At Welcome to Optimism, we attend conferences so you don't have to.
Whilst in the outside world, economies crumbled, banks crashed and the world burned, I went to the Marketing Week ‘New Agency Models’ conference today to see if there was anything to be learned about ‘achieving maximum success by challenging traditional frameworks’. So, where’s the business going? Here’s the gist of what the speakers had to say, paraphrased in my notes. These are their views, not mine. I’m assuming that by implication of speaking at the conference, people are happy to have their opinions disseminated online. But if not, let me know and I’ll take your bit down. Apologies in advance to anyone I’ve misquoted, misinterpreted or otherwise misrepresented.
Martin Sorrell, Chairman of WPP (on video, not in person).
The old ‘country club’ system of ‘Madmen’-style US agencies was ended by globalisation, consolidation and technology. Further consolidation will come: IPG, Havas, Aegis… ‘until we get to one client and one agency. Ha, ha, ha.’
Clients want the best resources, the best people, working efficiently. As the Ogilvy campaign for IBM said, ‘solutions for a small planet’.
WPP sees three ways of managing this: the network agency (JWT, Y&R, Grey, United), the team concept (e.g. Team Ford in Detroit, with people drawn from various agencies within the holding company to service the client) and the specialist agency created specifically to service the client. (e.g. Enfatico for Dell.)
What about creativity? That depends on the balance of power at the client. What would I rather have - the creative central brief, the ‘head’, or the ‘arms and legs’? The arms and legs because that’s the real investment. The creative briefs appear to be more sexy but the adaptation (and it's not really just adaptation and translation) is more exciting because that’s where the real money is. The art and craft are essential but, uncomfortable though it may be for some, this is a business. The future lies with ‘the big battalions’.
Bruce Winterton, President, The Barbarian Group
BG isn’t an agency, because an agency represents clients. That presumes that clients know what they’re doing. We consider ourselves a shop, or a creative organisation.
Prevailing wisdom is that this is an 'ideas business' but that’s too loose.
One agency can’t provide excellence at all stages of the value chain. Nor can one holding company. (Despite what Martin S says.)
We have an internal ‘creative collaboration tool’ called BEARD – a piece of software (it looks sort of like a blog) that allows everyone to work on any brief collaboratively and simultaneously.
Actually, what we do is solve clients’ problems. We make “stuff that works”.
Roger Stighall, Founding Partner, North Kingdom
What are we? A SWAT force, specialists who are called in to do ‘something extra’; an ‘interactive boutique shop’. We don't want to be a big agency.
Factors for success: passion, innovation, perfection. It is a challenge to retain these values as the company grows. 60% of our work is done direct with clients, 40% for agencies. Our remote location in northern Sweden influences our culture. It's dark.
You should identify your focus from the overlap of three things: what you are deeply passionate about, what you can be best in the world at, and what drives your economic engine. Our vision is that North kingdom should be a platform for our own people’s and our clients’ growth. We want to hold hands with our clients and walk them into the fog – get them to try new things.
What makes us different? Flexible dedicated teams, low churn of people, specialism, creative quality, extremely selective about what we choose to do, open to collaboration.
Living outside the hub allows us to focus on work. There are fewer distractions.
Why is Sweden good at interactive? Swedish design heritage, tech know-how, education (Hyper Island), accustomed to tight budget, mature internet usage.
What are our challenges? Not full service, far way from clients, high expectations of our work, detailed project management necessary, need to find strong, brave, flexible clients, global competition.
What is the future? Technological advances, integrated digital campaigns, challenging our clients, keep innovating, build on what got us this far.
Jed Glanville, Chief Exec Mindshare UK
Some of the other speakers seem to want to stay small. We are obsessed with size, scale, share, committed to growth.
The traditional ad model is dead. What’s the new model?
We reject the distinction between ‘media’ and ‘creative’. Media is creative. In the new world, how the consumer gets to the brand – i.e. how they use media – is key.This is not the world of the 30s execution. It’s about the consumer journey.
How things have changed. From…
The era of persuasion – parent to child instruction.
The era of engagement – parent to teenager. Trying to be interesting to get them to pay attention but they weren’t listening,
To…
The era of negotiation: adult to adult. Consumer-centric, not brand-centric.
What do clients say they want? Digital capability, business knowledge and insight, ROI…
What are their key challenges? Quantify ROI, improve efficiency, grow customer knowledge, extract value from customers…
We haven’t lost faith in the Big Idea. But while waiting for that increasingly rare bus to turn up, we have to get on with running the business.
Clients want simplicity and integration. Agencies need radical restructure to deliver this.
Mindshare’s principles:
From postbox for other people’s 30 sec spot ideas to our own business ideas
From buying space to creating space
Different kinds of talent: hybrids, producers, digerati…
“Industrial management of addressable messaging”.
New world: data and content, addressable IP media, content creation and ownership, world of IP.
The new agency will focus on results not rhetoric.
New remuneration models will be based on value creation – creation and ownership of intellectual property.
“The future demands industrial scale and imagination.”
Bill Brock, Founding Partner Analog Folk
What we do – communications through the lens of product development. “We make communications products”.
How we evaluate stuff: Is this useful? Does it solve a problem? Is it worth paying for? Does it last?
What do people want – to be entertained? To feel good? To belong? By understanding their motivations we can create products that people will seek out.
How? By being flexible (using outside resource), having a collaborative environment, being ‘supremely connected’ to a global network of talented folk.
Move from making ads to making products. Service offering based on product development model – we speak of prototyping, beta-testing, etc.
Move from vendor to shareholder. From ratecards to dividends. Move from full service to connected.
Move from billable hours to equity stakes in clients.
Model not 100% successful yet but having some wins.
We also do AF properties - creating our own products. Currently working on a music label and a golf community site.
Q: ‘Are you making life too hard for yourselves with this model?’
A: ‘Do I look that tired? Because I am exhausted. It’s really tough. But we think it's right for where things are going.’
George Bryant, Partner, The Brooklyn Brothers
We’re not from Brooklyn and we’re not brothers. We’re a creative enterprise. We’re in the business of business. We start with the business issue, not the comms brief. It’s about problem solving with creative flair and entrepreneurial spirit. We’ve won 10 clients in 6 weeks and none of them pay us a retainer. We’ve launched our own products (such as Fat Pig choc bar in USA) because it teaches us how to do everything: distribution, sales, marketing, deals, etc. We don't do it to make money, because it hasn’t.
We have an ‘open table’ philosophy: put the problem in the middle of the table. Then you have people who make it up and people who make it happen. Collaborators are welcomed to take a seat at the table.
We stay awake by keeping out of the comfort zone.
Nick Blunden, UK MD, Profero
In the old days 21 million would tune in for Morecambe and Wise on a Saturday night. Those days are over. Now collaboration is critical to success: across disciplines, across cultures, and with partners.
That doesn’t mean we have one global culture, we embrace local cultures. Time zones allow us to provide solutions to clients overnight. We also outsource work to locations with lower overheads to offer value to clients.
We see employees as partners – the job is one thing they do amongst others, often on a part-time basis.
There’s a trade off between collaboration and control – you have to let go.
Rony Zibara, Creative Director, Fahrenheit 212
We are not a comms agency, we are an innovation consultancy. Our core belief is that ideas create markets. We create businesses for our clients. We talk to the CEO, not the brand team. (We call this the ‘higher parallel path’.) We don’t ask consumers what they want, we inspire them with possibilities. Disruption is a core IN-competency for clients, it’s not part of the 9 to 5. That’s where we come in.
Our inspirational dream is: to be the most commercially rewarded practice in the USA.
We have a unique business model. We have a minimum $1 million fee. Of this we take 1/3 upfront. The rest we put at risk, dependent on progression of ideas with the client. We typically present 6 to 8 ideas in highly finished form. Typically 3 to 4 of these will go to execution without amendment. We never pitch because we don’t give anything away. If a client rejects an idea, they have to pay a ‘kill fee’ to stop us from using it elsewhere for another client.
In a world populated with rational incrementalists to the left and pipe-dreamers to the right, we bring a unique focus: ideas on the money.
Our internal motto is ‘Where’s the money? Where’s the magic?’
We do commercial creativity; it has to be big, fast, doable.
Our discipline is ‘transformational thinking’ – we are constantly looking for ‘vectors of change’.
We look for ‘the problem behind the problem’. We tear up the client brief and tell them what their problem really is. We’re quite arrogant about it. We don’t kiss ass, we don’t suck up, we don’t do client entertainment. Our attitude is, ‘They’re lucky to work with us’.
We have a different place to play – disruptive innovation
A different way to play – performance based remuneration
We get paid for what we do – no pitches
We’re a $15million business, with 25 people, making a 42% margin.
Q: For a creative person, this vision seems very financially focused. Is that right?
A: Yes. I got tired of working in agencies where my work wasn’t valued and I wanted to start something where I got paid for the value of my ideas.
Nicola Mendelsohn, Chairman Karmarama
The challenges are the same as ever, though lots has changed.
Our task – make work that’s more engaging, more creative, more memorable. Better consideration of business issues and the channels available.
Agency positionings are all too similar.
Success depends on great creativity, great client relationships.
Smaller companies need to collaborate and be entrepreneurial.
The desire is to become a great ad agency and a strong business.
We have in-house TV production, with 250 ads made in the last year by K Broadcast. This gives clients a 30-50% cost saving without compromising on creativity.
We also have a JV with a digital production house whose producers work out of our agency. We have, or are planning, similar JVs for PR, social networking, etc.
We also do non-client things like our own mugs.
‘We may not be as big as Usain Bolt, but boy can we run.’
So, are any key themes that occurred to me from all this? Here are the ones that have stuck with me this far into the evening:
- collaboration is key
- culture (for the small agencies) vs. clout (for WPP agencies)
- humility (from North Kingdom) vs arrogance (from Fahrenheit 212)
- lots of talk of ‘making our own stuff’ but no evidence of making any money from it
- no-one (apart from maybe Karmarama) likes being classified as an ‘advertising agency’
Er… that’s it.
I’d be interested to hear any reactions to the above. Interesting? Inspiring? Worrying?
As the conference finished and the world carried on burning, I popped next door to the Tate’s Francis Bacon exhibition. Now, never mind your alternative remuneration models, there’s a powerful vision of what life’s about.
Fascinating how one man’s extraordinarily focused and personal vision of confined spaces, screaming mouths, flayed flesh, popes, naked men and monkeys has haunted the popular imagination for 50-odd years.
What, you don’t dream of screaming popes, naked men and monkeys? It’s the future.
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