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The 21st Century Advertising Agency in 21 Minutes

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The emerging characteristics of advertising agency business models that are leading in the 21st century.

Published in: Marketing, Business, Technology

The 21st Century Advertising Agency in 21 Minutes

  1. 1. The 21st Century Agency in 21 Minutes Presented by Tim Williams Ignition Consulting Group www.ignitiongroup.com
  2. 2. The Satir Theory Where are we now?
  3. 3. “As the world changes, and I continue to explore different business models, I keep running up against new competitors. I'm trying to map out as many different places that we intersect and compete with companies in other industries as possible. From media companies like Meredith who have purchased agencies so they can create content directly for clients, to entertainment companies like Electus in Hollywood, to data companies, to technology companies like Foursquare that have direct client relationships, to media agencies that are now in the content creation business like Starcom’s Liquid Thread, to PR firms, to design firms, even companies like Accenture vying for their share of analytics and digital production.  It seems everyone is bellying up to today’s pool of marketing dollars. Technology has made it possible for everyone to expand their capabilities and all of the different ways to reach the consumer has really grayed who does what.  Net, not only have our options to reach consumers increased exponentially, but also the universe of our competition.” BBDO Executive
  4. 4. PR FIRMS AS “FULL SERVICE” AGENCIES
  5. 5. PR FIRMS AS “FULL SERVICE” AGENCIES
  6. 6. The 21st century agency has competencies focused on “pull” instead of “push”
  7. 7. “The Bridge”
  8. 8. The 21st century embraces the open source concept
  9. 9. Level of involvement Create the content Control the content Consume the content Level of creativity Evolution of content
  10. 10. June, 2006 CROWDSOURCING
  11. 11. New role of agencies: Not just create, but curate.
  12. 12. Crowdsourcing Model
  13. 13. Expert Sourcing Model
  14. 14. The 21st century agency knows how to create value in a disintermediated world
  15. 15. DISINTERMEDIATION “The Internet, World Wide Web and secure e-commerce has empowered the firms that create the product, service, or intellectual property at the source of the value chain to directly sell to customers, thus eliminating the need for costly, and thus inefficient intermediaries.”
  16. 16. THE DECLINE OF THE “AGENT”
  17. 17. “The disintermediation of everything.” David Smith Global Futures and Foresight
  18. 18. DISINTERMEDIATION IN MEDIA
  19. 19. DISINTERMEDIATION IN PRODUCTION
  20. 20. DISINTERMEDIATION IN IDEATION
  21. 21. DO YOU SELL COMPONENTS OR SOLUTIONS?
  22. 22. WHERE WOULD YOU RATHER PLAY? OVERDEVELOPED SERVICES UNDERDEVELOPED SERVICES Satisfied client needs Overserved markets Unsatisfied client needs Underserved markets Strategy: Low Cost Leader Strategy: Innovator Many providers Low margins Few providers High margins
  23. 23. The 21st century agency works in an agile way
  24. 24. “Marketing will be carried out in the digital spaces by people quite different from the ones who inhabit today’s agencies. They will be what Thomas Friedman calls ‘versatilists,’ able to write and draw and program and read research. Agencies that are able to offer a staff like this will resemble Pixar more than they resemble the agencies of today.” Jeff Goodby
  25. 25. Agencies are organized like classical orchestras in a jazz age. - Rashid Tobacowala
  26. 26. The Industrial Revolution created scale The Digital Revolution decimated scale Bob Garfield and Doug Levy “Ignore the Human Element of Marketing at Your Own Peril” Advertising Age
  27. 27. The Agile Philosophy 1.  Small teams that are empowered to make decisions about the project. 2.  Constant collaboration (daily “scrums”). 3.  Everything is iterative; work is constantly improved based on feedback.
  28. 28. Small business units, small teams “To become more adaptable, companies must ‘disorganize’ into smaller units.” Gary Hamel London Business School Average team size at Google = 4
  29. 29. “The Beatles were never more than four men and George Martin; they didn’t get bigger to get more creative.” Dave Bedwood Creative Partner
  30. 30. This is not collaboration
  31. 31. Collaboration is not a meeting – it’s a cultural way of working
  32. 32. Collaboration springs from culture An open, risk-tolerant culture that encourages multiple sources of input; emphasizes innovative problem solving. .vs A nose-to-the-grindstone culture that emphasizes efficiency and “getting the work done.”
  33. 33. Collaboration depends on how you define success Completing a job “under estimate.” .vs Solving a marketing problem in a brilliant way.
  34. 34. The 21st century agency is adopting the new discipline of behavioral economics
  35. 35. Behavioral Economics: A new strategic imperative for agencies “Hundreds of agencies have developed models for ‘how marketing communications works.’ What’s needed now is for agencies to base their business on ‘how people work.’ Rory Sutherland, President Institute of Advertising Practitioners (IPA), Vice Chairman, Ogilvy, London
  36. 36. Behavioral Economics The study of how people work
  37. 37. Choice Architecture
  38. 38. Advertising or PR? Does it matter? Corona “Save the Beach” Project
  39. 39. The majority of revenues of the major marketing communications holding are now derived from non-advertising activities.
  40. 40. The 21st century agency goes beyond “work for hire”
  41. 41. What keeps clients up at night? The need for experimentation
  42. 42. Innovation fund
  43. 43. Exploring new channels requires a “test and learn” approach
  44. 44. Are you just an “agent” acting on a client’s behalf, or should you also invest in “product development?” Agency R&D
  45. 45. Why always “work for hire?” All campaigns, trademarks, service marks, slogans, artwork, written materials, drawings, photographs, graphic materials, film, music, transcriptions, or other materials that are subject to copyright, trademark, patent, or similar protection (collectively the “Work Product”), developed or prepared by Agency or its employees, agents, contractors, or subcontractors under this Agreement, are the property of the Client, provided: (i) such Work Product is accepted by the Client within twelve months of being proposed by Agency (and such acceptance is reflected in written form from Client to Agency received within such twelve-month period); and (ii) Client pays all fees and costs associated with creating, and, where applicable, producing such Work Product. Subject only to the two aforesaid Conditions (the “Conditions”), all title and interest to Work Product shall vest in Client as “works made-for-hire.” To the extent that the title to any such Work Product may not, by operation of law or otherwise, vest in Client as a work made-for-hire, or any such Work Product may not be considered a work made-for-hire, all right, title, and interest therein is hereby irrevocably assigned by Agency to Client.
  46. 46. The ultimate expectation clients have of us: That we should be investing in our own future SERVICE BUSINESS
  47. 47. “The most important question for any organization is this: are we changing as fast as the world around us?”
  48. 48. www.IgnitionGroup.com @TimWilliamsICG www.linkedin.com/in/TimWilliamsICG “Positioning for Professionals” by Tim Williams

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