derek robson how you can digitilize your agency

AGENCY EVOLUTION17 THINGS THAT I HAVE LEARNEDABOUT TRYING TO EVOLVE AN AGENCY

April, 2010

Account Manager

+AccountPlanner

O&M Direct

AccountPlanner

Ogilvy & Mather

AccountPlanner

+ Deputy

Planning Director

+Business Director

+Managing Director

BBH

ManagingPartner

Goodby, Silverstein & Partners

Who am I?

What was I joining?

1The Agency dilemma: Rightvs.Interesting

The agency dilemma

“If you had to choose, would you rather be interesting or right?”Q:

—Malcolm Gladwell, GQ Magazine

The agency dilemma

“If I were President of the United States, I would rather be right than interesting. If I were a CEO ofa company, I would rather be right than interesting. But I am a journalist—what journalist would rather be right than interesting?”

A:—Malcolm Gladwell, GQ Magazine

The agency dilemma

Right + Interesting

2What’s the motivationto change?

The motivation for change for us

“ ”Fear.

3The importance of the simpleAgency objective

—Rich Silverstein

“RELEVANCE.”Our #1 Objective for the Agency:

4Treating the agency like a Client(What’s theagency problem?)

Auditing the agency

EXTERNAL

INTERNAL

Industry

Consultants Press

Headhunters

GSP

GSP

External perceptions of the agency

Source: Adweek, Industry-on-Industry Survey, 2005

We were number one:

“The shop that makes the best hires”

“The shop with the best reel”

“Best at Consumer Insight”

“Best at Strategic Planning”

(the industry)

When a good ad can be bad for you...



But we lagged behind in:

“Most creative”

“The shop with the best reputation”

(the industry)



We didn’t even appear on the attributes that defined the future:

“Best at Branded Entertainment”

“Best at Branded Integrated Solutions”

“Most Media Neutral”

(the industry)

External perceptions of the agency(the pitch consultants)

—Judy Neer, Pile & Co

—Russel Wohlwerth, Select Resources

“I don’t associate GSP with integration.”

“Is there an ability to tap into interactive and the nontraditional?”

External perceptions of the agency(the headhunters)

—Rachel Law, Kendall Tarrant

—Gary Stolkin, Stolkin + Partners

“It feels very ad driven.”

“I am not sure people know that you’re fully engaged in interactive.”

External perceptions laggedbehind agency reality

4 59

152

4

5

11

2002 2003 2004 2005

Interactive Creative Interactive Production

GSP Historical Head Count

We were the 2004 One Show Interactive Agency of the Year

Source: Goodby, Silverstein & Partners

5The importanceof managing the agency brand

External perceptions of the agency(the advertising press)

—Stuart Elliott, New York Times

—Ellie Parpis, Creative Editor, Adweek

“Personally, I feel under-informed about the agency’s work.”

“Crispin have got two people who just work the phones. That’s all they do.”

Managing the agency’s brand

We hired a PR agency to help us

6Why agency vision is important(and what happens whenyou don’t have one)

Internal perceptions of the agency

We’ve got Crispin envy.“ ”Source: Goodby, Silverstein & Partners Agency Interviews

Internal perceptions of the agency

Our biggest single issue is lack of a clearly articulated identity.

Source: Goodby, Silverstein & Partners Agency Interviews

“ ”

The vision thing

The lack of vision led to questions about the leadership of the agency

7Does your agency work?

A quick formula for efficiency

X

Ideas Generated & Produced

X

Ideas Generated & Not Produced

XX%

% Hit Rate

Creative/Client

TV Print OOH Radio Web Other

A quick formula for efficiency

Who’s performing? Who’s not performing?

X


X


XX%

% Hit Rate

Creative/Client

TV Print OOH Radio Web Other

Agency productivity, 2005

2005

Low strike rate clients with correlated problem relationships

804


1,413


37%

% Hit Rate

How we worked

Source: Internal Agency Interviews

“There are too many creative teams on assignments. The result is no ownership.

Everyone thinks someone else will crack it.”

How we worked


“We’re a big agency with small agency processes. We need to address this because we’re starting to

kill people.”

How we worked

“ ”We work dumb.


Managing our most expensive resource

We committed to full-time, high-level resource management of the creative department.

8Do your collarsand cuffsmatch?

Our workload(percentage of GSP projects)

May 2005 18%

82%

Web/InteractiveTraditional Source: Goodby, Silverstein & Partners

Our output was evolving(percentage of GSP projects)

May 2005


42%

58%

18%

82%

May 2006

Web/InteractiveTraditional

So we needed to changeour creative resources(percentage of head count)


The CreativeDepartmentMay 2006

TraditionalTraditional + InteractiveInteractive

49%14%

37%

The shift in our output was dramatic


Web = 29%

Print = 23%

TV = 11%

Alt media = 11%

OOH = 11%

P Of Purchase = 8%

Radio = 5%

Brochures = 2%

50% 50%42%58%

Web/InteractiveTraditional

May 2005 October 2006

More flexibility in ourcreative resources was our goal


The CreativeDepartmentOctober 2006

TraditionalTraditional + InteractiveInteractive

41%31%

28%

9Why do all Agency creative departments look the same?

We were recycling creative resources

Goodby,Silverstein &

Partners

Crispin Porter + Bogusky

Wieden + Kennedy

TBWA \ Chiat \ Day

Fallon

Different output = different resources

The Sci-Fi ChannelSweden YouTube Star,

The Rappin’ Jelly Donut

Interactive Agencieswith Dangerous-sounding Names

Best Buy

UCLA Media LabDesign Firms

Malcontents in London, São Paolo,Stockholm and Berkeley

Planning at Hal Riney & Partners

Film School

Sketch Comedy Troupe(“Killing My Lobster”)

Punk RockZine

Music VideoProduction

Goodby,Silverstein &

Partners

Crispin Porter + Bogusky

Wieden + Kennedy

TBWA \ Chiat \ Day

Fallon

10Forcingchangewhere

changecan be

seen

A simple approach to increasingdigital competence


From two distinct creative “camps”

TraditionalArt Director

+TraditionalCopywriter

InteractiveArt Director

+InteractiveCopywriter

A simple approach to increasingdigital competence


To a consciously mixed creative resource

From two distinct creative “camps”

TraditionalArt Director

+TraditionalCopywriter

InteractiveArt Director

+InteractiveCopywriter

Traditional ADs and CWs+

Interactive ADs and CWs

11You haveto be badto be good

In the words of Jeff Goodby...

“It’s going to get worse, before it gets better.”

—Jeff Goodby

In defense of failure

Source: Time Magazine, March 22nd 2010

“Making mistakes is a greatAmerican freedom. The goal shouldn’tbe to eliminate failure; it should be to

build a system resilient enoughto withstand it.”

Goodby was right—It got worsebefore it got better

Source: Creativity Magazine, top 20 creative agencies at the awards shows

2005 2006 2007 20081. Crispin 1. Crispin (695) 1. TBWA\Chiat (565) 1. BBDO NY (845)

2. TBWA\Paris 2. TBWA\Paris 2. Crispin 2. TAG SF

3. GSP (300) 3. AMV BBDO 3. Saatchi + Saatchi, NY 3. McCann Erickson

4. W+K London 4. DDB London 4. R/GA 4. Fallon London

5. TBWA\Chiat 5. DDB Chicago 5. DDB London 5. Saatchi NY

6. Taxi 6. JWT London 6. DDB Chicago 6. TBWA\Chiat\Day NY

7. DDB London 7. Dentsu Tokyo 7. BBDO NY 7. Crispin

8. Fallon/NY 8. Forsman +Borden 8. BBH NY 8. GSP (260)

9. Almap/BBDO 9. Taxi 9. Leo Burnett Chicago 9. Saatchi Singapore

10. W+K/Portland 10. GSP (155) 10. Fallon London 10. DDB London

11. DDB Brasil 11. Fallon London 11. Saatchi + Saatchi, Singapore 11. TBWA Paris

12. Dentsu/Tokyo 12. W+K London 12. W+K Portland 12. W+K London

13. Springer + Jacoby 13. Saatchi + Saatchi, NY 13. TBWA\Paris 13. Saatchi + Saatchi, NY

14. Arnold 14. Nordpol Hamburg 14. W+K Amsterdam 14. Nordpol Hamburg

15. The Jupiter Drawing Room 15. Leo Burnett London 15. Fallon Minneapolis 15. Leo Burnett London

16. 180 Amsterdam 16. Lowe Hunt Sydney 16. GSP (115) 16. Lowe Hunt Sydney

12Two heads are better than one

A more holistic approach to developing strategy...

How can the message and channelwork hardest for each other?

ConsumerInsight

BrandInsight

Account Planning

Message Content

MediaInsight

ConsumerInsight

MediaPlanning

Channels

...driven by a focus on ideas

People engage with ideas, not channels.Ideas drive channel behavior.

Account Planning

Media Planning

MessageContent Channels

Change the way we create strategy

Do what Bernbach did by combining Copywriters and Art Directors…

we could implement with Account Planning and Media Planning

One department called “strategy”

Focused on how the message and channel can work hardest for each other

BrandStrategist

MediaStrategist

13Yes,yes it really isall about the work

14How fast should we change an agency?

Speed of change

—Tom Kelley, General Manager, IDEO

“Creative firms of all kinds (including ours) know thatthey must evolve at LEASTas fast as the world ischanging around them.”

15Are youready fora change

in theagency

landscape?

Increasing industry convergence

Digital production shops

(e.g. Big Spaceship,Firstborn)

Traditional ad agencies with “bolt on” digital

(e.g., DDB, Euro)

Integrated ad agencies

(e.g. GSP, CPB)

“Larger” digital agencies

(e.g. R/GA, Razorfish,

AKQA)

A looming turf war

Integrated ad agencies

(e.g. GSP, CPB)

“Larger” digital agencies

(e.g. R/GA, Razorfish,

AKQA)

Implications for talent retention,organic growth and new business

Traditional ad agencies with “bolt on” digital

(e.g., DDB, Euro)

Digital production shops

(e.g. Big Spaceship,Firstborn)

Creative output alonewill not be enough to succeed

Source: Reardon Smith Whittaker survey of 184 key marketing decision makers, October 2008Heidrick & Struggles survey of 111 senior marketing executives at firms with $1B+ in annual revenues, December 2008

Top four most important elements for an ad agency

1. Understand my market

2. Creative

3. Understand company direction

4. Strategy and thinking



% Very Satisfied

18%

13%

19%

17%



2. Creative



Top four most important elements of digital

1. ROI

2. Analyses of Web behavior

3. Search

4. CRM



A need for fluency from “the work” to how the work works; the “what” to the “why”

% Very Satisfied

18%

13%

19%

17%



2. Creative



Top four most important elements of digital

1. ROI

2. Analyses of Web behavior

3. Search

4. CRM

One final observation

The Agencies of the futuremay not be the Agencies that

have dominated the past

16Interactive scaleabilityand other oxymorons

Interactive is very labor intensive

More interactive

work

More Interactive

staff=

17 Q:How do

you get big without

getting bad?

Setting the right metrics for the agency

To be the best advertising Agency in the world, as judgedby our peers, based on the quality and effectiveness of our work

An Annual GSPClient Relationship

Survey

An Annual AgencyStaff Survey

Our performanceat the major

Creative Award Shows

Our performanceat Effectiveness Awards

(EFFIES)

Does this theory actually work?

The changes helped make us more productive



2005 804 1,413 37%

% Hit Rate


2006 1272 1,214 51%

Historical Creative Performance

Source: Creativity Magazine, top 20 creative agencies at the awards shows

2005 2006 2007 2008 20091. Crispin 1. Crispin (695) 1. TBWA\Chiat (565) 1. BBDO NY (845) 1. GSP (680)

2. TBWA\Paris 2. TBWA\Paris 2. Crispin 2. TAG SF 2. Crispin

3. GSP (300) 3. AMV BBDO 3. Saatchi + Saatchi, NY 3. McCann Erickson 3. Saatchi + Saatchi NY

4. W+K London 4. DDB London 4. R/GA 4. Fallon London 4. W+K Portland

5. TBWA\Chiat 5. DDB Chicago 5. DDB London 5. Saatchi NY 5. Droga5

6. Taxi 6. JWT London 6. DDB Chicago 6. TBWA\Chiat\Day NY 6. BBDO NY

7. DDB London 7. Dentsu Tokyo 7. BBDO NY 7. Crispin 7. Dentsu Tokyo

8. Fallon/NY 8. Forsman +Borden 8. BBH NY 8. GSP (260) 8. TBWA NY

9. Almap/BBDO 9. Taxi 9. Leo Burnett Chicago 9. Saatchi Singapore 9. CumminsNitro

10. W+K/Portland 10. GSP (155) 10. Fallon London 10. DDB London 10. Leo Burnett Lisbon

11. DDB Brasil 11. Fallon London 11. Saatchi + Saatchi, Singapore 11. TBWA Paris

12. Dentsu/Tokyo 12. W+K London 12. W+K Portland 12. W+K London

13. Springer + Jacoby 13. Saatchi + Saatchi, NY 13. TBWA\Paris 13. Saatchi + Saatchi, NY

14. Arnold 14. Nordpol Hamburg 14. W+K Amsterdam 14. Nordpol Hamburg

15. The Jupiter Drawing Room 15. Leo Burnett London 15. Fallon Minneapolis 15. Leo Burnett London

16. 180 Amsterdam 16. Lowe Hunt Sydney 16. GSP (115) 16. Lowe Hunt Sydney

2009 CREATIVE AWARDS

1. Goodby, Silverstein & Partners (680)

2. Crispin Porter + Bogusky (365)

3. Saatchi & Saatchi NY (345)

4. Wieden + Kennedy Portland (320)

5. Droga5 (295)

6. BBDO NY (205)

7. Dentsu Tokyo (200)

8. TBWA Chiat Day NY (200)

9. CumminsNitro Brisbane (200)

10. Leo Burnett Lisbon (200)

AGENCY WINNERS 2009

Source: Creativity Magazine, September 28, 2009

2009 CREATIVE AWARDS

1. BBDO (1375)

2. DDB (985)

3. Leo Burnett (965)

4. Saatchi & Saatchi (885)

5. TBWA (765)

6. Ogilvy (700)

7. JWT (615)

8. Wieden + Kennedy (470)

9. Y&R (420)

10. Crispin Porter & Bogusky (400)

AGENCY NETWORK WINNERS 2009


Goodby would have placed seventh in this ranking, even though it’s a one-office agency

We were named the mostawarded agency in the world


“The most awarded Agency of 2009 is GSP, a shop that simultaneously was named Cannes’ Digital Agency of the Year and, according to our count, had the most awarded TV spot this season with ‘Rabbit’ for Comcast.

“What’s more, the San Francisco–based Omnicom agency didn’t earn this distinction for hitting one home run that won everything—last year’s top winners could chalk up success to standout campaigns like HBO’s ‘Voyeur’ and ‘Halo 3.’ A broad range of award-winning work and strength across media proved fruitful for Goodby, which won for work like the YouTube-quaking ‘Wario Land Shake It!’ for Nintendo, the split-screen ‘There Can Only Be One’ spots for the NBA that inspired spoofs on the cover of Time Magazine and on SNL, the ‘Save the Honey Bees’ campaign for Häagen-Dazs and the virtual haunted ‘Hotel 626’ for Doritos. Goodby also won for the first augmented-reality campaign for a major advertiser, the GE Plug into the Smart Grid Web site, as well as the data-crunching Sprint Now widget.”

2009 saw a real cementingof our digital interactive credentials

We were the One Show Interactive Agency of the Year(with work for six different clients)

We were the Cannes Digital Agency of the Year(with work for seven different clients)

And 2009 wasn’t just about creative awards. Media got in on the act too...

We won six (out of a possible 16) awards at theCreative Media Awards in NY for four different clients,

including the Grand Prix

We were the #2 office in the world at theFestival of Media Awards in Venice

derek robson how you can digitilize your agency

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