Auditing Your Agency's Business Model

Auditing Your Agency’s Business Model

Presented by Tim Williams

What is the ideal agency structure?

By Hello Future www.hellofuture.set

How long should a piece of string be?

Account Management Creative Production Media Traffic Accounting

Agency structures today don’t look anything like they used to during

the golden age of advertising.

Really?

“An agency should be agile, forward thinking and engaged in delivering growth by deploying a wide range of tools and people, a far cry from the sausage-factory it was 10 years ago. We might be making software, content, binding books, or creating theatre. An agency engages itself in a diverse community of creative people, from coders to copywriters. It should be a place where there’s space for marketing judo, where business conventions are outmaneuvered and overthrown.”

Robert Harwood-Matthews President, TBWA/Chiat/Day New York

From “Marketers Explain ‘What Is An Agency,’” Ad Exchanger

A short history of agency models

①  The full-service model

② Unbundling creative and media

③  Further unbundling and specialization; the client as integrator

④  ?

Many agencies are reacting to the new multichannel marketplace by attempting to become a new version of “full service” all over again

Media agencies as creative agencies

Convergence?

Media companies as agencies

Consulting firms as agencies

Production companies as agencies

Digital agencies as “full-service” agencies PR firms as “full-service” agencies

Holding companies as “full-service” agencies

Convergence

-- or --

Divergence?

Convergence?

“So here we are with traditional agencies struggling to become digital agencies and digital agencies struggling to become traditional agencies. It just another big convergence mess and the losers for now are the clients. On both sides you have partially constructed solutions: brands suffer from traditional agencies that are renovated with a digital coat of paint but doing what they've always done, and from digital agencies with incomplete organizations and inexperienced traditional skills.”

Tony Quinn Chairman, Society of Digital Agencies

From “Marketers Explain ‘What Is An Agency,’” Ad Exchanger

“I wish that the agencies would stick to what they are good at. They try to do everything, and they would be better served to narrow their focus.

You can’t do everything, and if you try to do everything, you do nothing. It drives me crazy when the agency is trying to pitch you every single service available.”

What clients think

The three approaches marketers use to work with agencies

Client

1. Best-of-Breed Model

Models marketers use to work with agencies

1. Best-of-Breed Model

Models marketers use to work with agencies

1. Best-of-Breed Model

Models marketers use to work with agencies

1. Best-of-Breed Model

Models marketers use to work with agencies

1. Best-of-Breed Model

Models marketers use to work with agencies

Agency

2. Single Source Model

Client

Models marketers use to work with agencies

2. Single Source Model

Models marketers use to work with agencies

Lead Agency

3. Service Integrator Model

Client

Models marketers use to work with agencies

3. Service Integrator Model

Models marketers use to work with agencies

3. Service Integrator Model

Brand Agency Leader

Models marketers use to work with agencies

3. Service Integrator Model

Models marketers use to work with agencies

3. Service Integrator Model

Models marketers use to work with agencies

Single Source Model

Smaller client companies Local/regional appeal

Best-of Breed Model

Larger client companies National/global appeal

Best-of-Breed Model

Best-of-Breed Model

How do clients access your services?

Best-of-Breed Model

Single Source Model

Service Integrator Model

Clients you work with in this model (mostly)

Clients you work with in this model (mostly)

Clients you work with in this model (mostly)

The four dimensions of agency business models

The Brand

The Experience

The Purchase

The Product

Four dimensions of agency business models

Paid

Owned

Earned

Channel Content Execution Ideation

The Brand

The Experience

The Purchase

The Product

“Traditional” Creative Agency

Paid

Owned

Earned

Channel Content Execution Ideation

Creative Agency

The Brand

The Experience

The Purchase

The Product

“Traditional” Public Relations Firm

Paid

Owned

Earned

Execution Ideation Channel Content

Public Relations Firm

Public Relations Firm

Public Relations Firm

The Brand

The Experience

The Purchase

The Product

Design Firm

Paid

Owned

Earned

Execution Ideation Channel Content

Design Firm

Design Firm

The Brand

The Experience

The Purchase

The Product

“Traditional” Media Agency

Paid

Owned

Earned

Channel Content Execution Ideation

Media Agency

The Brand

The Experience

The Purchase

The Product

Brand Development and Business Strategy Firm

Paid

Owned

Earned

Execution Ideation Channel Content

Brand Development and Business Strategy Firm

Brand Development and Business Strategy Firm

The Brand

The Experience

The Purchase

The Product

Agency Trading Desk

Paid

Owned

Earned

Execution Ideation Channel Content

Agency Trading Desk

Agency Trading Desk

The Brand

The Experience

The Purchase

The Product

Production Agency

Paid

Owned

Earned

Execution Ideation Channel Content

Production Agency

Production Agency

Production Agency

The Brand

The Experience

The Purchase

The Product

Experiential Marketing Agency

Paid

Owned

Earned

Execution Ideation Channel Content

Experiential Marketing Agency

Experiential Marketing Agency

The Brand

The Experience

The Purchase

The Product

Digital Agency

Paid

Owned

Earned

Channel Content Execution Ideation

Digital Agency

Digital Agency

The Brand

The Experience

The Purchase

The Product

Experience Design Firm

Paid

Owned

Earned

Execution Ideation Channel Content

Experience Design Firm

Experience Design Firm

The Brand

The Experience

The Purchase

The Product

Analytics Firm

Paid

Owned

Earned

Execution Ideation Channel Content

The Brand

The Experience

The Purchase

The Product

Product Development Firm

Paid

Owned

Earned

Execution Ideation Channel Content

The Brand

The Experience

The Purchase

The Product

Incubators and Venture Capital Firms

Paid

Owned

Earned

Execution Ideation Channel Content

The Brand

The Experience

The Purchase

The Product Paid

Owned

Earned

Channel Content Execution Ideation

Which dimensions are most common in your model?

Where do you play on the value chain?

Client % of income related to PRODUCT

% of income related to BRAND

% of income related to

MARKETING

% of income related to

EXPERIENCE 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. All other clients

What classes of media do you utilize?

Client % of income related to

PAID

% of income related to EARNED

% of income related to OWNED

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. All other clients

Are you focused on content or channels?

Client % of income related to CONTENT

% of income related to CHANNELS

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. All other clients

Are you about ideation or execution?

Client % of income related to IDEATION

% of income related to EXECUTION

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. All other clients

Mapping your current business model

1. How clients access your services

2. What media classes you utilize

PRODUCT BRAND MARKETING EXPERIENCE

PAID EARNED OWNED

CONTENT CHANNEL

IDEATION EXECUTION

3. Focused on content or channel

4. About ideation or execution

5. Where you play on the value chain

BEST OF BREED

SINGLE SOURCE

SERVICE INTEGRATOR

“If we don’t kill our old business models, someone else will. But if we are ruthlessly curious, learn relentlessly, and fail harder, we get to reinvent the business of persuasive communication for the connected age.”

Renny Gleeson Weiden+Kennedy

www.IgnitionGroup.com

@TimWilliamsICC @IgnitionGroup

www.linkedin.com/in/TimWilliamsICG

“Positioning for Professionals” by Tim Williams

Propulsion Blog www.IgnitionPropulsion.com