In the October issue of Admap, we considered how the homogeneity of agency briefs, across disciplines and geographies, is antithetical to the goal of differentiation. Jane Newman, referring to the development of account planning, pointed out that "to achieve our creative philosophy of relevant distinctiveness, we've applied that same creativity to how we structure ourselves both internally and dealing with clients".
Account planning was a great innovation in agency structure but success was rapidly imitated, especially once Jay Chiat proclaimed that "account planning is the greatest new business tool ever invented". The account/planning/creative/production assembly line spread. The structure surrounds the art director and copywriter pair, as the proton and neutron of advertising creativity. In actuality, as my partner Rosie pointed out in a speech called 'It takes a village to tweet', some ideas are better served by different combinations of thinkers and makers, be that an engineer or an artificial intelligence. If you want different kinds of ideas, not just different ideas, you need different kinds of people.
Disruptive innovation, a now worn-out term beloved of Silicon Valley, is characterised by a specific pattern. In Clayton Christensen's model, a 'product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, displacing established competitors'. It allows a new population of consumers at the lower end of a market to access a product or service that was previously only available to those with a lot of money. Google, and then Facebook, brought small businesses into advertising, because they offered a lower price point of entry. Lower gross margins are offset by expanding the target market from hundreds to millions of companies. Structural innovation that leverages the internet to mitigate transaction costs - the costs of putting together solutions for customers - challenges existing companies because they can provide solutions without expensive overheads. Famously, as Tom Goodwin pointed out in a quote that has since been endlessly recycled, the world's largest accommodation company owns no rooms, the world's largest retailer owns no inventory, and the world's largest transport company owns no cars (although it did just buy a fleet of self-driving trucks).
What if an agency didn't 'own' any creatives? Innovation of this sort was previously championed by Victors & Spoils but they moved away from crowdsourcing. Newer entrants like Boom Ideanet position themselves as an outsourced creative department. In their vision, the agency of the future will be a small core team that works with a distributed crowd - the agency assets will no longer go down in the elevator every night. My own agency works with a curated group of global collaborators. We don't crowdsource but rather select partners to work with on different kinds of projects, be it UX designers, filmmakers or technologists.
The original idea for Uber was to bring town cars to people who weren't corporate executives by making it on demand and cheaper. Using software to connect drivers and riders via mobile phones significantly reduced the infrastructure needed to provide transport. They used this bulwark to expand into taxi and delivery services, a model called adjacent innovation, which leverages what the company does well in new spaces.
This adjacent innovation model has also been aggressively adopted by many traditional media companies, as they seek to diversify revenue streams in light of declining ad spend, especially print. The New York Times has acquired several agencies and wrapped them into a Brand Studio, specifically to compete with traditional agencies for creative work.
I was speaking recently at Brand Week in Istanbul and encountered another new model agency, one that has an even more disruptive business model. CEO Mark van der Heijden travelled the world for a year, trading his creative skills for food and lodging. He ended up working with agencies, brands and charities in twenty-two countries. It occurred to him that many restless young creatives were more interested in adventure than funding their pension. When he got back to Amsterdam, he set up Wanderbrief, which connects over 6,000 creatives to companies looking for ideas and executions. The catch is that they don't charge. The creatives trade their skills for the experience abroad and they are making content for the likes of Vodafone and Ricoh.
With ever-increasing pressure on margins, agencies will need to consider how to innovate their structures and business models to compete and collaborate with content created just for the adventure.
