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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...
External perceptions of the agency
Source: Adweek, Industry-on-Industry Survey, 2005
But we lagged behind in:
“Most creative”
“The shop with the best reputation”
(the industry)
External perceptions of the agency
Source: Adweek, Industry-on-Industry Survey, 2005
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
Ideas Generated & Produced
X
Ideas Generated & Not Produced
XX%
% Hit Rate
Creative/Client
TV Print OOH Radio Web Other
Agency productivity, 2005
2005
Low strike rate clients with correlated problem relationships
804
Ideas Generated & Produced
1,413
Ideas Generated & Not Produced
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
Source: Internal Agency Interviews
“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.
Source: Internal Agency Interviews
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
Source: Goodby, Silverstein & Partners
42%
58%
18%
82%
May 2006
Web/InteractiveTraditional
So we needed to changeour creative resources(percentage of head count)
Source: Goodby, Silverstein & Partners
The CreativeDepartmentMay 2006
TraditionalTraditional + InteractiveInteractive
49%14%
37%
The shift in our output was dramatic
Source: Goodby, Silverstein & Partners
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
Source: Goodby, Silverstein & Partners
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
Source: Goodby, Silverstein & Partners
From two distinct creative “camps”
TraditionalArt Director
+TraditionalCopywriter
InteractiveArt Director
+InteractiveCopywriter
A simple approach to increasingdigital competence
Source: Goodby, Silverstein & Partners
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
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
% Very Satisfied
18%
13%
19%
17%
Top four most important elements for an ad agency
1. Understand my market
2. Creative
3. Understand company direction
4. Strategy and thinking
Top four most important elements of digital
1. ROI
2. Analyses of Web behavior
3. Search
4. CRM
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
A need for fluency from “the work” to how the work works; the “what” to the “why”
% Very Satisfied
18%
13%
19%
17%
Top four most important elements for an ad agency
1. Understand my market
2. Creative
3. Understand company direction
4. Strategy and thinking
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
Ideas Generated & Produced
Ideas Generated & Not Produced
2005 804 1,413 37%
% Hit Rate
Source: Goodby, Silverstein & Partners
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
Source: Creativity Magazine, September 28, 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
Source: Creativity Magazine, September 28, 2009
“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