The Napsterization of the Ad Industry
November 4, 2009 - י"ח חשון תש"ע by admin
Brands are increasingly looking outside of their traditional advertising / marketing agencies for new innovation and new ideas and the agency model is under threat.
We’re so interconnected now and brands can source ideas from anywhere (at less cost) — it’s the “Napsterization of the Ad Industry” as I called it in a conversation with Ian Mirlin back in September.
We’ve seen brands like Unilever, Amazon, Frito-Lay and P&G pursue this “crowd-sourcing” model and AdAge wrote a great piece this week talking about Pepsi’s latest “Dewmocracy” crowd-sourcing push:
“The trend of marketers relying on the wisdom of crowds to create marketing campaigns is escalating as PepsiCo turns over the choice of agencies for three product launches to the masses, ramping up the potential threat to ad shops bypassed or relegated to a supporting role in implementing the resulting efforts.”
How have agencies responded? The large multinational agencies are naturally afraid and many are following the same path we saw in the music industry and newspaper industry as technology disrupted their respective business models. They’re burying their heads in the sand and rationalizing this trend as “mere experimentation.” Ignoring this trend may well be a very dangerous non-decision.
Social networks like Facebook, Twitter and others have enabled global social connectivity and shifted power on a scale that is astonishing. And we’re not going back. Twitter’s stated goal is be the connective tissue for 1 billion people across the world.
This is part of a larger trend of transparency, openness and “free” markets, written about in a recent article in The Economist, entitled “A market for ideas.”
Ian Mirlin made the following prophetic suggestion back in September:
“Someone needs to start a business whose purpose it is to utilize crowd sourcing in a way that balances the input of the crowd with the responsibility of conscientious brand management. Think of it as iTunes for the brand management business – a model which promises fair value for all.”
Enter Victors & Spoils, a new #Crowdsource agency, founded by two former Crispin Porter senior managers:
“The way we see it, companies need an alternative to both current ad agencies as well as current crowdsourcing platforms. One that offers the strategic direction, engagement and relationship management that agencies deliver today, but one that also delivers the engagement, cultural relevance, results and return on investment that crowdsourcing {if managed and directed well} can deliver.”
Global brands aren’t the only ones utilizing this new model to great success. Here’s a personal example, albeit on a much smaller scale. After 15 years in the agency world, I recently embarked on a new entrepreneurial quest and founded JazLabs, Inc, a seed-stage business incubator. We just used 99designs (a design crowd-sourcing platform with more than 50,000 designers) to source a new corporate logo design for our company. I uploaded a brief and within 4 hours had over 10 creative design directions from people across the globe (Australia, France, Singapore and India). We provided feedback on the designs and within 24 hours, we now have full ownership of our new logo at a cost of $250.
How is this trend impacting your business? Are you seeing the opportunities to evolve your own business model or do you feel threatened?
