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?

72 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?

BruceDeBoer
BruceDeBoer

In a crowdsourcing model are there any campaigns that we can point to and say, "wow, killer stuff ... game changers?" Too early to tell? We all know commidities are price based differentiated competitive models. I never hear crowdsourcing mentioned without a) some kind of retoric about hightened creativity and b) it's cheaper. Is the crowdsourcing model a convenient way of accessing creativity based on price differentiation? If not, where is the brilliance that will attract campaigns where price is not the major consideration?

Howie Goldfarb
Howie Goldfarb

Here is my view on Victors and Spoils and Harley. They won the award. But they have not executes or helped Harley win back market share or their stock price. And the old Agency resigned because Harley refused to listen to their advice. So the jury is out.

My biggest question and something I once brought up in this blog before because my Agency model is a bit similar to V&S. I outsource most aspects of a campaign. But I am 100% responsible for all subcontractors. You need one leader, one project manager who the buck stops with. Just like Ford doesn't ever talk with Tier 3 subcontractors. They talk with Teir 1 and tell those partners it is up to them to manage the companies that provide parts into bigger assemblies. How does V&S manage this. If I am a Cleint and one part of a broad campaign falters say the Digital side did not execute. The blame has to fall on the lead Agency because it is up to them to pick a partner who will execute.

How does V&S plan to manage a broad campaign that might include all marketing disciplines? Can a big client have enough trust in your project management skills to feel comfortable. What about your partner agencies. Will a partner agency be willing to do work they know will fail just for the billings knowing they could take a reputation hit because of a alliance agreement. How will you handle such a situation. Obviously the ex-agency for Harley refused the billings because they felt Harley was going to fail.

malbonnington
malbonnington

What kinds of people / skills sets are you looking to bring in to your businesses, and where are you finding them?

mitchellholder
mitchellholder

I feel like advertising education in traditional colleges is always one step behind on these new agency models - what can students do to prepare to enter into these new types of businesses?

malbonnington
malbonnington

Where does the agency end and the crowd begin?

caff
caff

What's your payment model based on and how do you see the payment model for clients changing as earned media becomes a bigger player in campaigns?

cindygallop1
cindygallop1

'What's your profit margin?'

Cindy Gallop
Founder & CEO, IfWeRanTheWorld
www.ifwerantheworld.com

malbonnington
malbonnington

People, especially people within businesses called advertising agencies, talk about 'the advertising industry'. But does the advertising industry exist any more? If so, what makes it distinct from other neighboring industries? If not, what's replaced / replacing it?

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