First off, the days of agencies earning a buck every time their clients flight ads are a distant memory. In fact, for those of us entering the ad world over the last two decades or so, this concept is entirely foreign. Those must have been the days of long lunches and never-depleting agency bar inventory. Then there is the bonus system that existed as incentive for agencies to aid clients in reaching their targets, which has also started tethering on the brink of extinction.
Clients are embracing the multi-agency model and questioning the ability of one agency to service all of their brand needs, which means agencies are now faced with a slice of the pie instead of being served the full dish. Lastly, the recent recession has left brands with the same marketing budgets they had five years back, resulting in many brands taking creative resource in-house to assist them in cutting costs and enabling faster turnaround times on cut-and-paste creative work.
Bottom line is there is less money going around for creativity. Which brings me back to my initial question around the traditional operational structures within advertising agencies.
Advertising agencies sell creative solutions to business problems. Period. Which means the essence of what the client is paying for, is the creative product of the agency. So, if you’re loading your costs with operational duties in support of the creative product, you’re too expensive.
Now this leaves agencies in an uncomfortable place, because you can’t compromise on your creative talent; that is your core product. And that leaves only one area to slim down on – everything defined as a non-creative product. Rent, account management, traffic scheduling, print, tv and radio production, art buying, finance, office management, HR. All the suit-stuff, which if you really look critically at, you realize can be amalgamated and handled by a select number of efficient and capable individuals. None of these disciplines require a siloed specialist. We’re not dealing with brain surgery here.
The nature of a start-up is that you don’t have the luxury of adding fat to your core product offering. You’re forced to be lean where it counts. Having come from the traditional agency model it was a daunting space to operate within. Who was going to schedule the creative work to ensure it met deadlines and allowed for efficient work flow? Who would do the cost estimates and invoicing, and pay suppliers? Who was going to book production elements like radio recordings, print ads and TV shoots? Who would buy the stationary and make sure the coffee reserves don’t run low?
It all comes down to ensuring you have highly efficient and resourceful account managers, or as I like to refer to them, project managers. Whilst these tasks deal with different disciplines they are at their core a management function that require two things: excellent time management, and a can-do attitude. That’s it. All you need is a small suit-team that can juggle multiple functions simultaneously and that are prepared to tackle any challenge thrown their way. Lean and keen.
So, the next time you’re faced with a budget cut, ask yourself if your agency is too chunky where it doesn’t count. Ask yourself if they are lean and agile, or beefy and slow. Because the marketing budgets aren’t getting bigger, and as clients you have every right to question if your money is going towards a fancy office space and sizeable operational structure, or to the core product you are purchasing: the creative ability of your advertising agency.