Media Perspective: Ad agencies should stop believing that R&D is a dirty word

Do you remember Ray Harryhausen? He's the guy that did all those early stop-motion animated monsters, like the skeletons from Jason and the Argonauts.

Watching Microsoft circling Yahoo!, with Google waiting in the wings, reminds me of one of his famous creature battles. We're fascinated by these huge beasts tearing lumps of plasticine flesh from each other - we can't look away - until we remember that one of them is going to win, and that when it does, it's going to come bellowing and snorting at us, the puny humans at the edge of the battlefield, and the beast will probably devour us whole.

Because what they're fighting over, mostly, is advertising revenue. And that's really what's frightening, because that shouldn't be their money, it should be ours. The world should be watching huge ad groups and media businesses squaring off over the advertising pie, not a bunch of coders and geeks. How come they stole our lunch? What went wrong?

Well, a lot of it comes down to two little letters: R and D. Microsoft said that it had spent about $7.5 billion on research in 2007. Yahoo! Research has divisions all over the world, and has found a number of smart ways to learn from the communities around it. Google gives its engineers one day a week to pursue their own projects in the hope that they'll invent the future of the company.

And advertising agencies? Does any agency have a genuine research and development budget? Typically, technology companies spend about 20 per cent of revenues on R&D, so is there an agency anywhere that spends even 1 per cent?

Media companies aren't that much better: most TV producers think of R&D as inventing a shinier floor for celebrities to dance on. No wonder advertising occasionally finds itself outflanked. Even when agencies do commit to spending money on something forward-looking, it's often just to garner headlines or persuade a wobbly client that the agency is still vibrant and exciting.

And, if most agencies spend money on new skills or development, they normally just buy someone in to bag some knowledge that someone else already has, not to create something that is genuinely new.

All of which makes complete short-term sense, but in the long term means we've surrendered thought-leadership of the industry to the West Coast of America. I'm not suggesting that agencies need to put money into string theory or gene-splicing, but it'd be good to think that a media or communications business was committed to getting ahead of the technology businesses in some small aspect of what we do.

Wouldn't it be great to have an influence on the battling monsters, to chuck a spear in there and bring one of them down? Far better than just sitting here, waiting to be eaten.