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17.05.2021

Advertising iatrophobia: Why do some spheres have trust issues towards agencies and outsourcing?

Iatrophobia is a fear of doctors and therapists. There can be many reasons a person has a fear of doctors. It could be fear of specific medical procedures, possible pain, an anticipated diagnosis, fear developed due to a bad experience with a particular doctor or a prior visit.

Parallels between advertising/marketing and medicine sometimes are very pertinent. Agencies, in this case, are doctors. Clients are patients that have specific issues related to certain business aspects. Some want more sales, some — strengthen brand perception and brand values. Just like the patient, some clients may avoid meeting a doctor because their issue is “too intimate,” some — because they have had previous unsuccessful experience. Also, the patient may think that the problem is “too complex” and only they understand the roots of the issue; hence — only they can solve it.

As a result, some spheres often prefer to insource their marketing efforts — which sometimes does not provide the best possible solutions and results for the business. In Armenia, one of such sectors is IT. With local companies like PicsArt, Krisp, ServiceTitan, Zangi, SoloLearn, Codefights, Shadowmatic, Teamable, and many more internationally well-known startups/companies, the IT sector of Armenia is growing rapidly. There are many ongoing startups and new IT projects that enclose more and more people, money, and new perspectives. However, having in mind the potential and resources of such companies, marketing, and advertising efforts are still low.

Of course, marketing is a complex strategy that depends on a number of factors and variables. Final results drive marketing and its decisions. It determines its vector (or vectors) and determines its target, decisions, and goals. That said, to have a profound analysis or certain sphere, we must have all the necessary data, a proper KPI measuring system, and an understanding of companies’ goals and objectives.

So, on the one hand, there is a lack of communication that is not hard to notice. Still, on the other hand, local IT companies make clear that they “don’t really need” ongoing marketing/advertising activations and campaigns but rather prioritize their products and focus on developing those products. Everything seems well-settled and understandable.

But to capture and understand the global pattern, let’s look outside to IT pioneers of different spheres. Do they follow the same pattern? Is the product really “everything?”


Spotify

Spotify was created in 2008, and its first strategy was to offer a free service with advertisements included. However, the founders hoped that its users would choose the option to pay a $10 fee per month to receive an ad-free experience. Initially, the company was positioned as an IT music streaming service. But still, the platform suffered from negative cash flows in the first couple of years and realized that you could never outcompete a website like Piratebay if the service you offer is not better than piracy. So, how did Spotify beat piracy and tough competition?

In 2018 and 2019, Spotify began to play a more decisive role in the global design community. The company started developing a brand for discipline through an external website, social media (Twitter and Instagram), and cool events (a number of design events, seminars, and webinars). Spotify did a noise-making rebranding driven from companies positioning change — they slowly moved from IT music streaming service to lifestyle key opinion leader. Throughout the process, Spotify’s decision-making team understood that the wanted result is impossible to reach with only insourcing the resources. There is always an outsource company that does a specific thing with higher and better competence. In Spotify’s case, the company was Collins (US). The company turned its rebranding process into a case study during the process itself. It engaged and interacted with design and IT KOL-s (key opinion leader) from all around the world, receiving feedback and working with them. They presented the whole process as an educational practice/case study.

“So, we started fresh. We tackled the new brand using our product design process — a.k.a. think it, build it, ship it, tweak it — to give ourselves some structure and share our progress with designers in their own language.”

As a result, Home to 60 million tracks, four billion playlists, and 1.9 million podcasts, Spotify is a leading music streaming service and a top destination for music and other audio content.


Apple

This article would’ve been incomplete without Apple. It is safe to say Apple reinvented business reinvention. Throughout the company’s whole history, Apple always highly prioritized marketing and advertising. As a tech company, they never limited themselves to only good products. Apple didn’t invent all-in-one PCs or lightweight laptops, but it did introduce its models with such style and user-centered design that no one remembers the awkward clunkers that came first. Year by year, the company moves away from IT positioning and positions itself as a lifestyle essential brand. That became possible with the perfect combination of insourcing and outsourcing. Apple has so many iconic communications that it would take tens of articles longer than this to list them all. For example, the “1984” Super Bowl commercial advert successfully put the Apple brand in the minds of the mainstream American audience. Apple was finishing the development of the Macintosh personal computer in 1983, and Steve Jobs was excited about the potential of the product. He believed the Macintosh would give Apple the chance to compete on equal grounds with IBM.

Apple needed the right ad to promote it. When Apple decided to produce a commercial for the Macintosh ahead of its launch, they turned to ad agency Chiat/Day. Creative Director Lee Clow would be the one leading the agency response. The tagline “Why 1984 Won’t Be Like ‘1984’” references George Orwell’s 1949 novel 1984, about a dystopian future controlled by a “Big Brother.” The tagline was written by a team at Chiat\Day in 1982, who tried to sell it to various companies but were turned down repeatedly. Together with Clow, the creative team decided to use the line as the proposition for the advert, to be centered around a dystopian future where IBM was seen as the “Big Brother” and Apple as the hero.

When Jobs first saw the idea, his reaction was, “Oh shit. This is amazing.” former Apple CEO John Sculley remembered.

This is a historical example of how outsource communication shaped the market and the mindsets of people. Now, it is hard to imagine Apple concentrating only on its products and not working regularly on its communications, isn’t it?


Yeah cool, but what’s the plot?

Long story short, whether a company produces machine learning data stream metaflows, AI-based AR cloud systems, or caramel donuts, regardless of how good the product is, the power of the brand is undeniable. There is no such thing as “product will sell itself” or “the product does not need additional communications.” Also, no product can’t be communicated. It’s a matter of competence, professionalism, and thorough analysis of the product and the market. Never underestimate the power of outsourcing/insourcing balance. Truly considerable results are coming when the company properly bridges insource and outsource marketing and communication objectives. It is a luxury to keep a full-service marketing team that even big brands are avoiding to afford. Expenses include the processes needed to form a specific product team, such as the hiring process, competitive wages, standards development, strategy development, day-to-day work, software acquisition of various analytics platforms, administrative and office costs, etc. Business becomes more flexible when working with an agency. It does not link the business with specific individuals (taking into account the turnover percentage of employees of Armenian companies, it is a big problem), but advances its marketing processes within the contract, almost always getting more than promised in terms of the written contract. The agency always looks at things from the freshest point of view, always keeps its hands on trends and innovations on the page.

This is because, so to speak, agencies’ employees are usually involved in various fields and are always looking for news to implement in real life. According to the Los Angeles Times, 78% of businesses are generally satisfied with their outsourced partners. According to The Drums, 16 of the 20 (or 80%) hottest viral video and OOH advertising campaigns of 2019–2020 were done by outsourced agencies. Agencies are self-motivated about the common goal. Agencies are interested in making the case go viral, receiving critical acclaim, and winning trophies because that’s how agencies survive and evolve. In other words, the outsource team naturally has more motivation to “impress” than the in-house team. Finally, as every rookie communication/marketing specialist knows, everything is worthless until it’s not converted in numbers. In the case of agencies, reporting and analytics are done from a goal and conversion-oriented perspective, in business language, and through specially selected tools, all of which help keep one of the most essential business development components — marketing, at the proper level, without being overlooked.

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