Given the breadth of services, all multidisciplinary agencies are now essentially the same.
Hello, I'm Neil Perkin, the host of Think with Google Firestarters.And Firestarters is a series of insightful conversations with the interested and the interesting of the marketing, advertising, and innovation communities.
Now, one of the most interesting areas of challenge within advertising right now is how agencies can drive growth. in a fast-changing and rapidly developing agency and client landscape.
And I'm delighted to say that we have the perfect person to help us understand some of the challenges and opportunities that agencies have.
Robin Baum, the CEO of Codefinery, which is a specialist consulting and coaching business, helps agencies create their own market of one.
So they enable them to accelerate growth, command a premium, attract the best talent in the market, and he's advised many of the world's best-known agencies, from indies like Analog Folk and Amplify and Stink Studios, to network agencies including DDB and UM, McCann and Mullen Lowe.
So Robin also actually has an excellent podcast called The Immortal Life of Agencies, which seeks to add a bit more positivity around the business of running an agency.
He's also a Marketing Week columnist, the co-chair of Beamer's Future Growth Council, and a mentor for, she says, supporting women and non-binary people in the creative industry.So Rob, welcome to Firestarters.Delighted to have you on.
Could you tell us a bit more about what you do?And also, of course, what your provocation is for the Firestarters audience?
Yeah, wonderful.Thank you, Neil.I'm delighted to be here.It's something that I've aspired to appear on for a long time, so I'm thrilled to be here.Thank you for the invitation.
I'm not sure the listeners probably want to hear much more about that lengthy introduction.I'm almost tired just listening to all of it.There's so much stuff to do, but it's all good.
The simple way of describing what Codefinery does is really we help agencies figure out what they're uniquely good at, and then we help them command a premium with the work that they do.
And everything else we do across the consulting side of the business and the coaching work that kind of lines up behind that as well.So the provocation, let's get into the meat of this quickly.So the provocation that you and I came up with was this.
So given the breadth of services, all multidisciplinary agencies are now essentially the same. Now, I love this as a provocation, and I'll just speak to it for a second ago.
I think a lot of people would agree that that is true, and I think other people would absolutely argue to the death that it is not.For me, I tend to imagine that there are shades of grey in here, so I think there's a lot of subtlety in this.
So, I'll just say it again.Given their breadth of service, All multidisciplinary agencies are now essentially the same.So where I think that's true is if you look at this through the lens of capabilities.
So I would argue that we are effectively, and I say we as agencies for the sake of argument, we as agencies are in effectively a post-capability world.
So what I mean by that is that the days of agencies being able to differentiate themselves on the strength of their discipline, the things that they do, are long gone.And that, I think, stands to reason.
There's very few agencies that just do one thing very well.You don't see any ad agencies that don't do social.You don't see any SEO businesses that aren't into content.And so it goes on.
So yeah, I think if you look at that statement through the lens of capability, agencies are very, very similar.
Now I think the truth of the matter is that when you start to look at the best performing agencies in the marketplace, you get some quite interesting things come out.
So one of the things I like to do if I'm at a conference is to ask everybody in the audience, who is the agency you can think of that's absolutely smashing it?
It's the one that seems to just pick up the best clients, best work, best awards, best fame, all that kind of stuff.
And it doesn't matter where I do this, what part of the world, or what kind of disciplines that kind of audience might skew towards, you always get very, very few names come up, usually three.
Rarely, if ever, more than three, but sometimes less than three.And the usual suspects come up.If it's a sort of advertising-centric group, people right now will be talking about uncommon.They'll be talking about mischief.
They'll be talking about gut.And that's fine.And everyone kind of settles into that question quite quickly.The next question is, what do we think, as an audience, that these agencies are doing differently? And then things shift dramatically.
There's no consensus at all.There's all sorts of different answers about why it is that these agencies are particularly thriving.And I think there's a real interesting observation to be made.
We can be very clear as an industry which agencies are not the same, but we're not very good at explaining why they're not the same.
And just to sort of wrap up this opening monologue, I would have a strong view on this is that the single biggest difference between the agencies at the top of the tree and the ones that aspire to be there it's really down to mindset.
And I think the ones that get it are the ones that understand what I see in the marketplace, which is most agencies, I'd go that far.
The majority of the agencies in the marketplace, probably globally, but certainly in the Western world, look at the market and they see that it's oversupplied.I would question that.I don't believe the market's oversupplied.
I think it's underdifferentiated. And I think once you recognize that distinction and behave accordingly, you're much more able to sort of write your own story effectively.The marketplace doesn't happen to you.
You define the market that you want to be in.And that's really where the whole market of one idea in terms of what co-definery delivers.That's where it lives and dies in that distinction.
Great, that's so interesting.So let's dive into that in a bit more detail.I mean, there's lots to talk about.I'd like to dive into things like agency business models and the future of agencies and AI, of course, as well.
But before we get there, differentiation problem, which you're framing, and the idea of a market of one, tell me a bit more about how agencies can differentiate what they do, how they can create this idea of a market of one.
Yeah, I mean, again, there's loads in this.I think one of the issues that agencies see, particularly the larger ones, is that there's a lot of vagueness around the language in this space.
So we talk about positioning and proposition and mission and vision and values, and we sort of toss these ideas around like confetti.
And generally things like positioning, certainly as I say from a large agency point of view, ends up really just being a pithy strapline.There isn't a great deal of substance that sits beneath it.
Now this might have CSOs the world over pushing back in anger saying, well that's nonsense, we have a strong strategic process that underpins our positioning.
But really what I mean is that I think there's a confusion between a sort of strap line, which is a sort of pithy two to four word statement, and an actual value proposition that offers the marketplace some means of deciding whether agency A is right for them or not right for them.
So I think one of the things that really helps here is to recognize that positioning isn't a strapline.For me, positioning is just the discipline that you're in.We're an ad agency.We're a CRM agency.We're a global marketing services network.
It's the ballpark that agencies can put themselves in to make them easy to find by their chosen target audience.And in contrast to that, I would say your proposition is the most succinct distillation of your business strategy.
So the sad truth, I think, here, and I know this from having done this for a long time, and we probably repositioned 120, 130 agencies over the years, is that when you ask an agency what your business strategy is, you get quite a woolly answer quite a lot of the time.
And that's never better exemplified than when you ask an agency who their target audience is, and you either get very, very top line ideas, or we book off Well, the target CMO is because they have money and authority, which is incredibly broad.
Or you get very granular sort of pen portrait ideas.Oh, our audience is Jane.She's a head of UX in a financial services business.I think there's space for that level of granularity in pen portrait, but that's really more of a marketing question.
What I'm talking about is having a clear conceptual target that you can start to own.Because once you're clear about who you super serve and you're able to define that conceptual group,
and you're able to define the problem that you solve for them, rather than trying to bring all things to all people, that's really what starts to put a valuable value proposition together, and that's really what allows an agency to own its space.
OK, and you mentioned earlier about some of the agency names which might typically come up if you were to ask 200 people that question.But obviously, proposition relates to how they make money as well.So let's just begin.
And before we get to the sort of business model money part, perhaps a bit more on the agencies which are doing proposition really well.
So is this restricted to a certain type of agency or is this really about networks and creative studios at both ends of the scale, I suppose, which are actually defining their propositions well?Who's doing it well?
Yeah, it's a really interesting question because I think this is really an emerging trend.And the obvious answer to who's got a meaningful proposition is probably Uncommon Creative Studio.
You know, since they launched, I think probably about whatever it is now, five or seven years ago.
Um, they've been very, very clear in the way that they've spoken to the market and talked about, um, and I'll probably mangle the words ever so slightly, but they talk about, um, creating brands that people in the real world wished existed.
I'm sure they express it slightly more eloquently than I have.But I think what is interesting there is that they are speaking to a certain kind of mindset.That's their target audience.
They could be big brands, they could be small brands, they could be, you know, sort of, you know,
Having been around a long time and need a kind of reinvigoration or it could be, you know, something that's just been funded and no one's ever heard of before solving a problem that, you know, no one knew they had.
I think what's interesting is that they apply a lens to the kind of work they want to do.
And I know from having spoken to one of their founders, Natalie Graham, she talks about there being a very active dialogue in the business about, you know, who do we want to make famous? And for one, I absolutely love the swagger of that.
They know they have the ability and the skills and the conviction to make brands, you know, to sort of supercharge their progress.And they have a degree of responsibility there.
So in amongst that stuff, not only is there quite a clear line about what they do, there is some clear delineation between that and what they won't do.
So there's much clearer guidelines in the business about what they might say no to, or what they might push back on if the client suddenly decides to get cold feet and they're heading in one direction.
So there's real permission to challenge the client in there as well.
So I think being able to be very explicit about your convictions as an agency, having a real strong point of view about what you genuinely believe in, not just some pithy to say to the market, which sounds cool,
That's where these clear value propositions start to come from.
So yeah, to your point about models, I think it's easier for an independent to do this stuff, just because it's easier to get everybody around the table and really distill down what everybody believes.
But frankly, the same is true of the larger agencies and even the holding companies.They're still ultimately governed by a group of people.So get them around a table, take them through a process, get super clear on what's important to them.
And you can start to craft a space in their marketplace, a value proposition that makes sense.And it'd be representative of genuinely what that group of people believes is the right thing for the future of their stakeholders and frankly, the planet.
Yeah, I mean just to echo what you said there, I mean we had Lucy Jameson, one of the other co-founders of Uncommon on Firestarters as well, she was talking a lot about boldness and bravery and you know just having that kind of point of view about things as you were saying there.
I mean, it's the whole kind of emergence of creative studios like Uncommon is quite interesting, isn't it?What sort of trends are you actually seeing really with how agencies are emerging or structuring themselves?
So tell me a bit more about what you're seeing in terms of the landscape.
Yeah, I mean, I think it's a fascinating time.There is so much change happening.
And I think it's being dramatically accelerated by AI and the, you know, the sort of ripple effect of what people are imagining AI is going to be able to, you know, help agencies achieve.I'm sure we'll come on to that one in a minute.
But I think from a holding company perspective, there are some pretty polarized views out there.I think a lot of people working in those big agencies are worried.The job security that they thought they had is, let's say, shaken at best.
People will argue that holding companies are in managed decline, they won't survive the next five years.I don't think that's true.I think they are certainly in a period of transition.
Clearly, clients are looking for more and more and more, for less and less and less, and that's been going on for 25 years.
But there's no getting away from the fact that maybe they used to make 30% margin, and particularly the creative agencies, they're making less than 10 now.
My optimistic view, and I always will take an optimistic view on this, because I think brand is too important for big clients to just let big agencies disappear into obsolescence.
I also think there's too many very smart people in agencies to let that happen as well. There are some big challenges out there.There needs to be more differentiation beyond rhetoric.They need to change how they charge.
The way we look at resorting in agencies, the different models of bringing together groups of people for short or longer periods of time.I think there is a weakness in a lot of agencies.They're not particularly trusted advisors to their clients.
roll up, give stuff away, and we've talked about this as an industry for a long time, I don't just mean giving ideas away in pitches, but of course over-servicing clients.
All that sort of inefficiency is so baked into how the large agencies operate, and obviously changing that is all kind of hampered by the constraints of reporting to the stock market, so that sort of short-termism is almost kind of baked in.
So the point about creative studios, a lot of those issues are just as prevalent in the independent agency community as well.I think generally there's more sort of business model innovation in some of the indies because it's easier to do.
But the reality is that so many indies are running the image of the larger agencies in the way that they communicate their value, in the way that they service clients, in the way that they charge.
what do you think about pricing you know that's what i had to choose about you know the class holding all the cards you know just isn't true my opinion say i think there is opportunity for innovation right across the board i'm you know we've seen this long-term with independence like you know the mother's the widens the elements of this world
You can carve out a niche and i'm really not fond of the word niche because everyone thinks it means small i don't think it does.
You can carve out a space in the market that you can own with your big with your small with your listed with your independent.
I don't think any of those are fundamental blockers to creating that kind of you know ownable space that i think agency should aspire to.
You mentioned though about sort of changing how they charge and earlier we were talking about proposition and proposition obviously would be tied into how you make money as well.So let's get stuck into your remuneration models.
There was an interesting piece of work which the IPA did, which I think might help frame this, the IPA Institute of Practices in Advertising, and so they kind of frame these sort of inputs, outputs and outcomes kind of models, these ways of remunerating an agency.
So inputs Based on an agency record, I suppose, you're basically getting paid for the things that you're actually doing as a kind of retainer fee, if you like.
Outputs, where you're more being paid on the things that you're actually creating and that you're doing. And then outcomes is, of course, paid on performance or the result of the kind of work that you're actually doing.
So three very different models there.What are the trends that you're seeing in terms of how agencies are redeveloping their remuneration or the way in which they need to?
Hmm, such a fascinating multifaceted question.I also think sometimes it's the wrong question.We get very sucked into what are the emergent pricing models, when actually I think the models are not actually that innovative.
We see them all around us in our daily lives.The blockers that agencies face are more attitudinal, they're more cultural, which is probably the bigger and broader conversation. It's almost important, I think, to go a step back before we go forward.
So you and I have spoken before about something called the Smile Curve.It came out of Acer computers in the early 90s.A guy called Stan Shee that created it.
This probably won't work super visually for anybody who's listening to this podcast on their headphones.But the basic premise of the Smile Curve is that there is a smile-shaped curve which tracks the way that agencies
value is perceived by their clients over the chronology of a typical you know project let's say so if you think of the the tip of the smile on one side it's at its highest when the client is doing the thinking so the strategizing and concepts etc it then dips in the middle of the smile when the agency gets into things like um you know
the sort of legwork, if you like, so the kind of creation, the distribution of the work, and then the smile sort of returns back to its tip and the curve rises again when the client perceives value in things like, you know, measurement and, you know, the iteration and optimization of the work.
So that's the kind of classic smile. The problem comes is when you overlay how agencies make money over the top of that and effectively the smile is turned upside down.
So that same sort of left hand end of the timeline agencies are giving stuff away at the point when the client values it most. to get in the strategy, the concept and stuff like that.
When you get into the legwork is the top, you know, the sort of peak of the hill, if you like, where agencies are sort of hoping to make their money back, which is where the client values their services least.
And then oftentimes, agencies will be, you know, sort of less beholden, if you like, or at least less able to get into a meaningful conversation about how successful the work has been.
But it's the middle of the curve that I think is mostly relevant here.
Because if you're an agency and you give a lot of stuff away, particularly thinking, and then you're looking to make money on the delivery, the doing, that's going to become even more problematic as time goes on.
Monk's chairman, Sir Martin Sorrell, he was in the press, I think, towards the back end of last year.He said, for anybody selling time, AI is going to be a double-edged sword. I have to take my hat off to Smart in there.
I think that's probably the best understatement I've heard in a long time.
It just, it beggars the belief to imagine that your business model as an agency is not going to change if, you know, a machine with a big red button can't just be pressed and all of a sudden loads of stuff is created at speed.
The idea that clients aren't going to, you know, and aren't already wanting those savings back is a nonsense.So that's why we're having to look at very different ways of charging for our work.
So to go on to your point about the business model, or at least the way that agencies capture value from the marketplace, the fundamental challenge is if you're selling time, then you have a constraint on how much money you can make.
Because if you want to do more stuff, you need more people, and that's fundamentally limiting.
So why wouldn't you, particularly with the sort of catalytic effective AI coming into the market, why wouldn't you want to put together packages of value that allow your client to say, right, I'll have one of those or one of those in the same way that we say, right, I don't want an iPhone.
It's too expensive.I'll have a Samsung instead or whatever it's going to be.The market can make a choice.And I think that subjectivity is one of the mindset shifts which are so important.
I can spend 250 quid buying a gig ticket to go to see Bob Dylan.And I did.And it was a bit, which I expected because Bob Dylan, um, bless him.He's still touring, but he's famously a bit ramshackle when he plays.
I think the following week I spent 25 quid to go and watch Steve Mason play X of the beta band.If anybody's into that stuff.Um, and he was amazing.So he pays you money.He takes your choice.The question is whether I'd go and see Bob Dylan again.
Probably not.Would I pay more to go see Steve Mason again in the future?I would.
I think once we kind of accept that there is going to be some unknowability, some risk in what we're offering to clients, whether it'll work, whether they'll want to hire us again, then that was always going to be the case.We can't edit that away.
So I know this is a very long answer, Neil.I apologize.But absolutely, we can get into different pricing models.But one of the issues we face there is that as agencies, we're babies.
We've got very little experience of doing anything that isn't time and materials.And what I see time and time again when we're working on pricing stuff is that people say, oh yeah, time and materials, I get that it's limiting.
But we tried payment by results once and the client wouldn't give us the data or they weren't very happy to pay us a bonus.And we have this bizarre dichotomy where it's either you're selling time and materials or you're selling payment by results.
and that's a nonsense.There's so much, you know, as you suggested about three hours ago when you asked me this question, there is a huge amount of options that an agency has and a client has to navigate to get to a pricing model that works.
I'm going to take a breath there, otherwise I'll just keep on talking.
That's all right, I mean it's a really fascinating subject I think.
One question that I wanted to ask actually on the back of that though is that sort of small curve is just a brilliant way I think of articulating the disconnect in the market perhaps.
um between what you know the perceived value and the and the kind of way in which agencies are actually making money and particularly the kind of um uh you know the thinking the strategy piece which um and there's long been talk really about how maybe ad agencies should become more like management consulting perhaps because management consultancies are able to kind of charge for their thinking and
you know, they can actually make money from that.Do you think that's true?Is it really the case that ad agencies should become more like management consultancies?
Again, it's a very blanket description.It's like saying that cars should be more like lorries.Well, maybe at points they should, because cars should have four-wheel drive.I don't know.
But I think they're two very monolithic things being trying to be spliced into one.So there's a lot of what consultancies, the large management consultancies do, which I think agencies can look at and think we can learn from.
There's a number of agencies we work with over the years who have sought to build a more consultative model. We get into quite theoretical discussions about what makes it a consultancy versus what makes it an agency.
So I think there's a few things here.So fundamentally, consultancies make more money, rather than the sort of 100,000 or 100,000 pound, $150,000 per head. of revenue that agencies are kind of satisfied with.
Looking at a significant management consultancy, you're looking at, you know, three or four times that.So there's something interesting going on there for sure.
That's represented in the profit margins, said sort of sub 10 for a lot of agencies these days.Many will be very, very happy with 15 or 20, perhaps looking at 30 or 40% for, you know, for many consultancy businesses.
I think what a lot of consultancies do well is they are, and I think again this is an important nuance, it's less about the business model and it's more cultural, they are just fundamentally more consultative.
So it's yes about, it's that little distinction between being a think for me or a do for me agency.I think that's one of the things that AI is gonna impact.
If you're an agency that sort of sits back and waits to be told what to do, here's the brief, you know, or you ask staff questions like what keeps you awake at night, you're really just asking to be spoon fed by your client.
Whereas, if you're able to go to your client with a point of view and say, listen, this is what we're seeing.We think there's some implications for you.I think you need to get ahead of this.You are leading the conversation.
You are being consultative.The client isn't just sort of leaning back and seeing your work and, yeah, you're pretty good.I'll give you a call when I need you.They're leaning in and saying, OK, well, this changes things.
you know, I need to act on this, how do we move this forward?And that is really, for me, the beginnings of a trusted advisor relationship, or at least the evidence of that potential being in place.
So I think undoubtedly, that's the biggest gain that any agency of any size in any business model can implement quickly, is to be more consultative, and to bring a point of view to their clients so that they can start to influence the priority set that that client, you know, is, is working with.
So I mean, as part of that, there's this whole idea of agencies should get more upstream.You hear lots of people talking about that.
And rather than just responding to a marketing brief, they should understand the business problems at the heart of the marketing brief, what's come before that brief in order to result in that creative brief, perhaps.
So do you think that is really where agencies need to head?They need to expand their footprint perhaps beyond marketing, they need to get further upstream into businesses, is that the case?
I don't know.I mean, this one's been going around for so long, hasn't it?I think it's a bit of classic agency self-flagellation.Oh, we need to get more upstream.Well, yeah, maybe.
But if you're a sort of small SEO agency in a suburb of West London and your marketplace is local businesses, then you probably don't need to get upstream, really.
And likewise, if you're Mark Reed, and you're probably having quite a lot of very upstream conversations with at least CMOs, and I'd like to think with CEOs as well.
So the logic of speaking to decision makers and not allowing your sales conversations and your client service conversations to be intermediated by a bunch of middle people
I think the logic of that is as old as the hills, and I think it certainly makes a lot of sense.I mean, arguably, as I say, the self-flagellation thing is it's not that agencies don't do that, it's perhaps they do it less than they did.
I'm not going to reference a certain sort of 60s themed advertising TV show, because frankly, I'm so glad that we've stopped referencing it.
But the world was very different when a lot of the cues and a lot of the sort of self-esteem of the industry was originally set.And obviously, things have changed dramatically since then.
So we don't necessarily have a right to have the ear of the chief exec of a PLC. So yes, have conversations with the people that matter.Yes, get to decision makers.
But it's a little bit of, you know, it's like asking doctors, should they question their patients about their symptoms?Or should they just give the drugs to the patient that they come up asking for?
And it's a nonsense question, really, when you put it in those terms.So yeah, get upstream if you can, but only if you should.
I guess one of the interesting lenses on this is customer experience, I suppose, because marketing is part of a sort of broader set of elements that comprise customer experience now that goes outside of marketing and into many different areas of the business.
And so if you're really going to kind of, you know, Well, in fact, as your better way of framing, this is Richard Huntington, who was one of the first guests actually on Firestarters several years ago.
But he actually framed this is a really nice kind of catchy sort of phrase, which he called brand led transformation.
And what he was talking about there is the fact that actually the brand can play the kind of lead role in a business transformation, because it can be the kind of North Star, which can dictate all kinds of different elements of customer experience.
And that really, to me, sort of seemed to kind of signal a need for perhaps agencies to think more broadly, perhaps, about the role of brand within a business, the role of creativity that they can
for creative problem solving, but also about customer experience.So do you think there is an opportunity perhaps in this idea of brand led transformation?
Yeah, I do.I, you know, Richard, I don't know him well, but he's obviously a very smart guy.And I think that I remember reading about that at the time.
You know, we've as an industry, you know, and I suppose I'm talking about mainstream advertising and, you know, creative media agencies.So that's sort of subset of the agency space.
We have an incredible skill set and a credible depth of experience about what makes, you know, businesses grow.
I think where we've come unstuck over the last 20, 30 years is failing to continue to grow the way that we apply those skills, particularly as, as you quite rightly say, sort of customer experience has emerged as such an important battleground in the way that companies seek to sell and to develop loyalty on behalf of consumers.
i mean i think i can tell us what my banks are you a tv commercial say i do care about is the customer experience i want to be able to do my business banking on the phone i want to pick up the phone and know that i'm you know my mobile when i call them if you don't call send to be able to solve my problem i'm so that the sort of.
You know, the role, let's say, of traditional marketing comms perhaps isn't quite so singular as it was.But the impact of brand on those other touch points is massive.
I mean, you know, so the idea is to say that, you know, an agency wouldn't have a strong view about the way that brand is going to impact business performance.
I think it does a disservice to the most senior, smartest people in agency land to suggest that they're not thinking in those terms.
I think the question is whether they're all running so lean now and so busy chasing their tails that they just don't have the time and the headspace to be able to take those kinds of systemic thoughts and innovative thoughts to the client community who are also under a ton of pressure themselves.
Let's not forget. But again, you know, I think the same thing applies, you know, sort of brand led transformation.
It's got some analogs within the way that Codefinery operates in as much as, you know, we talk about the agency customer experience, and it's one of those, you know, the same logic of customer experience, I think, applies to agencies as well.
So if you're sort of relying on some pithy strapline, which doesn't make much sense on its own, you immediately need to unpack it and explain it.You're already on the back foot if you're trying to communicate the value of what your agency does.
But of course, if every single touchpoint that your agency has, with all different stakeholders, also serves to substantiate a really clear value proposition, everything is proof of something.
So it means that whether an agency is, you know, a client is sort of experiencing an agency at a conference or, you know, some thought leadership in a sales meeting, in a pitch, you know, in a client onboarding process, you know, it's the same throughout the whole employee experience.
How does all of that stuff substantiate that the client does, that the agency is what it is, can deliver what it says it can deliver?
I think the idea of the customer experience as proof is massive and I think if that doesn't invite a conversation with the most senior decision makers in that organization, whether it's an agency or whether it's a client-side brand, that's a missed opportunity for sure.
Yeah, that's nicely put.I think one of the podcasts, one of your Immortal Life of Agencies episodes was with Michael Farmer who's written the couple of books on Madison Avenue manslaughter and Madison Avenue makeover, I think they're called.
about transforming agencies and one of the things you were talking about there was quite interesting which is about civility so basically you know agencies not pushing back enough on clients and getting squeezed.
I think you called it like a foot in the door business model you know the idea of just like getting your foot in the door and then we can just sort of grow from there and
you know being hopeful of client growth and so on and also michael i think made a really interesting point about how agencies are not very good at sharing the knowledge they have of the client business with the client themselves you know bearing in mind that you know if you got a cmo tenure of whatever whatever it is now 18 months or whatever you got this kind of churn going on
And actually the benefit of agencies who've worked with a client for a period of time, actually sharing the knowledge they have about their market, their competitive set, the organization and themselves and the history and what's gone on before, has been really valuable to marketers.
So tell me a bit more about this idea of pushing back against clients and also alongside that, sharing the knowledge that you have as an agency about that client.
Oh, this is a massive topic.You're going to regret asking me about this one.I come from a background where I started my career, I did about three years in technology before I started in agencies, just before the turn of the millennium.
I was fortunate to work outside the industry because it meant I was trained how to sell stuff.We don't really do much of that in our industry, which I think is a real shame.
One of the learnings I took from that is that there is a nobility in selling.I think of sales as service.
Because effectively, you're trying to help people get from where they are, which they might not be very clear on, to a state in the future, which they also might not be very clear on, and that state, that future state being a happy place for them.
And if you're the person to help them get from A to B, then great.And if you're not, then maybe you can help them find the person that is.And I think within that framework,
you know, the idea of challenging clients ceases to become this sort of, you know, scary, don't rock the boat, you know, sort of mindset, which is so pervasive in agencies.
Oh, hey, client service person, you know, is it possible for us to get maybe a testimonial of our clients so we can put it on the website?Yeah, no, not now.No, it's not a good time.
We're just in the middle of a launch or, you know, we said something last week and there's this real scarcity mindset where, you know, we've got to protect what we've got at all costs.
And I think that shows up in all sorts of places, but not least in those moments of truth in client conversations, whether it's when you've just met, or whether you're trying to close a piece of business, or whether you've been working with them for some time.
As a leader of an agency, empowering your team to recognize that it's not just advantageous to challenge your clients.
It's actually, you know, it's part of the sense of duty you have as an expert practitioner to say to them, you know, diplomatically, sensitively, and obviously this is an art form because some people don't want to hear it, but be able to say to the client something on the lines of, you know,
we should maybe think about doing this differently, or have you thought about doing it this way?
And you can dress up challenge in any way you like, perhaps the word innovation is a more sort of healthy banner for it, but at all points in that customer journey, particularly during the pitch process where we are as an industry so subservient, so much, yeah, yeah, yeah, we're definitely the answer, we're the best, of course you wanna hire us, what was the question again?
you know, the unwillingness to say, yeah, that's not really something we do.
The industry is peppered with stories of agencies actually, you know, saying no to the client, or pulling out of a pitch late in the piece, or resigning a client, and it being the start of something really good.
It being a really strong kind of teachable moment for the culture of the agency, it being an opportunity for the leadership to demonstrate that, you know, we care about our people.
So why we don't say no more often, and why we don't have a much broader debate about what no means, as opposed to the conventional definition being, oh, we say no to our clients all the time, which usually means, yeah, we declined the occasional pitch brief where there's no money or silly timings or it's an arms manufacturer.
The easy no's, they're immaterial.Of course you say no to that stuff.It's the difficult no's that are more interesting. So I think it's part of being a trusted advisor.
We can't really whinge about not being in meaningful partnership with clients unless we learn to, you know, to say what you mean and to bring useful contributions to the conversation.
And I suppose that has implications, doesn't it?
If you are kind of acting in that way, it makes it more difficult to maybe attract talent into the agency if you're not able to kind of question or challenge or, you know, really put a point of view forward.
So the question of talent is quite an interesting one and gets talked about quite a lot.What do you think is some of the key challenges here around attracting talent into the advertising industry and what do agencies need to do differently?
Well, I mean, it's a complex system, but it's not particularly complicated.Most agencies are worried about top line growth.Pitching's hard, growing existing clients is hard.They're worried about the bottom line.There's pressure from procurement.
There's pressure because they're over-servicing and giving stuff away.And of course, the lack of money and momentum and morale in the system obviously then cascades down onto people.Because frankly, what else is there?
And, you know, if people are exhausted, if they are, you know, underwhelmed at the lack of vision that the company is showing, if they are, you know, if their mental health is at stake, if they're on the verge of burnout, you know, if they're at risk of jumping ship,
which a lot of people are a lot of the time, which by the way, I think a lot of that has been exacerbated by, you know, sort of hybrid working, the kind of cultural bonds that, you know, tie agencies together are probably weaker than they've ever been.
So, um, you know, I'm always kind of sort of, we don't sort of talk about there being this sort of, um, crunch, if you like on, on hiring in the same way we did a couple of years ago, although I'm sure it's, it's, you know, it's still present to some degree, but it would always tickle me when I heard it, because if you go and talk to agencies that are very clear on what they do and what they don't do and who they are and who they're not, they've got a queue of people waiting to join.
It's not rocket science, is it?If you give the market, whether that's the talent market or the client market, something to buy into, then lo and behold, you're going to start to attract a disproportionate share of the best people.
So I think you're right.If you're an agency that can say, going back to Natalie and Lucy and Uncommon, if you can say, look, if you want to come here and work on brands that people in the real world are going to welcome into their lives, fantastic.
Come here.Come do the best work of your career. As opposed to any other agency saying, yeah, come along, you know, we've got a good job for you.There's some financial services stuff to work on.There is, you know, we've got a couple of retail clients.
It's quite hard, you know, it's quite, you know, pacey stuff.It's a bit of a thankless task, but you know, it pays the bills.
I mean, come on, it's, it's pretty simple, which, which person, any sane individual is going to want to, you know, want to listen to and go and work for.
Yeah, that's brilliant.And I think, I mean, your podcast, the Immortal Life Agencies, strikes a very upbeat note, I think.It's very optimistic about the potential of agencies to really kind of deliver outsized value to clients.
So I guess we're running short on time, so I'd love to finish, if I may, with a similar kind of optimistic or looking at the opportunities in front of you.
So let me ask you a really difficult question now, which is about if you were the CEO of an agency, let's say a midsize agency, whatever, and what would be the key opportunities?How would you view those opportunities?
And how would you talk about your agency differently?What would you do in order to kind of really kind of capitalize on the opportunity in front of you?
And you asked me this when we're short of time, Neil.I mean, come on.I mean, you know, there are a set of principles that we see as being critical to creating a market of one for the agencies we work with.
And the first one is that you've got to believe that it's possible.Because if you don't, it's a non-starter.So if I was running an agency, let's take it as Red Dot, I would fundamentally believe that it was possible.
I would have strong convictions about the kind of work I wanted to do and the kind of work I didn't want to do.I'd be able to articulate a belief in the same way that I can for co-definery.
I would recognize that I would need a clear strategy, not just some pithy strapline that sounds cool.There needs to be real substance in it.And I'd make sure I made the difference I was claiming.I'd make sure I made it real.
I'd make sure the whole customer experience of my agency substantiated the claim of expertise I was making.And I think I would be very clear that my
job as a sort of sales entity, and arguably everything in the agency is a sales entity, would be designed to inspire clients rather than persuade them.
I think we should fire ourselves from our sort of presumed job that we're here to persuade clients.We're not.We're not trying to crowbar them into doing stuff they don't want to do.We're there to inspire them to do the things that they need to do.
To make my answer maybe a little bit more practical, I would probably still run a consultancy business.I'm very interested in the way AI is changing or certainly accelerating change in the market.
I think there's going to continue to be a sort of premiumization, if you like, of human endeavor and human creativity in the broadest sense.
whether that's data science or traditional advertising creativity or innovation in customer experience or whatever else.
So I think being able to advise clients, being a mid-size agency that's able to advise clients on those core strategic matters, that's how I would be looking to achieve a 40% margin.
The other thing is I probably wouldn't be looking to grow it to sell it. I have no real interest in that kind of lifestyle, which is why I run my own company.
And I've got no great interest in being a listed business either, because of the constraints that that brings.So you pay your money, you take your choice.That's what I would do.
And I would certainly be optimistic about it, because frankly, there's no reason not to be optimistic about anything.
Absolutely.And that's a great note on which to close the podcast.So my thanks to Robin.Super insightful, super interesting.Lots to dive into there.But thank you so much, Robin, for being part of Firestarters.
And just to say, if you enjoyed this episode, of course, don't forget to subscribe and also to share the episode.But once again, thank you, Robin, for being part of Firestarters.
It's been a pleasure, Neil.Thank you, too.
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