The following post is written by mobile strategist Tim Dunn. Tim and I have worked together in the past and often discuss whether agencies could (or should) make products. Tim follows up the great post by Jules Ehrhardt and is part of a series of articles on the subject. You can follow Tim on Twitter here: @timmcdunn

I’m intrigued to see another round of opinion pieces circulating along the lines of ‘Why Are Agencies Not Innovative’ and ‘Can Agencies Ever Make Products Successfully’, in particular, Jules Ehrhardt’s piece from early last week.

The reason I felt moved to reply this week in particular is not because I particularly disagree with much of what is written. For sure, many agencies pay lip-service to the notion of innovation, and declare they are becoming products-and-services businesses without really making any steps to take on that competence.

All this is true. But the question we should be asking really is not whether we as agencies are failing to fulfil this role, but whether it’s realistic for us to do so in the first place. Why should ad agencies with both history and skills in ‘comms’ need to expand out of what they do best? And even if agencies were to try and do this – is it even possible?

Why bother?

If there’s one over-riding thing that agencies have to do – it’s sell product. All of our clients, particularly those with really big budgets in FMCG, are obsessed with it – and so they should be.

It’s a common complaint from digital agency wonks that ‘<Insert name of client> is just playing everything safe to protect their job>’, but the fact is that client marketers are assessed regularly on sales numbers.

Why does this lead to ‘digital stagnation’ and ‘putting the budget back into TV’ rather than funding our latest social-geo-caching mash-up? One answer is to look at this hilarious dismemberment of interactive marketing here.

In summary – brands do not have the right to claim a relationship deep enough with consumers to persuade them to spend their valuable time downloading your app, responding to your posts etc. It’s arrogant and ridiculous of 99% of brands to think otherwise.

The fact is that TV (and by extension any other display format) works – sorry! Most products sell through raising awareness among as many people as possible, not by engaging a small number of people through some digital wizardry. Sure – you can take an innovation-led project and scale it (obligatory Nike+ reference) but only if your brand:

a) has a heritage and consumer connection that can realistically support the levels of engagement required

b) has a commitment and huge budgets needed for product development and support over time.

So what agencies should be doing is getting as much reach and awareness as possible for the brands who pay to sell their products. While there should be a little room for playing around the edges, that is not what’s going to sell more Shreddies or Volvos, which ultimately defines who keeps their job, who gets a raise, and whose CEO gets to go to the City with good news.

Murat argues here that the agency should be the heartland of great product development, and that the next Instagram/Klout etc should be coming from us, but I feel this is a little like arguing that we should also be building the TV shows where our adverts are shown, or writing the newspapers where we place our banner ads. These platforms are NOT brand vehicles, and brands CANNOT launch them, so it can’t be in the agency’s interest to sink resource into something so beyond their core discipline – few other businesses would try it.

The reality gap

While I completely understand why Jules, Murat and many others would like to see a transformation in digital agency land, my view is that it’s not just outside of agency remit, but also agency capability – at least in the short term.

There are a few key reasons for this:

  • Product design and innovation requires people that agencies don’t have: a team of creative technologists, product managers, spare UX people, and of course development resource
  • Agencies work on narrow margins – 10% if you’re lucky. This is really the only number that matters to a CEO who answers to shareholders or Group management, and additional cost is a no
  • Agencies tend not to have mundane skill-sets such as 24/7 support and responsive operations departments

So it’s all bad news right?

It’s easy to assume that all’s doom and gloom in agency land for creative digital people.

Some go so far as to predict the demise of the traditional agency model. But it’s not “change-or-die” – so long as most brands shift product by generating mass awareness, the TV/online display media model, and the agency ecosystem it supports, will continue to exist (like it or not).

Does this mean that all creative/technology/product people should pull out of ad agencies? This depends on your interpretation of creative and innovation.

In ad agencies you generally are looking at utilising trends and tools, rather than building them. You are developing ‘ideas using tech’ rather than particularly diving into the tech itself. Agencies have to experiment and innovate with ideas, and this will remain the heartland of the creative process as we currently know it in adland. This is still creative, and still relies on tapping into insights and behaviours from consumers.

But it’s not for everyone.

So what’s the answer for us?

If (by us) you mean creative digital people with an interest in great products, slick UX, engaging and developing new tech ideas etc, then we have to stop relying on ad agencies as our creative outlet. We should all know by now that agencies can’t support high levels of tech innovation, Labs, consumer products etc. One of the main arguments from those who have grown to dislike this agency model is that it stifles and disappoints the creative and technical people who work in it. It’s hard to argue against this.

But there are plenty of opportunities for us to earn a daily wage AND make the most of our creativity. You can break these down as gollows:

Consultancies such as Berg, Ideo and Astro specialise in the kind of innovation we all want to do, and there are more of them than you think.

There are spectacular opportunities client side, even without going somewhere like Nike’s top secret Digital Sport unit. Many clients are taking elements of technology and digital brand extensions in-house, where there’s time to focus on delivering digital propositions strategically over time rather than the rushed and sporadic approach that working with an agency on a day rate produces. I have colleagues and clients as diverse as M&S, AutoTrader and the Government who are doing cool things from the inside.

There’s a continuous flow of start-up opportunities. One of my best developer friends recently left the agency he’d been at since a grad to take up tech lead building up a product from scratch, and is loving using his skills on something he can own.

Platform and media businesses offer the satisfaction of long-term program development of D2C services, with sensible revenue streams allowing time for wider thought and innovation.

And then of course, there’s JFDI – everyone should have at least one side project – it keeps you sane and sharp, and gives you freshness and perspective. While I’m not a developer (I wish!) I do this by training and teaching on the side.

So in summary, we should all stop moaning about agencies’ failure to fulfil our seeming desire for them to be all things to all people. There is creativity there, but if you don’t like it – leave, or at least upgrade your side projects and reset your expectations about your day job.

People who can change the world through technology are more in demand than ever before, and there are more than enough options out there for us.

  • Josie Brown

    Our expectations HAVE changed, and so have (ad) agencies.

    Yes, you’re right – the bemoaning of agency life can partly be resolved by JFDI and having more empathy for the pressures on clients to sell, sell, sell. But when great (innovative and on-brief) agency work is thrown out time and time again for just another banner or re-skin it becomes harder and harder to keep good talent engaged without striving to improve the agency itself.

    I don’t think anyone is denying why we’re here in the first place. Agencies serve a clear purpose not only because people love great ads (think of the millions of views ads themselves get online) they love a good story, and they love cool brands. That hasn’t changed.

    What has totally revolutionised in the past 10 years is how and when we consume content, seek out entertainment and operate our lives as consumers. This has changed the agency and the kind of talent you find within it. There were no programmers, developers or data visualisers around ten years ago, but they’re here because we need them. How silly to think that’s going to stop, and even sillier to think such talent will not evolve the way an agency operates for its clients and for itself.

    I agree – quit the negative whining about agencies, it’s like telling off a puppy for not being a dog. Perhaps we should just concentrate on evolving the agency and keeping it relevant day by day without expecting an overnight revolution.

  • Simon Liss

    Great post Tim, really enjoyed it. I’d like to reflect on a few areas.

    Firstly, agencies are what they are, client driven,marketing services operations that need to feed the beast – that is, ensure they continue to win and deliver work. You know this, I know this, Martin Sorrell knows this.

    That sausage factory approach doesn’t leave much time for naval gazing or coming up with truly new ideas. It’s often about pure growth (more work, more money, hungry investors and banks) or simply defending revenues (keep winning business or people get fired). It’s a treadmill at the coal-face of consumerism. If you like working hard, working fast and not dwelling on projects or your contribution to society, then agencies are the place for you!

    If you like mulling over business problems, looking for better ways to do things and to be ‘truly creative’ you are probably in the wrong industry. Sure, some agencies play lip-service to innovation, with the odd hack-day and a ‘director of innovation’, who is wheeled out like a shiny show-pony whenever the client looks bored. But
    in reality most clients simply don’t want disruptive, game-changing innovation. They don’t like risk, they like models that have worked in the past. Yes, they love beating the competition, but they hate the idea of losing money even more. They rarely back new marketing concepts or products – they tend to buy familiarity
    dressed up as novelty, pulled along in a slow-moving band-wagon, probably by that show pony I mentioned earlier.

    But there is some hope for agency monkeys here. If you can accept that innovation and being creative doesn’t have to be about creating products as such, or owning IP – then perhaps you can start to understand that being innovative within a restrictive environment is actually the ultimate creative challenge. Taking a big disruptive idea and turning it into something that you can sell to a client, that you can get to market and that you can turn a profit on, in the face of mediocrity and fear of failure, without the need for massive investment, perhaps by leveraging existing technologies in new ways – isn’t that creating something new? It’s not
    a ‘thing’, it’s a solution, and while a solution is not as sexy as a ‘thing’ it has an in-built purpose, and therefore an undeniable worth.

    Necessity is the mother of invention, and if you absolutely need to innovate in your agency job, then you’ve set yourself a big challenge – one that arguably needs as much, innovation patience and application as product development itself.

  • tim dunn

    Wow – this is a smart blog – whenever I post on Econsultancy
    I get idiots coming on saying “you don’t know fuck all about responsive” and my
    personal favourite “this article makes me sad to work in mobile.”

    Still – you can’t choose your audience!

    I think both your excellent responses are driving at the
    same thing in different ways. Fundamentally there are different types of

    The traditional agency creates Things For People To Look At. Rooted in the Draper-isms of the traditional ad model, it’s ruled by the perpetual search for the Big Idea, and often driven by what Jules refers
    to as the Creative Director mega-ego. As I write above, I have no issue with
    this model at all – for ads. The great Martin Bailie was waxing lyrical to me
    only yesterday about how it’s worked for years because it shifts product so
    effectively, and reduces complex messages down to simple digestible ad-friendly chomp

    On the other hand, people like Murat and me who
    have a lifetime in digital/mobile/whatever see creative as making Things For
    People To Do. This is sometimes as far from the Big Idea as you can get, and I
    number some of my best work as including the PlayStation app, the New Look
    mCommerce site and other stuff like that because of the way we were able to
    play and innovate with the fine details of technology and content models to
    gain huge results and a little of the Great Leap Forward

    This presents two challenges for the agency transformation
    you mention @josie.

    Digital agencies who are firmly rooted in “Creative” are
    going to fail to reach cut-through compared to the TV-awareness-driving model –
    we just can’t reach scale. This is particularly going to hurt pure-play digital
    comms specialists who without diversifying will find their lunch continually
    eaten by larger integrated agencies, and margins squeezed accordingly. Budget
    pressures and even harder revenue chasing then form a vicious circle. And
    @simon while I get your point in theory, why would we choose to work within
    limits, rather than outside them? It’s like having to build a ship in a bottle
    rather than sail one on the ocean.

    Also, in terms of staff retention @josie, I don’t find your
    ‘evolving day-by-day’ all that attractive – and I’m an old geezer, so I have no
    idea how bad it must feel for a talented 24-year-old designer or developer with
    burning dreams and ambitions. These guys need time and space and freedom to
    grow, and having 90% of your ideas not delivered is not the way to facilitate
    this. In short – people are not patient, and are quite confident finding
    somewhere outside adland these days where they can get what they need.

    Of course, nothing is black and white, and some agencies are
    more skilled than others at doing things which keep ‘us’ challenged and
    engaged. Depending where you are, you could end up UX-ing the next MiCoach or
    doing the social strat for Old Spice or whatever.

    So my advice to anyone foolish enough to listen to me is to
    think hard about your own creative desires and destiny. If you’re restricted
    and constrained in your setting you will do rubbish work and start to hate
    yourself, and probably the rest of
    humanity too. It’s not a good place to be.

    We need to get good firstly at seeing through the smoke and
    mirrors of adland innovation and take a firm appraisal of the true potential of
    where we are. Then we need to be honest about whether we’re happy or not in
    what we’re doing – it’s easy to lose your best years turning someone else’s
    wheel. Then we need to have the courage to admit that, very often, there are
    wilder skies than these.

  • Pingback: Here Comes Everybody: The Power of Organizing Without Organizations |

  • Joel Blackmore

    That is a good deck along the same lines as Tim’s Engagement vs Interruption deck mentioned above.

    Great post, and very interesting to think about when considering the nature of comms between a brand and consumers.

  • Nikhil @

    The best part is that the ad agencies should give a service where in they can fulfill client`s expectations. Nice article! :-)