10 Things You Pay for From Traditional Marketing Agencies

In today’s business world, it’s no longer the big fish that eats the small fish; it’s the fast fish that eats the slow fish.

In the same way the information revolution has changed how customers and market share are won, it has also reshaped the old systems that once governed how companies operate and how people work. The future of business is more flexible, faster, leaner and smarter.

This is not just about adopting a telecommuting policy or forgoing the purchase of that expensive copier. It’s about changing how business is done, both in philosophy and in execution.

The penalty of clinging to old business practices is losing clients that no longer can justify bills with unneeded overhead baked into them. As leaner and smarter companies emerge, the old juggernauts who are slow to change are quickly dying.

Marketing agencies

At the top of the scale of corporate bloat are marketing and advertising agencies. While not all industries can shed their physical offices and adopt a virtual model, the dominance of digital marketing coupled with the very nature of marketing’s day-to-day business operations afford these agencies a clear-cut path to modern efficiency.

However, in reality, few have changed. The majority of marketing firms hang on to these old systems of operations, passing on the burden of their expenses to their clients.

The traditional marketing firm still maintains an expensive posture to attract its clients.Why? Most find changing their methods of operations to be just as hard as adapting to today’s Web culture and the new rules of doing business. Too much has changed too quickly. In clinging to old methods – even those of its own self-promotion – the traditional marketing firm still maintains an expensive posture to attract its clients with their lavish offices and costly travel. These companies force work into physical locations, perpetuating the punching of clocks and shuffling of paper, while carrying years of old business operations in the form of debt, all of which must ultimately be paid for by the client.

There’s a reason why marketing companies are dying left and right, beyond becoming irrelevant in the digital age. Today's clients no longer accept invoices inflated by bloated operations, particularly when virtual companies can do more at a fraction of the cost.

The rise of the virtual company

It took time for companies like Amazon, Netflix and Apple to revolutionize and overtake industries that were once based in bricks and mortar. Replacing the physical form was a challenge in reconditioning the mind of the consumer and in reshaping traditional systems, such as fulfillment, customer service and exception handling.

2010 will see the emergence of the virtual company in full force.These initial obstacles were quickly overcome as consumers realized the advantage of lower prices by way of lower overhead, mutually beneficial partnerships and geographical barriers being torn down and giving way to an expanded market. Today, that same virtual model that started strong in the retail sector is being adopted throughout all applicable industries. As a result, virtual companies are growing at record pace.

2010 will see the emergence of the virtual company in full force. The convergence of technology, communication, new service-based companies and systems that meet the demands of companies that no longer carry the burden of bloated operations will allow more companies to work smarter, faster and from anywhere.

As virtual companies continue to refine their systems and clients continue to realize the value in receiving better service for less money, the virtual company will gain strength and overtake the outmoded traditional business models. This not only improves efficiencies but tears down geographical barriers to markets and talent.

As we enter the age of the virtual company, let’s review ten things you pay for from traditional marketing agencies:

1. Facilities

Office space is typically the largest expense on the books for marketing agencies. These obligations range from rented space in a shared office park to owning (and owing for) real estate, freestanding buildings and parking facilities.

Virtual marketing companies shed this expense because the nature of the business simply doesn’t require it anymore. Marketing is digital, and print is dying. All the infrastructure that was once housed in a physical location is now replaced by a range of new digital services. Communication is conducted through e-mail, mobile devices, video conferencing and client dashboards rather than on-site meetings and client lunches, the costs of which are ultimately passed back to the client.

The marketplace demands geographic barriers be removed to hire, collaborate and partner with the best talent in the industry. The virtual company’s employees work remotely within a virtual space that accomplishes anything that a physical location provides and more. They are mobile and available at a moment’s notice to meet with clients. Even remote offices, meeting spaces and presentation rooms can be rented by the day or hour, as needed, so as not to waste money on a fixed building that sits there to house all the bloated systems and conventions the traditional marketing company clings to.

2. On-site employees and physical work systems

For many office-based companies, the days of having people gathered in a building to work is gone. For these businesses, the act of keeping people around was just another form of time card punching, rooted in old systems founded on the demand for people to be present and available to coworkers and customers from 9 to 5.

Happy employees do better work, particularly the ones responsible for great creative work.Virtual companies don’t operate according to fixed 9-to-5 schedules. Instead, their systems and employees are faster, more flexible, working within tighter deadlines and using new, more robust project management conventions.

Telecommuting is more prevalent today than ever, for reasons that go beyond avoiding the cost of expensive office space. Happy employees are ones that are not trapped in cubicles, hustling through traffic, burning 30-40 hours and hundreds of dollars a month in commuting to a fixed place to do work that can be done anywhere. The fact is, happy employees do better work, particularly the ones responsible for great creative work.

Moreover, work systems based on having everyone in a centralized office all day are terribly inefficient. To see this, you have to look beyond hard costs and expenditures and consider the man hours wasted on meetings, scheduling, water cooler talk, Web surfing – the list goes on and on.

Replacing the physical office environment are proven virtual office management and collaboration systems like Basecamp, video conferencing, cloud computing and mobile Internet connectivity. Most importantly, the philosophy behind the work is based on maximizing project development efficiencies rather than filling up a 40-hour work week simply for the sake of adhering to convention.

3. Utilities

From security systems, electricity, heating and A/C to cleaning and facility repairs, the auxiliary costs of maintaining a facility can be extraordinary. This is an expense that virtual companies leave behind and don’t pass on to their clients.

4. Landline phone systems

In an age where business is a 24-hour, anywhere and everywhere proposition, corporate phone systems are an enormous waste. Everyone has a cell phone, and most working professionals carry smartphones. For many, the superfluous office phone collects dust, and voicemail systems are rarely used. In a time when most households are shedding the costs of landlines in favor of more flexible and leaner mobile options, many businesses still lag behind.

Agencies that continue to operate from a physical facility must pay to maintain and upgrade expensive landline systems, adding yet more extraneous dollars per hour to their clients’ bills.

5. Office furnishings

Expensive offices, conference room tables, desks, chairs, bathrooms, kitchens, interior decoration and even trophy cases displaying purchased accolades are omitted from the overhead costs of all virtual companies.

6. Computing infrastructure and LANs

So many companies still keep gobs of file and printer servers along with data backup systems, server redundancies, uninterrupted power supplies, routers, switches, cabling, internal e-mail systems – the list goes on.

For virtual companies, the idea of a LAN (local area network) has been replaced by cloud computing, with Web-based service providers, project management, collaboration systems, and applications. These systems are accessible from anywhere in the world, offer true collaboration with anyone and are always backed up and protected.

What’s more, project management in the virtual space allows for new and innovative work habits that promote speed, efficiency and flexibility in ways old companies employing old work systems simply cannot keep pace with.

7. Paper

So many of the slow, dying companies we see today still live in an office with paper circulating all the time. Believe it or not, nowhere is this more true than at your local marketing agency. Also included in this paper-filled world are printers, copiers, fax machines, shredders and a never-ending variety of supplies, all in support of paper trails that lead from the office to the client and back again before ending in nicely climate-controlled filing cabinets.

Virtual companies exist in a paperless world, and the best work circles around those that stay in a paper-driven office. The benefits of going (and staying) completely digital are immense. Digital documents are searchable, sharable, versioned, more secure and viewable on nearly any device. The more files that are kept, used and cataloged in digital format, the more efficiencies will increase overall.

8. Support staff and personnel

When agencies pay for an office, furnishings, phone systems, computing infrastructure and everything in between, they also require additional personnel, time and resources to support those systems, including office managers, receptionists, IT staff, cleaning crews, landscapers and security, to name a few. Thus, these already excessive expenses are further exacerbated and passed on to the client.

9. Restricted geographical barriers

If there’s one thing the Internet has brought to the economy, it’s the expanded marketplace. The business systems of virtual companies are not only set up to take on clients without most of the additional expenses suffered by traditional companies but to hire the best talent available anywhere.

Truth is, many marketing agencies are restricted to their local markets. While these firms would in theory jump on a plane to take on a client nearly anywhere, most find in practice that only local clients are cost-effective given the traditional systems still employed.

10. Debt

The result of all of this expense in a world that is quickly shifting to leaner and smarter operations is that this much of the excess is carried forward in debt that comes at a premium paid to a bank in interest. That ongoing obligation is passed to clients along with the cost of all other inefficiencies.

Virtual companies that start fresh, using smart, lean and flexible systems of operation don’t carry years of bad investments in outmoded, expensive systems on their backs. In fact, as traditional marketing agencies continue to lose clients and market share to these more adept modern firms, the additional debt taken on to stay alive will eventually lead to the extinction of the slow, bloated traditional marketing company as we know it.

photos: Flickr: Christ0ff, chrisdlugosz

---

The New Ice Age: Lessons Learned from the ALS Challenge for Achieving Viral Marketing Success

If you have been online in the past few weeks, you have undoubtedly come across the viral phenomenon that is the “Ice Bucket Challenge”. Videos of people dumping buckets of ice-cold water on themselves, recording the video and posting to social media, and then nominating others to do the same, has taken the Internet by storm. Anyone who refuses to accept the challenge is asked to make a donation to the ALS charity of their choice, and the viral sensation as a whole has also raised significant awareness for ALS, which is often called Lou Gehrig’s disease. Fire up your social media site of choice and you are bound to see video after video of your friends and contacts dousing themselves in ice-cold H20. Even if you are not a big social media user, you have likely seen information on this freezing cold phenomenon as news outlets have gleefully reported on, and posted videos of, celebrities from the worlds of sports, entertainment, business, and more participating in the fun. A recent video even had actor Vin Diesel nominate Russian president Vladimir Putin to take the challenge! It seems as if everyone has happily dumped a bucket of water on their head for charity and good fun. The success of this campaign, which has raised millions of dollars, as well as that aforementioned awareness, for the ALS Association, is an interesting case study in the concept of “viral marketing”. In this article, we will take a look at what this Ice Bucket Challenge can teach us about this type of potentially powerful marketing.

You never know what will go viral.

The concept of the Ice Bucket Challenge is pretty simple. You film yourself doing something silly (and somewhat uncomfortable) and you challenge others you know to do the same. Pretty straightforward – so what makes this such a craze? What does this campaign have that so many other campaigns that were hoping to “go viral” were missing? The truth may actually just be dumb luck, because the reality is that you never know what will find an audience and go viral. Many organizations that try to initiate a viral campaign try many different ideas hoping that they will strike gold with one. They do this because they know that even one viral sensation can be all they need to meet their goals, whether that goal is to raise awareness for a cause like the ALA Association is doing, or to just draw massive attention to a business or a product, similar to what Burger King did many years ago (and what they are trying to do again) with their Subservient Chicken campaign. Viral marketing is really a roll of the dice, but there are some things that can tip the odds in your favor. We can see some of these things at play here in the Ice Bucket Challenge, including the presence of celebrities.

Celebrities sell.

The Ice Bucket challenge has now been taken by celebrities including Bill Gates, Ben Affleck, Justin Timberlake, Dwayne “The Rock” Johnson, Jimmy Fallon, Oprah Winfrey, and Charlie Sheen (who mixed it up by dumping cold hard cash on his head instead of cold water – although he promised to donate all that cash to the ALS Association). The participation of celebrities, who then in turn nominate other celebrities, is absolutely one of the reasons why this Ice Bucket Challenge has blown up the way that it has. Their participation is what has driven news outlets to cover the videos, which prompts others to share those videos on social media. This in turn introduces the campaign to more people, who then do the challenge as well and nominate others. This is the very definition of “going viral”, and these celebs are helping to fuel that success! Compare the Ice Bucket Challenge to another “video for a good cause” from some years back – the Pink Glove Dance. Created by Providence St. Vincent Medical Center in Portland, Oregon, this video of medical staff dancing to raise awareness for breast cancer has been watched almost 14 million times on YouTube. That is amazing by any standard. If you asked any company if they would take 14 million views for one of their online videos and the answer, I am sure, would be a resounding “YES!”. Still, as popular as that video was, it pales in comparison to the reach that this Ice Bucket Challenge has found, largely because of that aforementioned celebrity involvement. So if celebrities can make your viral campaign, how do you go about getting them involved? Well, that’s the trick, you really can’t get them involved, it just has to happen! This is an important factor to realize, because if you are looking at the success of a viral campaign like the Ice Bucket Challenge and thinking, “How can we do something similar”, you need to realize that there is a “lightning in a bottle” aspect to what is happening here. You could do something identical and not find that audience that pushes it to this level. Yes, celebrities can make your viral campaign, but counting on them to participate is not a sound marketing strategy!

There is value in the ridiculous

One of the other factors that has contributed to the success of this campaign is the sheer ridiculousness of the act of dumping cold water on yourself. The Internet loves spectacle and the Ice Bucket Challenge delivers on that count! A successful viral campaign is often over the top and ridiculous. If you are considering trying you hand at a viral campaign, think outside the box and be willing to get a little crazy. When it comes to viral marketing, conservative rarely succeeds.

There is value in helping others.

Another factor helping fuel the success of the Ice Bucket challenge is that all of this silliness is for a great cause. While a viral campaign to promote a company or product may take off, one that is designed to help others has something that those others do not – good will. Doing good for others makes people feel good too. That is a powerful force that you can take advantage of if your viral campaign is for a good cause. With the Ice Bucket Challenge, many of the people who took the challenge also decided to donate to the cause. This combination of silliness and charity is something that has helped make this campaign what is has become.

Make it easy to participate.

Many viral campaigns require other people to get involved. The Ice Bucket Challenge has succeeded because so many people, celebs and normal folk alike, have recorded a video and posted it for the world to see. The key to this audience participation is making it easy to do! Take the example of the Pink Glove Dance again. After that initial video went viral, many other organizations recorded their own Pink Glove Dance videos, but none of them ever came close to matching the success of the original. One of the reasons is because there was not the massive flood of videos that we see happening with the Ice Bucket Challenge. This is absolutely because to the level of effort required to produce one of those dance videos, which includes a cast of dancers, music, editing, etc. Compare that to the Ice Bucket video, which only requires a cell phone camera and a bucket of ice water! By making it easy to join in the fun, the Ice Bucket Challenge has become the viral sensation that we see online now. If the success of your campaign requires others to get involved, make sure that the barrier to them doing so is as small as possible!

In summary

Viral marketing campaigns can raise incredible awareness for your organization, but there is never a guarantee that a campaign will achieve any kind of success, much less the massive reach that we are seeing with the Ice Bucket Challenge. Being willing to take a chance on a potentially viral idea is great and I encourage you to explore those ideas, but you also need to make sure that your entire online strategy does not center on a viral campaign. A well-rounded strategy that may include a viral campaign as one of the pieces, but which also embraces other initiatives as well (search engine ads, email marketing, content marketing/blogging, etc.) is how you will want to proceed. That way, if the viral campaign explodes, then you have the exposure you wanted, but if it fizzles, at least you have other initiatives working towards your online success.

---