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AGENCY EVOLUTION

17 THINGS THAT I HAVE LEARNED


ABOUT TRYING TO EVOLVE AN AGENCY

April, 2010
Who am I?

Goodby,
O&M Direct Ogilvy & Mather BBH Silverstein
& Partners
Account
Planner
+
Account Deputy
Manager Planning
Account Director Managing
+ +
Planner Partner
Account Business
Planner Director
+
Managing
Director
What was I joining?
The Agency
dilemma:
Right
vs.
Interesting
The agency dilemma

Q: “If you had to choose,


would you rather be
interesting or right?”
—Malcolm Gladwell, GQ Magazine
The agency dilemma

A:
“If I were President of the United States, I would
rather be right than interesting. If I were a CEO of
a company, I would rather be right than interesting.
But I am a journalist—what journalist would rather
be right than interesting?”
—Malcolm Gladwell, GQ Magazine
The agency dilemma

Right + Interesting
What’s the
motivation
to change?
The motivation for change for us

“ ” Fear.
The importance
of the simple
Agency objective
Our #1 Objective for the Agency:
“RELEVANCE.”
—Rich Silverstein
Treating the agency
like a Client
(What’s the
agency problem?)
Auditing the agency

Consultants Press

EXTERNAL GSP
Industry Headhunters

INTERNAL GSP
External perceptions of the agency
(the industry)

We were number one:

“The shop that makes the best hires”

“The shop with the best reel”

“Best at Consumer Insight”

“Best at Strategic Planning”

Source: Adweek, Industry-on-Industry Survey, 2005


When a good ad
can be bad for you...
External perceptions of the agency
(the industry)

But we lagged behind in:

“Most creative”

“The shop with the best reputation”

Source: Adweek, Industry-on-Industry Survey, 2005


External perceptions of the agency
(the industry)

We didn’t even appear on the attributes


that defined the future:

“Best at Branded Entertainment”

“Best at Branded Integrated Solutions”

“Most Media Neutral”

Source: Adweek, Industry-on-Industry Survey, 2005


External perceptions of the agency
(the pitch consultants)

“I don’t associate GSP with integration.”


—Russel Wohlwerth, Select Resources

“Is there an ability to tap into


interactive and the nontraditional?”
—Judy Neer, Pile & Co
External perceptions of the agency
(the headhunters)

“It feels very ad driven.”


—Gary Stolkin, Stolkin + Partners

“I am not sure people know that


you’re fully engaged in interactive.”
—Rachel Law, Kendall Tarrant
External perceptions lagged
behind agency reality

GSP Historical Head Count 11

4 15
2 9
4 5
2002 2003 2004 2005

Interactive Creative Interactive Production

We were the 2004 One Show Interactive Agency of the Year

Source: Goodby, Silverstein & Partners


The importance
of managing
the agency brand
External perceptions of the agency
(the advertising press)

“Personally, I feel under-informed


about the agency’s work.”
—Ellie Parpis, Creative Editor, Adweek

“Crispin have got two people who just


work the phones. That’s all they do.”
—Stuart Elliott, New York Times
Managing the agency’s brand

We hired a PR agency to help us


Why agency vision
is important
(and what happens when
you don’t have one)
Internal perceptions of the agency

“ We’ve got Crispin envy.



Source: Goodby, Silverstein & Partners Agency Interviews
Internal perceptions of the agency

“ ”
Our biggest single issue is lack of
a clearly articulated identity.

Source: Goodby, Silverstein & Partners Agency Interviews


The vision thing

The lack of vision led to questions


about the leadership of the agency
Does your
agency work?
A quick formula for efficiency

Ideas Generated Ideas Generated % Hit Rate


& Produced & Not Produced

Creative/Client X X XX%

TV Print OOH Radio Web Other


A quick formula for efficiency

Ideas Generated Ideas Generated % Hit Rate


& Produced & Not Produced

Creative/Client X X XX%

TV Print OOH Radio Web Other

Who’s performing? Who’s not performing?


Agency productivity, 2005

Ideas Generated Ideas Generated % Hit Rate


& Produced & Not Produced

2005 804 1,413 37%

Low strike rate clients with correlated problem relationships


How we worked

“There are too many creative teams on


assignments. The result is no ownership.
Everyone thinks someone else
will crack it.”

Source: Internal Agency Interviews


How we worked

“We’re a big agency with small agency


processes. We need to address
this because we’re starting to
kill people.”

Source: Internal Agency Interviews


How we worked

“ We work dumb.

Source: Internal Agency Interviews
Managing our most expensive resource

We committed to full-time, high-level resource


management of the creative department.
Do your collars
and cuffs
match?
Our workload
(percentage of GSP projects)

82%
May 2005
18%

Web/Interactive
Traditional Source: Goodby, Silverstein & Partners
Our output was evolving
(percentage of GSP projects)

82% 58%
42%
18%

May 2005 May 2006

Web/Interactive
Traditional Source: Goodby, Silverstein & Partners
So we needed to change
our creative resources
(percentage of head count)

37%

The Creative
Department
May 2006
49%
14%

Traditional
Traditional + Interactive
Interactive Source: Goodby, Silverstein & Partners
The shift in our output was dramatic

Web = 29%

Print = 23%

TV = 11%
58% Alt media = 11%
50%
42% 50%
OOH = 11%

P Of Purchase = 8%

Radio = 5%

Brochures = 2%

May 2005 October 2006

Web/Interactive
Traditional Source: Goodby, Silverstein & Partners
More flexibility in our
creative resources
was our goal
28%

The Creative
Department
October 2006
41%
31%

Traditional
Traditional + Interactive
Interactive Source: Goodby, Silverstein & Partners
Why do all
Agency creative
departments
look the same?
We were recycling creative resources

TBWA \ Chiat \ Day Crispin Porter + Bogusky

Goodby,
Fallon Silverstein & Wieden + Kennedy

Partners
Different output = different resources
The Sci-Fi Channel
Sweden YouTube Star,
Music Video The Rappin’ Jelly Donut
Production
Punk Rock
Zine

Interactive Agencies
TBWA \ Chiat \ Day Crispin Porter + Bogusky
with Dangerous-sounding Names
Sketch Comedy Troupe
(“Killing My Lobster”) Goodby,
Fallon
Silverstein & Wieden + Kennedy

Partners
Best Buy

Film School

UCLA Media Lab


Design Firms

Planning at Hal Riney & Partners

Malcontents in London, São Paolo,


Stockholm and Berkeley
10
Forcing
change
where
change
can be
seen
A simple approach to increasing
digital competence

Traditional Interactive
Art Director Art Director
From two distinct
creative “camps” +
Traditional
+
Interactive
Copywriter Copywriter

Source: Goodby, Silverstein & Partners


A simple approach to increasing
digital competence

Traditional Interactive
Art Director Art Director
From two distinct
creative “camps” +
Traditional
+
Interactive
Copywriter Copywriter

To a consciously mixed Traditional ADs and CWs


+
creative resource Interactive ADs and CWs

Source: Goodby, Silverstein & Partners


You have
to be bad
to be good
In the words of Jeff Goodby...

“It’s going to get worse,


before it gets better.”
—Jeff Goodby
In defense of failure

“Making mistakes is a great


American freedom. The goal shouldn’t
be to eliminate failure; it should be to
build a system resilient enough
to withstand it.”

Source: Time Magazine, March 22nd 2010


Goodby was right—It got worse
before it got better

2005 2006 2007 2008


1. Crispin 1. Crispin (695) 1. TBWA\Chiat (565) 1. BBDO NY (845)
2. TBWA\Paris 2. TBWA\Paris 2. Crispin 2. TAG SF

3. GSP (300) 3. AMV BBDO 3. Saatchi + Saatchi, NY 3. McCann Erickson


4. W+K London 4. DDB London 4. R/GA 4. Fallon London
5. TBWA\Chiat 5. DDB Chicago 5. DDB London 5. Saatchi NY
6. Taxi 6. JWT London 6. DDB Chicago 6. TBWA\Chiat\Day NY
7. DDB London 7. Dentsu Tokyo 7. BBDO NY 7. Crispin
8. Fallon/NY 8. Forsman +Borden 8. BBH NY 8. GSP (260)
9. Almap/BBDO 9. Taxi 9. Leo Burnett Chicago 9. Saatchi Singapore
10. W+K/Portland 10. GSP (155) 10. Fallon London 10. DDB London
11. DDB Brasil 11. Fallon London 11. Saatchi + Saatchi, Singapore 11. TBWA Paris
12. Dentsu/Tokyo 12. W+K London 12. W+K Portland 12. W+K London
13. Springer + Jacoby 13. Saatchi + Saatchi, NY 13. TBWA\Paris 13. Saatchi + Saatchi, NY
14. Arnold 14. Nordpol Hamburg 14. W+K Amsterdam 14. Nordpol Hamburg
15. The Jupiter Drawing Room 15. Leo Burnett London 15. Fallon Minneapolis 15. Leo Burnett London
16. 180 Amsterdam 16. Lowe Hunt Sydney 16. GSP (115) 16. Lowe Hunt Sydney

Source: Creativity Magazine, top 20 creative agencies at the awards shows


Two heads
are better
than one
A more holistic approach to
developing strategy...

Account Media
Planning Planning

Consumer Brand Media Consumer


Insight Insight Insight Insight

Message Content Channels

How can the message and channel


work hardest for each other?
...driven by a focus on ideas

Account Message Media


Channels
Content
Planning Planning

People engage with ideas, not channels.


Ideas drive channel behavior.
Change the way we create strategy

Do what Bernbach did by combining


Copywriters and Art Directors…
we could implement with Account Planning
and Media Planning
One department called “strategy”

Brand Media
Strategist Strategist

Focused on how the message and channel


can work hardest for each other
Yes,
yes it
really is
all about
the work
How fast
should we
change
an agency?
Speed of change

“Creative firms of all kinds


(including ours) know that
they must evolve at LEAST
as fast as the world is
changing around them.”
—Tom Kelley,
General Manager, IDEO
Are you
ready for
a change
in the
agency
landscape?
Increasing industry convergence

Traditional
ad agencies with Integrated “Larger” digital Digital
“bolt on” digital ad agencies agencies production shops

(e.g., DDB, Euro) (e.g. GSP, CPB) (e.g. R/GA, (e.g. Big
Razorfish, Spaceship,
AKQA) Firstborn)
A looming turf war

Traditional
ad agencies with Integrated “Larger” digital Digital
“bolt on” digital ad agencies agencies production shops

(e.g., DDB, Euro) (e.g. GSP, CPB) (e.g. R/GA, (e.g. Big
Razorfish, Spaceship,
AKQA) Firstborn)

Implications for talent retention,


organic growth and new business
Creative output alone
will not be enough to succeed

Top four most important


elements for an ad agency

1. Understand my market

2. Creative

3. Understand company direction

4. Strategy and thinking

Source: Reardon Smith Whittaker survey of 184 key marketing decision makers, October 2008
Heidrick & Struggles survey of 111 senior marketing executives at firms with $1B+ in annual revenues, December 2008
Creative output alone
will not be enough to succeed

Top four most important Top four most important % Very


elements for an ad agency elements of digital Satisfied

1. Understand my market 1. ROI 18%

2. Creative 2. Analyses of Web behavior 13%

3. Understand company direction 3. Search 19%

4. Strategy and thinking 4. CRM 17%

Source: Reardon Smith Whittaker survey of 184 key marketing decision makers, October 2008
Heidrick & Struggles survey of 111 senior marketing executives at firms with $1B+ in annual revenues, December 2008
Creative output alone
will not be enough to succeed

Top four most important Top four most important % Very


elements for an ad agency elements of digital Satisfied

1. Understand my market 1. ROI 18%

2. Creative 2. Analyses of Web behavior 13%

3. Understand company direction 3. Search 19%

4. Strategy and thinking 4. CRM 17%

A need for fluency from “the work” to how the work works; the “what” to the “why”

Source: Reardon Smith Whittaker survey of 184 key marketing decision makers, October 2008
Heidrick & Struggles survey of 111 senior marketing executives at firms with $1B+ in annual revenues, December 2008
One final observation

The Agencies of the future


may not be the Agencies that
have dominated the past
Interactive
scaleability
and other
oxymorons
Interactive is very labor intensive

More More
interactive = Interactive
work staff
Q:
How do
you get big
without
getting bad?
Setting the right metrics for the agency

An Annual GSP Our performance


Client Relationship at the major
Survey Creative Award Shows

To be the best advertising Agency in the world, as judged


by our peers, based on the quality and effectiveness of our work

Our performance
An Annual Agency
at Effectiveness Awards
Staff Survey
(EFFIES)
Does this theory actually work?
The changes helped make us more productive

Ideas Generated Ideas Generated % Hit Rate


& Produced & Not Produced

2005 804 1,413 37%

2006 1272 1,214 51%

Source: Goodby, Silverstein & Partners


Historical Creative Performance

2005 2006 2007 2008 2009


1. Crispin 1. Crispin (695) 1. TBWA\Chiat (565) 1. BBDO NY (845) 1. GSP (680)
2. TBWA\Paris 2. TBWA\Paris 2. Crispin 2. TAG SF 2. Crispin

3. GSP (300) 3. AMV BBDO 3. Saatchi + Saatchi, NY 3. McCann Erickson 3. Saatchi + Saatchi NY
4. W+K London 4. DDB London 4. R/GA 4. Fallon London 4. W+K Portland
5. TBWA\Chiat 5. DDB Chicago 5. DDB London 5. Saatchi NY 5. Droga5
6. Taxi 6. JWT London 6. DDB Chicago 6. TBWA\Chiat\Day NY 6. BBDO NY
7. DDB London 7. Dentsu Tokyo 7. BBDO NY 7. Crispin 7. Dentsu Tokyo
8. Fallon/NY 8. Forsman +Borden 8. BBH NY 8. GSP (260) 8. TBWA NY
9. Almap/BBDO 9. Taxi 9. Leo Burnett Chicago 9. Saatchi Singapore 9. CumminsNitro
10. W+K/Portland 10. GSP (155) 10. Fallon London 10. DDB London 10. Leo Burnett Lisbon
11. DDB Brasil 11. Fallon London 11. Saatchi + Saatchi, Singapore 11. TBWA Paris
12. Dentsu/Tokyo 12. W+K London 12. W+K Portland 12. W+K London
13. Springer + Jacoby 13. Saatchi + Saatchi, NY 13. TBWA\Paris 13. Saatchi + Saatchi, NY
14. Arnold 14. Nordpol Hamburg 14. W+K Amsterdam 14. Nordpol Hamburg
15. The Jupiter Drawing Room 15. Leo Burnett London 15. Fallon Minneapolis 15. Leo Burnett London
16. 180 Amsterdam 16. Lowe Hunt Sydney 16. GSP (115) 16. Lowe Hunt Sydney

Source: Creativity Magazine, top 20 creative agencies at the awards shows


AGENCY WINNERS 2009

1. Goodby, Silverstein & Partners (680)

2. Crispin Porter + Bogusky (365)

2009 3. Saatchi & Saatchi NY (345)

4. Wieden + Kennedy Portland (320)

CREATIVE 5. Droga5 (295)

AWARDS
6. BBDO NY (205)

7. Dentsu Tokyo (200)

8. TBWA Chiat Day NY (200)

9. CumminsNitro Brisbane (200)

10. Leo Burnett Lisbon (200)

Source: Creativity Magazine, September 28, 2009


AGENCY NETWORK WINNERS 2009

1. BBDO (1375)

2. DDB (985)

2009 3. Leo Burnett (965)

4. Saatchi & Saatchi (885)

CREATIVE 5. TBWA (765)

AWARDS
6. Ogilvy (700)

7. JWT (615)

8. Wieden + Kennedy (470)

Goodby would have placed seventh in this 9. Y&R (420)


ranking, even though it’s a one-office agency
10. Crispin Porter & Bogusky (400)

Source: Creativity Magazine, September 28, 2009


We were named the most
awarded agency in the world

“The most awarded Agency of 2009 is GSP, a shop that simultaneously was named
Cannes’ Digital Agency of the Year and, according to our count, had the most awarded TV spot
this season with ‘Rabbit’ for Comcast.

“What’s more, the San Francisco–based Omnicom agency didn’t earn this distinction for
hitting one home run that won everything—last year’s top winners could chalk up success to
standout campaigns like HBO’s ‘Voyeur’ and ‘Halo 3.’ A broad range of award-winning work and
strength across media proved fruitful for Goodby, which won for work like the YouTube-quaking
‘Wario Land Shake It!’ for Nintendo, the split-screen ‘There Can Only Be One’ spots for the NBA
that inspired spoofs on the cover of Time Magazine and on SNL, the ‘Save the Honey Bees’
campaign for Häagen-Dazs and the virtual haunted ‘Hotel 626’ for Doritos. Goodby also won
for the first augmented-reality campaign for a major advertiser, the GE Plug into the Smart Grid
Web site, as well as the data-crunching Sprint Now widget.”

Source: Creativity Magazine, September 28, 2009


2009 saw a real cementing
of our digital interactive credentials

We were the Cannes Digital Agency of the Year


(with work for seven different clients)

We were the One Show Interactive Agency of the Year


(with work for six different clients)
And 2009 wasn’t just about creative awards.
Media got in on the act too...

We were the #2 office in the world at the


Festival of Media Awards in Venice

We won six (out of a possible 16) awards at the


Creative Media Awards in NY for four different clients,
including the Grand Prix