Agencies, Call in the Surgeon

Surgeon wielding a syringe full of bloodAgencies have completely lost their way. I don’t think time needs to be spent debating that point. What I haven’t seen yet is a cohesive plan to restore the true agency business model.

Let’s take a look at history. Ad agencies were started by newspaper executives, who realized that by “priming the pump” and delivering better ad creative, publishers would ultimately sell more ad inventory.

At their peak, agencies were hired for their ability to create big ideas—business-building ideas. I’m not saying you don’t need execution, process, traffic, operations and the rest. But I am saying I’ve never met a client who wants to give an agency a substantial account because of any of these things.

Agencies win on million dollar ideas (I do realize there are specialized agencies that focus on SEO, SEM, etc., but I’m talking about the truly big agencies here). You can’t pitch a Fortune 50 account and say “I have great process, I compensate my people correctly, my production is pristine” and so on. You have to go to them and say “I won client XYZ and they were floundering. With our help, they advanced from #6 in the category to #2, and are seriously competing to be #1” (or something similar). Everything else you might say is a rabbit hole. You can spend all the time you want in it, but you won’t significantly advance your business.

How do you get to this point?

I run a business that is helping agencies establish incredible amounts of operational flexibility, via offshore labor and technology solutions. For every $1 million clients spend on production, I can give them $300,000 to $500,000 back and ensure they can still output the same amount of work—faster, at equal quality. They can use that money to keep their creative and strategy directors happy and well-resourced so they can dream up more million-dollar ideas. Those people should have the funding to go travel to understand client businesses before they make pitches. They should have the funding to understand trends as they emerge, not read about them in Ad Age. Frankly, they can use this money however they like and maybe buy the technology they know they need.

The agency of the future looks like this. You have your superstar creative directors and thought leaders. You give them all the resources to truly understand clients and consumers (this does not mean a Forrester subscription). Under them, you keep a skeleton crew, because you will always need to get something done in five minutes. Otherwise, you outsource all services, including production, ad ops, traffic, analytics support, etc., to companies who do nothing but eat, sleep, breathe these functions. The alternative is to maintain the status quo and be masters of nothing while being busy with everything.

Having worked at very large agencies for 14 years, I can say this with complete certainty. Any amount of process tweaks, initiatives to “refocus” and calls to organize better will not work. It is just not in the agency DNA. Agencies need surgery, plain and simple. And they need to inject outside DNA; companies who provide extremely disruptive services reliably and with high quality.

I’m happy to talk further to anyone who would like to know more.

(Also check out what Scott Belsky said on this topic and my CEO Ken Swanson’s perspective.)

About David Kang
David is executive vice president and chief digital officer at Affinity Express. He was formerly a Senior Partner at WPP’s Group M and Vice President of Client Services at GSI Commerce.

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