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7 reasons social media agencies are like advertising agencies; 8 reasons they’re not

Posted on July 13, 2010 by Rob Petersen

Before starting BarnRaisers, I worked at well-known advertising agencies.  I was fortunate to have worked on major brands, some at times of profound change, and with very talented people.  It was a lot fun for a lot of years.

A former client, Brian Perkins, Vice President of Corporate Affairs at J&J, said at Cannes this year, “holding companies for ad agencies should consider taking themselves private.  Advertising is a labor-intensive, not capital-intensive, business and it’s inevitable digital agencies are going to gravitate toward brand stewardship.”

You may or may not agree, but Brian’s comments indicate a shift is taking place.  To help explain why, here are 7 reasons social media agencies are like ad agencies and 8 reasons they’re not.

7 REASONS THEY ARE

  1. Both have to demonstrate a deep understanding of consumer attitudes and buying behaviors
  2. Both have to find insights into unmet consumer needs
  3. Both have to know how to create and build brands
  4. Both have to be able to take the brand idea and translate it across all media platforms
  5. Both have to be on top of media usage and trends
  6. Both have to find unique tactics and executions that accelerate sales and have people talking
  7. Both are accountable for results, return on investment and sustainable sales growth

8 REASONS THEY’RE NOT

  1. Ad agencies communicate through a monologue.  Social media agencies through a conversation
  2. Ad agencies work with product benefits.  Social media agencies with shared interests
  3. Ad agencies target heavy users of brands who they encourage to buy more.  Social media agencies find advocates who they encourage to spread the word
  4. Only 14% of people trust advertising.  80% of people trust the recommendations of other people
  5. Ad agencies use multiple mediums and are “media neutral.”  Social media agencies work mostly on the internet where 90% of all purchase decisions begin.
  6. Ad agencies are labor intensive.  Social media agencies are even more labor intensive because, once the campaign is launched, the work has just begun (e.g. content refreshment, community management, measurements and analytics).
  7. Only 18% of ad campaigns ever generate a positive ROI.  While people kick the tires on the ROI of social media, brands, like Blendtec blenders, have proven an ROI of 500-to-1 with much less investment.
  8. Ad agencies tend to be secretive about their “proprietary” and “trademarked” process for creating ads.  Social media agencies tend to share their work and publish for all in places like SlideShare.

I’ve found social media promotes a culture of givers, not takers.  People like Joe Sorge, Toby Bloomberg, Tom Anderson, David Berkowitz, Kelley Connors and Mike Rogers (to name just a few) have routinely offered to help or participate in speaking engagements, workshops and presentations with no mention of “where’s my cut” or “what are you getting.”  It something that’s a little different and a whole lot more fun.

Do you have an opinion on the difference between the two?

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128 to “7 reasons social media agencies are like advertising agencies; 8 reasons they’re not”

  1. Joe Sorge says:

    Rob,
    It’s a pleasure to know you! Thanks so much for including me in your list of givers, I’ve really enjoyed being involved with all that you do and have learned much from you and your insights on this blog.
    Joe

  2. Rob Petersen says:

    Thanks Joe. Believe me, the appreciation on the social media learning curve from all you’ve taught up me is mutual. Rob

  3. Rob, not all ad agencies behave like you think — and not all ad agency people like the term “media agnostic”. I prefer “media neutral”.
    http://admajoremblog.blogspot.com/2010/03/none-of-us-are-media-agnostic.html

  4. Rob Petersen says:

    Thanks Steve. Fair enough and it’s worth correcting. On a separate note, I like your blog. Rob

  5. Rob Petersen says:

    Tricia, Thanks for the pingback. Rob

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    Thank you and I appreciate your Facebook posting. Rob

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