From the perspective of serial entrepreneur Jeff Bussgang, a partner at Flybridge Venture Capital in Boston, traditional advertising as embodied by fictional characters in AMC’s hit show Mad Men are true relics, with little chance at ever again exuding the kind of swagger we see in Don Draper.
Writing in BusinessWeek, Bussgang argues:
With the rampant digitization of advertising and the explosive growth of performance-based marketing, the nerds are taking over advertising…
The advertising agencies are thus in a structural box, a classic case of Innovator’s Dilemma. Meanwhile, venture capitalists and entrepreneurs smell blood. Young companies are going directly to CMOs to mine their marketing budgets. And marketers are more aggressive about experimenting with new media with the help of niche consultants and technology providers.
The only saving grace for the industry may be that their remains great power in the Big Idea. Great creative can still move the needle and provides the direction for all that whiz bang, targeted, performance-based execution.
Bussgang says today’s “Mad Men” have four major problems: they’re owned by Wall Street; they have to answer to the CFO first, then the CMO; lack of pay for performance compensation models; and a severe talent suck thanks to the attractiveness of companies like Google and Apple.
These aren’t new arguments, of course. Just persistent ones. Here’s what I think. Madison Avenue ceased to exist a long time ago. That’s why Mad Men the TV show works so well–it’s fiction.
The reality is ad agency holding companies can go away and the ad agency business will be fine, no, better than fine. For one, there are thousands of independently owned agencies today. Wieden + Kennedy, The Richards Group and RPA are the biggest and most well known indies, but as Bussgang suggests, “young companies” are increasingly being invited to the big time marketers table.
It would be easy to deduce from Bussgang’s article that “young companies” and “niche consultants” with “big ideas” are ready to rock. Given the rise of shops like Wexley School for Girls and Creature in Seattle, and countless others around the world, I have no fear for the marketing communications industry. Like media itself, the agency business has exploded into a multi-channel offering. The trick is to know where to look, and to have a knack for assembling teams from a variety of disciplines.