Jonah Bloom the executive editor at Advertising Age is looking for a new agency business model. This from a March 07, 2005 column Jonah wrote:
"While the incoming tide of consumer control and wave after wave of media fragmentation have left many large broadcast-dependent ad agencies looking slothful, defensive and ill-suited to marketers’ needs, a new generation of shops proves change can be opportunity."
Bloom identifies several new shops that he believes are breaking the old agency model. He describes one, McGarry Bowen as:
…"a throwback to the supposed halcyon days of spot-making, a traditional ad shop where the mantra seems to be "have fun," but the key is meticulous account management, persuading clients to pay for experience, and a cost structure unencumbered by holding-company overhead."
I’m not sure that qualifies as a new business model. He then describes Anomaly another new challenger:
"Anomaly decries tradition and craves revolution. Its real selling point is that its principals have diverse skill sets in interactive marketing, media strategy and design as well as advertising so that clients can have faith they will get a marketing solution rather than an ad campaign."
I’m not sure that qualifies as a new model either. But at least there’s recognition that the old model no longer works. What does work? This is my take on a new agency business model:
1. CAMPAIGN CENTRIC. Utilize discrete campaign relationships, the nature and duration defined by the achievement of a specific objective. Stop selling ala cart services easily commoditized (media buying) and instead sell tangible turnkey results like market share gains, new product launches, repositionings etc. Eliminate AOR completely.
2. STRATEGY DRIVEN. The ability to develop and execute winning campaign strategy needs to be the core competency of the new agency model. Understanding and mastering the complexities of 21st century marketing is beyond the grasp of mid-20th century mindsets.
4. RAPID CYCLES. Replace long lead time location shots, F/X wizardry, technology initiatives and other production techniques with rapid cycle messaging that is easy to change and wickedly-fast to execute in response to consumer behavior and competitive threats/opportunities.
5. CONTINGENT COMPENSATION. A significant portion of the agency compensation should be contingent and driven by the success of the campaign.
This is the model we run with at vSente. Click on the campaign tab to find out more about our approach.
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