Recession, technology combine to challenge agencies

When the recession of the early 1970s saw Seattle's venerable Boeing Company slash employment from 100,000 to 38,000, two real estate developers with a sense of humor rented billboard advertising space along southbound Interstate 5.

The sign read: "Will the last person leaving Seattle please turn out the lights!"

In today's technology-loaded advertising environment, the same message would likely be wirelessly directed to motorists' iPhones which now, with utilitarian applications, could simply tap their mobile devices and carry turn off the city's lights without a hitch.

What a difference 40 years has made in the lives of advertising professionals. The Burma Shave road signs are history. Digital rules!

The nail-biting recession that began in the fall of 2008 was frightening for virtually all northern Nevada advertising and marketing firms. Large firms such as The Glenn Group and KPS/3 felt the sting quickly as clients stopped spending money. Many were forced to lay off talented staffers.

"Everybody's business was impacted," says Valerie Glenn, CEO of The Glenn Group. "But this time was different than in past downturns. Sometime when we've had downturns, marketing was the only thing a client would pare down. This time, everything went. People were cutting payrolls because of the severity of the recession.

"We had to cut staff, too, but because we have such a diverse client base, we fared fairly well. The gaming industry has been hit hard and if we had only gaming clients, we would have been in terrible shape."

David Branby heads up an advertising and marketing firm that bears his name. Prior to the recession, there were five people working at his agency. Today, there are two. Still, he says his 20 to 25 clients have remained. The only difference: Most have yet begun to resume spending.

"Ours has been a traditional advertising and marketing firm," he says, "but we recognize we need to take advantage of the new technology tools that are out there. We've totally switched to branding, web content development, and search engine optimization (SEO). Research indicates people don't go to the yellow pages when they can go right to Google or to Yahoo. So our efforts are aimed at helping our clients' potential customers find them when looking for services. This is how people are telling their story, so we need to be all over this."

Stephanie Kruse couldn't agree more.

She heads up Reno-based KPS|3, an advertising and marketing firm that has been around since the early 1990s. She says marketers who are successful in the future will be those who effectively link Internet web sites and their blogmeisters with social networking sites such as Facebook and Twitter.

"We stopped being a traditional ad agency some 10 years ago," she says. "We saw the future was no longer in traditional advertising. We stopped adding markups to media buys and now work for our clients on a fee basis. Today we make choices based on how best to push out messages for our clients and, in today's digital environment, it means a prescriptive approach on channel planning.

"There are lots of different ways to use a mobile platform. You can take videos and get them on YouTube or post it on your own Web site, then distribute it via email. Lots of variations. What you want to do for your client," she says, "is to create a wildfire of online word of mouth."

Why?

Because research shows that consumers believe their peers more than they believe businesses or institutions.

The Glenn Group has also pushed more deeply into the digital world.

"Digital is a huge part of how we market," says Glenn. But she cautions against ignoring the traditional platforms.

"The traditional methods of communications still play an important role; but we do have an opportunity with newer methods to have a relationship, dialogue, get more feedback and help us become better marketers for our clients. It's pretty exciting and interesting to apply all these methods with different industries and it doesn't make any two days the same."

With myriad communication channels now available in the marketer's toolbox, how does an agency go about finding the right mix for its client?

"We do a lot of thinking in our firm," says Kruse. "Research is important. But thinking, strategizing the 'what ifs,' is paramount. You've got to have a multi-channel communications approach today. Channel selection is an art form and the agencies that will be successful tomorrow will be those who can connect the dots."

When social networking sites such as Facebook began showing up, some felt they were just a fad. But today, almost all marketers have come to realize that it can become a powerful tool to reach select consumers.

"We have a couple of clients who are fearful of Facebook," says Branby. "They view it as a site where you prey on young women, so obviously we've got some educating to do. The fact is there are 80,000 people in the greater Reno and Sparks area who post on Facebook.

"Marketing is just storytelling," he says. "You link the blogs to Facebook which enables you to drive search ability to your Web site and that goes out to your Facebook pages. It's really cheap. We tell clients to keep out there and let people know what you are doing."

Kristi VandenBosch is the new CEO of San Francisco-based Publicis & Hal Riney, a once-traditional advertising firm that is boldly moving forward in the development of digital solutions for clients.

"I came from a large digital network," VandenBosch says. She recently spoke to members of the Advertising Association of Northern Nevada. While in Reno, she also addressed advertising students at the University of Nevada, Reno. "I told them to develop their digital skill sets because this whole divide between traditional agencies and digital will go away naturally as the next generation comes into power within agencies. We'll see a natural new kind of talent, a new school of knowledge."

How might the digital landscape change over the next five years?

"That's a good question," she says. "I could see an application-based economy. You could literally have the entirety of your economic world run through the applications on your iPhone. Your shopping, banking, your dining, your relationships, everything you manage could have an application-based economy. And that's what makes our business so exciting."