New agency models and what we can learn from them

If you could ask John Winsor, Ty Montague or Ian Schafer any question at all, what would it be?  Please leave your questions in the comments below.  Thanks.

Next week I get to moderate a panel that includes Ian Schafer, CEO and founder of Deep Focus; John Winsor, CEO and founder of Victors&Spoils; and Ty Montague, co-CEO and founder of Co.  Each of these “agencies” offers an alternative, if not an antidote, to the traditional advertising agency.

Deep Focus is a digital agency that calls itself an engagement agency. Its manifesto challenges the relevance of traditional agencies, arguing against a single-minded focus on awareness and in favor of real-time interaction. Ian claims his company — the first US acquisition by Engine — represents the ideal agency for the future. It emphasizes platforms over campaigns, believes in the permanence of social media, and strives to connect with consumers at every touch point.

Victors&Spoils, which recently prevailed against traditional shops to win creative duties for Harley Davidson, on top of a number of assignments for other impressive clients, takes its inspiration from the overused and oft misunderstood label “crowdsourcing.”  Cliché’d criticism of crowdsourcing not withstanding, V&S carefully gathers communities of creators then sources the crowd for a wide range of creative solutions. It manages to offer ideas and solutions to clients for less than what traditional agencies charge while apparently satisfying its creative community with the extrinsic rewards of interesting assignments and a chance to exercise one’s creative muscles.

And finally, Co: introduces yet a third approach. Founded by refugees from JWT North America, BBH and IBM, the advertising collaborative begins with the assumption that one agency simply can’t provide best of breed capabilities necessary for the networked world. CMOs remain ill equipped to gather and unite best of breed resources. And holding companies let financial motives get in the way of crafting the perfect solution.  Co: aims to steal a chapter from the Hollywood studio model, assemble the perfect team from loosely affiliated agencies, deliver the right blend of services for any given project, then disperse when that project comes to an end, promising clients better talent and greater efficiency.

Two things make each of these models possible: digital technology that fosters a new kind of collaboration; and the fact that they all started from scratch, free of the constraints, muscle memory or DNA of an existing advertising agency.

True it remains to be seen which if any of these alternatives will emerge as a real threat to legacy ad agencies. (In fact, a number of great full-service agencies are  successfully adapting.)  But based on enthusiasm, press coverage and early success, all three are on to something. Seems to me that whether you’re a traditional ad agency, a digital or interactive shop, or a CMO trying to figure it all out there’s something to be learned from what Ian, John and Ty are up to.

Questions for Victors&Spoils, Deep Focus and Co:

  • Did you create your agency believing that the old model is broken?
  • Can a traditional agency replicate what you’re doing?
  • Is it possible to transform a company from one specializing in awareness and paid media to one that understands real time interaction, earned media, and the new networked environment?
  • What would its greatest challenges be?
  • Are engagement and UX the new art and copy?
  • Does crowdsourcing have a place inside the traditional advertising or interactive agency?
  • What makes the alliance model of Co: better than the integrated agency where people actually have experience working with each other?
  • What kind of reactions are you getting from clients and prospects?
  • If you were still back inside an ad agency, what would you implore management to do differently?
  • In each of your cases, you personally re-invented your own careers, learning new skills in the process. Any advice for those in the room on how to do the same?

Those are but a few of my questions for the panel.  What are yours?

71 comments
megfred
megfred

My question is a simple one, particularly relevant to Co. and V&S: If we recognize more minds are key to solving today's big marketing – and big business – problems, then why are we further isolating collaboration, as opposed to bringing it closer together? V&S model isolates people and collaboration more than the traditional model. Co. model shows that they would have to know what partners to bring to the table before collaboration begins, which means (1) their core group would have to know, or assume they know, the solution to the problem before gathering the right partners to implement and (2) they assume these different groups would know how to collaborate once they bring them together.

stuartcurran
stuartcurran

The guys on your panel are clearly very smart, driven individuals. I'm just wondering if they perceive any personal opportunity cost in setting up a new ad agency (albeit innovative ones, for sure) as opposed to any other kind of venture?

PhilAdams
PhilAdams

Less of a question and more of an observation.

It strikes me that the only enduring (repeatedly successful) model for agency start-ups is the high concentration of senior talent, to which clients have direct and full-on access.

There's a breed of client that is naturally drawn to the adrenaline-fuelled, chaotic and therefore highly creative environment of a start-up, regardless of the underlying ("revolutionary") model.

New agencies undoubtedly need an angle in order to generate the industry profile to come to the attention of these clients.

But for most successful start-ups it's the fact of starting up rather than the form of the start-up that makes them most attractive.

If the people behind these new organisations are natural exponents of all things social, all things transmedia and all things collaboration then so much the better. Again it's about talent, chemistry and attitudes rather than the headline model.

sarahdoody
sarahdoody

To build on your original question of "can a traditional agency replicate what you're doing" ... how about taking it a step further and asking if traditional agencies even should? Can this even be done within the perimiter of a traditional agency?

And here's my question to them ... how do their new models approach technology differently than agencies? It seems like traditionally its been somewhat of an assembly line method. How does the new models represented work with technologists differently that they did (or even could) in the agency setting?

bud_caddell
bud_caddell

Badly paraphrasing this, but, producing red blood cells is necessary for a person to live, but it's not why we live – so aside from producing profits, why does your company exist? In other words, what do you stand for? Would be thrilling to hear from all of the distinguished panelists.

melex
melex

Questions V&S and Co:

In your organizations, who "owns" the client relationship for the long term / retains a deeper understanding of the commercial issues facing a brand? Do you think that's important?

How do you manage your resource effectively? Agencies need such a broad range of capabilities nowadays to deliver, what tips do you have for keeping the very best talent engaged?

LexBZ
LexBZ

Many of the questions are already out there and I look forward to hearing/seeing the discussion, but two things scratch away at me, at both ends of the spectrum:
- how important is the rolodex (or outlook contacts now) to these guys in setting up their shops; do you think that a 'new model' agency could get up and running without an ex-madison ave (or similar) name on the front?
- how do these models work when you get into the dirty, executional end of things - who handles the endless back-and-forths with the client teams, can we crowdsource the project management too?
Thx

JeffShattuck
JeffShattuck

There are so many good questions already, but here are a few more. Mine are all directed toward V&S, because I was so down on them when they started and their model seems easiest to understand:

1) When I read that V&S showed Harley 65 ideas, I totally understand that Harley was impressed, but what happened next? How were the best ideas culled?
2) Can the compensation model for crowd members be described simply?
3) Why no examples of the work on the V&S site?
4) How is this not quantity over quality?
5) What is Frey's role? Does he actively direct or only judge or both?
6) How is production handled?
7) Once a prospect becomes a client, does the V&S model revert to a more traditional agency?
8) What does Bogusky have to say about all V&S?

Thanks!

smartel
smartel

Inspiring models, I couldn't be happier seeing genuine and real agency changes coming the way and putting emergent and digital platforms/medias at the very core of marketing plans.

Thing is, the major problem is not the new agency model or the future of advertising itself but the mistakes in formats we've seen and endured with the arrival of display advertising on the internet and seeing THE SAME mistakes being done with mobile and tablets AT THIS VERY MOMENT.

Without media and content publishers (whatever the channels - TV, Web, Mobile, ...), advertising does not survive.

Media proposed display on TV. Then on the Internet. Now adapting it to super-mega-rich-ultra-engaging formats on mobile and tablets. Still display. And you know what? This alone does not pay the publishers bills, and results for (most) brands are not what they're expected to be.

So, my questions are:

Q1) How these new models can make things change in the media offer?

Q2) What's your (proposed) approach with advertisers? Because even if some marketers are bright and understand what you're about to propose, most simply don't.

Thx

SM

timburley
timburley

Do you participate in pitches or try and disrupt the process to gain an advantage? If you pitch, how do you build a pitch team involving loose affiliates? What issues cause problems?

question
question

when someone says you are all talk, do you think it makes sense to respond with performative dance?

rnadworny
rnadworny

How is this new "new agency model" you're talking about any different from any "new" start up agency? New fresh agencies pop up all the time, sometimes they're named Strawberry Frog or Mother, now they're named Victor & Spoils and Co. Is there anything truly different this time, or is there always a need in the marketplace for new combinations?

question
question

how do you make marketers comfortable with the idea of putting millions of dollars into an experiment that is yet to be proven viable?

caff
caff

Do you expect to see a change in how and who is running things on the client side? I've heard some rumblings about how not only the agency model is broken but also in terms of how things are run on the client side (especially in terms of digital)...agree? disagree?

malbonnington
malbonnington

Which of the four agencies represented on the panel (V&S, Co, Deep Focus, Mullen) do you most fear pitching against, & why?

question
question

let's be honest here. DeepFocus is nothing new whatsoever. V&S is not new either. there are a number of crowdsourcing agencies out there, most of which have received tons of backlash from their contributors because at some point people get sick of working for free and feel they were taken advantage of. The KDU is case in point. and now :CO. this is just a clever ploy to have top resources available with little investment. once :CO has landed a big account and can actually staff up they will drop all these partners and just go back to doing things on their own. so what's the question really? i'd say why do we consistently believe the hype of new models from people who are in the business of creating hype? proof is in the pudding not the PR.

iboy
iboy

When Deep Focus was acquired by Engine, Ian said it's about "keeping digital at the head -- and heart -- of a marketing organization that was actually built in this decade to reach consumers in the way they are actually behaving."

There's a huge battle for control of top-tier client relationships going on in adland today, and there are precious few examples of digitally led agencies having the kind of influence that Ian suggests he wants. Old-school clients who are kept in line by equally old-school agencies are often to "blame" for this ... to say nothing of the continued influence of media companies who either don't get or don't care about new channels, as it's easier for them to make money using established high-margin traditional media.

Do you agree with this assessment?
If you agree, what do you do to deal with it?
If you disagree, why?

Thanks,
@iboy

harshalg
harshalg

How do you keep learning as an organisation, when people keep moving about?

wdowen
wdowen

Who are you selling to on the client side (I think you asked me this question once Edward) and how effective are you at influencing different parts of the client's organisation?

question
question

Deep Focus is different but they are not an ad agency. they are a digital media company with a lot of jargon hanging on each buy

question
question

everything that all of these agencies are doing has been done already and there's nothing new. the only thing remotely "new" is that they left big agencies to start their "new" agency and got a lot of press because they were already well known old-school ad people

question
question

do you really feel that by describing an old thing in a new way it changes what it is?

mnburgess
mnburgess

Excellent blog! Victors & Spoils has made a heroic effort to gain momentum in the industry and make a very impressive new business win with Harley-Davidson. How do you keep the momentum and add value so the client will continue to look to you for creative work rather than go to the crowd themselves?

Mark Burgess
www.bluefocusmarketing.com

question
question

how long do you think the smoke and mirrors of "new agency model" will continue to get PR before the media and clients realize they've been tricked?

DaveAtNORTH
DaveAtNORTH

"Each of these “agencies” offers an alternative, if not an antidote, to the traditional advertising agency" As antidote is a substance that counteracts certain poisons, I can only presume by using that word you suggest that 'traditional advertising' agencies are to be considered poisonous. The hyperbolic articles I've come across in just the last two weeks, that pit so-called 'Digital' agencies against so-called 'Traditional' agencies, are so incredibly boring and mundane they seem to be written only as a form of relief for the sleep deprived. We need new thinking.

Why are we wasting our precious and prodigious creative talents on pointless arguments and finger pointing about who or what model is right or wrong? In my creative life, which began as a professional musician, I have never considered "which way is right," I have always considered the idea of "not knowing." Unlearning what we've been taught since we were children is a great blessing. The curse of knowledge is crippling, as can be seen in some of the facile arguments I've read in the media lately.

Our children will look back on this important time, a period in which the Internet disrupted and changed culture and society, as a long period of lost opportunities because, as they will point out to us, we were all arguing about 'Digital' or 'New' versus 'Old' and 'Traditional.'

We should all be out there, outside the echo chamber, making great things for our clients.

brianjeremy
brianjeremy

What do managment teams look like in new agency models (size, skill sket, etc)?

EricWilliamson
EricWilliamson

Most agencies start out small & scrappy relying on a network of partners/contractors out of necessity ...then after a few years of success they find themselves bloated & bogged down in beauracracy (...a lotta b's). As you get bigger and have more clients that need dedicated services, and have more employees that need support ...how do you keep from ironically becoming a big bloated agency?

My Question #1 -- What guidelines have you set for your agency from the start to help ensure you do not fall into this trap?
- Is there a max number of employees you have set for your core team to avoid this scenario? If so, what is it?
- Is there a master list of roles/specialties that you will always crowdsource versus in-house to avoid this scenario? If so, what is the list?
- What happens if a client likes a particular creative (art/ copy) found via crowdsourcing? Do you secure a long-term freelance agreement with that creative ...or stick to the idea that the best work always floats to the top & crowdsource the next campaign and hope for consistency?

My Question #2 -- What keeps a client from bypassing your agency as the contractor and going straight to the crowd (using available collaboration software & crowdsourcing platforms) ...or using this to squeeze your margin.

My Question #3 -- How transparent are you with your financial model? Do you tell the client how much the talent from the crowd gets paid out of the total revenue?

I am really looking forward to the interview. Will you be posting a podcast or video (if you are interviewing in person) of it on your blog, or a blog post transcript?

phildearson
phildearson

Given the increased demand for agencies to collaborate with each other, what do you believe are the optimal financial and organisational structures for making this easy?

apierno
apierno

as you approach prospective clients, what's the top barrier you hear from those that are hesitant to working outside the model they are familiar with?

DanielE
DanielE

The co: and V&S models are still very new, but has anyone yet quantified/qualified levels of success (for clients and their businesses) that are improved vs. the "old agency model"?

Daniel

mikescheiner
mikescheiner

All three of you have created a new type of model, or in some cases a model that agencies have proposed or tried to recreate and that were unsuccessful doing. Do any of you think its possible to retro fit an existing agency model that is silo'd or has individuals who can't get out of the way from one another to one thats built around the idea of a transmedia experience or that is truly committed to a collaborative model?

edwardboches
edwardboches moderator

@stuartcurran Are you suggesting that these moves aren't radical enough? That is an interesting question.

edwardboches
edwardboches moderator

@CarolWeinfeld I'm not sure that there is anything to disagree with re William's deck. It's a message that has been stated many times in different ways, though he does it extremely well. I'll go out on a limb and suggest that Ian agrees totally, Ty embraces it (based on his comments on the recent The Beancast podcast I just did with him), and John practices it, though so far probably sells more traditional advertising using a networked model.

question
question

@malbonningtondon't have inside info on CO and do not know them personally. i did see the same tactics used by a few other very notable start-ups in the past 5 years. they all loaded up on partners to get free collaboration on pitches and to have the credibility to make clients feel comfortable their team of 4 could actually pull something off. after landing the first big account all the other agencies become obsolete when they have the $ to start building internal teams to create a higher profit-margin on production.

wdowen
wdowen

@edwardboches@wdowen
In general yes, as high upstream as possible, but it depends on the context: what’s the scale of ambition of the project, what kind of client organisation and how is it managed? Does the project change the business model? You need access to the CEO or at least across departments. Does it add transactional capabilities or influence product or customer development? You need access to the head of product, CTO and CMO. Or is it a pure marketing play (CMO).

edwardboches
edwardboches moderator

@wdowen Good one. Expect it to be the CMO for two of the three anyway. CMO or CEO (of smaller company) is where you want to be, yes?

question
question

@edwardboches creative? their biggest succes is the madmen yourself project that was just a reiteration of elf yourself. what's new about repackaging another agency's success? i've worked with them and all they did was suggest putting all the money into a facebook buy.

edwardboches
edwardboches moderator

@question Perhaps. Though they do some creative and apps. And their purchase by Engine gives them a new presence.

DaveAtNORTH
DaveAtNORTH

@mranauro @edwardboches thanks, but I can't take credit for "a new way of seeing the market" that's from my good friend Justin Spohn who's worth a follow on Twitter - adognamedpants

mranauro
mranauro

@edwardboches @DaveAtNORTH It's a trait in any industry, talking about how to evolve with peers, and there's quite a bit of good thinking from the collective. But you need to have a hard look at your model, the market and then disrupt your own business before it gets disrupted.

Influx business models are catching on in a big way. Netflix, Amazon... have been reinventing themselves while they are in a dominant position. Advertising has been painfully complacent for, oh, about 50 years.

Think you're spot on w/ "a new way of seeing the market."

DaveAtNORTH
DaveAtNORTH

@edwardboches Yes, it will be difficult but a lot of the articles I mention presume that progress hasn't been made, or stasis as already set in, which I would disagree with. Let's face it, the Web itself in its current popular format as embraced by regular folk not the geeks, has only been around for less than 20 years. Long enough for sure to create challenges to companies and brands, small and large, yet not long enough for us to be able to look back and consider periods of time ala the Renaissance. Currently we are trying to look backwards and forwards simultaneously and it's hurting our necks!

As my friend, and former business partner at Fight, Justin Spohn, puts it:
"Fight was founded on the principle that, what we thought we knew about digital was incorrect. Where we thought it was a new thing we had to learn, it’s actually some thing that has totally disrupted society and along with it the market place and marketing, to the extent that the fundamental relationship between customer and brand has been permanently changed.

What's needed isn't a new way of making digital marketing, but a new way of seeing the market."

I believe that last sentence directs us towards the place of agreement and understanding of what a great agency, new or old, can be. One that helps its clients see the new market and the new relationship between it and its customers. Then the 'right' and 'wrong' ways of our approach may simply evaporate.

edwardboches
edwardboches moderator

@DaveAtNORTH You are certainly true. However, it appears that is more easily said than done, yes? Wouldn't Tower Records have figured that out? Or the majority of newspapers that went out of business before figuring out how to evolve. Or Blockbuster video? Or Cliff Freeman and others? True many other industries -- plumbing, for example -- don't spend nearly as much time talking about shit. They just unclog things, get it all running smoothly and move on. But we seem to have an industry that likes to talk about this stuff.

EricWilliamson
EricWilliamson

@edwardboches Thanks - I am really looking forward to seeing the interview. Your blog is excellent btw ...several people at Martin follow it regularly. Keep up the great posts.

mikescheiner
mikescheiner

@HowieG @edwardboches You make several good points. However I feel its less about structure and more about a philosophy and culture. I've been in both situations. One with a big agency that wanted to change and could never get out of the way of their own ego's. The other was with a branding start-up where we defined our own culture and approach, which was later destroyed after being acquired. Firms such as Co., V&S, DF, and Mullen all have a unique offering and approach. Yet they all (for the time being) share a philosophy of delivering a model that is very much in demand and relevant to marketers desiring a true integrated partner.

Howie Goldfarb
Howie Goldfarb

@edwardboches @mikescheiner When I think of Models I think of Structure more than anything else. I am not sure that Structure trumps everything. But it can impede business. One problem with the current Conglomerate Structure that became so popular is the silo effect. I have to go to many places for various services. What if I don't want too?

So to me the structure needs to have/allow the ability for an Agency to pursue new avenues of business freely without constraint. I saw this when calling on giant media buyer Kenetic World Wide. The minute I added mobile marketing to an Out of Home service all of a sudden no one knew who can give me a PO or decide to go with me. Meanwhile Kinetic set up their own mobile division. I gave up calling on Media Buyers. And now call directly on companies and creative firms. Even NBC + Universal made me talk to someone else because technically my service fits Mobile, Digital, Out of Home, and Print (and Social). That is bad for the Client and me of course.

What if a client with deep pockets really liked the folks at Mullen and wanted to add media buying because (this is just or argument sake) they had a really horrible experience with your sister company that did this. Or add Print. And what if they said we don't care your price we trust you. Does the parent company say sorry no go?

edwardboches
edwardboches moderator

@mikescheiner Thinking the same thing. Learning from new models is only good if you can improve your own.

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