We Are Witnessing the Slow Death of the Ad Agency

I loved the show Mad Men.

I’ve always felt like Mad Men was one of the most well-done shows ever made. It may not have been the most exciting or the most watched but it terms of quality, it was flawless.

The acting, the writing, the costumes and the sets were all done with such quality and detail. But, my favorite part about Mad Men was the main character. Don Draper.

Don Draper was truly a “mad man,” which was a slang term used to combine the term ad man with Madison Avenue. Madison Avenue in NYC was once considered the ad capital of the world. But not anymore.

World renowned ad agencies are dying. They are slowly being chipped apart by smaller firms and independent business owners. This is important for modern business owners to understand.

There is a change in the seasons in this industry and there is a lot of denial to go along with it. The days of the big ad agencies are numbered and if the ad market doesn’t start to adjust we will see them slowly burn out.

Here’s why.

Horizontal Marketing is Eating Up Vertical Marketing Strategies

First let’s define vertical marketing.

At the top you have the CEO / Marketing manager, or whoever is in the charge of the money for an ad spend. The money drops into an ad and gets sent into a third party television channel or broadcaster. That ad then gets dropped into an audience. The audience will buy a product or service that was being advertised and that money siphons back up to the top back into the ad budget. It looks like this.

No need to compliment me on my art.

This model is still effective for a lot of companies. All the major players in TV ads still use this model. But social media is killing it. The reason why is because social media marketing allows for companies to build an audience.

I call these audience members or followers “brand advocates.” The digital revolution allows us to have instant communication with our following so we no longer have to build collateral and promote media to grab their attention. Now we can simply create value and the attention will come.

This has transformed the vertical marketing strategy into a horizontal marketing strategy. It only takes one person at the top to drop some kind of media or content and the audience will share it amongst themselves. Let’s take a look.

After taking just a few moments to comprehend the power social media gives the smaller companies or entrepreneurs, ask yourself why anyone would spend huge budgets fighting for attention when they could simply earn the attention for themselves?

The Fight for Attention

Advertising is all about attention.

You want eyes, you want ears, you want to spark an emotion and you want people to talk about your business or product. For decades, the attention has been on the television set, radio, and magazines.

Billions of dollars have been spent fighting for attention on the television and for good reason. Sort of.

Yes, there is still lots of attention given to the television but how much of that attention is given to ads or commercials? We are in the age of on-demand content. Why would anyone bother watching a commercial when they could watch the same TV show on Netflix with no interruptions.

Even worse, studies show that millions of people are recording shows and watching them 20 minutes after they start simply so they can fast forward through commercials.

Imagine the heartache. Lexus just spent $250,000 to feature and ad on a commercial break of The Walking Dead and I just fast forwarded right past it. It doesn’t make sense.

There is no longer attention given to commercials. Now, attention is on the mobile device. Right this very second, how far away are you from a TV? How far away are you from your phone? Think about it.

The industry is seriously underestimating the power of mobile platforms. Smaller companies and entrepreneurs are absolutely crushing it with Facebook, Instagram and Snapchat. Why are you still stuck in the past?

Social Proof is the Ultimate Testimonial

There are some very fascinating studies on this subject. I have previously written about the 6 laws of persuasion and I suggest you learn about it. One of the 6 laws is social proof which essentially predicts that people will do what other people are.

We claim independence and uniqueness but in actuality, very few of us like to go against the grain of society. We prefer to fit in and go with the flow.

Social media has created a social proof complex on steroids. In a world where our authority is predicated by the “likes” and “followers,” society trusts the word of society more then ever.

This is an advantage for digital advertising because social proof can be earned.

What this means is that it is more and more difficult for large companies to buy social proof with big budget TV ads. The internet has brought transparency to our world and buying a following is very difficult. Yes, it still can be done but earning a following is always more effective.

Smaller companies are taking advantage of this and earning their following the old fashion way, by creating value for their community and by being personal with them. Brands now come down to the consumer level and speak to them personally instead of creating the perfect commercial.

If you don’t believe me, just take a second to realize that you are reading this article and this is exactly what I am doing. Why would I spend $10,000 on a radio commercial when I could spend 5 hours creating a valuable piece of content and earn your trust. Eventually, I will get clients through this method and I will make a profit without spending a dollar in ad space.

It works guys. It’s not hocus pocus. It’s common sense and dedication.

You can’t buy social proof anymore. People are too savvy and they know when they are being manipulated and sold a dream. Ad agencies aren’t in the businesses of earning trust, they are in the business of painting pictures and that picture is slowly fading.

Start and Start Now

Just yesterday I got a phone call from a business owner. I sent this women a very affordable proposal and I explained to her in depth the method I would use.

She was still stuck in the times and wanted to go the traditional ad route. I objected to her idea but none the less, we went her separate ways.

A year later and $12,000 later she got one client from her ads. She is probably reading this right now and kicking herself that she didn’t start building an audience sooner. The fight for consumer attention is only going to get more and more competitive and the time to start is now.

Times change. Don’t be romantic or nostalgic about the good old days or about the time you took out a magazine ad and your phone rang off the hook for months. That is in the past, that world is dying.

Be in the now and grow your business.