Why is this agency a good idea?
The state of the industry is such that all of the various siloed disciplines are fighting each other for shares of the marketing pie. So if the business owner - the CMO or CEO – [that has] a business problem [and] needs to drive market share, revenues, [or] margins... asks, "I have a problem, how do we fix it?” the answer always depends on who you ask. If they ask an advertising guy, [he] will always say, “The solution is more advertising.” If they ask a PR guy, he'll say, “We're underfunded...”
There's also conflict within client marketing comms organizations; they often report into different [departments] and they're all fighting for what I call share of credibility with management. Do I spend a million more on advertising or do I increase my PR budget by $1 million? The fact is, no one has an answer to that question. [No one] measure success or value in context with everything else. So, everyone is using proxy measurement.
There's actual prejudice – I've seen it for two decades – within the industry – from discipline to discipline. Marketing and business executives have a hard time sorting out all of the voices on their teams who are coming to them to justify their budgets.
In my opinion, the single most important thing the agency world can do is answer the question: what do I do with my budget? And to unify all of their metrics and analytics into one engine that allows them to model the effects in relation with each other, so they can actually see that a press release or PR event had a direct impact on revenue. Because I guarantee you the science to do that is possible, it's just never been applied to marketing before.
What made Dell felt it was in the place to do something as grandiose as this? Was there a lot of work needed to be done [internally?]
What is about Dell that makes it passionate about this approach to marketing? Dell is almost the perfect corporation to seek an agency solution versus stove-piped, siloed agency services. Dell recognizes that what its own clients are looking for solutions, not just products. It's not just your server or storage – it's the relationship those [products] have together in your corporation that are becoming more important. It's in Dell's DNA to make decisions based on data. It's right down in our DNA, perhaps more than any company I've heard of.
Dell is unique in that it has more customer data than anyone in our category. Our direct model has put us very close to our [customers]. We can hear the customer breathe. We can hear the customer express their frustration or their joy; their relationship with Dell PCs or technology. We're extremely close with our customers; we hear them respond all of the time. It's the data that we have access to internally that is half of the equation. The other half of the equation is that, in the last ten years, the entire world of measurable things in the marketing universe has changed, radically. The wires are all there and they're this far from each other; it takes a Dell to say, we're going to connect them. It requires an agency partner that is willing to go that distance with us.
We have over 869 marketing communications vendors. Think about that. All of them were hired to provide point solutions to problems that Dell was facing from a marketing standpoint. However, all of the data from their efforts is sitting in little pockets all over Dell. There's no central point to aggregate all of that information and all of those activities. It just can't be done. So some kind of consolidation is necessary.
We highly favor a single holding company model because we think that if we consolidate all the way to one holding company, then that holding company has the same opportunity we have with respect to measurement, analytics, and information. We believe that it is something beyond integration.
I've been striving for integration for twenty years, and I've decided to give it up. Because integration means you're trying to glue things together that are not organically part of the same thing. We're looking for an agency relationship where PR, media, Web site analytics, creative, and planning are all fixed on one objective – which is shareholder value for Dell. And they get up every morning, thinking about shareholder value. They need to be thinking about how their efforts contribute as team members to advancing the ball towards the goal. Right now, it's like we have a football team with 25 quarterbacks on the field. Our assertion is that the entire marketing communications world looks like that. No one is taking responsibility for shareholder value – they're only taking responsibility for siloed, segmented, individual proxy metrics. We're not looking to our agencies to prove to us they're the most creative; we're not looking at to deliver the lowest CPMs. We're [just] looking for an agency to partner with us.
How many other companies do you think can do this?
I actually think corporations are crazy for not asking for solutions. All of the corporations that are out there currently asking for agencies for one-off RFPs. I'm going to put my PR up for review; I'm going to put my advertising up for review; I'm going to have someone over there put up my Web site work up for review. That means that the responsibility for coordination of all the players on the team sits inside the corporation, and it's messy. There are conflicting interests all over the place; no one's interests are aligned...
I know that clients want it, but corporations simply aren't asking for it. I had an epiphany last year when I was meeting with a very senior executive at a holding company. I kept saying, "We have got to change. We have to offer a solution."
His response was, “Casey, why? That's not what clients are asking for. They're not buying solutions. So I can't afford to invest any money in putting one together. As long as people are demanding siloed solutions, I'm going to provide them with siloed services.”
I was shocked. I went down, sat in my office, and said, “You know what, change has to come from the client.” Corporations have to ask for solutions in order for agencies to invest the resources necessary to put them together.
We have to stop buying wheels, engines, fenders, windshields, and seats all from different manufucturers and try to assemble them in the office. We just have to ask for a really fast car.