Agency practice: Adherent to the past.


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Agency practice: Adherent to the past.

  1. 1. agencymanagementAgency practice: adherent tothe pastAntonis Kocheilas suggests that the ad industry needs to evolve and develop anew business model HAVE A diminishing interest about As my colleague Mohammed Iqbal Agencies like Crispin Porter + Bogusky,‘I the future’ is what David Ogilvy answered when he was asked aboutthe future of the advertising industry. writes (1), as an industry we are accus- tomed to media time and space scarcity and to the idea of repetition as a device of Anomaly, Naked and others propose ways of working more suitable for the new world of media abundance and audienceWhen he said this he was, first of all, persuasion. These ideas have become fragmentation. But their organisationalDavid Ogilvy and, second, in his late sev- ingrained in our thinking and practice so designs are not yet tested over time andenties. A diminishing interest about the much that we do not see them as a they have yet to prove themselves opera-future is a luxury only legends can afford. problem. The way we organise, develop tional on a global scale, so as to become I have a growing anxiety about the and judge our work follows conventions the dominant species in our ecosystem.future. This is the only thing that gives me of scarcity and repetition. But those con- By studying the behaviour and organisa-the right to propose some ideas about the ventions do not exist in today’s world of tional design of those hybrids you canfuture of our industry. I do not believe my media abundance and audience fragmen- understand some things about the future;thoughts will come close to a final tation. Also, the inhabitants of this new but I want to focus on understandinganswer, but I do believe that the advertis- world, the brands, are not monolithic what stops the bulk of the industry froming industry is an interesting place to entities that form uni-dimensional rela- evolving, even though the need for evolu-work and that finding ways to improve its tionships with consumers. Successful tion is unanimously accepted.efficiency and effectiveness is a worth- brands are multi-faceted, forming natural-while project. ly multi-dimensional relationships – more Any kind of idea, so long as it is like the relationships between people. bigA brand-new world for brands Charles Darwin wrote that to survive Also unanimously agreed is that ourCommunication nowadays is far more you must be responsive to change. industry’s product is ideas. Ideas arecomplex than ever. I need not go into Responsiveness is usually found in strange things. They can have incredibledetail about the social, media and techno- hybrids that arise in an ecosystem in transformative power, and they distin-logical causes of this new reality, since change. These hybrids co-exist with less guish great brands from much has already been written, responsive species for some time What is not openly agreed, but we allbut clearly the nature of marketing and eventually a new species is born, know, is that there is little understandingcommunication has changed for good. properly equipped to survive in the new in our industry about what ideas are andNonetheless, I can’t resist the temptation ecosystem. how they work. Our inability to defineto mention the best description of these In our industry ecosystem, hybrids this hampers efforts to review and revi-changes. have been appearing for some time. talise the way ideas are produced, developed, deployed and valued – stops us FIGURE 1 from responding to change. Defining the status and nature of an idea Often an idea is sold by presenting a great execution that’s instantly gratifying Strategic but disguises the fact that the idea is a false dawn, with limited life expectancy or breadth of application. In a great book entitled Rigorous Magic, Jim Taylor and Advertising Steve Hatch from Mediaedge:cia (2) ideas explain what communication ideas are and what they do. We can understand the CRM/ nature and status of communication direct ideas ideas by placing them in a chart. On the Attitudinal Platform ideas Behavioural Transformation Transformation vertical axis you define the status, strate- gic or tactical, of how the idea affects the brand. On the horizontal axis is how the idea affects the audience, behaviourally or Activation ideas attitudinally (see Figure 1). Advertising ideas are developed mainly above the line and aim to cause attitudinal transformation. Platform ideas are territories or spring- Tactical boards for communication that can be used through the line, aiming to cause42 Admap • April 2008 © World Advertising Research Center 2008
  2. 2. Antonis Kocheilas has held senior positions in big communication agencies – his last job was general manager of Ogilvy Athens. He is a planner by trade. kocheila@hol.grmainly attitudinal but also behavioural prices it with Marxist logic. As Ron where you look from. From the ‘creative’transformation. Baker explains (3), the current cost-based side, our industry produces a product, CRM/direct ideas are developed mainly compensation model for advertising in the form of tangible executions ofabove the line; their nature is strategic agencies is based on Marx’s theories. communication ideas, which are devel-and they aim to cause behavioural Marx explained this in Value, Price and oped, executed, sold and even awarded.transformation. Profit, in 1865: From the ‘client-facing’ side, the industry Activation ideas are ad hoc participatory ‘The relative values of commodities offers a service, ranging from brandactions, often executed through the line, are, therefore, determined by the respec- strategy and consumer understanding toaiming to cause mainly behavioural but tive quantities or amounts of labour, opportunities for delivering added valuealso attitudinal transformation. worked up, realized, fixed in them.’ and achieving growth. A ‘big’ idea is a construct that lies If Marx was right, two friends emerg- This dilemma is reflected in the typicalbehind not just paid-for communications, ing from a movie would have enjoyed it structure of the advertising agency. Halfbut at the heart of the company’s explana- equally, since it took the same amount of the agency is dedicated to building andtion of who it is and what it does. A big labour hours to produce, so each would nurturing the relationship with clientsidea is a purpose, a rallying cry that guides value it the same. Marx ignored the con- and the other half to ‘creating’ the prod-not only marketing communications but sumer, who ultimately determines value. ucts. For sure, advertising rhetoric isthe whole organisation. A big idea is rare. Any transaction between a willing against this distinction, and preaches thatIt neither lives in a vacuum nor can it be buyer and a seller is not based on equality in an agency everyone should be creativesimply produced by an agency and sold to of labour, but on the subjective value and everyone a brand ‘steward’, but this isa client. It is the product of a symbiosis of goods bought and sold. The current far from the reality of the average agency,between agency and client: the agency cost-based compensation model for adver- anywhere.expresses the idea and the client lives it. tising agencies is flawed, because it What stops us from walking the talk is Our industry persistence with ‘big’ misaligns the economic incentives on that the industry compensates andideas is idealistic, not to say romantic, each side. The client pays whether the rewards creatives for winning awards andbecause ‘big’ ideas are only a small portion agency adds value or not, and the agency account management for keeping theof what we produce, just as sports cars are is paid a fixed amount regardless of the client happy. This dual definition of pur-only a small portion of what the automo- value it creates. pose fosters a Tayloristic business model.tive industry produces. What we say to This takes us back to one of Adam Crafting a message that will speak mean-our clients is that you can have any kind Smith’s central insights, that both buyer ingfully to the complex animal we call aof idea you want, so long as it is what we and seller must gain from an exchange, or consumer is not simply a matter of thethink is big. it will not happen. The existing compen- account manager opening the job, the Our tendency to claim that everything sation model focuses entirely on the copywriter writing the copy, the artwe do is a big idea diminishes the value of wrong things: efforts, executions andbig ideas. Our industry’s inability todefine the characteristics of its product costs. It does this at the expense of the right things: ideas, results and value. A ‘To help ourleads automatically to an inability to value-defined price for our product pre- industry evolvematch this product with our clients’ supposes a clear definition of what ourneeds and to align the processes that product is and how it works. Then the to serve today’sproduce it in order to make them moreefficient. price can be determined by the difficulty of the desired outcomes, ownership and needs, we have toWhat is the price of sweat? use of intellectual property, the risk the agency assumes, service guarantees and disrupt ourHow we define our product defines not other permutations of value propositions conventions and re-only our business model, but our com- the agency could propose. Ultimately,pensation model. For agencies, it still does a business is defined by what it collects imagine ourselves,not seem right to be earning a living forsomething as intangible and indefinable revenue for. using the sameas an idea. We prefer to sell somethingtangible – a reel of film, a poster or a point- Existential dilemma Our inability to define our product, and creativity that weof-sale display unit. Or, even worse, we our reluctance to charge for its value, use for the brandsprefer to charge for our sweat, our effort to affect our nature as an industry. We faceproduce them. It is odd that an industry an existential dilemma: are we offering a under ourthat is thought to produce the oil thatlubricates the cogwheels of capitalism service to our clients, or a product? This has a different answer depending on stewardship’© World Advertising Research Center 2008 April 2008 • Admap 43
  3. 3. agencymanagementdirector doing the layout, traffic putting including most of the discipline heads in FIGURE 3the comp on the account manager’s desk an existing conventional agency, a The vicious cicle that keepsat 2:45pm, and the account manager leav- reduced account management depart- the ad industry stuck in the pasting at 3:00pm to present it to the client. ment, a reconfigured planningYet, sadly, that is how it works a lot of time department with both brand and commu- del our prin many agencies. nications channel planning skills, and a mo o du The process agencies use to develop service department including IT, HR, e ss c n tmarketing solutions needs to be much finance, and so on. Most traffic and pro- si > bumore interactive, both between depart- duction, some planning and most creative homents and between agency and client. implementation would be bought in ad uct > our w ou proAgencies need to break down departmental hoc, via a combination of an online mar- fail towalls and the linear way they move a job ketplace and the old-fashioned ‘little determine rthrough the agency. Advertising is a service, black book’.but it is also a product, but what clients By owning fewer assets and leveraging od duvalue most is a solution (see Figure 2). the resources of partner companies, these pr t c Neither an agency that creates self- network orchestrators require less capital; r w u orindulgent artefacts nor one that just takes return higher revenues per employee, and o of ksorders or is afraid to say no; but an agency spread volatile market risk across the > t he valuewilling to make the effort to understand network. The network organisation is notwhat the client really wants and needs. new; a successful model has existed forThis empathy is necessary for big ideas to years. It’s called Hollywood. By switchingemerge. to it, the studios availed themselves of the Stop chasing our tail best talent for each product, creating Let us return to the present. The threeA prophetic view? unique products and shedding unneces- pitfalls described create a vicious circleGoogle vaporised my illusion of writing sary overhead. that keeps our industry glued to the pastabout the ad agency of the future. Not Maybe the business will evolve much (see Figure 3). Our inability to define ourbecause Google is the closest manifesta- as clients have evolved; agencies will product, ideas, and how our producttion of the agency of the future, which it structure themselves by segments. Take works leads the industry to a flawed com-may be, but because Google has over 45 telcos. They have moved away from divi- pensation model and a linear, Tayloristicmillion listings under that heading. It is sional selling (for example, mobile, business model created to manufacturesure that somewhere in the internet cloud internet) into consumer segments. Agen- executions, not ideas.exists a rough blueprint … but I will still cies that were traditionally structured Someone said that change is themake some predictions. into direct, design, digital, etc., will break process by which the future invades our I believe that the first step that the down the walls and group all this into lives: let us welcome that invasion. Weindustry will take to escape the vicious appropriate segments – ‘luxury’ or should understand that the three flawscycle will be to unbundle thinking from ‘youth’. Agencies will use appropriate are interrelated: each is both cause andimplementation. Imagine that, perhaps, tools to build relationships by segment, effect of the other two. So to help ourwe reduce our implementation capabili- rather than focusing on a single disci- industry evolve to serve today’s needs, weties, not increase them. Perhaps we should pline. The tools used will vary, depending have to disrupt our conventions and re-jettison the creative department (or they on need: what matters is the segment we imagine ourselves, using the sameshould jettison us). Perhaps we should aim to reach, rather than the discipline we creativity that we use for the brandsoutsource implementation completely – want to sell. At the core are ideas – the under our stewardship. The future isand re-create ourselves as genuinely essence of our lives. always here, but is never evenly distrib-neutral brand consultants, with commu- Finally agencies will understand that uted. David Ogilvy was blessed with anication-planning capabilities that draw even the name ‘advertising agency’ is a larger share of the future, his wordsin ‘executors’ only when necessary. We problem. ‘Advertising’ refers to paid sounding ever more relevant:could post briefs on a website and invite media, and ‘agency’ connotes the idea of ‘Encourage innovation. Change is ouran online network for jobs when they commissioned agents. That’s not how lifeblood, stagnation our death knell’. ■arise. We could have Tom Wolfe slug it most ad agencies want – or need – to beout with Philip Roth for the Aquafresh perceived by clients. The role of advertis- AcknowledgementsExtreme Clean screenplay. And Sting ing is to push (or pull) consumers toward Parts of the thinking and elaboration in this paperpitching against Rod Stewart for an products. At the centre is the product. owe their existence to the books referenced, and toanthem to Kellogg’s Strawberry Pop Tarts. Advertising is at the periphery, with pack- many others. My thinking was also fuelled by con- We would only have to pay them if aging and CRM and distribution as layers versations between colleagues and myself atthey did a decent job. The new agency between it and the product. The agency’s Ogilvy’s Senior Management Program 12.might comprise: a management team job is not to interrupt, but to create con- nection content that is entertaining and 1. M Iqbal: The Elongating Tail of Brand FIGURE 2 useful, so consumers wouldn’t want to Communication. The value for our clients lies in live without it. The future of advertising is 2. J Taylor and S Hatch: Rigorous Magic. great products with branding embedded 3. R Baker: Pricing for Purpose. the intersection in them, not added at the end by commu- 4. T Williams: Take a stand for your brand. nications. All the brands we consider as 5. M Tungate: Ad Land. Service Value Product iconic – Apple, Nike, Starbucks, Google, and so on – have branding embedded in More on agency management at their offering. WARC online44 Admap • April 2008 © World Advertising Research Center 2008