This one will probably get me in trouble.

Nonetheless, I believe its time somebody said it. Most ad and PR agencies don’t really understand social media as a way to engage with customers and prospects. I am not the only one who believes it. I have had many a conversation with other business owners and social media professionals who feel the same way.

For example, I had a conversation last week with a highly respected social business professional who runs a membership organization that helps its members, individuals who are responsible for social media and social business in their company, by providing research, white papers and private forums for discussion. We were discussing the state of the industry and I was asking her for some business development advice. She said to me, “Well.. the New York market is a very weird and difficult market.” I asked her what she meant by that and she said, “Most companies in New York feel like if they need assistance or direction with social they need to reach out to an agency. Then when the agency doesn’t deliver on their promises, the business owner decides that social media doesn’t work.”  She is right. When it comes to social media, agencies dominate the New York market and most just don’t get social.

This is not a new phenomenon. Agencies have been dominating the New York market as far back as 1877 when James Walter Thomson purchased an ad agency he worked for and renamed it the James Walter Thomson Company.

Today, agencies come in all shapes and sizes. From two person shops who use freelancers to do much of their work, to small and medium size “boutiques” , all the way to huge behemoths such as Omnicom Group, WPP Group, Publicis, Interpublic Group of Companies and Havas.

Agencies also position themselves in different ways. There are traditional advertising agencies, PR agencies, interactive agencies, search engine agencies, social media agencies and there are also agencies that specialize in particular kinds of advertising or PR: recruitment, help-wanted, medical, classified, industrial, financial, direct-response, retail, yellow pages, theatrical/entertainment, investment, travel, and so on. Then there are full service agencies that  provide all types of services in advertising, PR and non advertising fields.

Agencies have evolved with the times and as new types of media emerged and became mainstream, agencies were quick to adopt them and establish themselves as “experts.” It all started with print advertising, then came radio, television and finally the Internet. The rise of the Internet saw the emergence of interactive agencies, either as divisions of larger full service agencies or as new stand alone agencies that provided companies with creative and business advice on web-based advertising and banner ads.

Naturally, as the Internet matured and social media networks emerged, agencies were quick to claim this new domain as their own. Interactive agencies began to position themselves as social media agencies and began to provide guidance and advise on this new way to interact with and attract new customers. Companies, trying to make sense of this new medium and what it means to their business, were quick to rely on their agencies advice on how to approach social and what to do with it.

A couple of years ago, I was introduced to head of one of the leading social media agencies in New York. He had just returned from a conference where he spoke about the importance of social media. I asked him how it went and he laughed and said to me, “It went great, they all bought it. After all social is just another channel for us to exploit.” Needless to say, I was shocked! Here was the person who ran one of the most successful social media agencies in New York and he was telling me that social is just another channel?

Social is not just another channel. It is an opportunity for companies to truly engage, on a personal level, with their customers and prospects. It is a chance to build real meaningful relationships with your target audience by developing a sense of mutual trust and advocacy. It is not just another channel to use for advertising purposes. There are thousands of companies today that are failing at social. The number one reason they are failing is because they are using social as a channel for self promotion and advertising. They are not looking to engage. They are not looking to share valuable content and establish themselves as true partners with their customers. Guess who is leading the social strategy for many of these companies: agencies.

That is not to say that all agencies are missing the boat. I have a tremendous amount of respect for people like Dave Kerpen at Likeable Media, David Armano and Steve Rubel at Edelman, Geoffrey Colon at Oglivy. These guys get it and are some of the leading minds in the social media space. Unfortunately, they are the exception rather than the norm. Most agencies really don’t have a good sense of the challenges and opportunities presented by social media. I have had many a business owner complain about the terrible guidance and advise they received from their agency. So much so that they had all but decided that social media doesn’t work.

Other companies like Nike, have decided to bring the social media efforts in-house. Nike’s new head of social, Musa Tariq, decided to assume full control over  Nike’s social media offering. The reason is simple, it is part of a broader effort from the business to gain a deeper understanding as to how its consumers interact with the brand on its owned social networks such as Nike Plus as well as on third party platforms. More and more companies are deciding to forgo the agency route and instead build their internal social media teams. It is important to consider several things before you hire for social media. However if your company picks right, you will have access to two very important things: access to the latest customer insights and insider knowledge of your company and its customers.

Access to customer insights is invaluable. These provide opportunities for true engagement and in many instances these insights lead to new products or services within a company. Insider knowledge of your company is also critical when dealing with customers and prospects. Who knows your company better than your own employees. They have deep knowledge that is invaluable. Knowledge that most agencies don’t have and cannot really gain.

I find that one of the biggest problems with agencies is that for the most part they only hire people with past agency experience. If you don’t believe me look for yourself. Do a search for a social media position on Indeed.com or Monster and without fail any positions that are posted by agencies list a requirement of previous agency experience. This may seem like a good idea, after all you want someone with experience at doing what you do. Except that in this case, I think it is a major disadvantage. Because most agency people have not worked  as employees of many of the business they perform work for. They have little to none operational knowledge and lack the critical understanding of how business work on a day to day basis. If I was in charge of an agency, I would much rather hire someone who had worked in-house and had a good understanding of the needs and demands from corporate executives.

Social Media is a new way of doing business. It requires time, effort and the ability to truly connect with your customers. Most agencies are not equipped nor do they want to deal with your customers. They just want to prove to you that they are doing all the things they are expected to do. In my opinion, a company is much better assigning internal resources to execute a social media strategy. You can ask your agency for help in the creative aspects of the campaign, but I would leave the execution to your internal resources. Who better than your employees to take care of your customers or prospects? For a social media campaign to be successful, you need to be able to Listen, Learn, Engage, Measure and Adapt. Do you think your agency is going to take the time to adequately do this? Does your agency have intimate knowledge of what your company is working on? Issues that you may be encountering? New projects or initiatives you may have underway? That is what you need to properly engage with your targets in social media. That is what is necessary to succeed.

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