The story of Yahoo is an amazing story of the Internet and how quickly it moves and how ruthless it really is. 

I had lunch with Lewis Gersh the other day and we talked about the big ones — AOL, MySpace — but also the long list of others — GeoCities, Excite, Altavista, LetsBuyIt, Interworld, Netscape, The Globe, QXL — that crossed industries and have all disappeared.  The question of why is of course different for each one, but here is a very insightful post from someone that was inside Yahoo before Google was founded.

The big lesson I take from below?  Realize that if you rely on a website to succeed, you are a software company.  If you don’t understand how to get the best developers and keep them, you will fail. 

In my world of creative agencies we spend a lot of time understanding how to get and maintain the best creative culture.  How long before we realize we’re in the software business as well?

August 2010

When I went to work for Yahoo after they bought our startup in 1998, it felt like the center of the world. It was supposed to be the next big thing. It was supposed to be what Google turned out to be.

What went wrong? The problems that hosed Yahoo go back a long time, practically to the beginning of the company. They were already very visible when I got there in 1998. Yahoo had two problems Google didn’t: easy money, and ambivalence about being a technology company.

Money

The first time I met Jerry Yang, we thought we were meeting for different reasons. He thought we were meeting so he could check us out in person before buying us. I thought we were meeting so we could show him our new technology, Revenue Loop. It was a way of sorting shopping search results. Merchants bid a percentage of sales for traffic, but the results were sorted not by the bid but by the bid times the average amount a user would buy. It was like the algorithm Google uses now to sort ads, but this was in the spring of 1998, before Google was founded.

More

Interesting to see this article on IPG’s Media Lab.  We’ve been pitching dynamic advertising and targeted communications for years.  As Brian Monahan points out later in the article, it isn’t the technology that holds up implementing these ideas, it is how Madison Avenue (and clients) are organized.

All agencies across the spectrum from advertising to DM and PR will need to understand dynamic data elements being fed into interactive creative pieces.  Whether a banner ad (as described here), an e-mail or an side-bar given to the NY Times for the tablet version of an article — it is dynamic data that will get people’s attention and thus deliver the message.

Interpublic Takes Media Lab From Theory To Application: Initial Foray Focuses On, Well, Applications

by Joe Mandese, Friday, August 6, 2010, 9:11 AM

After years of studying the theory of how
emerging media are impacting the consumer advertising marketplace,
Interpublic’s renowned media lab is restructuring and shifting its focus
to practical , real-world application. Not surprisingly, one of its
first applications is, well, an application. Specifically, it will test
and deploy new forms of online advertising that dynamically connect with
other software or databases. The new format, which Interpublic
executives believe could be the next big breakthrough in advertising,
exploits so-called APIs, which in tech industry parlance means
“applications based interface,” but which from a marketer’s or agency’s
point-of-view means advertising will simply become a pathway to any kind
of programming a creative thinker, media strategist or programmer can
think of to connect with a consumer.

“We believe the next generation of storytelling will be fueled by
dynamic data elements,” asserts Brian Monahan, the head of social media
at Interpublic’s Universal McCann unit, who recently took over as
day-to-day director of Interpublic’s Emerging Media Lab, when former
chief John Ross stepped down to launch Shopper Sciences, a promising new
shopper marketing agency that will draw from many of the innovations
developed by the lab.

More

I’ve been a big fan of the TED conferences for a bit — we host “MiniTEDs” with the digital team in London (credit to Tori Winn) and we bought the stream to the first Oxford TED conference and dedicated the Fishbowl conference room to it and invited the whole agency for the week last year (further credit to Tori Winn).

It is an amazing conference and even more laudable since they make all of the content available online.

Here is a nice intro to the power of the event from Contagious‘ co-founder Paul Kemp-Robertson that sums it up nicely.  Full Article

‘We spend money we don’t have on things we don’t need to impress people we don’t care about.’

It’s not always easy being an Adland native in the crowd at a TED
conference. If you haven’t saved the world or don’t own enough liquid
capital to die trying, then the whoops that greeted this jibe from
economist Tim Jackson can make you feel like a dumb jock who’s accidentally
stumbled into the Chess Club Christmas party.

But maybe that’s just my insecurity and the nagging suspicion that my soul
has been stress-fractured thanks to 20 years of commentating on the
mechanics of mass consumption. When the biggest task you’ve recently
completed is a speech on ‘advertising as a conversation’ and you’re
suddenly surrounded by AIDS activists, women’s rights campaigners, MIT
brainboxes and people who’ve spent their retirement fund building an
eco-school in the middle of a jungle, it’s hard not to feel just a teeny
bit marginalised and shallow. But then, I guess, such abrupt
introspection is actually part of the value of TED. The compressed
intellectual energy of the 18-minute speeches certainly dragged this
editor out of his corporate cocoon and berated and beguiled him in equal
measure.

Don’t get me wrong, I love my job and I’m proud to
have played a role in building the Contagious brand during a period of
intense change and fragmentation. But commenting on the ad business as
it confronts the challenges of a new century feels like reading road
signs in the fast lane. What TED is good at is dragging you away from
the rut of routine and forcing you to confront concepts and issues that
hover on your peripheral vision. AA Milne put it much better than I ever
could (and props to Arup’s Chris Luebkeman
for reminding me of this quote): ‘Here is Edward Bear, coming
downstairs now, bump, bump, bump, on the back of his head, behind
Christopher Robin. It is, as far as he knows, the only way of coming
downstairs, but sometimes he feels that there really is another way, if
only he could stop bumping for a moment and think of it.’

To paraphrase another speaker – rational optimist Matt Ridley
- TEDGlobal is where ideas have sex. (It’s also the kind of event that
introduces people with job titles like ‘rational optimist’ or
‘retronaut’ without a snigger.)

It has been a while since I've updated my "who's winning" table on agency performance, but I think the real prediction is to say before we know the winner, it won't matter.  Everyone is running to the middle and soon enough all of the big agencies will quickly resemble one another in an integrated heaven!
That said competition runs deep in humans and there will be plenty more news bulletins of battles won and lost, and strategic analysis of how the war is progressing.
This opinion piece from Ad Age by Barry Wacksman, Chief Growth Officer from R/GA (of course), is a really well written argument.  No question the best way to win a war is to have the best army. 
If we can get our teams focusing on being a strategic advisor to clients with a big dose of innovation, solid delivery and passion for analytics on peformance we'll get out of being commoditized creative brokers and back into being non-procurable consultants and all win.  Bring on the new age of the strategic agency partner.
 

Forget Being a 'Lead' Agency; Strive to Be a Dream Agency
And It All Starts With Innovation

by Barry Wacksman
Published: January 11, 2010

Three recent articles in Ad Age have spurred a furious online debate about whether digital agencies are ready to "lead" and whether the industry even needs big digital agencies anymore. All three suffer from multiple misconceptions about the agency business, so it's time to offer another point of view.

The very idea of a lead agency as the center of command-and-control for other agencies has outlived its usefulness. The model was appropriate for the mass-media age, when the most important thing a brand could do was tell its story through paid media. Long ago, clients separated agencies from the "lead" and formed direct relationships with a mix of different firms. They may have spent more time (and money) with their traditional ad agency, but even this has changed. In some cases, so-called digital agencies have larger budgets and better access to senior client decision-makers, and this trend is growing.

We should worry less about being a "lead" agency and more about being a "dream" agency. We should ask: What do clients need today, and who is best equipped to deliver? This is what all agencies must consider as they create new business models appropriate for the digital age. So, if a client could build the dream agency today, what would it look like?

It would have a thorough understanding of how consumers think and feel, but also how they seek and make and share and transact. It would recognize that the lives of consumers have dramatically transformed in the past 10 years. In an era where Facebook has 350 million members and Google is the world's most valuable media company, the idea that consumers lead increasingly digital lives isn't debatable.

It wouldn't be wedded to a specific craft such as TV or print. Nor would it only think about designing a website. It would do all of those things without bias toward any strategic or tactical solution.

This agency would have innovation at its core and the ability to craft campaigns to promote these innovations. But it would start with the innovation — not the other way around, as most traditional agencies reflexively deliver campaign ideas as the first step.

Data would be its guiding light. It would have the right people to mine the data, interpret it and, based on the results, provide direction on whether and how to proceed to achieve the best ROI.

It would produce things with efficiency and fidelity, recognizing that brilliant ideas can fall apart with poor execution (a bad user interface, for example). It would understand that clients have an unprecedented opportunity to deliver massive amounts of content via free media channels such as YouTube and Facebook, as well as owned media channels, such as their own websites, mobile apps and Twitter feeds.

Whichever agency gets to this state of Nirvana first is likely to be the most important strategic and creative partner for clients — even if it's no longer called a "lead" agency. So, who will get there first?

I'd bet on the current crop of large, independent digital-age agencies. The most evolved have the skills to formulate and execute ideas that are digital but extend far beyond it. These agencies have had the advantage of evolving alongside the biggest consumer trend of the 21st century, the digital revolution, just as their predecessors had evolved alongside the biggest consumer trend of the 20th century, the mass adoption of TV.

The question — "Are these agencies ready to lead?" — has already been answered by the many clients who have appointed them as their primary strategic agency partners.

ABOUT THE AUTHOR
Barry Wacksman is exec VP-chief growth officer, R/GA.

1 Comment
Subscribe to comments on: Forget Being a 'Lead' Agency; Strive to Be a Dream Agency
  By JMorganBaker | London January 11, 2010 06:42:35 am:
This is a really well written piece and having been in digital market for 10 years now, it isn't a surprise that I agree completely. One thing to remember though — "execution" which you use as an example poor user interface, is also client management. Traditional agencies have real skills in gaining consensus around creative ideas that digital agencies–because we work with such complexity–often miss. Also if you replace "innovation" with "creativity," you have the argument all of the integrated agencies are making in the market today. It really is a rush to the center — is it easier to teach print to digital creative than vice-versa? Probably. Will digital agencies continue to see big growth, definitely. But the scale difference between big traditional agencies and big digital agencies means the big agencies will have time to learn how to be consultative, integrated and innovative.

Ever wanted to see some of the biggest names in the Internet commenting on the past, present and future? 

Comscore was started in 1999, and in the last 10 years has built itself a great corner in measurement.  Reaching out to John Battelle, Esther Dyson, Fred Wilson, Andrew Braccia and others they have put together a 6 minute video commentary.  It wanders into periods of smaltz promotion at times, but generally is quite good.  If only to be reminded of the faces to the names.

Comscore 10th Anniversay Video

What was I doing in 1999?  Aside from setting up an office in London and trying to be useful in the chaos that was boo.com — going to a lot of "launch parties," speaking to the BBC at First Tuesday and talking e-commerce at European HP summits. 

All good fun.

It is funny how you consume media in the internet age. 

Some of us call it “information snacking,”  some call it “managing feeds.”  What is amazing is how we do still end up reading what we want to read and are able to keep up with significant stories or trends — even if they aren’t defined in a few media players editorial calendar as they were before.

I believe this is because the ease of publishing means strong ideas get enough coverage to still have a significant share of voice, regardless of the media fragmentation.

It is also because as humans we tend to build off of each other’s ideas.  A more cynical view would be to say we herd around themes. 

This WARC article does a great summary of the key themes I see frequently.

The changing art of persuasion in a downturn

Laura James

There were a number of recurring themes throughout the day, but three were most prominent. First, the traditional “persuasion” model of advertising is broken. Second, the industry is becoming data rich but insight poor. Third, the structure and process of creating advertising has changed little since the days of Mad Men (while the customer, in the real world, has moved on dramatically).

Just watched an interesting presentation on augmented reality which must be the next big thing that we will all get to have lots of fun with in the next few years.  For those of you who don't know it, the poster child is the GE work recently launched.

GE Augmented Reality – Plug In To The Smart Grid Just as Microsoft Surface was the pre-launch of gesture computing the iphone made real, the first baby steps of Cop Space are becoming a reality. In the presentation, the guys from Inition showed an example of a car on a road where the reflection of the dotted lines were reflected on the car itself and speeded up and slowed down with the car, based on the users movement of the paper.  Nice stuff. Made me think of a scifi classic, of course.  In SnowCrash by Neal Stephenson the protagonist, Hiro, visits a very powerful man in the book's virtual reality called the Metaverse.  He is ushered into the office and to Mr. Ng's pleasure, Hiro recognises the statement he is making much like a wealthy collector would hope a visitor notices a Miro casually hanging in the corner.

"You working with Fisheye?" Ng says, lighting up a cigarette. The smoke swirls in the air ostentatiously. It takes as much computing power realistically to model the smoke coming out of Ng's mouth as it does to model the weather system of the entire planet.

Don't forget the impact of great production values.  People recognise and respect quality.  It makes an impression.

R/GA really may well be setting itself out as the agency for the new millenium.  They do a lot of things differently — a lot smart, some less obvious.

Take the smart set.  Here is a set of quotes from this AdWeek article that are really sharp in my book and when you review them — and other notes about the agency — you see a theme:  the importance of technology, the idea that you create applications that are fixed rather then campaign-based, and that brands must commit to be successful.

R/GA has been the fastest growing agency since the 90s, has done amazing work and retains clients with big relationships.  That is by definition success in our industry.

“There’s a difference between us and someone like Crispin Porter + Bogusky. We’ve taken the direction of building brand platforms rather than viral stunts or one-off things.” [Robert Greenberg]

The key, as Greenberg has long and frequently advocated, is technology, which enables forward-thinking companies to build systems that attract and retain customers while weaving marketing and product together.  “We’re looking at customer behavior and seeing how to create something bigger than a TV spot or print ad,” says Greenberg, an architecture buff.

With a relationship dating to 2001 — a lifetime in the interactive world — Nike and R/GA are deeply enmeshed. “We have people on the ground at Nike,” says Nick Law, chief creative officer for North America at R/GA. “We have deep technical relationships with them.”

One of the crucial aspects of R/GA’s work in 2008 was to make real the promise of blurring the physical and digital worlds. This is an old quest for the digital industry and has, for the most part, come up empty over the years. Not so anymore.

“Software is a medium,” says John Mayo-Smith, R/GA chief technology officer. “Having people who understand software and a high-quality user experience is really important.”

Greenberg saw something different: He saw technology forming a new kind of creativity that relied less on the metaphors of talking animals in TV spots and more on brands connecting people. If the “traditional” notion of digital creativity is the hot viral video, Greenberg counters with an application that uses data in a new way to help people live better.

The key to apps: tech chops.

“They understand the Web, engagement on the Web and e-commerce,” says Michael Mendenhall, CMO of HP. “But they also understand advanced TV, mobile and all the other touch points that are part of the digital ecosystem.”

Entry to the executive suite also has given Greenberg an opportunity to sell his religion: that agencies must have technology at the core to help clients navigate the new world of digital media. While traditional shops might thrive in creating the hot viral video of the day, he preaches, they will fall short when it comes to building sustainable brand platforms and useful applications that blur product and marketing. That even applies to a shop like Crispin. When it comes to the core of Nike+, “they couldn’t even have the conversation,” Greenberg says.

A key area for the model Greenberg envisions is production, a discipline in which R/GA began its existence back in 1977. While most agencies rely on outside production, R/GA has kept its in-house. In 2008, revenue from the 30-person production facility grew by more than 300 percent compared to 2007. The digital studio shot over 250 video projects during the year, working for R/GA clients and other agencies and firms.

R/GA: Digital AOY 2008

The IPG shop’s mantra of utility over gimmickry proves its relevance as the stakes rise

Feb 16, 2009

-By Brian Morrissey

Stepping into R/GA’s New York headquarters, a visitor notices, amid
the general bustle of a busy shop, the beautiful, sometimes
haunting images on the walls.

They are pieces from Bob Greenberg’s personal collection of
“outsider art,” more

I’ve always been impressed by the information that Dave Balter and the team at BzzAgent share through their BeeLog.

It makes sense — no confidentiality is broken and it allows people that are evaluating the company (clients, potential employees, partners) to educate themselves about their business and be smarter when working with the company. It also broadens the number of people that can give their input into what the company is doing — input which generally makes the company smarter.

It also a great tool for management — a forum for instant public recognition. Whether putting someone’s “name up in lights,” or “naming and shaming,” a company blog is a sort of a light-weight version of the more traditional atomic bomb, the press release.

Here is a great example BzzAgent did thinking about how they are working with their advisory board.

Basically the team at BzzAgent inserted a joke slide in their advisory board presentation entitled “Investor / Advisor Litigation Update.” Clearly a title that should get peoples’ attention. And of course under half noticed the slide or commented on it in their feedback to the company.

It is the bane of the world we’ve created that no one has time (or being busy has become fashionable?) and that business people don’t read, they only scan. Pretty soon we’ll need comment buttons on the bottom of e-mails and powerpoint presentations where people can indicate they actually reviewed them.

Advisors Advising

Posted by Dave Balter

August 21st, 2007

Since early 2003, BzzAgent has had an Advisory Board.

In the early days, before we had an official Corporate Board, we met a few times and we worked with a number of individuals to help us with specific projects such as patenting our WOM process and the best approach to certain partnerships. But as the company accelerated, and we’ve added board members, executives and staff, it’s been immensely difficult to utilize this group of experts. Individually, each would gladly help if we reached out, but as a whole this cluster is relatively distant. [more]