Monday, June 01, 2015

Everyone Is Saying 'We Need To Know The Client's Business Problem'. Do We?

This post is basically the same as last week's - I just thought of a new way to write the argument.

So if you've read last week's, you can skip this.

One day, Jonathan Topp-Guy - managing director of AdWow, one of the biggest advertising agencies in BigTown - had a eureka moment. Why were AdWow restricting themselves to solving crappy old marketing problems? It was just so damn limiting. Didn't they have the brainpower, the skills and the creativity to tackle real business problems?

So the next day, he made an appointment to see the CEO of FineBread.
"I'd like to know - what's your business problem?" he asked.
"Oh, I'll tell you," said the CEO. "The supermarkets are selling bread for $1, as a loss leader. They're killing us. We reckon it could be classed as anti-competitive practice, so I've hired an expensive firm of lobbyists to try to get the politicians to sort it for us. Can you help with that?"
"Um, no."
"All right, well can I tell you about our marketing problem?"
"We're struggling against our main competitor, TasteBread. Consumers seem to prefer their products over ours. It's pure image, really, since the breads are virtually identical. But it's a problem that's far from trivial - each point of market share we win from TasteBread is worth $7.5 million. Can you help with that?"

The next day, Jonathan Topp-Guy went to see the CEO of the well-known airline, SkyAir.
"What's your business problem?" he asked.
"Oh, I'll tell you. The price of jet fuel has shot up. It used to be 23% of our operating expenses, now it's 28%. That's a whopping 5% reduction in our margin. I've had several investment banks come in to talk to me and the CFO about buying fuel derivatives, but I'm not sure which is the right deal. Can you help with that?"
"Um, no."
"All right, well can I tell you about our marketing problem?"
"We could sure use some help advertising our new flat bed - it's better than any competitive offering, and a genuinely better experience for our customers - and we've run ads about it, but somehow the message hasn't gotten through. Can you help with that?"

The next day, he went to see the CEO of travel agency HolidayShop.
"What's your business problem?" he asked.
"Oh, I'll tell you. People are becoming more and more comfortable booking holidays online. It's only the older crowd who feel the need to come into bricks-and-mortar stores like ours. Currently we have 700 stores but we believe that in ten years there will be none. It's basically a dead category - a technological innovation has rendered our business model obsolete. Can you help with that?"
"Um, no."
"All right, well can I tell you about our marketing problem?"
"While we manage the decline, we're still spending millions of dollars a year on TV ads, but they're rather formulaic. I believe that if we had better ads, we wouldn't need to spend as much on media. Can you help with that?"

Look, I'm being extreme here, to make a point. Of course it's helpful to know the client's business problem, and maybe sometimes we can use our creativity to solve it. And hey, we'll at least then have more context around their marketing problem. But let's not be so self-effacing as to decide that our marketing communications expertise is not significant and valuable. It is. 


Anonymous said...

Brilliantly articulated. Lawyers are comfortable with being experts in law, accountants at accounting, yet the advertising world seems to believe marketing comms isn't enough.

Jono Aidney said...

Sometimes the product is the advertising and that's why we should stay open to other ways of working. NPD is not a promise that should be gratuitously sold to every client. And some agencies should absolutely stick to making ads, but I wouldn't want to be seen telling an agency like R/GA to forget about product innovation and write some funny TV scripts instead.

Especially for creatives who grew up with digital, there's a tendency to see potential users rather than target markets. So it makes sense to offer advice on tightening the product, especially when the solution is digital and somewhat within our skill set.

For example, Yellow pages is a broken business. But if you met a guy in a bar who said: "I have the biggest database in the country of small businesses who want to advertise I just don't know what to do with it," the opportunities in digital seem endless, right? Far greater than just a passive phone list, however searchable. That's where a creative shop could add a lot of value if it wasn't purely out to make $$$ via 3 print ads, a TV ad and some dynamic banners.

I think there's room out there for many models of creative shop. To me, uncovering new ways to work is the only thing that's still exciting or surprising about this business.

But I don't fundamentally disagree with you - most agencies should just focus on making better ads than other agencies. Because agencies that promise NPD and can't deliver are no better than agencies that promise good advertising and serve up stink bombs.

Pedant said...

KNOWING the client's business problem is not the same thing as SOLVING the client's business problem. And I for one would like to know it - otherwise the "marketing problem" (which in each of your examples, Simon, sounds more like an advertising problem) exists in a vacuum.

"Price of jet fuel's gone up you say, eh? What if we redesign the inflight menus so that you get a growth in food sales to counter it?"

That's how marketing can help solve SkyAir's business problem, which no amount of flat-bed advertising is going to do, given that all of SkyAir's competitors offer flat beds too.

Change nothing, expect a different result? said...

Couldn't disagree more in some ways, couldn't agree more in others.
We definitely need to know the business problem and clients look to us for creative solutions. That is what we have the ability to excel in, where no McKinsey or BCG could come close on. We as an industry have an awful tendency to see all problems with an 'ad shaped solution'. This is limiting, and is driving us into obscurity.
The problem arises when we look at how we're equipped - something pointed out here. We don't hire people with the skillsets to really understand the business problem (accounting, financial forecasting, basic economics etc.) and make it actionable for us as agencies.. but when you're offering graduates (and most levels) with the requisite skillset salaries half of what they can get ANYWHERE outside our industry, what can we expect?
Evolution is necessary.

Scamp said...

Good point Pedant, let's just pretend I said 'solve'!

Change Nothing, I agree with you. We do need to evolve. I don't think the answer is adding economists and accountants though.

lubomir said...

I'll drink to that!

Anonymous said...

Hear hear. This business problem bullshit is bullshit. It's more of uncreative people trying to put logic and science adn strategy into the process, when what works is emotional advertising or just doing cool stuff. Things that creatives can do, anyway. Look at Lynx.

Anonymous said...

I think (like most topics) it's not so black and white.

Pedant's right on the solve/know debate.

But often it is possible to solve the business problem via the ad agency.

(These are hypothetical, but you get the gist)

John Lewis - My sales are flat every christmas when all my competitors get a huge bump. Agency - Okay a huge emotional campaign every christmas will peak your sales.

Nike - I can't grow my business in apparel around sports any more. What's next in a digital age? Agency - How about Nike+?

Airline A - My margins are being eroded by low-cost airlines underneath me. Agency - Invest in brand advertising (maybe even reassuringly expensive) to justify your price premiums.

For service/digital brands there is far more opportunity for advertising to solve business problems. That's because you can actively change the way people use services.

eBay - With Amazon making it so easy and cheap to buy, traffic's down, engagements down and our % has had to drop. Agency - Launch sales & deals like a traditional retailer. Double down on the thrill of the deal

Daniel Barnes said...

Interestingly this argument seems to imply a marketing problem is not a real business problem - that it is something more trivial, something for "the colouring in dept" perhaps? Coincidentally this is just how a lot of C-Suite views marketing, and by extension advertising. And this is not good.

what pedant said said...

Couldn't agree more with Pedant.

Knowing the business problem gives you an insight into possible solutions to marketing problems that you couldn't have otherwise.

Each one of the business problem examples could be helped (if not entirely solved) by a couple creatives with some time and a solid brief.

Long in the tooth said...

Surely you know this by now Simon, it's the advertising agency's job to come up with their products and solve their business problems and the client's job to write the ads.

Sell! Sell! said...

I agree with pedant here too. The best creatives I've worked with would always rather know the context, the problems the business faces, and barriers to them meeting their goals, and probe with interesting and difficult questions. Sometimes the answer is a different brief to what everyone thought the brief would be. Agencies and creatives would do well to be more diagnostic and less prescriptive - we live in an age where a lot of people think they know the solution before they even know what the problem is. We have a led a generation of creatives to curtail their ambition, to believe all they offer to the process is some window dressing. Whilst I agree Simon that we need to guard against agency arrogance that we know other peoples' business better than they do, one of the great values of an agency, and of good advertising people, is the ability to look at things differently.

Jim Powell said...

It's a great post Simon and a topic that needs to be discussed.

I think agencies have done a terrific job at commoditising themselves on the whole. They have managed to avoid making it to board level where people talk about numbers, margins, systems, economics and baloney like that.

They have swerved any need to prove value in their work making it easy to divide into hours and buy and sell seamlessly.

They've managed to successfully get very good at the way clients want to buy stuff too, so they get it as cheap as possible e.g. RFI's and pitches. In fact they seem better at those things than doing the work itself. Agencies run better pitches than clients - how handy is that?

Agencies have managed to erode itself of any meaningful value that it once had - that now if they asked any upstream question the client may even look at them funny - I just want to know how much for an ad (or whatever) - the last lot were crap we'd like your's more but we want it cheaper to. Yes sir, no say how high and we'll jump.

Sales rule - the problem the prospect is never the real problem. This is why management consultants and the like make the dollars. Maybe agencies are up to the task but they are well behind the curve when it comes to selling their services IMO. They even use intermediaries to sit between them and their prospects. Could you imagine?

Anonymous said...

Without making it too complicated, a creative should know the business problem purely so they know what they are trying to achieve.

If a lawyer knows his clients desired outcome, but doesn't know his predicament then you're going to have a very poor salesman standing in front of the jury. Similar to advertising, if a creative knows the desired outcome but doesn't understand the context it's up against, their argument to the public will amount to 'believe me, what I'm saying is true'. Given the full brief, you can create communication without ever having to say unconvincingly, 'just trust me, it's true'.

Anonymous said...

I worked on Lynx when I was at BBH. The work was always grounded in the business problem or opportunity