An Emerging Agency OS
outcomes have become divorced from outputs
clients seek a profitable growth outcome, agencies seek rewards from a famous output
Clients like increased profit, agencies like making things
Consequently, clients don't always value the same things as agencies do
Replacing a client with a new one easily costs £100k or more. Our failure to align is eating into our profit and morale.
-Our business model:
Agencies have two masters but only get paid by one.
Agencies are addicted to short term client cash whereas consumers offer an additional revenue stream.
Spend will slowly flow away from agencies to cheaper crowd and outsourced services. All areas will be affected, from strategy modeling, to production, to optimisation to ideas.
As marketing, products, services and media merge, agencies, with new partners, will be able to service consumers as well as clients.
what's the need?
Client needs are simple: Clients need Ideas, Innovation and (real time) Intelligence to power sales.
Agency needs are to attract best talent and to increase revenue to pay for that talent and any (currently lacking) R&D
-Talent: Agencies are full of inventive and productive people but servicing clients full-time undermines motivation. If they are to be kept in agencies, agencies will need to find better ways to fulfil them.
-Revenue: Agencies have loads of ideas but make too few. We can divorce ourselves of client only revenue by exploiting our existing ideas and engaging new partners to fund and develop our ideas to successful launch and customer revenue.
what are the trends?
Two agency types are emerging - those that value outcomes, and those that value outputs:
1) Outcomes agencies will worship effectiveness and will be built around the client's business. They will become convergence consultants to deliver Ideas, Innovation and Intelligence (from any source) to grow client profit over time.
2) Output agencies will continue to generate big ideas, they will create fame for clients but will also develop new revenue streams for those ideas from direct to consumer products and services, thereby beating their addiction to short term client cash
All agencies need an AgencyOS – a data driven platform and structural/organising principle to deliver real time insight, development and optimisation.
The most successful agencies will deliver both ideas and effectiveness. But those will be rare as the increase of channels and approaches continues.
1. the agencies closest to the data will lead their agency partners. The most successful agencies will combine ideas and data talent in equal measure.
2. in client organisations, the older generations will cede control to younger managers investing ahead of the curve for the real time and digital future that’s unfolding. This will come too slowly for some. Those that don't answer customer’s immediate needs will quickly lose customers.