Advertising agencies get a digital wake-up call from Nike

Just Do It! Nike just did, ditching its running shoe advertising agency of twenty five years not because it was unhappy with creative or because of costs, but because Wieden & Kennedy just didn't have the digital media passion or expertise needed to adequately engage the new consumer.

While Nike moving its running shoe business after so long and successful a partnership is news in itself, what is really making waves in the agency world is the reason for the move. Agencies worldwide are generally still doing a half-hearted job of leveraging the internet and related technologies for brand building, and most of them know it. When a manufacturer as intimately in touch with its consumer as Nike is sees the need to do more and do it better, and is willing to just do it, the agency world looks over its shoulder to see who is next to go.

Wieden & Kennedy are not a minor agency – they have long been a creative powerhouse doing work for companies like Procter & Gamble and Coca-Cola. They must have seen this coming, and probably had plenty of warning from Nike, but were simply unable to change fast enough to keep the account.

In February, Mark Parker, Nike's CEO, told investors

The Nike brand will always be our strongest asset, but consumers are looking for new relevance and connections. We're fundamentally changing the way we're organized as a company. It's really all about going deeper to get deeper connections and deeper insights, to get more innovation and more relevance, and to make us ultimately more competitive in each of the discrete pieces of our business. This allows us to be more informed and more surgical in creating products and optimizing our go-to-market strategies within each category.

Nike gets it. The consumer – particularly in Nike’s demographic – is now calling the shots, and companies who insist on pursuing a 1980’s-style mass-market broadcast approach to communicating risk being marginalized or, worse, becoming irrelevant.

As the New York Times put it,

The message is clear: No matter how talented an agency's creative team or how well the client's management likes the firm's executives, the agency is of limited value unless it embraces digital media.

That means, just as the web has permeated the lives of consumers, agencies must permeate digital culture throughout their organisations, instead of regarding “internet stuff” as an afterthought, add-on, or external business. For many markets, digital thinking needs to be a foundation of advertising strategy. And while it makes sense to start digital operations as a separate entity (thus bypassing all of the legacy resistance), there has to be a plan to reintegrate online operations as soon as the “interactive agency” is up and running.

But advertising agencies the world over are still dragging their heels. Given that the internet attracts more advertising money than radio worldwide, and was second only to TV in the UK last year, it's hard to keep on regarding online as something that is still not important.

Last week at the Online Media Marketing & Advertising (OMMA) conference in Hollywood, a panel of industry insiders agreed that most ad agencies are simply not ready for the digital era. Tim Hanlon, from Publicis, was adamant that the traditional structure of ad agencies is an obstacle, and that de-siloing brand advertising and response advertising is essential to create the flexibility and spontaneity necessary to get to the online consumer.

Bant Breen of Interpublic was of the opinion that acquiring so-called interactive agencies is easy, but integrating them into existing agencies is not, and that’s the thing which is necessary for a more powerful approach to advertising which can do things like build customer relationships and enable transactions.

What’s the problem with traditional ad agencies?

Firstly, the whole structure within agencies (and the communication structures between agencies and clients) makes change a painfully slow process. Not good when rapid and disruptive change is a key characteristic of online consumer environments. How long does it take to brief, pitch, create and roll out a campaign? Given the aversion to risk within agencies and clients, it can take months. Online, you need to be able to do this stuff in days if not hours. The risk of not operating quickly vastly outweighs the risk of moving so slowly you are effectively doing nothing. Agencies need to be given more latitude to act almost spontaneously, but it is unlikely clients would allow that, and even less likely that agencies would want it.

Secondly, agencies and their clients are way too precious about protecting brand identity. Remember when the primary role of a brand manager was to police the “brand bible” and ensure the eternal purity of the proposition? In a web 2.0 world, consumers want to talk about products. And, in the words of the Cluetrain Manifesto, whether the news is good or bad, they tell everybody.

Trying to protect a brand from consumer comment, being afraid that customer opinion may pollute or hijack your carefully crafted identity, is no longer a valid marketing activity. But encouraging discussion and being ready to respond to it, and making sure you are structurally able to maximize net advocacy, are alien concepts to many marketers and their ad agencies.

Thirdly, the traditional approach to broadcasting generic messages to largely mass markets is inappropriate for digital media, which is all about sharply focused messages for niche audiences who are discerning, informed and impatient. When your medium is newspapers or television, you have to communicate across the broad mix of audiences that they reach, and being too focused in your message risks completely missing important components of those audiences. True, satellite TV and niche publications do allow for a more narrowcast approach, but it is nothing compared with the laser-focused nanocasting and individual consumer conversations that the web allows – and requires. But the broadcast mentality of traditional agencies results in nothing more imaginative online than generic corporate banners on mass traffic sites like directories and online newspapers.

Fourthly, the online business model does not work well for agencies. If a major part of your income originates in placement commissions paid by traditional media, it is very hard to look at online opportunities as anything but financially retrograde. So the only real financial incentives to pursue digital strategies are macro incentives: you’ll pull in big accounts if you are seen to be on top of this web thing, or you’ll lose big accounts if you are not. Ad agencies need to reinvent their business models for the 21st century, because their old models are a significant handicap to progress.

Got your MOO cards yet?

These days it's increasingly hip to be geeky. If you really want to make a statement about how web 2.0 centric you are, you put your commitment to humanising business, personalisation, niche marketing, and social networking right on your business card. And you do it in a format that deliberately bucks the boring uniformity and conformity of ordinary everyday business cards.

How? You have a batch of MOO cards made up for you, printed in a “widescreen” 70x28 millimetre size, with a range of colour photographs on the back that reflect your personal interests or passions.



MOO cards started out with people who spend a lot of their private time in the 3D virtual world of Second Life, allowing them to put screen shots of their alter-ego online avatars on the back of their calling cards. A simple viral concept, the craze spread rapidly, and now it seems everyone in the web world is doing it.

How do you get your own MOO cards? Online, of course, from www.moo.com

No longer limited to Second Life images, you can upload your own photographs or choose from thousands already available at their site. MOO’s online tools let you easily crop your photos to get the best effect. You order packs of 100 cards with as many as 100 different images per pack, for only US$20, and they will ship anywhere in the world.

Not only do MOO cards say a lot about your cutting-edge geekiness, they present an opportunity to promote your interests – or your business – in a way that regular business cards cannot. Because there is a distinctly casual and “fun” element to MOO cards, you can put photos of your your product, or your service in action without risking looking tacky.

There's another advantage, at least while MOO cards are relatively new. Ordinary business cards get stuffed in a pocket and forgotten. MOO cards are not only ice-breakers for your own first encounters, they get shown to other people long after you have gone.

Social Networks for KLM Passengers and Business Travellers

Loyalty programmes are invariably about a company trying to create a relationship with a customer, with the primary motivations being to secure repeat business and cross-sell services. That’s so web 1.0. These days, the objective is not so much to form a company-customer relationship as to facilitate customer-customer networking relationships with the company providing the context.

There is probably no industry in which loyalty programmes are so widespread as travel, so when a major airline starts trying to get social networks working for its frequent flyers, it may be the first sign of a significant evolution. Not surprisingly it is the Dutch, who gave us the compact cassette and the CD, who were the first to move in this innovative direction.

KLM is the first airline in the world to build online social networking communities for its customers. Aimed primarily at frequent business travelers, and currently centered on specific destinations and activities, KLM’s communities connect people with common travel interests. Its first two destination communities, KLM Club Africa and KLM Club China, and its first activity community, Flying Blue Golf Club, are at the moment available only by invitation.





The benefit of belonging is that members of the networks can get to meet and share experiences with people working in similar markets, facilitating connections that might otherwise never happen. Members also get access to services such as translation, travel advice, or legal assistance provided by KLM business partners. And the networks are not exclusively online: face-to-face networking events take place regularly in he destination zones, as well as back home in the Netherlands.

Members of the golfing network (ever meet anyone from the Netherlands who doesn’t love golf?) can use the community to create profiles of their playing ability, arrange to play with other members who are going to be in the same place, and even use frequent flyer miles to pay for games or buy golf equipment.

It is a fairly bold move by KLM to try to unite its customers. Most airlines prefer to keep customers at bay with a divide-and-conquer mentality. But KLM has a good product and an already very loyal customer base. What KLM has done is leverage and lock in that loyalty not by offering “me-too” benefits like more comfortable seats or better in-flight entertainment, but by offering a unique service of potentially great personal value which other airlines might find harder to mimic.

In a similar vein, a new company called PairUp is offering to help travelers (on any airline) to connect face-to-face with fellow travelers with whom they may already have an online connection. PairUp members uploading their contacts list (from Outlook, or whatever their e-mail or contact management tool is). When they schedule a flight or participation in a conference, they put their flight and accommodation information in the system.

The system shows them people in their list whose uploaded travel details coincide with theirs, and lets them pick the contacts that they are interested in getting together with. The system is not exclusively for use by vaguely connected people – it can be used as a coordination tool by colleagues who need to share travel plans.



PairUp also provides a version of its tool to event managers, allowing convention organizers to offer a pairing-up service directly to people who register for their event. Anyone who has participated in major conferences where you struggle to find out who is attending, then battle to track down the people you want to talk with, can see the benefits of such a tool.

Online Businesses Beat Offline Businesses in Customer Satisfaction

One of the prerequisites of successful online business is a commitment to customer satisfaction. The online customer simply doesn’t take the kind of abuse, disregard, or obfuscation that the offline customer is often resigned to. Online customers can go elsewhere at the click of a button; off-line businesses often perceive their customers to be captive because of the difficulty of going elsewhere, which can lead to habitually poor service by offline businesses.

The University of Michigan and ForeSee Results have just released the American Customer Satisfaction Index, which shows that customer satisfaction with e-commerce now surpasses that of offline business by 11.6 percent.

The Customer Satisfaction Index is a 100-point scale, and on that scale e-commerce scored an average of 80 against off-line businesses average of 68.4. Online retail scored 83 as opposed to offline retail’s score of 74.

Of course it is not necessarily a complacent attitude in offline businesses that is at the root of the problem. Online businesses have a major advantage in both information and flexibility. They are able to get really good insights into each and every customer’s behaviour and preferences, and can tailor a customer experience in a way that is so much more focused than any offline business could manage. Imagine trying to train, for instance, every in-store sales rep at HiFi Corporation to actually know and understand the products they are selling, and to develop the skills needed to understand the needs of every customer they deal with. Well, OK, that’s not so difficult. Maybe it is all down to management attitude after all.

Web 2.0 has played a big role in elevating online customer service. The ability to see multiple views of products, read and write actual consumer reviews, and seek out and provide peer recommendations has added tremendously to the enthusiasm with which consumers do business online. The transparency that Web 2.0 provides is a vital driver of the web as a window-shopping medium. Try to find out in-store exactly what the make, model, performance, strengths and weaknesses are of say the range of plasma TVs on the shelves, and you come away with snippets of information that may or may not be true. Online retailers encourage comparison shopping, and go to great lengths to provide extensive product information. Offline businesses often see informed customers as a threat; online businesses know that informed customers are an opportunity.

Of course, not all offline businesses do a bad job. In the US, many major stores have risen to the challenge and provide superb customer experiences. Multi-channel businesses like the giant bookstore chain Barnes and Noble have integrated online and offline services that pushed them up the Consumer Satisfaction Index to a score of 88, a little higher than Amazon.com.

Pepsi Goes Beyond 2.0

The Pepsi Generation is very much the web 2.0 generation, so it is appropriate that for 2007, Pepsi (through their agency Tribal DDB) is taking consumer online engagement and brand dynamism to a level not often seen.

Pepsi will be launching a new can/bottle design every three weeks, with each can design being themed to a consumer passion, and linked to a different online microsite that engages consumers in generating content around that theme. The dozen or so themes will include cars, music, fashion, entertainment and sports.



Pepsi’s first site was thisisthebeginning, which encouraged visitors to use a series of templated tools to collectively design a Pepsi billboard. The winning design will become a real billboard that will appear in Times Square.



The next site, pepsifreeride.com, focuses on cars, where visitors can play an online driving game and enter a lottery to win a specially customised Subaru Impreza.



Future microsites will let visitors design their own Pepsi can, with the possibility of the winner’s can actually making it onto the market. Another site will let visitors use their computer keyboard to create music.

You can see all of the Pepsi can designs at pepsigallery.com.

How Alasoop Uses MailChimp to Help Local Restaurants

MailChimp is an e-mail marketing service provider that makes managing e-mail campaigns very simple. Where services like Constant Contact charge a flat monthly fee that increases with the size of your mailing list, MailChimp charges a very low fee per e-mail sent.

On MailChimp’s site there is a great case study about how Webstellung (a small communications business) in Paris is using MailChimp’s e-mail marketing tools to help local restaurants market themselves.

They created a service whereby they get lunchtime restaurant patrons to sign up to receive via e-mail the daily menus of local restaurants who provide a high-quality but reasonably priced lunch. The service (branded " Alasoop", a tongue-in- cheek phonetic rendition of French for "Dinner's on the table") helps office workers find out about restaurants they may not have tried and let’s them know what’s on special today. It also helps restaurants – none of which have anything like an advertising budget -- find new customers, and to fill their restaurants every lunchtime.

Apparently the restaurants currently piloting the service are receiving increased business and increased repeat business. There is a coupon program built in to the e-mails to provide a little incentive, and it seems there is very little unsubscribing in the mailing lists.

You can read the full case study here on
MailChimp’s site.

Jeep's Comic Book Competition Seeks Consumer Generated Content

In an attempt be more appealing to a younger more environment-conscious consumer, DaimlerChrysler have systematically been rolling out smaller and smaller models in their Jeep range over the past few years. Their latest and cheapest model, the Jeep Patriot, is using some web 2.0 thinking to generate buzz: DaimlerChrysler are asking fans to create a comic book that features the car, if not as the hero, as a key character in the storyline. How’s that for leveraging user generated content?




Together with Marvel Comics, of Spider-Man and X-Men fame, Jeep is inviting budding comic authors to enter “The Patriot Factor” competition and submit story lines for the pending comic book. Marvel’s artists have jump-started the project, posting the first few pages at PatriotAdventure.com

Jeep’s ad agency, Organic, believes that the consumer-generated content approach will help them get exposure in their target demographic which is younger, male, first-time car buyers. They are also pushing the Patriot through social networks and video games, though there is as yet no mention of making it available in Second Life, the virtual world now so popular with marketers. (GM’s Pontiac, Toyota’s Scion, and Nissan’s Sentra have been selling virtual cars there for some time).

The winning entries will get author credits in actual comic books to be drawn and published by Marvel later in the year.

The Best Marketing Blogs

If you are active in the online marketing field, one of the best ways to stay on top of new developments and emerging ideas is to read the more popular blogs that discuss specific aspects that interest you, or to read the often less popular blogs of thought leaders in the field.

Finding those blogs is a process of search and elimination, but since this is the “collaborative web” there’s plenty of advice out there.

A good starting point is Todd Adrlik’s list of the Power 150 Marketing Blogs that he compiled by creating a novel evaluation approach that incorporates the popularity rankings of each blog awarded by a number of different sources. By comparing various indices such as the number of subscribers to each blog as registered by Bloglines, Google’s PageRank, Technorati’s ranking, and some more or less subjective personal criteria, he produced his list of the top 150 marketing blogs in America.

To read each one of these could take you a while, but they are probably all worth a look at least once. Most people will find that they do not have the time to read many blogs on a regular basis, so the trick is to treat a list such as this like a bookshelf in a bookstore: skim through each one when you can and shortlist a few that appeal to you. Then come back and dig deeper into the shortlist, and decide which you want to follow in depth on a daily or weekly basis, and which are worth skimming through every month or so.

You can make this process easier by subscribing to the content of each blog in a feed reader such as Google’s Reader, so it comes to you in one place, rather than you having to go out to each blog to get the latest entries. We’ll cover how to choose and set up an RSS feed reader in the near future.