On Agencies Going Upstream

Future-of-agenciesSimon Veksner makes a good point in this post written in response to this Ad Week piece that suggests that the future of agency value lies upstream of the communications brief, and in agencies getting more intricately involved in the 'depths' of a client business, becoming 'true general contractors'. Presumably, says Simon, this means going into areas beyond marketing and are we really suggesting that agencies should be getting involved with finance, HR, manufacturing and distribution?:

'We just don't have the skills...Are we really proposing to send a Comms Planner to a finance meeting, to sit alongside the Client's Finance Director, and a couple of guys from Goldman Sachs? Are we really proposing to send a Copywriter to a meeting about building a new factory, alongside the Client's Head of Manufacturing, and a couple of guys from Balfour Beatty?'

His point is that this depreciates what agencies actually can do, and that in an age of commoditisation, the value that marketing and Marcomms can bring is more important than ever.

I agree. When I conducted the research into the Progression of Agency Value a few years ago, I developed a model for agency maturity across four key areas (data, technology, skills and culture) and a framework (above) that referenced the progression of economic value model derived from Gilmore and Pine's The Experience Economy. Applying this model in the context of agency progression over time expressed the shift from delivering services towards staging experiences with or on behalf of the client organisation. And by that I mean the experiences that the client company crafts for its customers.

In the context of what agencies do this increasingly means greater involvement with owned and earned media assets (not just paid), growth in functions and expertise that work at the interface and interaction between the client and their customers (UX, content, experience design, analytics, data). This creates greater value for the client and differentiation for agencies whether it be based around a creative agency originating a great unifying creative idea, or a media agency constructing a media-driven solution that creates a compelling customer experience, or a technology/CRM focused agency that works to create a more joined-up experience for the customer of that client. 

This inevitably means that the lines between traditional territories, functions and disciplines blur, which leads to challenges for agencies to define exactly where they should play, where they should partner, and where they should leave alone. But where there is challenge there is also opportunity for agencies in developing a broader offering or new skills (most media agency revenues streams, for example, have increased considerably in number). We're already seeing this with examples of media agencies becoming more adept at content, and looking at how they can drive broader change within companies. 

The final stage in our model is where agencies are enabling real change, and guiding transformations for clients. This is arguably where even greater value lies, yet it may be that not every agency ends up here, some perhaps existing very comfortably by focusing on the previous stage. But the kind of thing we're talking about is transformation through creativity (a unifying creative idea that transforms a brand and a business), transformation through product (product and service design), transformation through performance (systems that enable customer needs to shape the business in more agile ways) and so on. The value is inevitably nuanced by sector, the progression nuanced by agency focus. 

We undoubtedly have some way to go before we see large numbers and a broad scope of agencies at this stage (many agencies are still getting their heads around what it means for their business to be more involved in the subtleties and complexities of creating exceptional customer experiences for their clients), but I think we're already starting to see examples of where agencies are adding deeper value to clients in this way - for example in the way that performance marketing is (in a few sectors) driving real change through a more focused profit-driven marketing approach.

Yes this does mean a broader footprint within clients, but one that recognises that the progression of agency value can only happen alongside the increasing significance of marketing to the whole organisation. Yes, marketing is undervalued in many organisations, and Simon is right - we should be making it our mission to give the function its rightful place at the top of client companies as a key driver of organisational value.


Jobs to be Done

Job-centre

I liked Martin Weigel’s take on how a more appropriate metaphor for modern brands is perhaps less about the human personality characteristics that we've long tended to attribute them and more about thinking of brands as software:

"Brands can now can remember what we like, and what we bought. They can anticipate when we need to restock, repurchase, or renew. They can suggest purchases, content, and experiences we will probably like.They can compare and recommend purchase options. They can respond to our service, upgrade, and replacement needs. And of course as brands become more like software, unshackled from the constraints of the physical world, they and their functions can inevitably flow through our lives with ever greater ease.”

This metaphor reminded me of Clay Christensen's ‘jobs to be done’ concept, which theorises that what causes us to buy a product or service (or indeed a brand) is that we ‘hire’ them to do a particular job for us. It's a simple idea, but framing it in this way helps us to understand customer motivations better. A simple example that Christensen uses is the V8 juice drink which was once marketed to compete with (and in a similar way to) other soft drinks like Gatorade, using brand attributes like how refreshing it was. The realisation that V8 was being bought instead to fulfil a different job led to a campaign that focused instead on how the drink provided the required daily servings of vegetables. Within a year of this decision, V8 had quadrupled its revenues.

Martin goes on to suggest that thinking of brands as software might encourage us to consider them as "...fluid, adaptable, responsive, upgradable, and permeating", and also how "utility (not just storytelling) can create meaning", all of which might encourage a more productive relationship between those who make products and services and those who tell stories. The best metaphors are those that interpret and clarify meaning in memorble ways. And this is one that is worth exploring further.


Google Firestarters 13 - Agencies and Product Innovation - The Event

Google_Firestarters_13 

The intersection of product innovation and agency culture and practice is a theme that has generated considerable debate in our industry and one that has been put forward by several Google Firestarters regulars as one that we should run an event on. So on Wednesday we did just that, with a packed house and three excellent provocations to help us navigate this fascinating topic.

I've long been an admirier of the work of ustwo, the digital product studio who originated the amazing Monument Valley as well as work for clients like Tesco, Sony and Channel 4 ("we launch valuable products, services and companies that make a measurable difference to the world"). So it was great to have Brett MacFarlane (whose background has been in network agencies) from the studio talk about their philosophy, and what he called the ustwo 'experiment'.

Nobody, says Brett, should own creativity or innovation but everyone does ideas:

Firestarters_13

Innovation is not one dimensional and may be incremental (refine), evolutionary (refresh), or revolutionary (re-imagine). One of the key questions in thinking about agencies and product innovation however lies in the difference between demand generation (which still has lots of value - advertising works) and value creation, which is more challenging for agencies than the former.

ustwo are focused on maintaining the right balance between client work, games and new ventures, and actively pursue diversity in both their staff and in what they do. Independence gives them the freedom to explore new revenue models and career paths for their people, so staff can really work on what they care about ("the founders didn't set out to run an agency and that's the point").

Brett also talked about the importance of the ustwo environment - an adaptive space, a sometimes chaotic setting, little rigid process ("rather than a process, we have a starting point and approaches"), a focus on employee wellness, time for invention, commercials that focus on the long-term and on value, and equity for employees.

Along their journey they've had significant failures (including a messaging app where they waited too long before bringing to market), but also huge successes like the one below, successful apps for financial institutions that focus their design on how it makes people feel, and new ventures including the just launched DICE ("the ticketing platform for fans, not fees").

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Brett finished with some thoughts on three key elements of ustwo culture: Collaboration ("we believe that the best work is accomplished by team members creating together and solving problems together"), Value ("we believe our job is to find the quickest route from idea to digital product because that's where the business value is"), and Learning ("in the complex marketplace, we believe future success belongs to those who learn the fastest"). In the end, he said, mindset eats organisation and evidence beats opinion, but it's all about the team ("only that team, at that time, in that way, makes that thing"). Perhaps the ustwo experiment is about breaking down the one last silo - the individual employee.

Google_Firestarters

I've long wanted to have Andy Whitlock, product strategy lead at MadeByMany, speak at Firestarters and he didn't disappoint. Andy's smart, witty talk started with his own journey from ad agency to product lead and the quite profound differences involved within each, not least in the relationship with clients and where value is placed. With advertising the launch day is everything, with product innovation if the launch day is your biggest response you're in trouble.

Firestarters_Andy_Whitlock

Advertising is about earning a reaction. Product innovation is about earning a role ("Life's too short to make things no-one wants" - Ash Maurya). With advertising some degree of success is likely, but with product innovation total failure is a real possibility. In fact, there's a whole series of differences that need to be accounted for between marketing and advertising and product innovation. With the former ideas are the most valuable thing, strategies are sold in, attention can be bought, deliverables are clear, budget is fixed, and it may be separate from the business. With the latter ideas are just hypotheses, strategies are adjustable, users can't be bought, deliverables and costs are unknown, and it must integrate with the business. 

MadeByMany keep their development loops very tight so that they never go too far down a particular road before developing a learning, and thereby minimising risk:

Firestarters_madebymany

Yet perhaps the interesting place is where these things can meet. Marketing can learn from user-centred development and product people still need marketing of-course (they are often not good at it: "no marketing needs to stop becoming a badge of honour for product people"). Andy's final summary captured three points about making useful things, and telling good stories with them:

  1. Differentaiate the service before the brand
  2. Spend less time guessing
  3. Great products lead to good stories but not necessarily good storytelling

Our final talk from BBH Zag featured four speakers: Adam Arnold (Managing Partner), Richard Davies (Creative Director), Aran Potkin (Strategist) and Alex Matthews (Head of Creative Technology), and was interesting in that it was from an agency that was actually creating products. Zag describe themselves as a "brand consultancy that ventures". Adam spoke of how being an active shareholder in a venture changes the relationship you have with a client quite fundamentally. It aligns interest better than anything, and puts you in a position where you really do need to keep on adding value ('the saga continues after the product ships"). The team described the learnings they'd had from developing and working with (amongst others) Autographer (the world's first intelligent wearable camera), Money Dashboard (online money management tool) and Beakle (which enables people to connect to audio streaming for outdoor digital screens).

The talks were fascinating and diverse in equal measure, and we had three very instructive but different perspectives on the subject.

My thanks to our inspiring speakers, to all those who came, and to Google for hosting of-course. You can see a Storify of the event here. Our next event will be in November. If you'd like to ensure you get notified of when registration opens you can sign up for my newsletter for more news of that.


A Rant About Customer-Centricity

Just about every large organisation thinks of itself as customer-centric. Many have this laudable objective as one of their strategic pillars. Yet it never ceases to amaze me that those same organisations seem to want to put as many barriers in the way of great customer service as possible. So here’s my version of what customer centricity is not:

If you are organised in ways that make sense for the business but not for the customer then you are not customer-centric
If your resourcing priorities are focused on business efficiency over customer satisfaction then you are not customer-centric
If the functional silos in your business unnecessarily impair a joined up customer experience then you are not customer-centric
If your customers are at all frustrated by the use of automation, inflexible rules and systems then you are not customer centric
If your staff use scripts then you are not customer-centric
If you charge your customers to talk to you then you are not customer centric
If you create demand for customer service by failure to deliver on promises that you have made you are not customer centric
If you make it hard for customers to find out how to talk to you then you are not customer-centric
If your representatives use language that makes sense inside the company but not to customers then you are not customer-centric
If your public proclamations to customers don’t match your actions then you are not customer centric

Saying you are something doesn’t make it so. And people can see that.


Google Firestarters 13 - Agencies and Product Innovation

Product

A few years back Murat Mutlu wrote a post that got a lot of conversation going around whether an agency could build the next Instagram or Angry Birds. His post raised some interesting questions around what capabilities modern agencies should have and whether they should be messing around with digital products at all or just sticking rigidly to advertising.

Adam Glickman wrote a piece on FastCompany that Murat quoted from in his post, suggesting that ad agencies should act more like tech start-ups:

'Startups and agencies alike always ask themselves, “What is the problem we’re solving?” If agencies want to think more like tech startups, they might focus less on clever storytelling and more on utility.'

And then we have John Willshire's mantra that making things people want trumps making people want things. Or as Russell Davies puts it: 'usability trumps persuasion'. One of the issues here, as Glickman said in his article, is that the two come from a different place: 'Tech startups begin with the big idea, then seek to monetize...Agencies start with a budget, then seek the big idea.' 

Yet, as products and services are increasingly digitised and marketing baked-in, perhaps there is a greater opportunity at the intersection of product development and marketing processes and metrics, a harmony between vision and validation, as Andy Whitlock put it. So should agencies re-model themselves to drive genuine innovation through a product, as well as a marketing, perspective? What can and should planners learn from digital product development processes? And should agencies be producing their own start-ups and products either for their own benefit or as solutions? 

These are some of the questions we'll be addressing in our next Google Firestarters event, which is on 17th September, 6.15pm at Google HQ, London. To help us navigate them we have three excellent provocations from Andy Whitlock (Digital Product & Service Innovation lead at MadebyMany), Brett MacFarlane of ustwo (who made the fabulous Monument Valley), and Adam Arnold (Managing Partner at BBH Zag). As always I have some guest passes to give away to readers of this blog so if you'd like one leave a comment below or drop me a line.