Nathan Hodges, TrinityP3 Managing Director Australia and New Zealand, has spent the last decade assessing and designing agency rosters for clients worldwide. He recently noticed a distinct trend in the development and implementation of bespoke agencies.
Once upon a time, advertisers would appoint what was known as an agency, record, or AoR. This agency would provide most, if not all, of their agency needs. But those needs have exponentially increased in the age of technology and digital communications. Suddenly, marketers required a village of agencies to meet all their needs. Then, the bespoke agency arrived. And today, it is evolving.
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Transcription:
Darren:
Hi, I’m Darren Woolley, founder and CEO of TrinityP3 Marketing Management Consultancy. And welcome to Managing Marketing, a weekly podcast where we discuss the issues and opportunities facing marketing, media, and advertising with industry thought leaders and practitioners.
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Now, once upon a time, advertisers would appoint what was known as an agency of record or an AOR. This was an agency that would provide most if not all of their agency needs.
But in the age of technology and digital communications, those needs exponentially increased. Suddenly marketers required a village of agencies to meet their needs. Then the bespoke agency arrived.
Now, my guest today has spent the last decade assessing and designing agency rosters for clients around the globe, and recently is noticed a distinct trend in the bespoke agencies that are being developed and implemented.
Please welcome to Managing Marketing Podcast, TrinityP3 managing director for Australia and New Zealand, Nathan Hodges.
Welcome back, Nathan.
Nathan:
Thanks, Darren. I’m back. I think it’s been a while, hasn’t it? Been a few years.
Darren:
It has been a couple of years, but you’ve been very busy. So, I haven’t wanted to interrupt you with another podcast request.
Nathan:
But now I’m back – as you always thought I would be.
Darren:
Now, a good place to start is the rise of the roster and what that actually means, because I know often when we’re talking to people about agency rosters, there’s quite a few different names and also definitions of what that is.
Nathan:
That’s right. I mean, a lot of the time, (I mean, there’s no reason why this should be anything other than the case) many marketing teams aren’t aware that they have a roster or they don’t see the need for a roster model.
And it is understandable because you’d think that all you need to do was appoint your agency or your agencies – maybe your agency of record along with your media agency – and all they need to do is just work with you very closely.
But there’s a bit more to it than that. There always was, and there certainly is these days. And that’s because the selection of your agencies, the number of agencies you have, and the capabilities that those agencies can contribute and bring to the party, all has a significant effect on the operation and success of any marketing team.
And it kind of creeps up on you as a marketing team, because very quickly – and almost unseen – the requirements that marketing teams have of their agencies can run adrift of the agency’s capabilities, the agenda to which they’re working, and the ways in which they are set up to work with each other and with you as a marketer.
As soon as that happens, you get that misalignment and suddenly, you find that your agencies are not doing the right things or are appropriately skilled to be the right agency answering the right question for you, or they’re not fitting together well.
Or there are big gaps that suddenly you need to cover as a marketing team, either internally or by going to a third, or a fourth, or a fifth agency or a specialist this, or a digital that, or a social media this, or a shopper that.
And suddenly you end up with that analogy you’ve always used (and I think I’ve probably used this before) that agencies are like the coat hangers that you get from a dry cleaners. You clear them out of your wardrobe and then three months later you go to your wardrobe, and dammit, it’s full of hangers once again.
Which is all very amusing and a lovely analogy except that every time you add an agency to your roster, it costs you around 12 to 15% in inefficiency, and that’s before you even get to the added inefficiency and barriers under which your team is working to manage that. So, it’s quite a serious thing to get right.
Darren:
Yeah. One of the things is how people when we’re engaging with them actually define that roster. Some will say, “Well, I’ve only got a handful of agencies.” And they’ll be the ones that are most top of mind. But in actual fact, it’s often the long tail.
And I know it sounds ridiculous and it probably is, but there’s been situations where total number of marketing vendors and supplies, and we’re talking everything from printers to little design shops is literally in the thousands sitting there on the …
So, what do you think is sort of the ideal way of defining the roster? Because if you get into thousands, people just think it’s too hard, but if you cast it too narrow to creative media and maybe one or two others, it can often be too narrow.
Nathan:
Yeah. So, as always, follow the money. So, you got to follow the money and see where your main spends are sitting with your main agencies.
It’s funny when you were saying that there, I was reminded of an example a couple of years ago, where we heard a client say to us, “I’ve only got a few agencies. It’s fine. Just have a quick look at them and see what you think.”
And I think when we’d finished, we counted 80 agencies and the biggest of them only had 7% of the total spend. And and everything was being pitched. So we said “right – there’s a problem here.”
Look, I think if you can account for say, 70, 80% of your spend with the agencies that are taking that spend then you’ve probably got the beginnings of what should be your roster model. And that’s where to start.
I mean, we have also had projects where we’ve ended up at two and a half thousand different suppliers, but that’s a really long tail and a lot of those, they’re taking a couple a hundred or a thousand bucks each.
So, you just get rid of that side of it, really. There’s not likely to be babies in with the bath water in that bit.
Darren:
Well, that’s right. Yeah, they’re not strategic providers, are they? They’re really just more implementers.
And as I alluded to, there are more printers and distribution companies and things like that, that have been appointed probably for one project and have managed to just hang on doing little bits and pieces here and there.
I think that’s one of the things is really, as you say, look where the money is. But also, look for where are the agencies that are really driving the need for implementation or doing the major implementation.
Nathan:
That’s right. And equally, where are the agencies that should be driving that implementation and should be having the lion’s share of your spend, and should be investing that in strategic and technical and capable resource in order to further your business?
So, if your biggest agency is only taking 7, or 20, or 30% of your spend, then you really need to look at the opportunity cost there and address that fast.
But yeah, so there are various ways that we use of categorizing any kind of roster model – three tiers of provider based on strategic contribution and centrality to the future of the business, those kinds of things.
But in answer to your original question, so what is that roster? It is the groop of agencies with which you do most business and the agencies who are going to be most central to the success of that business.
And then the question immediately is, to what extent are those agencies’ capabilities and enthusiasms and focus aligned to the requirements that you have at the moment and the requirements that you as a marketer are likely to have in the future?
And it’s fundamental because you don’t want to be the marketer that got three or four too many agencies losing that 12 to 15%. Or the marketing team that is running between the agencies on the roster, trying and fit together recommendations and insights that are coming from a discipline perspective, and not from the actual focus they should have, which is the requirement and the benefit of your business and where that’s going. So, that’s what we see all the time.
And as I said at the beginning, it creeps up on marketers. Your strategy changes faster typically than your structure does. And your roster model is part of what the structure is. That there’s big structure and capability questions to answer there.
Darren:
So, it’s interesting because there’s a piece of research going around from the in-house agency. Is it Institute and Cantor that says, I think it’s around 70 or 80% of marketers in Australia have an in-house agency. Should the in-house agency be part of the roster consideration?
Nathan:
Well, the quick answer to that question is, of course, it should, always.
But I’m going to go back a bit because that 78% – I was unlucky enough or lucky enough to be in the room when that was launched, that piece of research, it was a Kantar piece of research.
And that 78% figure, I think it was up from something in the 60s, and everyone was in the room was saying, “Wow, wow, look at that. In-house agencies, up to 78% of marketers now have those.”
When you looked at the report – and I did, I went back and looked at the report itself afterwards and looked at the question – and that 78% includes everything from what an outfit like Endeavour is doing (which is a fully fledged in-house capability of considerable investment levels and considerable reputation) right down to any marketer who has a couple of people in the corner sat at their monitors looking after their social media and everything in between.
Now that, most of the time is not an in-house agency. It’s just some people doing some in-house communications work.
And this is where the debate has got completely cart before horse. Because an in-house agency is a very different proposition culturally, in terms of expense, in terms of focus, in terms of future of the business, and a much more difficult thing to pull off, than it is to have a couple of people in the corner. So, there’s a real false debate here.
And the critical thing is you look at what the requirements are of the marketer across those three tiers, and then you work out what is best fulfilled by a lead agency, what is best fulfilled by a tier two agency, for instance, which has a business model and a set of capabilities to do the specialized work, or the fast turnaround work, or the lower cost work, or the more internally focused work that’s perhaps required, and then a tier three level of activity (which might be done by an agency, might be done by an in-house capability, might be done by a mix of the two).
And again, there’s glory to be found here. It’s not a poor relation. There’s glory to be found and huge benefit to any business to be made there by doing it right and having the right business model, the right capabilities, the right SLAs, and the right expectations.
Again, this goes down to the alignment of the roster that we are kind of dancing around a bit at this stage. But it’s what drove me mad about that 78%. Like why are we having an entire industry debate where people are going, “Oh, it’s not right. I don’t think marketers can run agencies. They don’t know what they’re doing …”
They’re not running an agency. They’re managing some people who are doing some tier three communication work. At what a surprise that tech allows you to do that now, more efficiently than an agency. What a surprise. Ridiculous.
Darren:
So, whether it’s two people in the corner doing some social media updates, or you actually do build a fully functional strategic and creative and even media function in-house, it needs to be considered as part of any sort of roster alignment, doesn’t it?
Nathan:
Of course it does. And again, at the risk of repeating myself here, you go back to what the requirements are of the marketer. You’d go back to making sure that those requirements, current and future, are being met.
I remember a couple of years back, we were putting a lead agency model into a marketer and we were doing some of the discovery work beforehand to make sure it was the right solution. They were running about four or five different agencies, all of whom were on different projects at various times.
And one of the marketers said to me, “Nathan, I don’t need any more insights from my agencies. I just need one insight and a solution that goes everywhere.”
And that’s almost the foundational observation across any roster modeling process – you get a focus, and an application, and a lens on your business that is integrated across the piece.
You don’t need an insight and an execution from your social media, from your digital build people, from your shopper people, from your TikTok specialist. You don’t need that.
You need one insight that drives thinking across the whole piece and is manifested across the comms mix as best serves what your audience requirements are.
It’s as simple and as complicated as that, really.
Darren:
Yeah. I’m glad you raised that because you used the term requirement, what was the marketer’s requirement? And I think it’s really important to dig down and get some real guidance around that.
Because sometimes marketers will say, “Well, I need a creative agency.” They’ll be defining the types of agencies rather than defining what they actually require of those agencies.
And I think that’s really important because it’s much more about aligning to what’s the strategy and what from the strategy goes into the plan and what are the parties, the resources you need to actually fulfill all of those different parts. It’s not about picking and choosing agency types, is it?
Nathan:
No, but so often it ends up being about picking and choosing agency types because marketing teams assume what they need.
We had a recent project where the marketing team had engaged a main agency within a roster, but the main agency were kind of at loggerheads with the marketers about creative SLAs and delivery. The gripe was that the agency seemed to be taking an awfully long time to produce work. And after that they seemed to revise it all the time.
And when you looked at the original agreement between marketers and agency, it was all around awards and excellence and fantastic creative work that was going to break category norms and all of that stuff.
But when you looked at the actual history of delivery, the marketer actually needed something much more prosaic – they needed the work on time, on budget, time after time, to satisfy a massive group of stakeholders stood behind them.
So, you’ve got to make sure that those things are aligned. They’re softer things, but the level of ambition and the way in which you are regarding the task that’s coming up – that needs to be aligned.
You might want to buy from an agency their creativity, their inspiration, their strategic excellence. But you may also need to buy from that agency at the same time a lot of tier two, reliable, hit-the-marks-every-time work that fills the order books every month. And also to satisfy a large stakeholder group behind you, and make sure the board is not going to be tapping on the marketer’s door asking where the sales are.
So, again, all of these things need to be aligned and one of the symptoms you find is where a marketer has put an additional agency on the roster alongside their original agency because they say “they couldn’t crack this brief or X brief in Y time, so we had to go to someone else and they turned it round in no time at all”. So, suddenly you’ve got two agencies. You’ve pissed one off, and you’ve got another one that expects a great deal out of this relationship. They’re both in opposition to each other. You’ve already fragmented your spend, and you’ve already doubled the effort that you as a marketing team are putting in. And still you haven’t solved the problem, which originally was a mismatch between client expectations of what’s going on and agency capability and modus operandi for delivering it.
So, all of this stuff needs to be aligned when you look at roster alignment. And it’s hard for me to talk about roster models unless you’re talking about how to fix them because that’s what-
Darren:
That’s what we’ve been doing. Look, and I said before, there’s quite a few different terms that the industry uses for roster. We’ve got roster, I’ve come across people that call it their agency portfolio, that they treat it like a portfolio.
But the other one that seems very popular is the idea of the agency village that they’ve created a village of agencies that all work together. And yeah, while it’s popular, I think it can be quite dangerous because it assumes that you just create these villages and everyone gets along and knows what to do and works together.
Nathan:
And that village sounds lovely, doesn’t it? Like everyone gets on in a village, everyone knows each other. Everyone lives in different parts of the village and maybe they all meet on a village green and have a lovely time now and again.
It’s rarely anything like that. I’ve got to be careful because we’ve worked on village models and made them kind of work. But it’s rarely anything other than a bit of an excuse, a bit of a lazy way out of things.
And look, typically you found villages in government advertisers quite a lot and in marketing structures that are decentralised-
Darren:
Panels, I think they call them. I think they take the procurement line of calling them a panel, not a village. I’m not sure I’ve run across any government bodies that have a village of agencies. They certainly have panels.
Nathan:
I’ve got [crosstalk 00:19:01].
Darren:
What I would say to you though is I think the biggest danger is that even in real life, a village has rules. And someone has set those rules for the way everyone needs to work together and get along.
And the danger is when a marketer creates a village and expects the agencies to work out what those rules are, the rules of engagement. No one’s given roles and responsibilities, no one’s told what the expectations are. There’s just lists of things and money’s being paid.
But I think it all goes off the rails when you don’t have rules of engagement set up for all of the players. Because while it may seem like an agency or a group of agencies should be able to work it out, the thing that’s being forgotten is that they’re all competing with each other on a commercial basis.
And collaboration under that sort of commercial almost zero-sum game environment is not conducive to collaboration, is it?
Nathan:
Absolutely. I think 100%. I think the way you describe the village is how it probably should work if it’s working at its best. But there are some rules. There is some community, there’s some shared vision about what they’re all there to be and do.
But often the word village is plunked upon a selection of agencies that the clients made in order to paper over cracks and cure problems that they’ve not been able to sort out. Maybe because they’re decentralized or whatever it is.
That’s why I said that sometimes I find it in government, and you’re right, they called it a panel. I did have one aid recently that actually said, “We need to sort out our village.” And I was quite surprised to hear it, but yes. And certainly, in further education, and telco you can get village models.
But the point is, it’s not a solution to just say, “Let’s get other agencies together and let’s get them to compete with the agencies that we’ve got.”
Procurement often loves to do this because they think they’ll get keener agencies, more focused, better pricing. And with people redoubling their efforts so we’re always getting the best deal. We can pitch everything. And it isn’t how it happens.
So, several things occur instead. Agencies lose focus. Your spend is fragmented, so you probably end up spending more than you should because you haven’t got the buying power and you haven’t got the efficiency of scale and the resource focus that you should have.
And more than that (this is the biggest thing perhaps) you find that you lose that really valuable ability in your agencies to say no.
Now, when I was on agency side long time ago, before I was a client, I was in a village model. It was alleged to be a village model for a large telco. And although to the client, it seemed like everybody was having a lovely time and swimming in the same direction, behind the scenes, it wasn’t anything like that at all. It was all competition. It was-
Darren:
Dog eat dog.
Nathan:
Yeah, sure. Because that’s the way it had been set up. But the point to that is that if you were the agency that was prepared to say yes all the time, and to stroke the client’s ego, you’d get the business and you get the next project. Thats no way for anybody’s role to be, long term of course, is it?
Darren:
Well, it’s a zero-sum game because there is a budget and everyone’s competing for it, which immediately eliminates the possibility of true collaboration, which is what most marketers are hoping to achieve.
I think it’s the dissatisfaction with a lot of the villages that made marketers start to turn to particularly the holding companies, and ask them to create a bespoke agency on their behalf.
And look, you have got some new trends that you’ve spotted, which we’ll get to a bit later. But let’s really talk about some of those bespoke models.
From my perspective, WPP probably 15 years ago, were the first ones to really hit this with big brands like Ford, Bank of America, Vodafone. Team red, team blue, team America, were the names that were given to these bespoke agencies.
But from your perspective, what do they look like and what are the strengths and weaknesses of them?
Nathan:
Okay. So, the strengths would be that you’ve got one throat to choke that’s one of the phrases that’s around. You got one point of contact for the marketing team. So, that’s always been a big selling point.
And the downside is that the marketers immediately go, “Well, are we really getting (this awful phrase) best of breed? We’re really getting the people in each discipline that the whole holding company model brings to us. And is that the best?”
So, that’s always been a kind of a push and pull in the model anyway.
The model got a lot better and a lot more credible when companies like WPP started genuinely constructing single bottom lines across their businesses.
And then also, put on the top of that holding company model, a team that would focus much more heavily on that client’s business than some individual agencies that revolve and guide the client through that whole thing.
Now, that became a lot more credible because I noticed way back in, what would it be, 2014, ‘15, we ran a couple of these pitches and suddenly the answers got a lot more convincing and had a lot more backing them up from some of the holding companies that we were running these pitches for.
Why am I telling you? But typically, when we run tenders out of roster alignments, some kind of holding company solution is present as a candidate solution, probably in about 20, 30% of cases. It’s an appropriate thing to do given that they’ve got enough budget to handle it.
So, the answer’s got a lot better. And I think also as ‘agile’ (God help us) started to run like a disease through client organizations, depending on your point of view.
Again, the holding company model, if you set it up right, it’s quite well suited to work along those ways. So, the squad and the scrum models actually fit quite well within a holding company approach if you can get the remuneration to work around it. So, we’ve got a couple of pitches where that worked quite well.
So, it can be really quite good. And it’s better now, again, where you can bring the media side of a holding company operation into the equation and have an honest discussion about whatever the requirements are, and will be, and could be over the next 12 to 24 months – there is a moving kind of resource mix that we can bring to bear with a group of specialists.
And the agencies says “honestly, marketers, it doesn’t matter to us because it’s the same bottom line”. I dare say there are still the same discussions behind the scenes. So, it’s making a lot more sense, Darren, than it used to for marketers.
I think it’s a more interesting option to discover and pursue in a pitch. The proof of the pudding, of course, is always in the eating because it’s got to go up against the other models that you’ve put into a pitch and make sure that it is the best candidate.
Darren:
The two areas that I still have concerns and I don’t think we’ve ever seen someone come up with a solution to this.
The first is that in creating a new agency, whether it’s cobbled together by bringing different people from agencies within the whole code together, or actually creating a bottom line, there’s a hidden cost associated with it.
And that is the coordination cost within that agency. Whether it’s the effective startup cost or the extra.
We often see in the benchmarking of the proposed resources a good 15 to 20% increase in account management, purely as a way of holding that model together.
And so, I think it’s probably the time that a marketer would spend actually trying to coordinate a mix of best of breed agencies to work together, becomes the agency’s cost of making that work.
The second point, if I can before we discuss it, is it’s also, incredibly hard, particularly for people that are strategic and creative to work dedicated on a single client. Because one of the things that attracts them is this need to have lots of different challenges.
And so, it’s interesting to see how some holding companies are doing that by really rotating creative and strategy people in the background behind the scenes.
The first one first, which is that cost, the hidden cost.
Nathan:
So, it always depends what you’re coming from and what you’re going to. So, if for instance, you’re a marketer with a roster of two, three different agencies at tier one and tier two level and you’ve got two or three sets of account management and strategy resource across the piece, discipline specific.
Then often it makes a lot of sense to reduce those strategic and management resources across the roster and pool them. So, then you’ve got a central team which is properly funded so you can get proper strategic resource in there. You can get proper investment in research and in capabilities around that and tech and all sorts of stuff.
And proper management focus to drive across the whole thing, so you effectively creating a lead agency or a lead agency within a lead agency team, but then a holding company.
So, the maths on that can often work okay or at least be revenue neutral. Of course, the opportunity benefit is significant. So, that can work.
And well, we’ve made it work quite a few times recently so that actually the efficiency of it in the end is greater and also, the operational benefit is greater.
I’ve got into that one now. What was the second point?
Darren:
Actually, holding and attracting the talent. And I think this is also, for in-house agencies as well. That one of the things is getting the high quality, high end talent to actually commit to working on one client problem or one client and one client problem.
Because there is that natural desire to want to have lots of different things to keep them engaged. Lots of different problems to solve.
Nathan:
Yeah. There’s no easy answer to that one, because that’s why we run tenders and we actually don’t just take people on face value on a kind of a submission and a polished presentation, but we take people through proper capability stages.
So, strategic workshops, strategic tests, that kind of stuff to get within a pitch process to as close as we possibly can for the marketer to what it would be like to work with that team on a day-to-day basis.
And there’s no hard and fast rule. Sometimes you find that people who just work on the one piece of business for five, seven, eight years never lose the inspiration, never lose the enthusiasm, build up all the knowledge and all the expertise. And they love to keep solving the same problems in different timeframes. And that can be fantastic.
Other times people go stale, and marketers complain about turnover on accounts and sometimes they go, “We can’t ever let go of these people. These people are great. Whatever we change, we need to keep these people.”
Darren:
I think that’s why we’re seeing this trend that you’ve identified with now, bespoke agency solutions, not just coming from a single hold code.
But actually, starting to say, “Well, there’s capabilities and expertise in all sorts of places. Let’s pull that together to create a bespoke agency, but not just sitting within a single holding company.”
Nathan:
That’s right. So, the one in particular that comes to mind is what Telstra has just done with the +61 operation. And we were talking about this the other day, weren’t we?
That again, it just says to me that culture in all of these things is the one thing you can’t dodge, you can’t duck it. You can have all the models you like, but no plan survives first contact with the enemy. That’s why we run pitches. We don’t just invite an agency to come in and fill in the blanks and off you go.
We then try out the model, try out the way of running things and see if culturally, and professionally, and in terms of collaboration, in terms of performance on the day, and working styles that it all actually knits together.
And I think looking from the outside at what’s been constructed there by Brent Smart, and the Telstra team, and TBWA, and Bear Meets Eagle on Fire, you go, “It’s really interesting and I bet it’s going to produce some cracking work.”
But I’d almost say it’s as dependent for its success on the culture that Brent is kind of putting in there as anything else. Like you’d wonder whether it would work in the same way. And I bet it wouldn’t under another kind of set of marketing leaders because there’s bound to be….
…If you changed out the marketing team at Telstra subtly, would that solution work as well? I don’t know. These models are all partly dependent on remuneration and following the money. And they’re also, dependent on the cultural fit of what’s going on.
Times past, you just said “what, a small creative hot shop and then married to a large multinational creative agency all in the same building, one inside the other with a difficult demanding, partially decentralized client like Telstra? Crikey, what a tinderbox.” No, I bet they’ll make it work.
Darren:
But I think that’s why it’s such an interesting solution from the point of view of it would be very hard for a smaller hot shop to actually be able to take on something as large.
And a lot of the bespoke agency solutions, the ones I mentioned before, the Vodafone, the Bank of America, these are very large accounts with huge amounts of budget, but also, a massive requirement from their agencies.
The idea of being able to not only have the agency capability to do the volume of work, but also, to bring in and cherry pick the creative hot shops to build into that to create a bespoke solutions. Quite interesting.
And then on the other side, we’ve got Smith Street for Coles Supermarkets. Which now, it’s over a year ago where we had Omnicom Australia, quite a big group, they had the media, bring together with Deloitte to really fill out that technology and strategy side of the equation to create Smith Street.
And just recently, NRMA … now, I know you could argue that The Monkeys and Accenture Song is one holding company. But it’s interesting that they’ve put those two together to create a end-to-end customer experience solution.
Nathan:
Yeah. That one I particularly like the look of.
And again, isn’t it funny, we can only talk about these things because we haven’t recently been directly engaged by the marketers. As soon as we are directly engaged by any of these marketers, we can’t talk about this at all. So, we just have to say, “Oh, a large appetite is really annoying, isn’t it?”
But anyway, that’s that. Most people would fight for our problems.
That NRMA, Accenture Song thing I think is fascinating because that’s the first convincing, (again, I’m an outsider, I’m just looking at it) attempt that I’ve seen at an agency group saying, “Actually, let’s take a proper full funnel approach, in proper partnership with the marketing team, and see what we can do across the entire spectrum there.”
And I think it’s going to be really interesting to watch. It certainly seems like a big public commitment from both sides to use all of the tech smarts that are available within Accenture and all of the marketing smarts that are available within NRMA to make that work across the piece and centered around that whole idea of help as well.
So, the brand person inside me also goes, “Yep.” Actually, you’ve got a lot of the proposition and the codes right, and the mnemonics right before you even start all of that.
So, I think it’s going to be really interesting to watch. And whether it becomes another model that we kind of apply or whether it’s too culturally dependent, I don’t know, the answer would probably be both of those things. I don’t know – what do you think, Darren?
Darren:
Well, I think Smith Street went down that path and it would be interesting to know how integrated the Deloitte solution is with the Omnicom solution or whether they’re operating totally separately.
But I think in a modern marketing world where so much of customer engagement is data and technology based, it’s a good solution to bring strategic comms creative thinking together with the technology and data side.
Whether you can do that as Accenture Song have done with Monkeys, the agency that they own and the rest of the capability. Or you do it as Kohl’s have done with Omnicom group and Deloitte.
I think this is going to be increasingly a roster option of building a bespoke agency that gives you probably the best of both worlds. We started off talking about the best of breed model and having lots of agencies that have their specific capabilities and trying to get them to work together.
Then the bespoke model, I think this is from my perspective, a natural evolution in response to that data technology focus to be combined with, you can’t have one without the other.
Nathan:
No, you can’t let that MarTech data led cart suddenly swing around and go before the horse.
It’s always got to be the other way around because your Ehrenberg Bass principles would say you’ve got to always deal with the light users. You’ve always got to deal with the people that eventually you’re trying to bring into the top of the funnel before you start to convert them and all of that stuff.
But to bring this back to roster models, Darren, where we kind of came in, it just shows me that the shape of the collection of agencies that you have, whether you call it an ecosystem or you call it a roster, or you call it a panel, whatever you’re doing, the shape of those teams and people, the number of them, the capabilities that they have, and then the way that they contribute to the business – all of it actually has an outsize impact on the direction of travel and the speed of travel for a marketing team.
And the more you can align those things … so, actually you have an agency roster that’s kind of slightly ahead of where the marketing team is going, but where it wants to be. And you can ask the agency roster to drag it along or you can ask it to support where it is.
The worst thing is if your agency roster is behind where the marketing team is, or the marketing team is having to fight with the various in-house debates, and arguments, and pressures, and egos in an agency roster. And it slows the marketing team down or takes away hours and hours of the marketing team’s day jobs whilst they’re fitting together these disparate jigsaw pieces.
So, it is who you choose as your agency partners that make up the roster and the model under which they work that is actually big contribution to a marketing team’s success when you reach a certain size at least.
And that’s why it’s more than just, “Oh, we’ve got these agencies, what’s the problem? We just need to pay them less and get them to do more.” No, there’s much more to it than that.
But the real problem is we sound like geeky specialists sometimes when we talk about it like this. I don’t know, maybe I do. Maybe it’s not you.
Darren:
No, no. I think it’s quite exciting, the idea that we now, have in the pallet of possible models, this idea of cherry picking creative hot shops, indie agencies, and putting them together with perhaps a holding company, or a Deloitte, or an Accenture and being able to customize within a bespoke agency.
No longer a roster of different companies that actually can build that together. So, there is to your point before, “one throat to choke”.
Nathan:
Oh, I hate that. I wish I’d never said that.
Darren:
Or one point of contact to get a consistency of brand and work, but that we’ve now, got more elements that we can build and put together behind the scenes.
Who would’ve thought even five years ago, taking a creative agency like Bear Meets Eagle on Fire and putting it together with a Omnicom agency like TBWA was even an option. Now, it is, and I think that’s really exciting.
That once it’s been done once, the opportunity is then to open that up. What Monkeys and Accenture song have done. I know they’re one company, but the idea of a more tech data driven function working with what is well and truly proven to be a very strong strategy and creative option and putting those closely together. And the same with Smith Street.
Nathan:
Yeah. It is fascinating and it’s really exciting. And at the risk of sounding like a stuck record, the biggest thing to get right is always, always the culture. It’s always the cultural fit.
You’ve got to look the marketing team in the eyes and just go, “What do you want here? And what are you equipped to manage? And what are you prepared to tolerate in terms of ambiguity and what do you need as an absolute deliverable? And what are you prepared to take a punt on and risk with your agencies?”
All of that stuff is absolutely central to it. Well, there’s never any best practice is there? Of course, that’s another podcast for another day. But there’s no set solution. There’s no cookie cutter answer here.
Irritatingly, you’ve got to look to what the capabilities and culture are of each of the teams that you’re putting together.
Hence, these are the discussions that we normally have before pitches these days, and around pitches, and sometimes after pitches that we haven’t managed or whatever it is. Or it’s in those discussions that the roster issues come up and it’s the most fascinating bit of what we do, isn’t it?
Darren:
Sure. Well, and it makes you realize how complex some of the pitch process or the complexity of the problem, challenge, opportunity that the pitch process is trying to solve.
And the need for then an approach to that process that allows with it to embrace that complexity rather than trying to reduce it down to, “Oh, look, who did the best creative work?” Because it’s the least important part of the whole process.
To your point, it’s about the mix of capabilities to meet the requirements in a solution that culturally is sustainable and has long-term workability. And I think that’s a much more interesting problem to solve with a pitch than just finding the agency that happened to luck in on the creative idea everyone liked.
Nathan:
Yeah. It’s much better than a horse race. It’s much more productive than a horse race if you’re trying to do those things.
And the beauty is, of course, once you know what the requirements are of that pitch process, you can design a process that meets that. You don’t have to keep redesigning on the way through, but it’s much better to know upfront.
Darren:
Yeah. Well, Nathan, look, time’s got away from us and you’ve got to get back to work. I mean, I’ve dragged you away for almost an hour now, so time for you to get back and get busy.
Nathan:
Right back, mate. Okay, mate. Alright, later.
Darren:
Thanks for coming and talking on Managing Marketing.
Nathan:
Always a pleasure.
Darren:
But before you go, I just have a question, and that is, of all the different combinations you’ve seen, is there one that you think has the best solution for the majority of clients?
