Agencies need to innovate

27 November 2014

SYDNEY: The Australian advertising industry creates no intellectual property, one reason it has become increasingly commoditised and caught in a downward price spiral, is the controversial assessment of one industry figure.

Darren Woolley, managing director of TrinityP3, a strategic marketing management consultancy, told an audience at a Sydney event, reported by Mumbrella, that agency staff were effectively "factory workers" at the mercy of a global market.

"When you are a commodity the only way is down and this is what is causing this race to zero," he said. There were, he argued, too many undifferentiated agencies and that was not the fault of clients or procurement or anyone else but themselves.

"If you are just a service supplier then get used to the fact that someone will always come along and take business off you because they can do it cheaper," he said. "Turn the conversation around to where you can add value."

Too many conversations with clients, he suggested, centred around costs and efficiency. "Don't have a conversation about cost recovery with a client, keep the focus on the upside which is value creation." Similarly, his advice on technology was not to talk about it "unless it's a way of adding value and effectiveness".

For him, the process of value creation started with intellectual property and agencies needed to consider what they created in this light.

But, he added, "it is only worth what someone is willing to pay for it and the IP created by the advertising industry in this country is worth zero because I do not know a single client who pays an agency for their IP. We give it away."

Agencies should be looking at innovating and developing products in-house that could be licensed to clients. "Anyone can take an order," he said, "but a real innovator creates things for people before they know they need it. Why can't agencies do that? It is a great way of proving your ability."

Data sourced from Mumbrella; additional content by Warc staff