Are you missing the point?

Bob Garfield of Advertising Age says that the job of advertising agencies has to be to connect with consumers. Stop thinking that you're in the business of making ads (isn't that marketing 101? - What business am I in?). He also highlights the need for agencies to rethink how they are compensated. All good stuff - but I'm only saying that because I've been saying it for ages:

Here's my column from Idealog back in May/June 2006

Creative thinking isn't just for clients. By David MacGregor

There was a time when advertising agencies played a far more significant role in the business lives of their clients than they do today.

In order to renew those relationships, agencies are going to have to shift their thinking to compete or be consigned, as Mike Hutcheson has famously said, to being ‘colouring-in factories’.

Creativity is lauded as the most important quality when using or choosing an ad agency. The problem is that creativity (as it is understood by most creative people in advertising) means creating an ad. Common sense, right?

But the problem with common sense is that innovation is the opposite of common sense. Innovation relies on uncommon sense—imagining things that other people don’t. Sometimes the solution to a client’s business or marketing problem is not going to be an ad.

Which is a dilemma.

The problem is systemic and self-perpetuating.

The biggest cost for most agencies is people. Pay for creative work is amongst the heftiest overhead to the company. Aquent, the ‘staffing solutions’ company specialising in the marketing, communications and creative industries, reports that the median salary for a creative director in advertising is $185,000 (the average for a marketing director in a client company is $120,000). Average salary for a senior copywriter is $125,000. You get the picture.

So, having geared up with a heavyweight creative team intent on creating stunningly daring and artfully-produced ads, the agency must pedal pretty hard to ensure they recover their costs. Just breaking even is tough and is reflected in the energy and resources that agencies put in when pitching for client business.

Now, don’t get me wrong. I enjoy a good ad as much as the next bloke—or rather I like an ad that relieves the endless parade of dross that pollutes media at the best of times. But to reclaim a position at the top table and be valued as strategic advisors to clients, ad agencies must rethink the meaning of creativity.

The concept of a ‘campaign’ is also an idea that hampers the thinking of many in advertising. The notion persists that a couple of TV spots, some supporting print and maybe a cute online promotion constitutes a campaign.

Perhaps, insofar as it meets the criteria for entry into an award show. But in the real world, marketing warfare has changed. It’s less about large-scale campaign battles and more about guerrilla warfare.

There are some agencies that ‘get it’. Saatchi & Saatchi has a division in New York headed by the irrepressible Geoff Vuletta , Fahrenheit 212. They work closely with the likes of Proctor and Gamble to commercialise their clients’ science and invent the very brands themselves. Even their remuneration model is clever thinking—charge fees for the development and retain a share of the profit in the event of scoring a hit. Sounds like a perfect strategic partnership to me.

Advertising people are some of the smartest, wittiest and most enjoyable company I know. They have a level of inquiry and interest in the world that most people in the vertically-integrated client world find remarkable. If we can only get those clients to invite agencies to help define the parameters sooner, rather than expecting them to perform the same old party tricks.

Because the problem is systemic, the system has to change. My first suggestion is to fire the creative department. Why would any organisation want a ‘department’ for creativity? Use the unemployed creatives as freelancers. People perform better when they are responsible for putting food on the table.

Form relationships with clients where bringing ideas to the table is encouraged and long term sharing of rewards is fundamental. Agencies need to take a punt, investing in ideas and then pitching them to the client. Share the rewards with creative talent—pay royalties for outstanding contributions (I can’t think of any better way of creating outstanding contributions).

Creatives: protect your ideas. Take a leaf out of the professional photographers’ book.

Above all, put commercial ideas on a pedestal, and not cute, well-coloured, executions.

Thanks to Bad Banana for the Garfield heads-up.