How Do Agencies Move Upstream?
7th September 10
Posted in business models, strategy
Author: Griffin Farley, Strategy Director, BBH New York
Image Source: U.S. Department of Agriculture
I have returned from the promise land, a place of myth and fable among ad agencies. We have many names for this place but I tend to call it… upstream.
It’s a question we as an industry often ask ourselves: “How can we get more upstream in our client’s business?” and this isn’t an uncommon theme here on the Labs blog (if you’re interested in reading some related material, check out Ben’s post So What Exactly Might Adaptive Brand Marketing Be? and Mel’s Marketing Mashup).
We’re just wrapping up a consulting project with a client where we had the opportunity to work more upstream than agencies typically work. We were asked to help a client develop an investor presentation that would allow them to raise funds to hire an ad agency. Before I get into that story I wanted to take a step back and share how agencies move upstream and what steps need to come first.
1. Moving from Execution to Strategy:
Having a dedicated strategic planning department is the first step. This isn’t as easy as it sounds for all agencies. Many agencies in smaller ad markets want to hire planners but struggle to find them. As an industry we have done a poor job training and cultivating young planners over the last 10 years, which I believe is the reason we have a shortage of Senior Planners in the States today.
The question inevitably comes up… Can we cross-train somebody to be our planner? I have worked with many strategic account managers and the biggest difference between an account manager and an account planner is the time planners get to think about strategy. It’s hard to be conceptual and strategic when your time is filled with other aspects of agency business like hounding the client to sign production estimates.
Being strategic by itself isn’t enough to hold your own as a planner. Schools like VCU and Miami Ad School help with this transition. They provide the fundamentals of research, moderation and creative inspiration. Some of the best cross-trained planners that I have met include Pam Scott who worked at Goodby years ago, and Laura Scobie who currently works at Fallon.
2. Moving from Strategy to R&D:
In the agency world we are told that meeting with the ad agency should be your clients best meeting of the week. However many brand managers might say meeting with the R&D folk makes the best meeting of the week. Some industries are more prone to employing brand managers that get excited about R&D than others. In my experience these categories include Toys, Consumer Package Goods, Casual Dining Restaurants and Technology to name a few.
Sometimes strategic and creative time is best spent thinking of new product or service innovations for clients. Ad agencies have developed amazing innovations for clients, and I think the best example of this is the Happy Meal for McDonalds. Just this week I heard CP+B is testing a new product for Kraft Mac and Cheese for the Grill.
3. Moving from R&D to Venture Capital:
Like I mentioned at the beginning, BBH Zag is helping a technology start-up develop an investor presentation. The goal of presentation is to raise a large sum of money that will allow them to hire an agency, be first to mass market and own this developing category.
Rarely do agencies get a chance to work this far upstream with a brand because the resource and time risk is too great. However, if agencies want to live in a world where ideas rule, there is no other place like venture capital. Understanding how to pitch an idea in 30 minutes or less, understanding what investors have to see and correctly size the marketplace for new market categories are unusual assignments for most agencies.
MIT has a program that teaches students how to pitch venture capitalists and if you do some searching on YouTube you’ll find videos that get students excited about the program like this one:
These are just a few thoughts. We don’t have all the solutions and would like to hear what you think: Do agencies belong upstream? Have we earned the right to be more than a vendor… to be a true client partner? Are we professional enough to make commercial recommendations? Do we demonstrate daily a habitual, deep-rooted interest in their business? Are there other ways for agencies to find themselves upstream?
The smaller the client, the easier it is to travel upstream. Bigger companies have dozens of suppliers/agencies/consultants/gurus all vying for a seat at the top table, and many of those can show how they’ve done it before. So it’s the same as developing any other specialism. You start further down the food chain, cutting your teeth and building a rep. As you get better at it, so bigger opportunities come your way.
Tim B, great comment thanks for taking the time to write. Do you think this is why agencies hold AOR titles so highly because it means they get these top seats at the table?
First off if you offer creative then you are, by definition, tactical. They see you as a PR firm, or an advertising agency. Or a design firm.
So focus your new more strategic consulting services on new prospects, and you reach out to the C-level suite because anyone BELOW that C-level rank can’t hire a consultant. And Tim, you are correct… start with some smaller firms.
Consulting competition is going to be with our industry for a long time. So you should learn how to do it, not how to be dominated by consultants.
The consultants have grabbed our spot at the board table with most clients. While agencies and design firms and other marketing communication company meet with lower-level personnel in the training room or the spare conference room. When we used to be sitting in the board table.
You can get back there again but it takes more than a marketing communications focus. Open a consulting service, and you’ll go right in to the board room again.
For more info: http://sandersconsulting.com/high-ground/
Thanks for the comments Bob! I don’t think my solutions help brand consulting firms as much, but I think these firms have similar aspirations of moving upstream. Most consulting firms have Scope of Work agreements and tactical assignments like brand audits, naming assignments, brand essence videos, etc. What paths would you suggest to consulting firms that want more work from clients?
Any firm that would like to move up stream, and already has the necessary tools, needs to focus on building strong relationships with key clients and prospects.
Understanding how people process information, buy, make decisions and tailoring your approach to that profile…
What we call chemistry.
Refocusing the firm’s attention toward controlling the relationship rather than attempting to control the client is a key element to moving up…
Of course, you must have the talent, tools, etc. much as you have outlined above!
B
Griffin, you’re into some pretty exciting thoughts here. I think you nailed the big issue right up front: time.
In the beginning, clients aren’t going to let you into these places without some type of track record. And to prove it, agencies will have to develop their own capabilities and result on their own dime. That’s what I thought BBH Labs was all about, and it certainly seemed to work for you.
Smaller clients can be easier, but don’t kid yourselves; they sometimes have an even harder time changing than bigger companies with more independent silos (who can take more risk).
Rich, I completely agree and time sheets are the devil of agency life (that reminds me, I need to do my time sheets). We tend to get attention by doing ‘added value’ projects, spending agency time on an idea… but do our clients take it seriously if we do it for free?
Griffin, excellent thoughts. Tim B I think that the smartest the client, the easier it is to travel upstream. Maybe size matters too.
As said we need to be true client business partner.
Hello dude!
I call this the Salmon Syndrome – the desire of agencies to endlessly fight their way upstream…
So. I used to be, and was trained as, a management consultant. I also worked at Naked which only operates upstream since they don’t make things, mostly
I think any business partner must be cognizant of business strategy and objectives. When I see strategy that doesn’t indicate how it will make a client money, the consultant in my dies a little.
That said, people in advertising haven’t usually been trained to do business consulting. Not to say they can’t, but it’s a different skill set, or set of skills, or approach.
The Naked person in me would say – it is impossible for agencies to act as upstream business consultants, if their business model is predicated on selling certain kinds of executions or solutions.
However, if we are charging for our strategy separate from production or advertising services, I think the conflict issue is diminished.
Then perhaps its simply a matter of having the write people.
Time is important, of course, but account planning is not the same thing as strategy – it is inherently advertising focused, where as strategy is not.
Without relevant experience outside of advertising, or eduction, I don’t know if we are equipped to simply decide to become consultant, if we are only doing it to control our own destines as we once did as partners.
There is education out there that can help
http://farisyakob.typepad.com/blog/2010/09/the-impact-of-education.html
If you don’t have CEO level access, or are empowered to active change management internally with a client, then you already exist inside a marketing silo and budget. This makes it very hard / frustrating to attempt strategic consultancy that is systemic.
I think R&D is required – but we should be doing it for ourselves, which is hard because time based business models don’t really allow for it – but we are looking at different ways to address this:Labs, Spies, PIE etc.
And VC stuff is super interesting – come to the First Round Capital meet up in a few weeks – we definitely should be working on this stuff – it is business strategy, usually powered by advertising, so good for both sides.
Sorry Griffin but the promise of your promised land isn’t enough
Strategy, innovation, and investment can be directed at big or small targets
Kraft Mac and Cheese for the Grill doesn’t cut it for me
How long before the ad industry realises there are exciting, creative, real life opportunities to go after out there??
Come on guys, try focusing on the stuff that actually has some social utility!
Peter, I love the challenge that you bring up! Ad Agencies shouldn’t worry about going upstream and should start taking ideas straight to the marketplace (this could be a post in itself). Developing social utilities is a great way to showcase agency creativity and R&D capabilities at the same time.
Griffin,
Great post.
Some good tips and your heart is in the right place.
My question- Planners love the idea of upstream, it plays right into their wheelhouse, but do creatives and what about agency leadership?
Without them- agencies don’t have a prayer.
Ed, thanks for taking the time to post a comment. I completely agree with you and I think it is important for planners to find those creatives that want to work upstream with them. For example, at my past agency I worked with a creative to design a new package for a national orange juice brand. The Tropicana blunder killed our assignment but the work from that ideation helped land him a job at CP+B. These types of assignments can help round-out a creative portfolio.
I don’t believe for a moment that agencies are equipped to solve the bigger commercial & strategic client issues (except, as Tim B points out, when it’s about smaller clients, as you’ve got less people to deal with).
As Faris points out, planners in agencies are often there as servants to the communication challenges at hand. They rarely have the time, permission nor skillset (all three are important!) to tackle any of the bigger issues. And what’s more, the advertising industry is currently under huge pressure to deliver more value for less money. The reality of the business therefore is that most agency people are running from briefing to briefing and from pitch to pitch.
On the one hand agencies have come so executional that moving “upstream” is simply about regaining strategic partner status. But I also believe the comms business has something more significant to offer clients and that is we have the skills and appreciate the power of creativity as a business tool. A collaboation in business creativity would naturally more agencies upstream.
A key point missing here is that the clients themselves have regulated creative agencies to the tactical side.
Full service agencies used to be the titans in the world, able to create new brands, new industrys and they alone controlled access to the masses… one great idea executed could transform a business.
Then below the line changes, new technology, the loss of intellectual altitude as the need for M&A drove the firms public, opening up the books and allowing all too see just how profitable the firms were, and more competition at the most senior levels from a new breed of management consultants we gave up the board rooms.
Marketing itself as lost the board room. Brand managers used to be in their position for 20 years, they controlled the budgets, reporting directly to the CEO, and had the power to make decisions.
Now its lucky if you get 18 months with the same person, budgets are handed to them and they have little access to the CEO.
In fact, the CEO as handed responsibility off to this new breed with the simple request “give me some incremental growth, and do no harm.”
So if you are involved in creative execution, it difficult to even see the CEO, as as soon as they find you’re involved in that tactical execution stuff they don’t have the time…
A strong strategic marketing firm can, but only by down playing the creative and showcasing more of the insight and branding efforts.
An expert in understanding a narrow niche has a better chance.
Just my two cents from the US… having worked in the EU I get there are some differences.
Bob
Dang, forgot the final point…
SO… you options are you can fight upstream, tough and hard work, OR you can flank, repackage/rebrand some of key skills and approach from the side.
Thank you for the brain food and thinking behind some of this!
I’ve worked on both sides of the fence – client and agency . The one thing I think most agencies fall short on is really taking the time to understand the client’s business and market. They don’t move upstream because they don’t prove themselves capable of playing there.
Patricia
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