John Hingley, CEO, Andiamo Systems

MM
That reminds me of a conversation I had with another practitioner. Specifically around the uses of viral video, and what makes it so juicy, compelling and effective.

In this conversation that we had late into the evening, there was a theme that developed. That was, most market communications in today’s market strike most customers as boring, dull and irrelevant. You could call the lack of creativity, but it also reflects the growing discrimination and discernment that we as consumers apply to our media consumption.

As a function of that, most advertising really fails to connect with the consumer on a basic emotional visceral level. Specifically, not just hitting at the level of the six-year old logic of the child within us. It’s not entertaining and it’s not fun.

So as we begin to think through the notion of viral video-specifically tracking its effectiveness or pass-along in various demographic cohorts, basically pass-along in repeated viewing seems to demonstrate that there’s something attractive and engaging about that particular instance versus another instance.

So really, in many respects, viral video becomes part of the ideation process for what creative really connects with various aspects of my consumers or various segments of my market-be it consumer or B2B. That really provides the missing piece or link between effective creative and the kind of increased revenue that marketers now demand for their marketing investments.

Does that make sense? Do you have any data or anecdotal stories that support or modify that particular anecdote or finding?

JH
It is interesting. As a direct marketer for years and years-and that means going back to direct mail, because that’s about all there was. We always had an adage-it was, “Test before you invest.” So we were always taking 20 or 25% of our marketing budget and testing offers or testing headlines or different outer envelopes. It was Direct Mail 101.

MM
You called those Test Panels. Right?

JH
Test Panels. Exactly. We’d test four or five different elements in any single major campaign that would go out. So we could continually roll into that next winner-whatever that winner might have been. But it’s such a time-consuming process.

It’s creating all of these panels, printing, lettershop, postage, mail, third-class mail takes you 3 to 4 weeks once it goes out to get statistically valid numbers and results back. Then you have to bring that back in to creative and revise it based on the winning test panel. Then you go back through that entire process. It’s all we had at the time. That means months before you can actually reap the rewards of the winning test. Who know? At that point some external force could affect things that render that winner moot.

Now, people want stuff when they want stuff. Consumers are in control. They’ll go looking for product information when and where it is most convenient for them at the time. And their perceptions and needs can change quickly. Direct mail is not going to address those issues. That doesn’t mean direct mail should disappear by any means. What it does mean is that businesses need to embrace social media as an additional channel to interact with consumers.
Whether it’s video or blog content and just articles and stories, the shift is very important. Once again, it’s the companies that see this as an opportunity versus a threat that are-of course-getting the biggest benefit of it.

From a viral video perspective, in using a series of viral videos to achieve what direct marketing and direct mail testing did eons ago, I’d have to say our insurance client is the most sophisticated user of putting out the short viral videos to gauge consumer reaction within days or sometimes within one day.

MM
It makes complete sense that an insurance company would probably steal the march in terms of that particular activity. They understand actuarial tables. That means to say they understand statistics and econometrics. They believe in blazing spreadsheets.

Also-there’s a very direct correlation between their marketing spend and premiums written six or eight weeks later. So it makes a lot of sense that they have a mindset already predisposed to closed-loop, analysis-driven marketing communications.

JH
Very well put.

MM
This also gives rise to another phenomena I’d like you to speak to. In fact, we have an executive briefing at the upcoming MOM and DAM Symposium on this. We call it Agency 2.0. The idea is that agencies must undergo a fundamental structural transformation, from a creative services shop or boutique into a digital services platform by which to provision not just content, but to provision interactive services into the brand interaction of a client’s engagement.

So agencies must make a shift from being artisans with lots of creativity to being very creative technologists about how to create more fluid content-and, more importantly, how to provision services into the brand interaction.

In our conversation and our investigation of that, one of the things that has loomed large has been the emergence of the social media agency. Specifically, the agency that really understands optimization strategies for social media-using metrics and really good, high-level analytics for not just driving the certain of social media-be they viral newsletters and viral video-but informing the broader media mix optimization, in terms of what broadcast and print ads actually get traction with our particular target markets.

Could you speak to the notion of a 2.0 agency as a technical services platform? And perhaps conversations that you’ve had with next-generation marketing service firms or advertising agencies?

JH
First off, you are completely accurate. As a case in point I believe Epsilon Interactive announced today they changed their name. We of course all know that changing a name doesn’t necessarily change the culture or the way it’s operated. But they changed their name from Epsilon to Purple@Epsilon.com. The issue is, it’s like United Airlines launching Ted. Unless the culture and direction changes along with the new name, it’s like putting lipstick on a pig.
The stated reason behind this change was that they were getting concerned about market share loss to folks like Digitas-which is definitely more of a platform player. Folks like Digitas and newer agencies like IgniteSocial Media.

MM
Digitas, by the way, John, is a great example of a traditional direct marketer who got down with interactive services and interactive promotions. It changed its name to Digitas about 4 or 5 years ago. Right? Then they ultimately sold out to-I think-WPP or Interpublic for $1.5 billion.

JH
That’s right. I believe it was Publicis Groupe

MM
So they used a technology platform and a technology strategy as a value-creation driver for their exit plan. Thereby, it wasn’t just about delivering great services to clients. It wasn’t about speeding up time-to-market. Rather, it was about creating new wealth as a function of harnessing these new technologies.

JH
Fair enough. And it worked for them.

MM
Absolutely.

Using that as a frame, could you speak a little more about how some of the traditional marketing service providers such as Epsilon and Merkle and Axiom and those kinds of companies are now looking at social media-and more specifically, social media tracking-as a way to get back in the game?

JH
I think they realize it is vital for them to get a better understanding of if they want to remain competitive. From what I’ve seen, these types of companies can be pretty slow to move though. They will probably acquire the talent and services via acquisition.

MM
As I understand it John, a lot of these companies-Epsilon being one of them-were essentially database compilers. They would take magazines or associations or transaction records from companies into their big mainframes