European ad agency Scholz & Friends put together this creative video showing the changing role of marketing over the last 75 years.

The first third shows the history from the 1930s to the turn of the century. The second two-thirds covers the challenges marketers face in the digital age. For “plugged in” marketing consultants and agencies, this is old news. But the explosion of digital advertising outlets can make a traditional advertiser’s head spin. I think that the key to who succeeds and fails in this digital age depends upon your mindset:

Do you view web 2.0 and social media websites as more outlets to place your ads?

Or, do you view them as a way to have a direct conversation with your market?

The ending delivers the message perfectly:

“Don’t you have something interesting to say? Let’s get the people engaged again!”

Though the message is geared toward B2C brands, it’s applicable to B2B companies: Start with content and continue a conversation. 

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If you’re running a small traditional ad agency, do you think you’ll be around in 10 years? According to the Institute of Practitioners in Advertising’s recent report, you’ll have a tough time growing if you’re not prepared for social media and digital communications.

We Are Social pulls together a nice summary of the report. The quote that sticks in my mind is from Steve Henry, the former TBWA\London Executive Creative Director:

“The current agency model needs rethinking because it’s run out of steam. Remember that a lot of digital agencies are ten years old and you have to ask if they’re flexible enough to seize the opportunities on behalf of clients. Many clients are starting to feel that the agency they need doesn’t exist. That’s to say one that understands the mechanics of social networking as well as delivering the upstream strategy and thinking.”

While social media is exploding right now, there’s plenty of opportunity for some of the popular social media sites (Facebook, Digg, Twitter, Delicious, YouTube, LinkedIn, Scribd) to flame out. Remember Friendster? They were the top dog before MySpace took over. Now, Facebook is challenging MySpace.

But regardless of which sites thrive, customers now control the conversations about brands and interruption marketing is disappearing.

Many traditional agencies simply won’t be able to make the transition–it’s too great of a shift in how to approach the marketplace. New digital agencies are sprouting up every week, run by different people with a clear understanding of how to blend in and become part of the person-to-person conversation.

If you’re one of them, this is your wakeup call. It’s time to address the elephant in the room.

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We all know it costs far more to acquire new customers than to expand relationships with existing customers.

Yet most companies focus on new customer acquisition instead of strengthening existing relationships (and revenues) from people already comfortable with their brand.

You see your clients do it. Are you doing the same?

I like how Drew McLellan recently phrased it, saying “most companies spend backwards.”

• They invest the most money on strangers they hope will become customers
• They spend a little money on current customers — taking their business for granted
• They spend little to no money on their employees, who either deliver the brand promise and delight the customer…or not so much.”

Drew’s been delivering great marketing advice for years, so make sure to subscribe to his blog. He’ll surely solve more than a few of your customers’ marketing challenges in 2009 (and maybe some of your own).

So what’s a solution? Step 1 is to shift some of your clients’ marketing efforts from acquisition to customer retention. This is even more important during a recession. Expand relationships with current customers, offer more value, and increase revenue with less marketing effort.

Step 2 is to do the same for your own practice. How? Take a more strategic approach to your role with your clients. You already understand many of your clients’ marketing and sales challenges. Think about the old saying “customers don’t buy a drill, they buy a hole.” The hole is the solution; the drill is the tool.

Instead of just delivering tools, deliver tools that focus on the solution. Better yet, deliver the entire solution! Most SMBs don’t have the bandwidth or resources to determine or create a solution themselves. But they don’t hire consultants solely for great advice or expertise (like Fortune 500 companies). SMBs hire consultants for results. And many times they’re looking to you for both strategy and the execution.

Ask your client tough questions to diagnose the real problems and deliver solutions. Put yourself in the CEO’s shoes and think about how your activities drive the top-line number.

Examples:

If an SMB hired you to rebuild their website, they probably don’t want a shiny new website for the sake of it: They want their website to play a greater and more effective role generating revenue. Learn about their current lead generation tactics and sales process and deliver a website that’s a part of a solution. Don’t just put lipstick on a pig.

If you’re executing a campaign (using email, search, events, direct mail, telemarketing, publicity or traditional media), understand exactly how that campaign will generate sales. Your SMB client might not know. Make sure to articulate it to them. If they presented the campaign idea to you, ask yourself

• Is it the right medium?
• Is it the right message?
• Is it the right offer?
• Is it handling the right part of the process?
• Will it help to facilitate a sale?

If you’re writing a marketing plan, deliver a roadmap that identifies and recommends the most effective ways to spend their (usually limited) marketing budget to achieve their 2009 revenue goal. SMBs don’t want an academic document to put on the shelf.

Shoulder a greater responsibility and show your clients how your work will help them achieve their desired results. Understand what they need to accomplish, and that you care about the results (not just finishing your project).

They’ll notice, and probably ask you to take on a greater role with them!

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