The Evolution of a Marketing Firm

Creative or marketing firms look a lot different today than they did 20 years ago. What happened to the ad agencies and design firms? And what trends are Blair and David seeing as businesses and technology continue to evolve?

Transcript

David C. Baker: Blair, today, it's my turn to interview you. Before we talk about the topic, I love these recording sessions. It's taken me four years, but now, I really look forward to--

Blair Enns: [chuckles] What do you mean it's taken you four years?

David: [chuckles] No, not really. No, but I just love touching base with you because we just compare what's happening in our lives, but it just forces me to spend time with the topic. If it's one that you suggested, and I'm interviewing you, I love looking through the notes, and poking and prodding and adding things. You remember, a long time ago, we did an episode about what's the most important thing for each of us in our businesses, and it was something around we have to keep learning. We have to satisfy this curiosity. To me, even if we didn't have an audience, we do have an audience, fortunately, but if we didn't have an audience, this is a fantastic way to prod me to keep thinking deeply about a new subject every week. I love it.

Blair: Yes, I think good content creation works that way. You start with an idea, and you realize, well, you haven't fully formed the idea, and it's not fully formed until you write through it. We've talked about this where we've written notes, and we'll talk through it. Just the writing of the notes, I'm always a little bit resentful of you that you demand that I--

David: That I'm so talented? [laughs]

Blair: That you demand I send you notes in advance, it's like, "Notes, we'll just figure it out when we get in there." It's like surgery, "We'll figure it out when we get in there. "

David: [laughs]

Blair: Then, the writing of the notes is the helpful part because I actually think through my fingers. I think through things more deeply by writing about them than I do about talking about them. This combination is helpful.

David: Yes. Today, the topic the way you've titled is the evolution of a creative or a marketing firm. I found this one to be particularly-- It just really satisfied a lot of curiosity for me, and it also dragged me back several decades to some of the earlier discussions we would have, even in the early days of MYOB. Remember, you and I were doing MYOB conferences every year and just having so much fun thinking about categories? This is a look back at how things have changed, and then towards the end, we'll have a look forward about what we anticipate. Even the title of this just gives you a prelude of how confusing this could be because you couldn't say, the evolution of a certain firm. You almost had to say, the evolution of a creative, or a marketing, or is it advertising, or is it design? What is it? Or is it PR? It's like that's part of what's changed, right?

Blair: Yes. I know you and I have had many conversations over the years of like, "How do we describe our audience?" We've changed the label over the years. We've resolutely at Win Without Pitching stuck to this description of our market as creative professionals. If I look at who is in our training programs, how many of them are truly creative professionals versus others who work in a creative firm? Then, you think of there's a lot of marketing firms that aren't creative firms, and then marketing is bleeding into other things. When I look at the number of people who are actually creatives, I don't know what the number is. I'll bet you, it's 50%.

David: Or lower.

Blair: Yes, or lower. Something is changing the definitions of what a creative firm and a marketing firm is. They're blending it to all kinds of other things. Some of it's causal and some of it's just correlative. It's this fragmentation of the marketplace that's being driven by internet search, so Win Without Pitching is 20 years old. You've been advising creative and marketing firms for close to 25 now? Is that right?

David: 28 now, yes.

Blair: 28? You're that much older than me.

David: Yes. [chuckles]

Blair: We just go back 20 years, and we think of the landscape, the firms that you and I served, they were ad agencies or design firms or PR firms. Is that about right?

David: Exactly right. I would say, "You're really a marketing firm." They would just look at me like, "What are you talking about?"

Blair: They would resist.

David: Advertising. "No, we're not advertising." You would have the people that came from a big advertising background. They usually worked at one of the holding companies, and then they started their own firm, or they went to Pratt or RISD, or they were PR, and there was those three categories. Then, digital started to come along, and you see so many firms now that have nobody with a pure creative design background. In fact, it's pretty rare.

Blair: Yes.

David: One of the exercises you did to kick this off was to just list the positioning of the last 20 firms that have been through your programs. Now, some of these, you may have influenced some of the positioning. A lot of them, they came to you with this positioning. You should just read some of these because it just illustrates how uniquely pigeonholed a lot of firms are in a good way.

Blair: Yes. I thought I would go back and review the videos of the orientation sessions for our workshops and get the last 20 firms. There's 20 people in a workshop, but some of them are from the same firm. I went over one and a half workshops or something and picked 20 firms, but then I realized, that would actually take too long because people take a long time to describe what they do. It's interesting, the language that they use is different than the language at the website, so I thought, okay, so the first source I'm going to use for this firm's positioning is the SEO that they're using, the language that they're using. When you hover over the tab on their website, what is the language that they've decided is most important to Google, and if they haven't populated that appropriately. It's amazing, like 20% of firms, their sites aren't search engine optimized.

David: Big surprise.

Blair: If they're not telling Google, they're making a claim of expertise to Google, then what's the language that they're using on their website? If I would've defaulted to the language that people used in conversation when they introduced themselves, we would've heard more examples of things like storytelling, purpose-driven brands, et cetera. We'll come back to both of those, but let me read the positioning language of the 20 most recent firms we've worked with at Win Without Pitching. Creative Content Studio (With a passion for storytelling). Experience transformation for B2B, branding and design for sports, content marketing for growth stage SaaS (We tell stories). Brand experience and packaging design, brand strategy for B2B tech, WordPress design and development, not-for-profit communications, architect, digital experiences, custom software for higher education, storytelling, risk awareness for aerospace and defense. This is an outlier. 20% of our clients are real outliers.

PR for restaurants and food, digital transformation. Here's another outlier, agile project management consultancy and training, brand strategist and writer. That's a solopreneur. Healthcare technology marketing, branding marketing and public relations agency. Again, they don't say this on their website. They don't say what they do on their website. I had to go to their LinkedIn to find a claim of expertise.

David: That's where it accidentally popped to the surface, and they haven't caught that yet.

Blair: Yes, this is an old school full-service marketing. We're not even going to say that, because if somebody comes to us with something else, we want to be able to do it.

David: It would be too limiting.

Blair: Then the last one is customer experience design for the insurance industry. Just before we get into a breakdown of the patterns here, what jumps out at you?

David: Oh man, do you have any idea how difficult it was for me to sit here while you read each one of those.

Blair: [laughs]

David: Oh, that hurts so bad. Yes, just before we went on the air, I went through them on my hands. I'm checking off the ones that I felt like were good. Now whether they fit the firm, I don't know, because I don't know the firms, but 15 of these were good. At first, you're thinking, "Oh, that's a score of 75 out of 100. You're not one of the best students in class," but the nasty truth is that 15 out of 20 is probably the highest proportion I've ever seen in history. If we had done this 20 years ago, it would've been 3 out of 20.

Blair: Night and day. It would've been one or two.

David: [laughs]

Blair: It really would've been that low. This is night and day different. It's night and day. Let's look at the commonality. Fully half of these firms, 10% of them identified a market in addition to a discipline. Going from broad to narrow, the examples that were listed, B2B, B2B tech, SaaS, healthcare, higher ed, restaurant and food, sports, insurance, aerospace and defense. 20 years ago, nobody would've mentioned a market. They would've basically said broadest discipline advertising, and wouldn't have said advertising for whom. It would've been advertising for whoever needs advertising. Graphic design for whoever needs graphic design.

People are getting tight about not only what they do, but for whom they do it. Five mentions of brand or branding, four mentions of experience or experiences, three mentions of storytelling. Again, if I would've pulled from the videos of people introducing themselves, there would've been more mentions of storytelling. Three mentions of design is either a noun or a verb, three mentions of marketing, two mentions of PR or public relations, two mentions of content, two mentions of the word transformation, zero mentions of the word advertising.

David: Yes, so why? Partly self-selection?

Blair: There are still ad agencies today. In fact, there are still a lot of ad agencies today, but what really struck me is, there are very few new ad agencies, and any new ad agencies where the firm would describe themselves as an ad agency is almost always-- This is anecdotal, I don't have data to support this. Any new ad agency is almost an advertising veteran, leaving an agency to go out on their own.

David: Absolutely.

Blair: What you don't see is a 30-year-old creative, or somebody coming out of school saying, "I'm going to launch an ad agency." It's a creative studio, it's a content studio, it's an AR and VR thing. It's something else, but it's not an ad agency. It's not like advertising is dead. It's always been prophesied, "Oh, this is the death." Advertising is unkillable. It's like the cockroaches and sharks and things that will be here long after we're gone. It's unkillable, but we're not talking about it. It's interesting, isn't it?

David: Yes, it is. I completely agree, I cannot think of a new ad agency that wasn't started by somebody who left an existing ad agency. I think that's absolutely true.

Blair: Yes. In their 40s or older, who've left another ad agency and said, "Oh, I'm just going to go out on my own and steal some of these clients." I'm being a little bit disparaging there but--

David: The corollary here is I find it's not so much an issue of substance, as much as naming.

Blair: Yes.

David: To me, paid digital, so AdWords and LinkedIn, and the whole SCM play, that's pure advertising, but we don't describe it that way. We think of it as digital marketing or growth marketing. We don't call it advertising, and I'm not sure why.

Blair: Yes, and some firms make the distinction between digital products, software typically, and digital campaigns advertising, but we're not using that word. Other than the observations that we've just made, I don't really have a strong opinion on whether or not this is a good thing or a bad thing. It's just a thing. I tend to think if everybody is vacating a space, isn't that an invitation to occupy that space? I don't know, but I guess advertising itself has become so highly fragmented. If you're BBDO, and I haven't checked, but surely, you're still referring to yourself as an ad agency.

David: Yes, you are. Can I add some of the firms that I--? These are the last-- I don't know, I didn't count them, but about 20 firms that I've worked with, just to carry this thread forward about positioning. These are the ones that I've worked with, and these are the ones where I help shape their positioning. Rapid custom reporting to infuse growth in mid-market companies. I'm just laughing to myself because could you imagine a positioning statement like that 20 years ago? Never. Never.

Helping companies succeed through engaged learning cultures that innovate and solve from within, or guiding brands to where sports, eSports, and gaming are going next, or building coalitions with a public affairs component to solve specific challenges in Texas, building custom software platforms to unlock sustainable growth for professional service firms, human centered naming frameworks for tech-centric products and services, establishing a culture-driven north star to drive brand growth, geopolitical data visualization for product companies, exceptional digital experiences with full accessibility for all, we help brands infiltrate and then dominate gaming channels, custom software for logistics, moving social determinants of health forward, driving cultural relevance of brands on TikTok, growth strategies for multi-location retail, combining traditional direct and performance digital marketing to propel brands, creating distinctive brands for the built environment, and finally, making behavioral science work for your cause.

We've taken a lot of time, you and I both, to read 40 of these, but I think our listeners are always interested in the exact articulation of a particular positioning. Here we're using it to describe how much more specific firms are in this space. I love this trend and I find all of these different articulations, really fascinating.

Blair: I feel like if we could go back to David and Blair 20 years ago running this perspective businesses and if the future us would show up and say, "Hey, 20 years from now, this is what firms are going to be saying about themselves. A, we wouldn't understand most of this. [crosstalk] You'd laugh off the platform." Yes.

[laughter]

Human-centered naming, but B, we would have said hallelujah. I don't think even then we could have comprehended the pace of specialism.

David: No, right. There have been other people that have been beating this drum too. Tim Williams for years and so on, but are you and I and the other half dozen people that are experts in this field, are we the ones that have moved this, or is it something else? [chuckles] What's caused all this? Is it we're really influential, or tell me it's something else?

Blair: It's mostly me. It's more me than you.

[laughter]

David: I knew that was coming. I was like, "A perfect set up."

Blair: No, no, this was inevitable. I remember reading Darwin's Origin of Species. In the edition I have, there's only one diagram. When you look at it, you go, "Oh my God, that's how brands fragment too." You get this specialization through iteration, effectively, trial and error, genetic mutation, et cetera, and some lines just end. They just keep branching, and some die out because those genes aren't adapted to the environment, et cetera, so the other ones go on.

I looked at that and I thought, "That is brands." I don't like to refer to agencies as brands, but it's also the fragmentation of a category of businesses. There is a tendency to fragmentation over time, particularly when you are selling services because internet search came along. It was pretty new about the time I started Win Without Pitching 20 years ago. You started what was then ReCourses, probably even before Google because a Google is not 28 years old.

Then along comes this thing from about buying point of view. You don't have to put up with the first generalist who calls you when you can do a quick search for specialism, so that internet search rewarded very early people getting quite specific. It's the idea of the long tail. Maybe you sent me this or I was reading something on Twitter the other day about somebody trashing saying, "Well, that long tail prophecy never panned out." It was such a straw man argument this person was making. In some places, it hasn't panned out, but in some places, it absolutely has played out, and it's played out in this space of the independent, what we used to call, marketing firms.

David: This isn't going to slow down, right? It's going to keep fragmenting. There's going to be even deeper, tighter, niches, is that what you're saying?

Blair: Yes. What's really interesting is you get this fragmentation of both the discipline, so what firms do, and the market, who they do it for, and then you get this recombination of the fragments. They combine together. When you start to think about the infinite possibilities as things fragment, and some become irrelevant over time, but you have an increasing number of fragments, and then they're recombining, just the mathematical possibilities of recombining these fragments, it's virtually infinite.

If you go back and read some of those descriptions, let me just pick one from your list, which I love this list. Geopolitical data visualization for product companies. Data visualization has only been a thing for less than a decade, five, six years maybe. Maybe longer. TikTok didn't exist a few years ago.

David: That's 130-person firm now that TikTok.

Blair: Wow. Then this idea of guiding brands to where sports, eSports, and gaming are going next. eSports was not a thing. Online gaming was not massive 20 years ago, but even wrapped up in that value proposition is the idea that things change quickly. Things fragment and evolve so quickly that the value proposition built in here implied as like things move quickly and we have an eye on it. We understand how things are changing quickly in this space. You just have this increasing fragmentation, increasing speed of fragmentation, increasing number of permutations of all of these fragments. It's fascinating.

David: We used to say back when we were doing those seminars on positioning and so on, New Business Summit I think we called it, and then MYOB, we did that for a bunch of years. We used to say, you make a positioning decision and think of it as lasting 10, 15 years. Then, it got shorter. Now, my feeling is when we land on the perfect positioning, you immediately go into the second phase and you start listening for signals that it needs to be narrower. That might happen within a year and a half or two years, and you need to look at your positioning every three years, typically, because it is going to change at a more rapid pace than before, and it's almost inevitably going to tighten rather than switch to some other one. It's just fascinating to [unintelligible 00:20:18] what, but you can't figure out what is going to happen until you're out there in the marketplace. List some of the trends that you see, like data analytics and so on. List some of the trends that you see as possibly bumping these categories in different directions.

Blair: Yes, and the first trend I'll mention here, it's not on our list, but it just occurs to me while we're talking. Do you remember working with the first few firms and maybe for the first few years of your practice on positioning? We still call it positioning, but those examples that you just read, David, that's strategy.

David: Business strategy, yes.

Blair: That is fundamental business strategy of where are we going to compete and how are we going to win? I've talked about different definitions of strategy. Positioning is what is left to those who do not have the ability to affect the product. It's basically, how do you take the strategy and spin it? Now I remember like the first bunch of times working with the firm on their positioning, it wasn't an exercise in strategy to them, it was an exercise in spin. I used to get asked a lot, "Okay, what's the next word for branding? What's the buzzword?" I used to say, "It's catalyzing." [unintelligible 00:21:30] move.

David: That was a bad prediction.

Blair: [laughs]

David: I don't know if I should mention that publicly.

Blair: It was like, what's the language we use to sound different to the market, but we don't actually have to change what it is that we do? I fought that battle, I imagine you did too, for the better part of a decade, where it's like, "No, this is an exercise at actually creating a different business, like narrowing, deciding, we're just going to do this for these people." Those descriptions of the positionings that you help your client come up with, these are all strategies. These are exercises in sacrifice. We're going to do these things for these people, we're not going to do these other things, or at least, we're not going to chase these other things. Because as you've said a hundred times, positioning is about the work that you pursue and not the work that you take.

These are firms that have said, "We're going to stand for this, we're going to pursue this," et cetera. The first trend is it used to be, how do we spend a narrower story without actually getting more narrow?

David: Yes, because if your positioning decision or your business strategy decision doesn't impact your service offering design and then the people that you hire, then it's not really. It's just window dressing. What we're talking about is the really, really deep perspective on this. Okay, so list some of these trends that you think might or might not-- We're not predicting these will heavily take over anything, but we're just like, "They're interesting, they're on the horizon, they might have some traction somewhere."

Blair: Yes, and I list them because they come up, but they did not come up in the 20 most recent examples, but if I went back to 40, 60, 80, they would absolutely come up. You see more of data analytics, AI and machine learning, so artificial intelligence and machine learning. It surprises me how often that comes up. What used to be referred to IoT, and now people tend to call connected devices, you still hear IoT a bit, but that whole 5G everything's got a sensor, everything's online, everything's connected, that is a space that is growing too.

Then I'm seeing a lot of what I call XR, AR, VR multiverse stuff, but none of that came up in the description of the 20 most recent firms that we've worked with. Then, one that I've only heard a couple times in people putting their toes into this space is being tested right now by the crash of crypto, it's what I'm loosely calling finance and trust. You can say blockchain, crypto, DeFi, et cetera, but it's like that kind of money layer and trust layer of the internet, once all the fad stuff shakes out and there's real technology and real outcomes that are approaching mainstream, that's going to be a thing.

I don't know what to call it, because I think each of these labels seems, like everything these days, as soon as you put a name on something, it just becomes loaded with negative meaning. I don't know if it's blockchain, crypto, DeFi, whatever. I'm just calling it the future of finance and trust on the internet.

David: I've got a firm in South Africa that just got acquired, that's focused in there, and then I have a firm in the US I've worked with called Krit, K-R-I-T, that's also in that space. I think there is something to it, for sure. Do we dare dive into storytelling or is that rant-inducing?

Blair: I'll just say that it came up three times in the language on people's websites. Then again, I think anecdotally, if I went back and listened to the videos, it would come up a little bit more-- Without ranting about it, it's a theme. Do you have a theory of why it's a theme?

David: Yes, it's because our clients the folks that are running independent smallish to mid-sized firms, they want to hook onto something. They want to hang onto it. They want to be a part of the trend, they want to process. Rather than invent it themselves, they'd rather piggyback on what somebody else has done. You saw a lot of that in the early days with HubSpot, and now you see it with the whole StoryBrand movement.

Blair: Yes. Can I speak to StoryBrand? Those who aren't familiar, Donald Miller wrote a very good book. He's got a very successful business called StoryBrand. There are a lot of firms out there saying we tell stories and my response, and I know yours is-- Okay. Well, look, what's your framework. If you're storytelling, there are publicly widely understood frameworks for storytelling. Some have frameworks and most did not. Some have gone through the story brand training, and they've brought that to bear in their business and you can see it. I loved the book. I imagine the training is as good as the book, but I have seen a pattern of firms going through that.

At the heart of it, StoryBrand, basically, it's this idea of the hero's journey. What Miller says is the fundamental mistake when it comes to storytelling in business is we make ourselves the hero of the story. We see ourselves as the hero and he says, "The customer is the hero. You need to make the customer the hero. You have to decide, are you the wise Sage that helps them along on their journey, but the core message and there's a lot more to it than this. There's a lot of framework to it, the key takeaway from that model is quit putting yourself at the center of the story, put the customer at the center of the story. Then, he uses storytelling frameworks to help people craft narratives around their business.

I actually think it's beautiful, and brilliant, and insightful. I see misapplication of it. What I mean by misapplication is I think some people think it's a substitute for strategy, and it's not. If a strategy is the answer to the question like, "Where are we going to play and how are we going to win?" Again, there are different versions of strategy. We've talked about this before. This is an exercise in sacrifice. What are we going to do, and for whom are we going to do it? Implied in that is, "How are we going to be different?"

Once you've made those difficult decisions, then I think that story brand framework is actually quite brilliant for how you communicate to your audience and how you make them the hero of the story. I think storytelling is just big for reasons beyond StoryBrand, as successful as they have been. I think when it comes to telling your own story, some of these frameworks are really helpful, but I think largely, agencies using storytelling is just the buzzword of the day.

David: Yes, I do too. I think it's fantastic as a helpful framework, but it is not a differentiator. It just helps you do your craft better, but do it like hundreds, maybe even thousands of other firms are doing it. I'm a big advocate of the training, but you see it as one tool. Develop those tools, that stuff is fantastic, but don't think it substitutes for the hard work or position in your firm.

Blair: Okay. I don't know how much time we have to talk about it, but do you want to make some future predictions about what creative or marketing firms will look like in say 10 years out? Do you want to do this rapid fire?

David: I think we should do a whole nother episode on that because I've got more thinking I want to do. I've got some ideas here. Like the next area of overpopulation is going to be eCommerce and we can talk more about, but I'd like to put more thought into predictions for the next 10 years. Let's just do a whole episode on that. That'll be fun. Before we finish today, Blair, I do want to bring up one concern. I just peek around a corner and I see a few things that I think we need to think a little bit differently about. I call it the affinity positioning. As a firm, we work with people who care about the environment or they care about changing the world.

Blair: Purpose-driven brands.

David: Purpose-driven brands. Right. All of that is fine because I'm a firm believer in a lot of that stuff, but that has nothing to do with expertise.

Blair: Don't say it out loud.

David: Right. I'm not going to ask my cardiologist who he voted for. It just doesn't matter to me. Now I have an HVAC guy I know who he didn't vote for because there's a huge sign on the back of his pickup that says something about Brandon.

Blair: I don't know what that means, but okay. [chuckles]

David: I don't understand how people can feel like this is a positioning decision. The fact that you care about the same things that your client does, that is useful and it's nice, but it does not speak to your expertise about building a purpose-driven brand or how you reach people, or what matters and what doesn't It's this weird thing that's creeping in. It's a substitute for expertise and it's more of an affinity. There's room for affinity, but that's not the same thing as positioning.

Blair: Yes, and it might be helpful in articulating to future employees. Every organization should have their values. If these are your values, great. I cringe every time somebody says it out loud when they're describing their positioning. There are different ways it comes across, but I use purpose-driven brands as kind of a catch-all for like, "We want to work with organizations that are doing good, that care," et cetera.

Reminds me of like in hospital marketing, I once like flushed out the taxonomy of hospital marketing. One category is, we care more. It's like a creative firm where the implied positioning of a million creative firms was we're more creative. Now it's like we care more. I think the sum total of times that a firm was ever hired because of their declaration of purpose is maybe not zero, but it's really low.

To your point, I would just echo, it's really important to understand what your values are and to have them. To put them forward like people are going to hire you for that reason or like it's a point of difference, it just absolutely is not.

David: Yes. It might help with recruiting but not so much new business.

Blair: We don't want to rain on people's values or good intentions here, just don't confuse that for like a valuable positioning language, it's not.

David: Wrapping this up with a bow here. The message is that positioning as a construct has changed really quickly in the last two decades, and is probably going to change even more, and that's good. You can't just go to an offset printer and print a business card and use it for the next 10 years. You might need to revisit this more frequently.

Blair: Before we wrap up, there's one key point I wanted to make that we just completely forgot about which is, to me, in the end, it's like it's all professional services now, it all is. Some other more historical professional services have elements of creative and marketing fragments or sneaking into some of those business models to. It's just all professional services.

Win Without Pitching we will continue to describe our audience as creative professionals and creative firms. Knowing that as more time goes by, a fewer of these individuals are creative, and fewer of these firms are purely creative firms. They are more professional firms with some element of design [music] or other aspects of creativity embedded in it.

David: That's a great way to end it. Thank you, Bair.

Blair: Thanks, David.