Billy & Sue Have Changed - Lessons from a Day in Los Angeles
By Mike Carlton

“If a new model isn’t developed, the old one will simply collapse” - Steve Heyer, president Coca-Cola
“It is time for ad agencies to stop whining and get creative” – David Lubars, president Fallon

Who are Billy & Sue?

This is all about Billy & Sue. They are the most important people to any marketer or advertising agency. They are you and me and a quarter of a billion others. They are the American consumer.

And while they are the most constant element in the myriad of changes facing agencies, even they have changed. This paper is about that change, and what advertising agencies can do to take advantage of that change. Because, the success of every marketer and every agency ultimately depends on the beliefs and behavior of Billy & Sue. It is that personal. And that individual.

First, Some Quotes From The Madison+Vine Meeting

“The advertising model has changed from intrusion to invitation” - Rance Crain, president Crain Communications
“TiVo is the Anti-Christ” - Jamie Kellner, CEO Turner Broadcasting
“What’s the measurement for all of this?” - Bruce Redditt, ExVP Omnicom
“Who pays the bills?” – Steve Sturm, VP & GM Toyota
“This is the Wild West, there is no financial model” – Mitch Kanner, CEO The Idea Bridge
“If a new model isn’t developed, the old one will simply collapse” - Steve Heyer, president Coca-Cola

Let’s Start Back in the 1950s

Most of the commercial information Billy & Sue received back then came through advertising. And, most advertising was print. Billy & Sue paid for subscriptions to newspapers and magazines and they only read the ads that were interesting to them. Paying for content which included ads was normal. And, expected. While radio was free, its overall role was limited.

Along Came Television

With the advent of TV, a new proposition was offered to Billy & Sue. The deal was simple. You give us your time (to watch commercials), and we’ll give you content for free. Not bad. Particularly since in that era Billy & Sue had more time than money. Sue was not working outside the home. And Billy’s activities centered around his job and family. So, it was a good deal.

But, Billy & Sue Were Pretty Smart

Almost immediately, they developed sophisticated mental filters. These filters effectively screened out TV commercials they were not interested in. They also quickly developed multi-tasking skills. So they could do all kinds of other things while “watching” TV. In addition, they planned their time so that TV commercial breaks were kind of like a brief intermission. As a result, almost from the start only the commercials they wanted to see got through. But, they still got all the content they wanted for free.

The Age of Television

During the next couple of decades, TV became the primary source of commercial information for Billy & Sue. TV not only became a commercial power house, it also reshaped our society. The world had never seen anything like it.

It was a golden age. Not just for the TV broadcasters and networks. But for advertisers, too. Advertising agencies thrived in this environment. And the 30 second spot became the principal currency of advertising. Legions of writers, art directors, producers, etc. sprung up to practice their skills in crafting innovative and effective spots. It was a whole new art form. And, it drove the advertising economy. Not to mention the national economy.

Other ways of reaching Billy & Sue continued. PR, radio, magazines, direct mail, newspapers, direct sales, outdoor, promotions, literature, word of mouth, and others all grew. But TV was the king. And, everybody knew it.

The basic economics of advertising agencies and the 30 second spot became intertwined. And, everybody prospered. Ah, those were the days!

But, All Good Things…

Imperceptibly at first. And then, ever so slowly the dominance of TV began to erode. Cable began to whittle away at the network audiences. Other media became more targeted and more sophisticated. And then the Internet burst onto the scene. Each took a small piece of the attention Billy & Sue had been giving to TV. None of these changes was overwhelming. But each took a small toll. Kind of like fleas on an elephant. TV was past its peak. But, still very powerful.

And through it all, its proposition remained the same: Give us your time, and we’ll give you free content.

But Wait, Billy & Sue Were Changing, Too

Remember the equation of the ‘50s; Billy & Sue had more time than money. That was the foundation for the TV deal. But, Billy & Sue’s lives were changing. First, they became better educated. Then, Sue got a job. While they now had more money, their lives became more hectic. They had more possessions. They traveled more. The pace of their lives quickened. Time demands increased. And on came the Me Generation. Big lifestyle changes.

Now Billy & Sue had more money than time. A big switch. They also began to question why they should do the advertising filtering. After all, if the marketer really cares about them, shouldn’t he be the one to make sure that their time was not wasted on irrelevant messages? And, if the marketer does in fact value their support, shouldn’t what they want to see be delivered when they want to see it?

Wow! Talk About a Paradigm Shift

The power had just shifted from the sender of content and commercial messages to the receiver.

Billy & Sue had developed a set of personal expectations. To win them over, marketers would have to:

  1. Understand them at the individual level (not as some abstract group)
  2. Communicate with them one-to-one (not as part of a mass audience)
  3. Make sure those messages were coherent (not different in each medium)
  4. Be natural (don’t be clever or contrived, show common sense)
  5. Respect them (recognize the personal dignity they demand)

In short, Billy & Sue are demanding that commercial communication they receive be PERSONALLY RELEVANT. This means that the sender must practice mass customization of his commercial message. Big, big change from the one size fits all era.

So, What Does All This Mean For Advertising Agencies?

Some More Quotes From The Madison+Vine Meeting

“We are talking about nothing short of reinventing the business of marketing communications” - Scott Donaton, editor Advertising Age
“I don’t want to live through this period of disruption” – CEO, advertising agency
“It is time for ad agencies to stop whining and get creative” – David Lubars, president Fallon
“Ad agencies can be the quarterback, if they can get over their fear” - Steve Heyer, president Coca-Cola

In this context, let’s take a look at some of the strengths and weaknesses of advertising agencies:


  1. Agencies understand the consumer’s economic and psychic interests better than anyone else on the marketing communications playing field
  2. Agencies also have a keen understanding of branding and what the brand experience means for the consumer and how that relates to the marketer.
  3. Agencies have strong, enduring relationships with marketers
  4. Agencies are skilled in aggregating the wide variety of skills and talents needed to create effective commercial communications
  5. Agencies have the most diverse talent base among all the market communications players


  1. Agencies are on the defensive, their share of the marketer’s spend is declining
  2. Agencies are stuck in the 30 second spot/colorful ad rut
  3. Agencies are poor collaborators when working with equals rather than subordinate suppliers
  4. Agencies have lost much of their earlier skills in business innovation – they have forgotten what made them successful in the first place
  5. Agencies fear that any change in the current market dynamics will negatively disrupt their business model

In short, no one else has the range of intellectual assets that agencies do. But, years of success has made them very risk adverse and resistant to change. This is particularly true of the bigger, more financially driven organizations.

Interestingly, this may be one of the reasons that the financial markets are punishing publicly held agencies and holding companies so severely.

Against this backdrop, what is an entrepreneurial agency to do?

Five Thoughts

We believe there is enormous opportunity for agencies that focus intently on five thoughts:

  1. Consumer Focus
    Advertising agencies understand the mind of the consumer better than any other player on the field. This is the unique strength to leverage.

    This calls for rethinking how the agency’s planning capabilities are deployed. Too often, planners are kind of an ivory tower afterthought. When in this new paradigm, they should be at the forefront of the entire agency’s effort. Serious rethinking of using this powerful asset is in order. For if the agency has a clear map of the consumer’s psyche and his/her various mental receptors, then the rest becomes much easier.

  2. Become the Brand Architect
    A bunch of diverse trade contractors working individually and directly for the owner are unlikely to produce a holistic and harmonious building that functions well. Or much less, does anything to lift the human spirit of the occupants. To accomplish that, it takes a skilled architect.

    Building a unified brand experience in the mind of the consumer takes the same holistic guidance. And, that won’t come from a bunch of media and marketing tool vendors. It is a role that agencies are best suited to fill.

    And it is a strategic position agencies should be moving to occupy.

  3. Coalesce the Outcome
    With the variety of ways available to touch today’s consumer, no one – not even the biggest holding companies – have the skills to do all the things necessary. Someone has to orchestrate bringing all of this together. And, it is not something most marketers have strong skills in.

    Agencies can fill that role by developing skills and processes that bring diverse talent together as equals, not subordinate vendors, and then facilitate the accomplishment of a unified brand voice through all the media and methods employed.

  4. Holistic Ideas
    Great ideas that only work in 30 second spots or colorful ads are not enough. The ideas that will drive the success of agencies in the future must be able to work in all kinds of media, and in all kinds of communications methods. They must be media agnostic. Anything less is insufficient.

    This means developing the understandings within agency talent that permit idea development that transcends traditional advertising, and speaks broadly to the consumer through all of their available receptors.

  5. Business Creativity
    In many respects, this will be the toughest challenge. Today, most agencies make their serious money from 30 second spots and colorful ads. Becoming a brand architect and guiding the collaborative process of diverse outside talent is out on the periphery of most agencies current business model. And, if they do act as brand architects, it usually represents a small portion of their total revenue.

But, today’s business model is clearly in decline. 30 second spots and colorful ads and other stuff as the economic backbone of the agency business will just not work much longer. The golden goose is dying.

A new business model must be created. The need is there. The opportunity is there. The agencies that can develop an effective new economic model for their business, and then successfully transition to it, can move to a whole new level of psychic and financial reward. Those that don’t will be marginalized.

The Good News

The market is there, and growing stronger. The consumer has more money to spend, and is looking for relevant messages about brands that will help fulfill their lives. In good times and in bad, their desires will be satisfied.

What an opportunity! What a time to be in the agency business!

Oh, And by the Way

Billy & Sue have not only changed their beliefs and their behavior. They have also changed their names. Two of the most popular children’s names today are Juan & Ashley. And if that doesn’t speak volumes about the evolving American consumer, nothing does.

© Carlton Associates Inc.

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