NZ AG: WHY ARE YOU STILL USING AGENCIES?
9 months ago I left my agency job to set up my own agribusiness advisory. I left a decent salary with 3 mouths to feed and friends thought I was crazy. I didn’t leave because I didn’t enjoy the people I worked with or because I wasn’t grateful for the opportunities they gave me. I did it because the agency model didn’t feel right anymore.
Having been fortunate enough to have worked on both sides of the fence as agency and client, I’ve seen things from both perspectives. Working in and out of different agencies between client roles I’ve seen the traditional agency model being slowly eroded through talent loss (some ironically moving across to clients in-house), new, smaller agile entrants who are specialists in their discipline, global creative crowdsourcing platforms like Fiverr and Tongal (who may be commoditising the creative product) or more digital and CX savvy consultancies like PWC, Deloitte or Accenture who have the capability and smarts to prove demonstrable ROI on digital (if you don’t believe me read this). Like the disruption we’re seeing in the media landscape or the recent Commerce Commission scraps over the failed NZME-Fairfax merger, agencies are finding they’re not immune either.
The problem with agencies is the word itself. As a term it has connotations with those within trying to do all they can to avoid using the “A word” for fear of associations like overhead, mark ups, hourly rates, egos and in some cases god-complex creatives. When faced with expensive downtown office leases, mark ups and hourly rates propped up by title inflation (is that 28 year old really an Account Director?) I’m not sure it does much to engender client trust. It never did when I was.
The other self-limiting problem is some agency people think they are just too clever and when you do that you’re dead. They try as hard as they can to morph or migrate into a new model but underneath the chassis, it’s still the same agency mechanics.
So as a healthy contribution to kick off the New Year, here’s one such driver of distrust that could save you 10% or more of your marketing budget right now if fixed: the days of tolerating mark ups on externals like print, photography or media should be long gone. Any client still paying mark ups and media commission combined with the billable time involved with production could use that same budget to be be better invested into where it should always be: in market. Cancelling commission and mark ups will remove the bias and restore the independence and robustness you need behind your agency’s recommendations.
Here are a few tips to look for and ask about if you have any doubts about your agency (and some of the ones I asked when I was a client*):
- do you really need that much “meeting meat”? ie. do you really need three client service in attendance when two would suffice? (state clearly how many people you need at the meeting when you’re putting the agenda together);
- ask why the Creative Director needs to be on shoot (is it because he or she wants to go on a jolly or could one of her or his Art Directors do a similar or better job at a lower rate?);
- are we paying commission on media or mark ups on print or production? And if so, how much and why? (instead negotiate a management fee on the value they can prove they will add);
- is your work being undertaken by in-house teams or being outsourced to contractors, (find out if it’s being sent out and then marked up in the process – a common agency practice during peak workloads);
- clearly state the talent you want on your account and agree the % of time against a defined scope of work that you regularly review (clever firms like www.trinityp3.comcan help big clients get this balance right using overhead and profit multiple benchmarking data as well as rate card analysis); and
- don’t get swayed by the big bosses at pitch promising the world to then find yourself four weeks later introduced to Lucy the Grad.
(* If I was brave enough I could publish a book on the myths and confessions of a client turned agency man but that’s a story for another time and blog)
Here’s another myth buster for those of you still enamoured and romanced by the assurance of the big name agency-badge: it’s a self-preserving industry lie to suggest all the best talent lives inside traditional agencies.
Some of the best talent I know and been privileged to work with over the years run and sweat their own businesses because they are good enough which means they can. Only the ones good enough survive. Years ago I was told by a Client “we’re a business that follows the talent, not the agency”. Or as Alibaba founder Jack Ma put: “choose the boss, not the business”. Wise counsel I’ve always thought.
So here’s the question NZ Ag: who would you prefer to be working on your rural marketing? Someone who’s paid a salary with the option to hid behind the system, cruise or do just enough to get by? Or deal directly with the business owner(s) who have skin in the game and whose personal livelihoods and families rely on them meeting and exceeding your needs? As a client I always knew my answer.
So what can we learn from others? We know the best performing artists openly collaborate with others. There are absolute masters at it. They know their creativity will benefit hugely from partnering with others rather than keeping it in-house assuming their good is good enough. Andrea Bocelli and Ed Sheeran is a great example. Both gain from the partnership and the end product is all the better for it.
Whether it’s Freddie Mercury with Montserrat Caballe, David Bowie with Bing Crosby or Shapeshifter with the NZSO they know their product, or art, will be better (and the bigger the juxtaposition the better too). Good creative thinkers, like artists, aren’t afraid to collaborate. They know two brains are better than one and the thinking is more robust. You want those ego-less people who are more motivated by the standard of work than the fear they might be exposed.
Good rural marketing types shouldn’t fall for the flash downtown offices surely? They’re “people people” who are more focussed on the questions like: Do these guys get me and can they do the job? Do they understand the sector deeply? Are they paying lip service to the rural sector? The location, type and attitude of the people they deal with matter far more than any glossy brochure or website propaganda. For marketers people involved in Ag, I still wonder why some opt for the big urban based agency names when it’s obvious most are learning on the job. Ag types too aren’t supposed to care for all that shiny shoe, fat finger stuff right?
However, it’s time I added some balance to the argument for those that may accuse me of bias.
I believe big clients need big agencies. A small outfit (even a “one man band with their band of brothers”) can’t meet the needs and demands of the stakeholders of a big corporate who themselves are also complex in their structure, hierarchy and decision-making processes. Corporates need a similarly corporate-type agency with the horsepower and resource to turn out production, strategies and work fast. No question. However some corporates are intelligent enough to see the value of dedicated specialists vs. generalists. This shift I believe will grow as the complexity of channels and data increases exponentially and as we see the shift from volume to value (this is why you’re seeing the big guys buy the small guys eg. JWT with HeyDay or Dentsu Aegis with Little Giant). However, if you’re getting sick of being pushed to the back of the queue and feeling like a tier two client it’s because you are. Agencies will always prioritise bigger clients over smaller ones because it’s the commercial reality. Some agency models work for some clients, and some don’t.
With a few exceptions, I believe the best talent today (and it’s always been about talent because our world is a proprietary business based on power of ideas) sits outside agencies. Those brave and courageous enough to go out on their own back themselves, their competencies and capabilities. To me, that’s where true talent lives.
We often see this dynamic play out when head planners or creatives decide after years of working for a big shop to set up on their own. Problem is this new shop often becomes the same shop. What they desperately didn’t want to become, they end up becoming because of their inherent biases. And so the agency wheel keeps spinning.
The best thing I’ve found working with people who are out on their own is that they have skin in the game. They are heavily invested to making sure the work works. If they don’t they don’t last. It’s that simple. Those are the people you want working on your business. Ones that are genuinely accountable and have a true duty of care for your business and budget.
So NZ Ag why don’t you make yourself a New Year’s resolution to challenge your current agency, test the market and see what smaller, specialist independent rural marketing advisories like mine or others can offer.
You might be pleasantly surprised.
ps: for those that want to read and find out more, here are some links to articles whose authors debating the demise of traditional agencies: