Auditing Your Agency’s
Business Model

Presented by
Tim Williams
What is the ideal
agency structure?

By Hello Future www.hellofuture.set
How long should a
piece of string be?
Account
Management

Creative

Production

Media

Traffic

Agency structures today don’t look
anything like they used to dur...
“An agency should be agile, forward thinking
and engaged in delivering growth by deploying
a wide range of tools and peopl...
①  The full-service model
②  Unbundling creative and media
③  Further unbundling and specialization;
the client as integra...
Many agencies are reacting to the new multichannel marketplace by
attempting to become a new version of “full service” all...
Media companies as agencies

Production companies as agencies
Convergence?

Consulting firms as agencies

Media agencies as...
PR firms as “full-service” agencies

Digital agencies as “full-service” agencies
Convergence?

Convergence
-- or --
Diverge...
“So here we are with traditional agencies struggling
to become digital agencies and digital agencies
struggling to become ...
“I wish that the agencies would stick to
what they are good at. They try to do
everything, and they would be better
served...
The three approaches

marketers use to work with agencies
1. 
Best-of-Breed Model

Client

Models marketers use 
to work with agencies
1. 
Best-of-Breed Model

Models marketers use 
to work with agencies
1. 
Best-of-Breed Model

Models marketers use 
to work with agencies
1. 
Best-of-Breed Model

Models marketers use 
to work with agencies
1. 
Best-of-Breed Model

Models marketers use 
to work with agencies
2. 
Single Source Model

Client

Models marketers use 
to work with agencies

Agency
2. 
Single Source Model

Models marketers use 
to work with agencies
3. 
Service Integrator Model

Client

Models marketers use 
to work with agencies

Lead Agency
3. 
Service Integrator Model

Models marketers use 
to work with agencies
3. 
Service Integrator Model

Brand Agency Leader

Models marketers use 
to work with agencies
3. 
Service Integrator Model

Models marketers use 
to work with agencies
3. 
Service Integrator Model

Models marketers use 
to work with agencies
Best-of Breed Model

Single Source Model

Larger client companies
National/global appeal

Smaller client companies
Local/r...
Best-of-Breed Model

Best-of-Breed Model
Clients you work with
in this model (mostly)

Clients you work with
in this model (mostly)

Best-of-Breed 
Model

Single S...
The four dimensions
of agency business models
Four dimensions of agency business models

The
Product

The Brand

The
Purchase

The
Experience

Paid

Earned

Owned

Cont...
“Traditional” Creative Agency

The
Product

The Brand

The
Purchase

The
Experience

Paid

Earned

Owned

Content

Channel...
Creative Agency
“Traditional” Public Relations Firm

The
Product

The Brand

The
Purchase

The
Experience

Paid

Earned

Owned

Content

C...
Public Relations Firm
Public Relations Firm
Public Relations Firm
Design Firm

The
Product

The Brand

The
Purchase

The
Experience

Paid

Earned

Owned

Content

Channel

Ideation

Execut...
Design Firm
Design Firm
“Traditional” Media Agency

The
Product

The Brand

The
Purchase

The
Experience

Paid

Earned

Owned

Content

Channel

I...
Media Agency
Brand Development and Business Strategy Firm

The
Product

The Brand

The
Purchase

The
Experience

Paid

Earned

Owned

C...
Brand Development and Business Strategy Firm
Brand Development and Business Strategy Firm
Agency Trading Desk

The
Product

The Brand

The
Purchase

The
Experience

Paid

Earned

Owned

Content

Channel

Ideation...
Agency Trading Desk
Agency Trading Desk
Production Agency

The
Product

The Brand

The
Purchase

The
Experience

Paid

Earned

Owned

Content

Channel

Ideation

...
Production Agency
Production Agency
Production Agency
Experiential Marketing Agency

The
Product

The Brand

The
Purchase

The
Experience

Paid

Earned

Owned

Content

Channel...
Experiential Marketing Agency
Experiential Marketing Agency
Digital Agency

The
Product

The Brand

The
Purchase

The
Experience

Paid

Earned

Owned

Content

Channel

Ideation

Exe...
Digital Agency
Digital Agency
Experience Design Firm

The
Product

The Brand

The
Purchase

The
Experience

Paid

Earned

Owned

Content

Channel

Ideat...
Experience Design Firm
Experience Design Firm
Analytics Firm

The
Product

The Brand

The
Purchase

The
Experience

Paid

Earned

Owned

Content

Channel

Ideation

Exe...
Product Development Firm

The
Product

The Brand

The
Purchase

The
Experience

Paid

Earned

Owned

Content

Channel

Ide...
Incubators and Venture Capital Firms

The
Product

The Brand

The
Purchase

The
Experience

Paid

Earned

Owned

Content

...
The
Product

The Brand

The
Purchase

The
Experience

Paid

Earned

Owned

Content

Channel

Ideation

Execution

Which di...
Client

% of income
related to 
PRODUCT

% of income
related to
BRAND

% of income
related to
MARKETING

1.
2.
3.
4.
5.
6....
Client

% of income
related to 
PAID

% of income
related to
EARNED

% of income
related to
OWNED

1.
2.
3.
4.
5.
6.
7.
8....
Client

% of income related to
CONTENT

% of income related to
CHANNELS

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
All other clients
...
Client

% of income related to
IDEATION

% of income related to
EXECUTION

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
All other client...
SINGLE
SOURCE

BEST OF
BREED

SERVICE
INTEGRATOR

2. What media classes you utilize

PAID

EARNED

OWNED

3. Focused on co...
“If we don’t kill our old
business models, someone else
will. But if we are ruthlessly
curious, learn relentlessly, and
fa...
www.IgnitionGroup.com

Propulsion Blog
www.IgnitionPropulsion.com

@TimWilliamsICC
@IgnitionGroup
www.linkedin.com/in/TimW...
Auditing Your Agency's Business Model
Auditing Your Agency's Business Model
Auditing Your Agency's Business Model
Auditing Your Agency's Business Model
Auditing Your Agency's Business Model
Auditing Your Agency's Business Model
Auditing Your Agency's Business Model
Auditing Your Agency's Business Model
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Auditing Your Agency's Business Model

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How to deconstruct your agency's business model to better understand the value you deliver to clients and better position for firm to work for the types of clients you really want.

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  • Hi Stephan:

    Thanks for the comment. I do indeed believe there will be further decoupling even in the digital agency model for a couple of reasons. First, there is definitely a difference in perceived value and skills sets between ideation and execution. And second, as digital agencies continue to morph into 'full service' firms (a strategic mistake, in my view) they will increasing be subject to the same dynamics affecting generalist agencies.

    I appreciate the dialogue!

    Tim
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  • Great deck!

    One question about the digital agency model. Do you think there will be decoupling in that business model since the model tries to cover so many spaces on the board? Or will the trend for specialization continue but ideation and execution will continue to be coupled in these hyper specialized agencies?
       Reply 
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Auditing Your Agency's Business Model

  1. 1. Auditing Your Agency’s Business Model Presented by Tim Williams
  2. 2. What is the ideal agency structure? By Hello Future www.hellofuture.set
  3. 3. How long should a piece of string be?
  4. 4. Account Management Creative Production Media Traffic Agency structures today don’t look anything like they used to during the golden age of advertising. Really? Accounting
  5. 5. “An agency should be agile, forward thinking and engaged in delivering growth by deploying a wide range of tools and people, a far cry from the sausage-factory it was 10 years ago. We might be making software, content, binding books, or creating theatre. An agency engages itself in a diverse community of creative people, from coders to copywriters. It should be a place where there’s space for marketing judo, where business conventions are outmaneuvered and overthrown.” Robert Harwood-Matthews President, TBWA/Chiat/Day New York From “Marketers Explain ‘What Is An Agency,’” Ad Exchanger
  6. 6. ①  The full-service model ②  Unbundling creative and media ③  Further unbundling and specialization; the client as integrator ④  ? A short history of agency models
  7. 7. Many agencies are reacting to the new multichannel marketplace by attempting to become a new version of “full service” all over again
  8. 8. Media companies as agencies Production companies as agencies Convergence? Consulting firms as agencies Media agencies as creative agencies
  9. 9. PR firms as “full-service” agencies Digital agencies as “full-service” agencies Convergence? Convergence -- or -- Divergence? Holding companies as “full-service” agencies
  10. 10. “So here we are with traditional agencies struggling to become digital agencies and digital agencies struggling to become traditional agencies. It just another big convergence mess and the losers for now are the clients. On both sides you have partially constructed solutions: brands suffer from traditional agencies that are renovated with a digital coat of paint but doing what they've always done, and from digital agencies with incomplete organizations and inexperienced traditional skills.” Tony Quinn Chairman, Society of Digital Agencies From “Marketers Explain ‘What Is An Agency,’” Ad Exchanger
  11. 11. “I wish that the agencies would stick to what they are good at. They try to do everything, and they would be better served to narrow their focus. You can’t do everything, and if you try to do everything, you do nothing. It drives me crazy when the agency is trying to pitch you every single service available.” What clients think
  12. 12. The three approaches marketers use to work with agencies
  13. 13. 1. Best-of-Breed Model Client Models marketers use to work with agencies
  14. 14. 1. Best-of-Breed Model Models marketers use to work with agencies
  15. 15. 1. Best-of-Breed Model Models marketers use to work with agencies
  16. 16. 1. Best-of-Breed Model Models marketers use to work with agencies
  17. 17. 1. Best-of-Breed Model Models marketers use to work with agencies
  18. 18. 2. Single Source Model Client Models marketers use to work with agencies Agency
  19. 19. 2. Single Source Model Models marketers use to work with agencies
  20. 20. 3. Service Integrator Model Client Models marketers use to work with agencies Lead Agency
  21. 21. 3. Service Integrator Model Models marketers use to work with agencies
  22. 22. 3. Service Integrator Model Brand Agency Leader Models marketers use to work with agencies
  23. 23. 3. Service Integrator Model Models marketers use to work with agencies
  24. 24. 3. Service Integrator Model Models marketers use to work with agencies
  25. 25. Best-of Breed Model Single Source Model Larger client companies National/global appeal Smaller client companies Local/regional appeal
  26. 26. Best-of-Breed Model Best-of-Breed Model
  27. 27. Clients you work with in this model (mostly) Clients you work with in this model (mostly) Best-of-Breed Model Single Source Model Clients you work with in this model (mostly) Service Integrator Model How do clients access your services?
  28. 28. The four dimensions of agency business models
  29. 29. Four dimensions of agency business models The Product The Brand The Purchase The Experience Paid Earned Owned Content Channel Ideation Execution
  30. 30. “Traditional” Creative Agency The Product The Brand The Purchase The Experience Paid Earned Owned Content Channel Ideation Execution
  31. 31. Creative Agency
  32. 32. “Traditional” Public Relations Firm The Product The Brand The Purchase The Experience Paid Earned Owned Content Channel Ideation Execution
  33. 33. Public Relations Firm
  34. 34. Public Relations Firm
  35. 35. Public Relations Firm
  36. 36. Design Firm The Product The Brand The Purchase The Experience Paid Earned Owned Content Channel Ideation Execution
  37. 37. Design Firm
  38. 38. Design Firm
  39. 39. “Traditional” Media Agency The Product The Brand The Purchase The Experience Paid Earned Owned Content Channel Ideation Execution
  40. 40. Media Agency
  41. 41. Brand Development and Business Strategy Firm The Product The Brand The Purchase The Experience Paid Earned Owned Content Channel Ideation Execution
  42. 42. Brand Development and Business Strategy Firm
  43. 43. Brand Development and Business Strategy Firm
  44. 44. Agency Trading Desk The Product The Brand The Purchase The Experience Paid Earned Owned Content Channel Ideation Execution
  45. 45. Agency Trading Desk
  46. 46. Agency Trading Desk
  47. 47. Production Agency The Product The Brand The Purchase The Experience Paid Earned Owned Content Channel Ideation Execution
  48. 48. Production Agency
  49. 49. Production Agency
  50. 50. Production Agency
  51. 51. Experiential Marketing Agency The Product The Brand The Purchase The Experience Paid Earned Owned Content Channel Ideation Execution
  52. 52. Experiential Marketing Agency
  53. 53. Experiential Marketing Agency
  54. 54. Digital Agency The Product The Brand The Purchase The Experience Paid Earned Owned Content Channel Ideation Execution
  55. 55. Digital Agency
  56. 56. Digital Agency
  57. 57. Experience Design Firm The Product The Brand The Purchase The Experience Paid Earned Owned Content Channel Ideation Execution
  58. 58. Experience Design Firm
  59. 59. Experience Design Firm
  60. 60. Analytics Firm The Product The Brand The Purchase The Experience Paid Earned Owned Content Channel Ideation Execution
  61. 61. Product Development Firm The Product The Brand The Purchase The Experience Paid Earned Owned Content Channel Ideation Execution
  62. 62. Incubators and Venture Capital Firms The Product The Brand The Purchase The Experience Paid Earned Owned Content Channel Ideation Execution
  63. 63. The Product The Brand The Purchase The Experience Paid Earned Owned Content Channel Ideation Execution Which dimensions are most common in your model?
  64. 64. Client % of income related to PRODUCT % of income related to BRAND % of income related to MARKETING 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. All other clients Where do you play on the value chain? % of income related to EXPERIENCE
  65. 65. Client % of income related to PAID % of income related to EARNED % of income related to OWNED 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. All other clients What classes of media do you utilize?
  66. 66. Client % of income related to CONTENT % of income related to CHANNELS 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. All other clients Are you focused on content or channels?
  67. 67. Client % of income related to IDEATION % of income related to EXECUTION 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. All other clients Are you about ideation or execution?
  68. 68. SINGLE SOURCE BEST OF BREED SERVICE INTEGRATOR 2. What media classes you utilize PAID EARNED OWNED 3. Focused on content or channel CONTENT CHANNEL 4. About ideation or execution IDEATION EXECUTION 5. Where you play on the value chain PRODUCT BRAND 1. How clients access your services MARKETING Mapping your current business model EXPERIENCE
  69. 69. “If we don’t kill our old business models, someone else will. But if we are ruthlessly curious, learn relentlessly, and fail harder, we get to reinvent the business of persuasive communication for the connected age.” Renny Gleeson Weiden+Kennedy
  70. 70. www.IgnitionGroup.com Propulsion Blog www.IgnitionPropulsion.com @TimWilliamsICC @IgnitionGroup www.linkedin.com/in/TimWilliamsICG “Positioning for Professionals” by Tim Williams

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