auditing your agency's business model
TRANSCRIPT
Auditing Your Agency’s Business Model
Presented by Tim Williams
What is the ideal agency structure?
By Hello Future www.hellofuture.set
How long should a piece of string be?
Account Management Creative Production Media Traffic Accounting
Agency structures today don’t look anything like they used to during
the golden age of advertising.
Really?
“An agency should be agile, forward thinking and engaged in delivering growth by deploying a wide range of tools and people, a far cry from the sausage-factory it was 10 years ago. We might be making software, content, binding books, or creating theatre. An agency engages itself in a diverse community of creative people, from coders to copywriters. It should be a place where there’s space for marketing judo, where business conventions are outmaneuvered and overthrown.”
Robert Harwood-Matthews President, TBWA/Chiat/Day New York
From “Marketers Explain ‘What Is An Agency,’” Ad Exchanger
A short history of agency models
① The full-service model
② Unbundling creative and media
③ Further unbundling and specialization; the client as integrator
④ ?
Many agencies are reacting to the new multichannel marketplace by attempting to become a new version of “full service” all over again
Media agencies as creative agencies
Convergence?
Media companies as agencies
Consulting firms as agencies
Production companies as agencies
Digital agencies as “full-service” agencies PR firms as “full-service” agencies
Holding companies as “full-service” agencies
Convergence
-- or --
Divergence?
Convergence?
“So here we are with traditional agencies struggling to become digital agencies and digital agencies struggling to become traditional agencies. It just another big convergence mess and the losers for now are the clients. On both sides you have partially constructed solutions: brands suffer from traditional agencies that are renovated with a digital coat of paint but doing what they've always done, and from digital agencies with incomplete organizations and inexperienced traditional skills.”
Tony Quinn Chairman, Society of Digital Agencies
From “Marketers Explain ‘What Is An Agency,’” Ad Exchanger
“I wish that the agencies would stick to what they are good at. They try to do everything, and they would be better served to narrow their focus.
You can’t do everything, and if you try to do everything, you do nothing. It drives me crazy when the agency is trying to pitch you every single service available.”
What clients think
The three approaches marketers use to work with agencies
Client
1. Best-of-Breed Model
Models marketers use to work with agencies
1. Best-of-Breed Model
Models marketers use to work with agencies
1. Best-of-Breed Model
Models marketers use to work with agencies
1. Best-of-Breed Model
Models marketers use to work with agencies
1. Best-of-Breed Model
Models marketers use to work with agencies
Agency
2. Single Source Model
Client
Models marketers use to work with agencies
2. Single Source Model
Models marketers use to work with agencies
Lead Agency
3. Service Integrator Model
Client
Models marketers use to work with agencies
3. Service Integrator Model
Models marketers use to work with agencies
3. Service Integrator Model
Brand Agency Leader
Models marketers use to work with agencies
3. Service Integrator Model
Models marketers use to work with agencies
3. Service Integrator Model
Models marketers use to work with agencies
Single Source Model
Smaller client companies Local/regional appeal
Best-of Breed Model
Larger client companies National/global appeal
Best-of-Breed Model
Best-of-Breed Model
How do clients access your services?
Best-of-Breed Model
Single Source Model
Service Integrator Model
Clients you work with in this model (mostly)
Clients you work with in this model (mostly)
Clients you work with in this model (mostly)
The four dimensions of agency business models
The Brand
The Experience
The Purchase
The Product
Four dimensions of agency business models
Paid
Owned
Earned
Channel Content Execution Ideation
The Brand
The Experience
The Purchase
The Product
“Traditional” Creative Agency
Paid
Owned
Earned
Channel Content Execution Ideation
Creative Agency
The Brand
The Experience
The Purchase
The Product
“Traditional” Public Relations Firm
Paid
Owned
Earned
Execution Ideation Channel Content
Public Relations Firm
Public Relations Firm
Public Relations Firm
The Brand
The Experience
The Purchase
The Product
Design Firm
Paid
Owned
Earned
Execution Ideation Channel Content
Design Firm
Design Firm
The Brand
The Experience
The Purchase
The Product
“Traditional” Media Agency
Paid
Owned
Earned
Channel Content Execution Ideation
Media Agency
The Brand
The Experience
The Purchase
The Product
Brand Development and Business Strategy Firm
Paid
Owned
Earned
Execution Ideation Channel Content
Brand Development and Business Strategy Firm
Brand Development and Business Strategy Firm
The Brand
The Experience
The Purchase
The Product
Agency Trading Desk
Paid
Owned
Earned
Execution Ideation Channel Content
Agency Trading Desk
Agency Trading Desk
The Brand
The Experience
The Purchase
The Product
Production Agency
Paid
Owned
Earned
Execution Ideation Channel Content
Production Agency
Production Agency
Production Agency
The Brand
The Experience
The Purchase
The Product
Experiential Marketing Agency
Paid
Owned
Earned
Execution Ideation Channel Content
Experiential Marketing Agency
Experiential Marketing Agency
The Brand
The Experience
The Purchase
The Product
Digital Agency
Paid
Owned
Earned
Channel Content Execution Ideation
Digital Agency
Digital Agency
The Brand
The Experience
The Purchase
The Product
Experience Design Firm
Paid
Owned
Earned
Execution Ideation Channel Content
Experience Design Firm
Experience Design Firm
The Brand
The Experience
The Purchase
The Product
Analytics Firm
Paid
Owned
Earned
Execution Ideation Channel Content
The Brand
The Experience
The Purchase
The Product
Product Development Firm
Paid
Owned
Earned
Execution Ideation Channel Content
The Brand
The Experience
The Purchase
The Product
Incubators and Venture Capital Firms
Paid
Owned
Earned
Execution Ideation Channel Content
The Brand
The Experience
The Purchase
The Product Paid
Owned
Earned
Channel Content Execution Ideation
Which dimensions are most common in your model?
Where do you play on the value chain?
Client % of income related to PRODUCT
% of income related to BRAND
% of income related to
MARKETING
% of income related to
EXPERIENCE 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. All other clients
What classes of media do you utilize?
Client % of income related to
PAID
% of income related to EARNED
% of income related to OWNED
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. All other clients
Are you focused on content or channels?
Client % of income related to CONTENT
% of income related to CHANNELS
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. All other clients
Are you about ideation or execution?
Client % of income related to IDEATION
% of income related to EXECUTION
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. All other clients
Mapping your current business model
1. How clients access your services
2. What media classes you utilize
PRODUCT BRAND MARKETING EXPERIENCE
PAID EARNED OWNED
CONTENT CHANNEL
IDEATION EXECUTION
3. Focused on content or channel
4. About ideation or execution
5. Where you play on the value chain
BEST OF BREED
SINGLE SOURCE
SERVICE INTEGRATOR
“If we don’t kill our old business models, someone else will. But if we are ruthlessly curious, learn relentlessly, and fail harder, we get to reinvent the business of persuasive communication for the connected age.”
Renny Gleeson Weiden+Kennedy
www.IgnitionGroup.com
@TimWilliamsICC @IgnitionGroup
www.linkedin.com/in/TimWilliamsICG
“Positioning for Professionals” by Tim Williams
Propulsion Blog www.IgnitionPropulsion.com