The shape of things
It’s easy to see that the marketing business has changed dramatically in recent decades. Just watch a few episodes of the award-laden TV show, Mad Men.
With its sleek style and seductive storylines (and chisel-jawed, bed-hopping, whisky-swilling hero, Don Draper), you may find yourself pining for a bit of ‘Brylcreem bounce’ and vintage frock flounce. Yet, from the dawn of the industrial era to the early 1990s, advertising wasn’t really a creative business. It was a commission business.
This fictional but historically accurate example may clarify. Sterling Cooper, the ad agency in Mad Men, works on commission. They get paid 15% of the cost of any media advertising they place. (So, if they book a $1 million TV campaign for a client, they get paid $150,000 – not by the client, but by the TV company.)
So, remember the little fat guy with glasses who runs the media department? Well, he delivers the income that pays for all the agency’s creative services, not Don the creative genius. Until the early 1990s, almost all agencies were commission agencies.
It was a weird system, which had a number of odd side-effects. Firstly, there wasn’t a direct connection between the hours worked and what the agency earned: the idea you came up with in the bath or in the pub could be worth a lot of money.
Secondly, the agency didn’t get paid unless the campaign ran – or get repeat business unless the advertising worked. So, despite appearances to the contrary, agencies needed smart, effective processes to make good decisions happen fast.
And, finally, the commission system allowed clients to see agency services as free. Senior clients could consult the agency on strategic issues – and outsource tedious marketing admin to the agency – without apparent cost. So, agencies used to be both well-connected and well-staffed.
The changing face
of the agency
The 15% ad agency commission system more or less broke down in the early 1990s.
The little fat guys with glasses broke away to become “media independents”, offering low commission and refunding the difference to the client.
The Don Drapers of this world had to start charging fees for their time, and stop drinking at lunchtime.
Since few companies like paying fees, clients also sought alternative sources of advice and started in-sourcing their own marketing admin. As a result, agencies got smaller and made less money.
And yet, agencies still stuck to the old structures.
Except for the rise of media independents in the late 80s, and the relentless rise of ‘the internet, stupid’, the basic ad agency mindset hasn’t really changed since the late 60s.
That’s when Stanley Pollitt of Boase Massimi Pollitt (BMP) invented account planning – a crazy idea that the voice of the customer might be important in forming communications strategies.
Sure, these days the approach may be more like ‘the voice of the planner’ – a breed even less like the average customer than art directors.
As the Adweak Twitter feed recently joked: “BREAKING: After A Couple Hours Of Google Research, Childless 25-Year-Old Junior Planner Suddenly Expert On Mom Demographic”.
Kidding aside, it still shows how disconnected the classic agency structure has become from the big trends of the past two decades, never mind the past two years.
The art of
For most clients, the world has become immeasurably more complex and pressured.
Marketing teams have found themselves picking up responsibility for a wide range of issues.
These may revolve around more than traditional brand measures, communications planning and campaign results.
The impact of customer data and metrics, social content and online analytics, service delivery and employee engagement have added both complexity and urgency.
That’s perhaps why clients seem to find themselves increasingly frustrated by the narrow focus and cumbersome hierarchies and convoluted processes of the traditional agency.
It’s also why we are doing something different.
Inspired by the ‘teal organisations’ of Holacracy and the agile methods of tech development, our system is self-motivated – covering CX science, data and analytics, human empathy, and organisational impacts.
By working in close-knit teams, we draw on these different perspectives in pursuit of a common goal.
In this way, we create holistic, timely solutions which fully reflect the customers’ needs, the commercial realities and the art of the possible.