Most of the time, people coming into advertising picture it works something like it does on Mad Men. A client comes to an agency, says “Make us famous” or “Make people want to buy our stuff”. The agency comes up with an idea, pitches it to the client, the client buys it, and some time later, the advertising appears on your TVs & in your magazines. It’s a ‘million dollar campaign’ and everyone drinks champagne.
(usually) small teams working closely together with constant interaction streamlined process - quickly finding an insight that triggers a creative idea, often by talking to people outside the building. clear objectives (to win!) and only one deliverable (the campaign). you don ’t have to produce the work yet, just a prototype of the campaign.
The momuments return. The departments return to their floors and set to work agreeing on ‘deliverables’ with clients, and then creating those ‘deliverables’, presenting them to the clients, and incrementally changing them to reflect all the internal politics and preferences of a client who - often - has never met the creative teams producing the work, or the consumers who will determine the success or failure of the campaign.
Let ’s do the math. If you did a $1 million campaign, the agency would make $150,000 in revenue. Of that, the agency would have made $30,000 in profit. That ’s 3% profit on a lot of effort. 85% of the money the client gives an agency goes to someone else.
We even knew it would require no change to their manufacturing facilities, that they already had access to the ingredients, and that, in fact, they would only have to take things out of the process, rather than add anything in. It wouldn ’t cost them any more than they currently spent, and might even have cost them less.
Nobody loves trends more than agencies. We love a new buzz word, and we start spewing them constantly. The incentives and market structure aren ’t there.
Lean Fables from Adland
Two Lean Fables from Adland #LeanIgnite
Our business: Ads. <ul><li>Commissioned by clients. </li></ul><ul><li>Designed by agencies. </li></ul><ul><li>Executed by vendors. </li></ul>
All agencies seem lean in a pitch. http://rpminsights.blogspot.com/2010/04/our-creative-department.html
But after a pitch... <ul><li>Client RFP </li></ul>Media Production Planning & Creative Creative Testing Account Service
How do agencies make money? <ul><ul><ul><li>Billings = Whatever it costs to produce work </li></ul></ul></ul><ul><ul><ul><li>Revenue = ~15% of billings </li></ul></ul></ul><ul><ul><ul><li>Profit = ~20% of revenue </li></ul></ul></ul>
Perverse incentives <ul><li>Agency v. Manufacturer </li></ul><ul><li>Campaigns v. Product </li></ul><ul><li>ROI? </li></ul>
No vision. <ul><li>Research is too often used the way a drunk uses a lamp post: </li></ul><ul><li>for support, rather than illumination. </li></ul>
But we got out of the building anyway. <ul><li>It couldn ’t have been the bits - </li></ul><ul><li>Nobody knew they were gone. </li></ul><ul><li>In fact, nobody ’d heard from the brand in years. </li></ul><ul><li>People (and dogs) had changed - </li></ul><ul><li>Lots more choices, no more junk food. </li></ul>
“ You’ve got 99 problems... and the bits ain ’t one.”
We suggested a pivot. <ul><li>Three-ingredient dog food. </li></ul><ul><li>Real food, no fillers. </li></ul><ul><li>With a new brand ID & campaign connecting the old, loved image (something dogs love), to a new doggie parenting style (something owners love giving dogs). </li></ul>
“ Thanks, but we just wanted to know if it was the bits.”
It ’s easy to talk about lean. It’s hard to be lean. Google #Firestarters: Agile Planning Do Agencies Need to Think Like Software Companies?
Principles of Lean Start-ups (for Ad Agencies) <ul><li>Assume the client briefs are hypotheses to be tested. </li></ul><ul><li>Continuous customer interaction - with both client & consumer. </li></ul><ul><li>Establish clear goals for the campaign from day one. </li></ul><ul><li>Start simple, and then iterate on successes and learn from failures. </li></ul><ul><li>Create right-sized, integrated teams, provide the right resources & tools as they are needed, and keep score with vendors & partners. </li></ul>