a network of companies, big and small, that sell ideas; some good and many, woefully less so. It's an industry built on buzz words where saying you do something is almost always enough and less expensive and exhausting than actually doing it. An industry built on sharing, where agencies win new clients at nearly the same pace as losing old clients who move happily on to the next agency.

The brilliance comes as the new agency throws out all the work of its predecessor, at great expense to the client, and scours the competitive landscape for a gap in brand positioning; opportunistic territory this client can "own;" meaning exploit. The agency starts cranking TV commercials, print ads, outdoor boards and platform-specific digital content from Facebook to snapchat.

Then the big payoff.

No, not a positive impact on the client's business. Agencies get to enter their massive blob of work in every local, regional and national award show they can afford so when the new, often meaningless hardware starts rolling in, it can be placed in the trophy case to "wow!" touring new prospects.

It gets better because agencies know client CMO's have no choice but to fuel the entire show.

CMOs rent instead of buy because they usually face stiff, internal opposition from Sales and Product Development whose influence with the CEO is real. Pressure is applied. The CMO's job is to "Fill the pipeline with prospects ready to buy," so lacking internal allies, the CMO looks outside for a partner; an agency s/he hopes is capable of finding the spark to ignite the fire, if not keep it lit.

It's seamless. And agencies appear to believe it's forever.

The CMO knows the agency's success is not driven by the success of its clients, no matter how often agency leaders suggest it is. Agency revenue and profitability are driven by winning more than they lose, doing more with less (talented people often price themselves out of work) and maximizing billable hours at "industry" rates. It's a delicate balance but with hourly rates building in profit, the agency just needs its people to put in the time because, like brokers, agencies make money regardless of the direction of their clients' fortune.

For more than 30 years, the agency model has been under pressure from dissatisfied clients. The structure is too layered. There's too much duplication. Things take too long, cost too much and, frankly, aren't that great when they are finally delivered and why is everyone on my business in their twenties?

But change is coming as clients wake up to Gary V's point. No one cares except for the guys in the black T-shirts and ripped jeans who want desperately to be known as storytellers.

It will be a slow, painful death to a magnificent industry that gave us so much in its golden era and is still capable of surprising us with moments of brilliance. But the flashes are just too few and far between for a million broken reasons.

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