Will Madison Avenue Become the La Brea Tar Pits of the Ad Industry?

The news that Ladies' Home Journal was turning to crowdsourcing as a way forward was a bit of a shock to me. The first company I started, Sports and Fitness Publishing, was a magazine company. You could say that I have ink in my blood. My Dad, Grandfather and Great Grandfather were all newspaper publishers. Almost every summer job I had in High School and College was working at the Canton Daily Ledger, my hometown paper. I loved being a reporter, selling local advertising and working in the press. There was something magical about waking up every morning and with an idea of what might be the news that day and by 3 o'clock be looking at a finished, printed newspaper fulfilling the vision of being at the center of the community dialogue. Unfortunately, those days are long gone for the newspaper industry.

What once were stalwarts of the media landscape now look more like dinosaurs on the verge of extinction. New forms are born from the skeletons of the old.

When I started Sports and Fitness Publishing I couldn't afford a staff of writers to write every article, like we did at the Ledger. With technology, two types of work evolved. We kept in house all of the management, client services and editorial skills but we free-lanced experts that might be more into a sport than a great writer. For Women's Sports and Fitness I couldn't see hiring a staff writer that could write a credible article about climbing Everest one month and doing the Ironman Triathlon the next. The editors provided the vision, hired the writers, edited their work and produced the magazine. 

If you want to call it crowdsourcing, a term that certainly wasn't around then, so be it. It was an economic imperative that we ran the company that way. And, it worked pretty well. We eventually sold the company to Conde Nast.

It's one thing to have a small Boulder-based magazine company use crowdsourcing but quite another to have one of the vaunted Seven Sister magazines turn to crowdsourcing as a way to allow their readers to write the magazine. I'm sure it's an economic imperative with slipping revenues (ad pages were down 13.6%), loss of subscribers and rising print costs. Technology is wreaking havoc on these once untouchable magazine properties as people find new, cheaper ways to get and exchange information.

The ad agency business is not far behind. There have been lots of great examples over the years of people experimenting with outsourced and freelance creative and strategy. In fact, the industry as a whole uses freelancers more than anyone would like to admit. Similarly, technology and the social web are changing what the very essence of advertising is. Just like the Seven Sisters who were built on 100s of pages of spread advertisers big agencies are still built on TV advertising. It's where the big costs are and hence where an agency can charge the biggest fees. (Check out my earlier post Fees, Lies and Advertising for a POV) My sense is that it won't be long be for you'll see the big venerated agencies like Y&R, BBDO, McCann, Saatchi and JWT turn to crowdsourcing, like Ladies’ Home Journal, as they will have to change their business models radically to cope with technology driven paradigm shifts.

The future of Ladies' Home Journal and the rest of the Seven Sisters will be a radically smaller in-house staff of editors, management and client services folks with the majority of the content being produced by a digitally organized crowd of freelance contributors and readers. (HuffingtonPost seems to have this dialed). It won't be long before big agencies follow suit. My sense is that a current 2000 person agency will become a 200 person agency made up of very talented creatives, strategists and account folks that all know how to harness the power of abundance. Sure, fees will drop substantially. Agencies will get a lot smaller. In the end a lot of the waste and puffery that agencies are so well known for will be gone. Egos will be in check. 

This radical wave that's sweeping over the industry has only just begun. Like any tidal wave of change, the more nimble, forward thinking agencies and holding companies will thrive and the bigger more, lumbering organizations will get swept under just like the dinosaurs that perished in the La Brea tar pits.

Not to fear, there will be even more work for talented creatives, strategists and account folks  who will still produce great work using new technologies to aggregate and groom great ideas, not much unlike Ladies' Home Journal is planning to do.

 

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