At the IPA Business Growth Conference last week, a group of marketers from independent advertising agencies offered insights into what they felt gave them a competitive edge. Culture and mindset dominated the conversation. The panel was chaired by Mark Nohr, CEO of Fold7.
Expansion and the need to please stakeholders is the oft-cited reason for the loss of agility and innovation in publicly owned companies. So it’s perhaps not surprising that a panel of professionals from nimble, independent advertising agencies would end up highlighting culture and mindset as the primary differentiators that they felt gave them a competitive advantage.
At a time when, as Mark Nohr put it, “independent agencies are in rude health,” there are undoubtedly lessons to be learned from their success. With EffWeek 2018 coming up and the publication of a new piece of research into effectiveness culture at agencies and brands, here are a few of the most salient take outs from the panel
Independent agencies are forged by their founders. The panel reflected on the kinds of things that occupied their minds in the early days of their businesses. What were the decisions they took at that point that would shape their companies into the future?
Jenny Biggam, owner of the7stars, kicked off with a theme that was to dominate throughout the discussion. “When I look back I realise that when we were setting up the business, we thought much more about culture than anything else,” she said. Katie McKay-Sinclair, a partner at Mother echoed Jenny, “For us, it was all about the work culture we were creating as well,” she said. “It needed to be fun. We came up with the phrase, ‘make a living not a killing’ to express our priorities. We don’t have to deliver 20% to shareholders every quarter, so we remain flexible, we don’t have fixed models we have to work to.”
Remaining independent may limit some growth prospects of a company, but the panel all agreed that a critical competitive advantage it gave then was this ability to remain flexible.
Transparency and pricing
Paul Hammersley is the founder of the Harbour Collective, an organisation that brings together independent agencies to help them benefit from scale. The organisation coordinates activities like buying insurance premiums as a group to combat the competitive disadvantage that independents have financially.
After many years working at a senior level in publicly owned agencies, Paul believes that the industries pricing model is one of the biggest limitations it faces. “We can’t keep using the old industrial model of pricing where we just add a bit to what it costs us,” he says. ” At Harbour, we advocate using a pricing model which separates design and delivery.” At a later session in the day Anna Hickey, COO, described this model at Wavemaker. “The ‘scope of work’ has almost become irrelevant because we are in an era of perpetual iteration. We charge a flat fee for Design, which consists of tools, products, and people. Then we charge for delivery based on cost and this charge is flexible so it can be scaled if necessary.”
Models like this were advocated for by Tim Williams at the Business Growth Conference in 2016. You can watch his presentation below.
Pricing at the7stars and Mother reflected their values of flexibility and transparency. “We have a very simple model,” said Jenny Biggam. “We only charge for the work we do, there is no markup for programmatic or media.” At Mother, there is no cross-selling of services. “So focus is not diverted from the thing that each person is brilliant at,” said Katie.
Investing in the community
Harbour’s model is one of overt investment in the community of independent agencies, but the other companies were also involved in this, supporting startups, often of previous employees. At Mother they use the experience to drive new business with other startups”Our experiences with Broody and The Romans…” two successful spin-offs from Mother “…have driven a lot of learnings about how start-ups work. Broody is a way of seeing how we can bring our marketing expertise to that market.”
“Just what the industry needs, great collaboration between clients and agencies on the topics that drive business growth.”
Bridget Angear, Joint Chief Strategy Officer at AMV BBDO
“It’s great to see the IPA in the UK bring the whole industry and particularly the trade bodies together to focus on effectiveness. This new Marketing Effectiveness initiative will enable people across the industry to work together to build on best practice.”
David Wheldon, Chief Marketing Officer, RBS
“Effectiveness is a team sport, so it was great to see the industry in the widest sense, come together. In an increasingly diverse and fragmented world, only by using all parts of the brain will we solve effectiveness challenges and design our campaigns to deliver short and long term value. That’s why what happens next is important – if the IPA can help facilitate progress on this with a long-term initiative around Marketing Effectiveness, we’ll definitely crack it.”
Bart Michels, Global CEO Kantar Added Value and Country Leader Kantar UK
“The time spent at #EffWeek was extraordinarily effective. It was great to hear the diverse views from all areas of the industry. All tied together with the common themes of accountability and effectiveness.”
Andrew Canter, Global CEO, BCMA
“It has been a privilege to be part of the inaugural Effectiveness Week. The agenda is one which we at O2 UK feel passionately about. To see and hear perspectives across the industry demonstrates how the breadth of marketing effectiveness is increasingly being valued within businesses. Data, insight, social, customer experience, test and learn, ROI, these are all fundamentals and were covered expansively at the event”.
Sandra Fazackerley, Marketing & Consumer, Telefónica UK Limited
“The full week of effectiveness events brought into clear focus the need for marketers to use data and insight to achieve the key business objectives of growth and profits. Marketers today are in a better position to quantify their knowledge of customers and measure the ability of investments in marketing to increase brand and shareholder value.”
Chris Combemale, Group CEO, DMA