What Companies Need to Know to Make Their Advertising Agencies More Effective

15 Nov What Companies Need to Know to Make Their Advertising Agencies More Effective

What is a good advertisement? An advertisement which pleases you because of its style, or an advertisement which sells the most? They are seldom the same. Go through a magazine and pick out the advertisements you like best. You will probably pick those with beautiful illustrations, or clever copy. You forget to ask yourself whether your favorite advertisements would make you want to buy the product.David Ogilvy, Ogilvy on Advertising

Does this sound familiar: you hire an agency for a campaign, but what you get back doesn’t fully capture your brand or it isn’t in line with what you thought you made clear during preliminary meetings? And, you end up running the ad anyway because there’s no time or budget to do anything else.

This isn’t out of the ordinary.

Many agencies try to convince their clients that they have unique expertise and creativity that the client doesn’t have access to without them.

Although many agencies do possess expertise when it comes to ideation and design, they lack the expertise of the client’s domain: many are novices when it comes to the client’s category and all are novices when it comes to the client’s specific business.[1. A domain is a potential area of specialty. In this context, a domain is a combination of the category you operate in and how your specific business operates in it.]

Agencies end up creating campaigns rooted in a design and execution expertise, but without the critical element of expertise in their client’s specific business. And, they present those campaigns as an expert opinion on what the client should do with its business and strategy.

This is not to say that these agencies are trying to pass off snake oil; they believe the strategy derives from expertise. But, people naturally overestimate the limits of their expertise.[2.Gary Klein and Daniel Kanehman, “Strategic Decisions: When can you trust your gut?” McKinsey Quarterly, 2010.] And, the reason they do and why it’s problematic is because of the way intuition works. 

What Is Intuition?

Intuition is the automatic reaction to a situation based on patterns and ways of behaving stored in memory.[3. Eduardo Salas, Michael A. Rosen, Deborah DiazGranados, “Expertise-Based Intuition and Decision Making in Organizations,” Journal of Management, 2010.] In short, intuition is recognition: recognizing what a complex situation is and how to respond.[4. Herbert A. Simon, “What Is an Explanation of Behavior?” Psychological Science, 1992.] Intuition is automatically recognizing patterns without deliberation.

The problem with intuition is that since it’s automatic and not deliberative, it’s impossible to tell where the intuition comes from: expert-level and novice-level intuition feel the same. As a result, novice-level and expert-level intuition appear equally valid.[5. Daniel Kahneman and Gary Klein, “Conditions for Intuitive Expertise: A Failure to Disagree,” American Psychologist, 2009.]

This is further compounded by novices and experts producing more intuitive judgments than people whose expertise lies somewhere between the two skill levels.[6. Amy L. Baylor, “A U-shaped model for the development of intuition by level of expertise,” New Ideas in Psychology, 2001.] Novices lack knowledge and an understanding of the rules that govern the domain so they’ll have an unbounded response to the situation; people in the middle learn the rules of the domain and end up engaging more in evaluating everything in terms of the rules rather than just reacting; and, the experts have internalized the knowledge and rules so much that they have become patterns that they can access automatically, allowing them to respond with expert intuition.

What Makes an Expert?

Expertise only exists within a specific domain. In other words: just because you’re an expert violinist doesn’t make you an expert pianist. 

And, with increasing complexity, the size of each of these domains is shrinking and the number of domains is increasing, 

For someone to become an expert, they have to pass beyond the stage of proficiency. A proficient person has enough knowledge to recognize the problem but they have to expend the effort to determine how to solve it. Experts both see the problem and have an automatic response as to what should be done to solve the problem.[7. Hubert L. Dreyfus and Stuart E. Dreyfus, “Expertise in Real World Contexts,” Organization Studies, 2005.]

To develop an expert level of intuition, two conditions must be met: 

1. There must be a sufficient number of opportunities to learn (be able to practice and receive feedback). Without being heavily immersed in the subject over a long time, this cannot occur.
2. The environment has to have high validity (i.e., if A happens then reaction B always follows it): it has to have conditions that allow someone to be able to learn the rules that govern it. Business doesn’t have the high level of validity that something like chess does, but it is high enough that learning can occur.[8. Gary Klein and Daniel Kanehman, “Strategic Decisions: When can you trust your gut?” McKinsey Quarterly, 2010.]

Because of developing expertise, experts are able to do two other things novices can’t. First, they can focus on what is novel in the problem as opposed to everything related to the problem, whereas novices don’t know what’s new and what’s not.[9. Walter Schneider and Richard M. Shiffrin, “Controlled and automatic human information processing: 1. Detection, search and attention,” Psychological Review, 1977.] In other words, experts can focus their attention on solving what hasn’t been solved in exactly that way before.

Second, they can evaluate the intuition. Once an intuition arises, experts have the ability to evaluate if the solution is viable as it applies to the situation due to their extensive domain-specific knowledge—something novices lack.[10. Kenneth R. Hammond, Robert M. Hamm, Janet Grassia, and Tamara Pearson, “Direct comparison of the efficacy of intuitive an analytical cognition in expert judgment,” IEEE Transactions on Systems, Man, and Cybernetics, 1987.]

Taking all of this together, to become an expert you have to consistently practice a skill in a specific domain to the point that the skill becomes automatic: you can respond to patterns without deliberative thinking. And, once you respond, you have the knowledge to evaluate whether or not something will work.

Why Expertise Can Be A Problem

The big problem with expertise is that when people have expertise in a domain that bears some relationship with a second domain, they become overconfident in their ability to deal with the second domain despite their lack of real expertise.

The psychologists Daniel Kanheman and Amos Tversky called this the illusion of validity: the overconfidence people feel in dealing with problems they lack true expertise in.[11. Daniel Kahneman and Amos Tversky, “ On the Psychology of Prediction,” Psychological Review, 1973.]

In the case of an ad agency: they have expertise in design, copywriting, ideation, and media buying and they have created successful results for a wide range of clients. But, they lack expertise in the client’s business and in many cases they also have only a low level of proficiency with the category the client operates in. 

Agencies’ successes in the past make them overconfident in their campaigns, despite lacking the domain-specific expertise. 

With the hyper-specialization of businesses these days, this is the main reason agencies also produce so many duds: they lack the ability to intuitively respond to the client’s specific business at the expert-level and also lack the ability to evaluate the intuition. They may strike gold sometimes, but overall they’ll produce a lot of solutions that will lack efficacy, as novices tend to do.[12. Amy L. Baylor, “A U-shaped model for the development of intuition by level of expertise,” New Ideas in Psychology, 2001.]

In many cases, this isn’t the agency’s fault—it is if it continues to be the case over several years—but rather the result of what it takes to develop expertise: when an agency gets a new client, they won’t have the time to immerse themselves in the business to the extent they would need to develop the relevant expertise before they need to produce a campaign. And, in some cases, I’ve seen companies withholding information because they fear that the agency may one day work with one of their competitors. 

What to Do

At one time, it was possible to develop successful campaigns with just the knowledge of the category. All you had to do is find something that nobody else in the category was promoting and then focus all of your advertising on becoming associated with that claim before your competition could try and stake a claim to the same benefit. 

It didn’t even have to be unique to your business, you just had to do it first. This is what produced the wildly successful advertising of Claude Hopkins’ preemptive claim and Rosser Reeves’ Unique Selling Proposition (USP): you just had to focus on something people wanted until you became identified with it.[13. Claude C. Hopkins, Scientific Advertising, 1923.] [14. Rosser Reeves, Reality in Advertising, 1961,]

It didn’t require the agencies to be an expert in your business, it just required them to become knowledgeable about the category and what was and what wasn’t being done.

And later with Bill Bernbach and the creative agencies that followed his model, you could just grab the attention of the audience and woo their minds with memorable fantasies.[15. Bob Levenson, Bill Bernbach’s Book: A History of The Advertising That Changed The History of Advertising, 1987.]

But now, grabbing attention is a commodity that people have become desensitized to. And, even if you manage to do it, it’s only a matter of days—or even hours—before something else becomes top of mind. 

Businesses now are much more complex: even though two businesses may be direct competitors in a category, they may—due to their brand and logistical reasons—be competing for customers in different ways. They may even be competing for different customers. 

Unless an agency is heavily involved in working alongside a client for a long period of time—and they make the effort to learn the unique business of the client—it is unlikely they will ever develop the expert intuition that will consistently allow them to come up with successful campaigns. 

Ultimately this places the burden on the company looking to advertise, giving them two options: take the advertising in-house or assist agencies in designing campaigns. 

Taking the advertising in-house will make the company have to develop a department with a whole new skill-set. It will be a steep learning curve and will take time before they reach the tactical and execution expertise of agencies. The strategy will, however, likely be better from the start as it’s based on an expert-level knowledge of the company. And, the campaign will likely be more successful than what most advertising agencies give them because a strong strategy will always beat something that’s just a highly-polished execution.

Taking an active role alongside the agency is something many companies dread: after all, they’re paying someone so they don’t have to do it. 

But, no agency is going to be able to quickly understand the unique needs of the business and nobody is going to be better at making a campaign stay on-brand than the company that created the brand.

It’s not the job of an agency to redefine a brand—although many seem to want to. It’s an agency’s job to focus on something the brand solves in its customers’ lives and display it in a new way or to a new audience. 

And to be able to do that, an agency needs a company’s expertise to coach them.

To coach from a position of expertise, you need to develop a strong brand playbook. To develop a brand playbook, some questions you should consider are  What do you stand for? What do you stand against? What’s visually and tonally on brand? Who are your best customers? What tensions do you solve? What do you promise your customers? What do customers get from doing business with you? 

And, when you are searching for an agency, find one that’s willing to be coached and one that asks a lot of questions. If they’re not asking questions and taking advice, they’re not learning. If they’re not learning, they’ll never develop an expert intuition for your business.

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