Experience the Teleferique in Lebanon

The Advertising Industry Today.

Think the advertising industry is full of innovative ideas and future potential? Think again. How did America’s darling Mad Men go from rolling in it to barely holding on? by Keenan Beasley, Forbes.

According to Michael Farmer, CEO of Farmer & Company and 25-year veteran advertising consultant, what was “once one of the most fulfilling and glamorous of industries has become a grim sweatshop for the people who do the work.”

Thus begins Madison Avenue Manslaughter, Farmer’s new book that outlines—in unrelenting, painstaking detail—the decline of the advertising industry and the tone-deaf agency executives that are leading their own businesses to the chopping block.

Last week, Farmer and I were on a panel for Mediapost, discussing how fragile agency-client relationships have become. It was one of the most candid discussions I’ve been a part of. It’s not often people shoot straight about the reality that exists behind the well-groomed facade of Madison Avenue.

So how did this happen? How did America’s darling Mad Men go from rolling in it to barely holding on?

An Outdated Compensation Model Is Driving Down Costs
“In the old days,” Farmer explains, “agencies were paid a 15 percent commission on media.” (That meant they could direct their clients to the most expensive media and make a killing.) However, in the 1980s, when that got out of control, brands wised up and agencies began earning a flat fee for the same work. Often, that fee was calculated based on the number of people assigned to the client. Add up their salaries and benefits plus a little cushion, and agencies could continue on with business as usual.

Only things didn’t continue as usual. “Any time you’re buying man hours,” Farmer says, “there’s a chance to buy them cheaper.” As advertising became more fragmented and complicated with the digital revolution, a saturated market of agencies began pitching against each other for the same amount of finite work, driving down fees.

Plus, hourly rates don’t even make sense for this kind of work. If there are rats in your attic, who cares what an exterminator charges per hour? You need to know what he charges to get rid of rats! In the same way, brand leaders—especially CMOs—need a partner that can help them achieve very specific financial goals. An hourly rate tells them nothing about what the agency can or will accomplish.

Agencies are Doing More Work Than Ever Before
Despite the decrease in fees, agencies are being asked to carry more and more of the marketing burden. Ten years ago, agencies were in charge of print, radio and television—now they are expected to be experts in traditional marketing, social, digital, programmatic, influencers, e-mail marketing, native advertising…. and pretty much anything else you can imagine.

“Since agencies [owned by holding companies] have to deliver profit margins, they are downsizing every year,” says Farmer. “So they are doing more work, with fewer, more junior people at a time when their clients’ need for profitability has never been greater. As a result, they are destroying their capabilities at a predictable rate.”

Agencies Don’t Know How To Measure What They Do
Agencies are stuck doing more work for shrinking hourly rates because too often, they don’t know how to quantify the results they deliver in a meaningful, measurable way. I’ve written about this before, using Alex & Ani jewelry as an example. Since its agencies weren’t figuring out where the company’s dramatic growth was coming from, former CMO Ryan Bonifacino resorted to hiring several outside PhD’s for their service and insight. And you better believe he didn’t flinch when he was writing those checks. Brands have no problem investing in growth. In fact, I’ve had marketing executives look me in the eye and say, “when you can analytically prove that the money I spend with you is providing a return, then I have an unlimited budget.”

But that’s the problem. The traditional “media marketing mix” is flawed. It’s a pinpoint in time, usually compiled long after a campaign is complete, and rarely takes into account anything that takes place before the swipe of a card. Online advertisers are to blame for a lot of this poor analysis. Just because I click a link and buy a product, doesn’t mean Facebook is the sole reason for that purchase. Maybe I saw a television ad or heard a friend talking about it, or saw someone else wearing that same pair of shoes one day, and I wanted them for myself. To really understand the impact of our marketing, we need better tools.

For far too long, ad agencies have avoided the analytics business. Instead, they’re interested in creativity and enamored with winning awards. As Farmer puts it, “agencies continue to cling to the notion that clients want creativity and service, but what [clients] really want is shareholder value. Agency executives have been completely deaf to the economics.”

Creativity still matters, but unless you can anchor the discussion in measurable data and results, your creative idea is worth nothing. That’s why I hate the traditional term AOR—Agency of Record? What does that mean? To survive into the future, agencies must become Agencies of Return. To do that, you have to be prepared to measure everything that you do, and take an honest look at your own results.

Agencies Are Afraid They Don’t Matter
Here’s the crux of the issue. As fees have been cut, workloads have increased, and measurement has become more complex, legacy agencies are getting cut out of the equation. Brands are bringing a lot of creative work in-house or they are parsing it out to freelancers or boutique agencies, “project by project, not relationship by relationship.”

That shouldn’t surprise anyone. Brands have shareholders to report to; they need help driving business. And that slight lack of confidence, that willingness to take work for lower fees and burn out your own employees and question your own ability… it’s becoming a self-fulfilling prophesy.

“I’ve written a book that documents the truth of things. But I’m convinced it won’t change the way these large holding-company agency executives operate. And that is a huge disappointment to me.” Farmer says.

“Executives at these large agencies somehow continue to eke out profits through these sweatshop conditions, and they get huge bonuses for doing so. They’re all just praying they retire before the whole system blows up.”

But what if we blew it up first?

Joining the industry against mammoth agencies like BBDO, Ogilvy, Grey and McCann is not for the faint-hearted. Despite the mess that exists behind the curtain— a mess that Farmer has clearly exposed—the agencies continue to survive, filling their leaky buckets with additional work. But the door is open. The situation is ripe for young, wildly unpredictable rebels to bust through the system and do something completely different.

We can start by charging for our solutions, not for our hours. We can outline very clearly a path for success so that clients don’t overload our hands with work we didn’t expect—work that doesn’t drive client profit. We can leverage available technology to measure results, accurately understand our progress and prove our value. We can hold confidently to the fact that if we’re willing to solve problems and help our clients drive business—our value is immeasurably great.

The Crucified

Today, and on this same day of each year, man is startled from his deep slumber and stands before the phantoms of the Ages, looking with tearful eyes toward Mount Calvary to witness Jesus the Nazarene nailed on the Cross.... But when the day is over and eventide comes, human kinds return and kneel praying before the idols, erected upon every hilltop, every prairie, and every barter of wheat.

Today, the Christian souls ride on the wing of memories and fly to Jerusalem. There they will stand in throngs, beating upon their bosoms, and staring at Him, crowned with a wreath of thorns, stretching His arms before heaven, and looking from behind the veil of Death into the depths of Life....

But when the curtain of night drops over the stage of the day and the brief drama is concluded, the Christians will go back in groups and lie down in the shadow of oblivion between the quilts of ignorance and slothfulness.

On this one day of each year, the philosophers leave their dark caves, and the thinkers their cold cells, and the poets their imaginary arbors, and all stand reverently upon that silent mountain, listening to the voice of a young man saying of His killers, "Oh Father, forgive them, for they know not what they are doing."

But as dark silence chokes the voices of the light, the philosophers and the thinkers and the poets return to their narrow crevices and shroud their souls with meaningless pages of parchment.

The women who busy themselves in the splendour of Life will bestir themselves today from their cushions to see the sorrowful woman standing before the Cross like a tender sapling before the raging tempest; and when they approach near to her, they will hear a deep moaning and a painful grief.

The young men and women who are racing with the torrent of modern civilization will halt today for a moment, and look backward to see the young Magdalen washing with her tears the blood stains from the feet of a Holy Man suspended between Heaven and Earth; and when their shallow eyes weary of the scene they will depart and soon laugh.

On this day of each year, Humanity wakes with the awakening of Spring, and stands crying below the suffering Nazarene; then she closes her eyes and surrenders herself to a deep slumber. But Spring will remain awake, smiling and progressing until merged into Summer, dressed in scented golden raiment. Humanity is a mourner who enjoys lamenting the memories and heroes of the Ages.... If Humanity were possessed of understanding, there would be rejoicing over their glory. Humanity is like a child standing in glee by a wounded beast. Humanity laughs before the strengthening torrent which carries into oblivion the dry branches of the trees, and sweeps away with determination all things not fastened by strength.

Humanity looks upon Jesus the Nazarene as a poor-born Who suffered misery and humiliation with all of the weak. And He is pitied, for Humanity believes He was crucified painfully.... And all that Humanity offers to Him is crying and wailing and lamentation. For centuries Humanity has been worshipping weakness in the person of the Saviour.

The Nazarene was not weak! He was strong and is strong! But the people refuse to heed the true meaning of strength.

Jesus never lived a life of fear, nor did He die suffering or complaining.... He lived as a leader; He was crucified as a crusader; He died with a heroism that frightened His killers and tormentors.

Jesus was not a bird with broken wings; He was a raging tempest who broke all crooked wings. He feared not His persecutors nor His enemies. He suffered not before His killers. Free and brave and daring He was. He defied all despots and oppressors. He saw the contagious pustules and amputated them.... He muted Evil and He crushed Falsehood and He choked Treachery.

Jesus came not from the heart of the circle of Light to destroy the homes and build upon their ruins the convents and monasteries. He did not persuade the strong man to become a monk or a priest, but He came to send forth upon this earth a new spirit, with power to crumble the foundation of any monarchy built upon human bones and skulls.... He came to demolish the majestic palaces, constructed upon the graves of the weak, and crush the idols, erected upon the bodies of the poor. Jesus was not sent here to teach the people to build magnificent churches and temples amidst the cold wretched huts and dismal hovels.... He came to make the human heart a temple, and the soul and altar, and the mind a priest.

These were the missions of Jesus the Nazarene, and these are the teachings for which He was crucified. And if Humanity were wise, she would stand today and sing in strength the song of conquest and the hymn of triumph.

Oh, Crucified Jesus, Who are looking sorrowfully from Mount Calvary at the sad procession of the Ages, and hearing the clamour of the dark nations, and understanding the dreams of Eternity... Thou art, on the Cross, more glorious and dignified than one thousand kings upon one thousand thrones in one thousand empires....

Thou art, in the agony of death, more powerful than one thousand generals in one thousand wars....

With Thy sorrows, Thou art more joyous than Spring with its flowers....

With Thy suffering, Thou art more bravely silent than the crying angels of heaven....

Before Thy lashers, Thou art more resolute than the mountain of rock....

Thy wreath of thorns is more brilliant and sublime than the crow of Bahram.... The nails piercing Thy hands are more beautiful than the sceptre of Jupiter....

The spatters of blood upon Thy feet are more resplendent than the necklace of Ishtar.

Forgive the weak who lament Thee today, for they do not know how to lament themselves....

Forgive them, for they do not know that Thou has conquered death with death, and bestowed life upon the dead....

Forgive them, for they do not know that Thy strength still awaits them....

Forgive them, for they do not know that every day is Thy day.

-- Gibran K. Gibran

Little Leaders

The Advertising Arena in Lebanon

Lebanon, a 10,452 square kilometer with a population of 4 millions + country), has a diversified culture. It was under the French mandate until 1943. Our "second" native language is French. But English, the business language, is grabbing shares and has become widely spoken by the teens. They even text, tweet, or post in English.

When a product communicates in French, it is:
- Favorably received by the A or B Social Class
- Positioned as expensive by the C or D Social Class
- Perceived as a good quality product by all Social Classes
- Addressed to a niche market

And when another product communicates in English, it is:
- Favourably received by all Social Classes that speak the language, even French-speaking ones
- Positioned as relatively expensive by the C or D Social Class
- Perceived as a good quality product by all Social Classes
- Addressed to a wider audience

But when you communicate an imported product in Arabic, it is:
- Unfavourably received by the A or B Social Class
- Positioned as somehow cheap by the A or B Social Class
- Perceived as a bad quality product by the A or B Social Class
- Addressed to the mass

It is worth noting the following:
- The origin of the product matters (e.g. if it a good product from the U.S. or Britain, it is best communicating it in English)
- The local high-end brands, such as restaurants, communicate in Arabic
- Most of the Lebanese speak 3 languages (Arabic, French, and English)
- The persons that have internet access here (with Twitter, Facebook, Google+, and other accounts) are mainly educated
- Official Arabic is not easy to formulate in a headline for an advertisement (spoken Arabic is somehow better)
- The teens have created their own "language" while texting, tweeting, and posting: It is the Arabic typed in latin characters! (e.g. kifik ya Lisa, kif el7al, inshallah mni7a, 9arlna zamen ma sme3na a5barik / How are you Lisa, how is everything, I hope all is well, it's been a while since we last heard from you)

And of course there is the new "Arabic", that is to have the three languages (Arabic, French, and English): "Hi, kifak, ca va?" / "Hi, how are you, all is well?"

End note:
It is advisable to use the language of the product origin (the internet has made things go from local to global). However still, the Arabic language could be smartly integrated in several different messages. It allows to grab different target audiences.

Print Ad of the Week

Picture of the Week

Kobe Bryant goes up for a dunk against Nigeria at the Olympics - London 2012

Gibran K. Gibran: Children

Your children are not your children.
They are the sons and daughters of Life's longing for itself.
They come through you but not from you,
And though they are with you, yet they belong not to you.
You may give them your love but not your thoughts.
For they have their own thoughts.
You may house their bodies but not their souls, 
for their souls dwell in the house of tomorrow,
which you can not visit, not even in your dreams.
You may strive to be like them, but seek not to make them like you.
For life goes not backward, nor tarries with yesterday.
You are the bows from which your children as living arrows are sent forth.
The archer sees the mark upon the path of the infinite, and He bends
you with His might that His arrows may go swift and far.
Let your bending in the archer's hand be for gladness;
for even as He loves the arrow which flies, 
so He loves also the bow which is stable.

Remembering April 13

Postcard of the Week

Kefraya (West Bekaa) - Lebanon