Interview: Steve Boehler

Founder, Mercer Island Group

Founder, Mercer Island Group

Steve Boehler is the founder of Mercer Island Group, a firm that comprises a network of marketing management consultants. MIG provides a range of services, including strategic marketing, consulting, new-product planning, brand consulting and positioning, competitive analysis, consumer research, and agency searches and performance evaluations.

Q: Are some clients predisposed to agencies based on size or their affiliation? Do agencies from holding companies pitch better than independents? A: Culture and chemistry become very important aspects in terms of finding the right match and are more important than size. When I work with senior executives on the client side, we find out if they have predispositions to size and location. Most wise clients don't; they're looking for the right results and people. Most sophisticated clients understand that the fit is going to be important. Q: You deal with advertising and PR agency searches. Is there anything that advertising agencies do better than PR firms? A: There are strong and weak new-business folks in both. It doesn't really relate to the industry, as it does to the people. Both industries have a range of quality. When the internet bubble burst in 1999, PR agencies in the late '90s had become dreadful at new-business development because there were many more new-business opportunities than there were agencies. The good ones were turning away business. There was an entire generation of PR agency executives tasked with finding new business in the early years of this century that hadn't done it before. They had lost a lot of ground with the ad agency businesses in the late '90s. Recently, I've seen the same kind of range of skills in both industries. Q: Are agencies predominantly erring on the side of caution when pitching? Is it a more worthwhile strategy to go for a unique approach? A: Agencies right now are erring on the side of caution in one incredibly important area: reinvention. The whole marketing services industry is in desperate need of reinvention to be strategic problem-solvers for their client partners, as opposed to being silo-oriented, highly tactical elements in a mix. Today, there's as much churn of staff on the client side as the agency side, so one of the values that the agency can bring to the business is the ability to help knit together different aspects of a company's brand proposition so it's well-integrated. Yet, the way the industry is set up today, the client has to do that [integration] because there are multiple agencies doing multiple aspects of the marketing mix. That is going to change; I don't know when it will, but I know that there are both big and small agencies experimenting with more integrated structures. But that is the number one challenge facing the industry, and I believe whoever cracks that code will win. I know there are firms working on it, but I haven't seen firms do it very effectively. Q: Do you think some clients will always prefer picking best-of-breed agencies in each discipline, or are they all pushing for integration? A: The world needs integrated providers. I don't know if the industry is moving that quickly towards it. I don't think that the best-of-breed network approach is the best long-term approach for that issue. They raise more conflict issues than they solve, and so unless you're a huge client, it doesn't seem like there's any solution there. And if you are a huge client there, you probably ought to be able to get it under one roof. Q: You provide many relationship services for agencies and clients. Do you sometimes work as a mediator? A: Sometimes. But the more ideal relationship is a partnership where all parties have the same thing in mind. When there's trouble, there can be a strong mediation role. Despite the fact that we do a lot of searches, I fundamentally believe that the world would be much better off if everyone figured out how to work best with their agencies. Often, the search doesn't necessarily reward the client or the agency, and the same people who just made a change will be making a change in a year. Q: How important is it for agencies to know, and make their decision to pitch, based upon how many times a client has switched AORs? Is it a foolish approach to think that your agency will be the one that makes that company satisfied? A: There are definitely companies that are constantly churning agencies and it's "always the agency's fault." Agencies themselves would be well-served to avoid those pitches. In a case where any company changed agencies multiple times in a few year, without significant structural change like new senior management that could trusted to be more disciplined when approaching agencies, then I would stay away. I won't do a search for a company that simply churns agencies all the time unless there's that structural change or significant new strategy. I believe a good marriage between a company and an agency is a two-way street. When an agency fails, there's almost always some shared fault. So if a company is constantly changing agencies, they have to be part of the problem. It's likely that if you're the new agency, you'll also be gone in a year. Q: Should holding companies pursue a best-of-breed pitch? A: Holding companies would be better suited long-term to put their energy into two aspects: giving better service on a day-to-day basis so they don't have to worry about replacing business, and [figuring out] what the future of the agency business model will look like, because I don't think it will be these best-of-class, loosely put-together teams from the [umbrella] network. On a practical level, if the client is large enough and wants a best-in-class approach, then, of course, networks will have to pitch that approach. But I would hope someone on the network side is really thinking about the future of the agencies and how they should be structured, so that, instead of showing up with a special ad-hoc pitch every time structurally, they can show up with an agency that the client needs. Q: Is procurement hurting the agency selection process? A: It shouldn't be, but it is. There's no inherent reason why having procurement executives involved is conceptually a bad idea. The bad idea comes from how a lot of companies are going about it - both on the marcom side of the company and the procurement side. The procurement side is focused on cost; the marcom people, knowing that the procurement people are involved, are worried about their turf. Then you end up with two groups that could probably work very effectively together not working very effectively at all. The fallout happens to the agencies. Procurement folks involved in agency searches today are often bringing something negative to the party - an almost universal focus on cost. Almost universally, companies are looking to their agencies for effectiveness. There's something desperately wrong with the scorecard that the procurement people have in mind, as opposed to the scorecard the companies largely have for those marketing services. It doesn't make any sense. It would be analogous to a company going out and hiring a critical new senior executive and trying to manage that process through a reverse auction. Such as: I have these five candidates. Which one will take the least amount of money for this job? The only time there are significant cost-structure differences in this industry is when you're looking at significantly different-size firms. Q: Do you think PR firms make a major push for branding? A: I do, but I would really love it if I saw a branding presentation - either by a PR, advertising, or identity firm - that was overt about recognizing that branding was more than just about their piece of the pie. Everyone who makes a pitch about his or her branding abilities seems to gloss over or overtly ignore the fact that branding is about customer service. It's about the complete experience that the customer has with that brand. It's a lot more than just what messages come out through the PR efforts and the reaction to advertising. There's no reason, based on the experiences I've had, that PR firms can't really help a lot with branding. Q: Is it more difficult to reinvent or introduce a brand today? A: I don't think it's any more difficult. The way it happens has changed a lot. We have much better tools. I don't think people are better at it today than they were 50 years ago, just like I don't know if we're even more productive than we were 50 years ago. In the past, there weren't enough people who took the time to really understand how to brand things and how to zero in on creating a real strong emotional connection between their business and their target audience. And there are not enough people worrying about it today. People are worrying more about new product features, revenue and profits, and not nearly enough time on customer satisfaction and how [the company] can truly provide a unique experience. Q: When you have a company like TiVo, whose brand name is frequently used incorrectly to describe the whole category because it leads that category, how can you avoid that? A: Building a long-term, successful brand is really about meeting the needs of your target audience over a long period of time and raising that relationship, as opposed to a products-featured mode. Even though people refer to that feature [of digitally recording shows] as TiVo even if they don't have [TiVo], I think they've missed the boat because they too narrowly defined the business they were in and didn't create enough of a broad emotional connection with enough of the audience. There are certainly satisfied TiVo customers. But it's still a new industry. If you don't have a TiVo, Comcast and Time Warner [can] have their systems in place really fast, and you're never going to care that you didn't have TiVo. Unfortunately for TiVo, the train has left the station and they have not defined their vision in a broad enough sense. They don't control distribution; the people who do control distribution desperately need to be doing what TiVo was smart enough to figure out. The TiVo model that would have been successful was as a partner to the [Comcasts and Time Warners] as opposed to a competitor.

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