Cultural barriers to change in advertising agencies

This post is by Darren Woolley, Founder of TrinityP3With his background as analytical scientist and creative problem solver, Darren brings unique insights and learnings to the marketing process. He is considered a global thought leader on agency remuneration, search and selection and relationship optimisation.

I was on a flight between Hong Kong and Doha and the guy I was sitting next to was the Professor of Cultural Studies at Jeddah University. We were talking about how you define culture and he showed me the video below about the Five Monkeys Experiment.

His point being that culture and especially corporate culture is defined and often practiced with little or no understanding or reason why. I have posted a story in the past that says that this approach meant that the size of the Space Shuttle booster rocket was determined by the width of two horses arses.

Later I was reading the Anecdote blog (Shawn Callahan and his colleagues regularly guest blog here) and I saw this post by Mark Schenk titled “That’s how we do it” with a “Lamb Roast” story that helps distinguish between mindless cultural practice and practical considerations.

The interesting thing is that technology is driving change, especially in marketing. The access to Big Data, the rise of social networking, the impact on publishing and media generally and the empowerment of the consumer require marketers to rethink their approach to market.

Many of the traditional strategies are becoming less effective and we have seen reports on the death of traditional marketing. In the face of this change many marketers are challenged by the pace of this change. But when they turn to their agencies the creativity they often find is usually expressed almost exclusively through the creative concepts they provide.

The opportunity to innovate the strategy and creative and production process, increase collaboration and develop more value based remuneration is largely overlooked. When was the last time you heard of a huge innovation in the way advertising agencies did business?

In fact when we engage agencies in discussions on implementing new ways of doing business,  such as new remuneration models or structures or business processes, the excuse is often “That is not how we do it here”.

Interestingly, the “creative” department (anachronistic in itself) is regularly used as the reason why change would be counter productive. In one case an agency Group Account Director told the marketer and our client that “If you insist on making the changes recommended by TrinityP3, you are at risk of compromising the creative magic”.

If this is to be believed, the supposedly innovative and creative area of the agency is also the most conservative outside of their core competency of generating “novelty and creative communications ideas”.

It is no wonder that increasingly marketers are turning to technology companies and digital media companies like Facebook and Google and the rest for broader innovation and ideas on a business and marketing level.

It is also why advertisers are turning to SXSW to see where the market is going and why interest in ‘navel gazing’ creative awards continues to wane amongst everyone but the agencies themselves or the marketer groupies who support the awards. With most creative advertising awards only recognising the novelty of a communications idea or execution.

A prime example of the lack of innovation in business strategy, structure and process is the fact that:

  1. Agencies still largely have the same structure they adopted in the MadMen era of the mid to late 1960s,
  2. When faced with loss of the media commission, the compensation the industry chose was the remuneration model of labourers and accountants (head counts and hourly rates) over the creative professions (shares of sales, profit and revenue)
  3. Most are still producing advertising and managing workflow in labour intensive manual processes rather then embracing the efficiencies of technology.

It appears to me that innovation in advertising is largely in the creation of novelty communications and not creative business. Perhaps because innovation in a broader business context is simply “not how we do things here in advertising”.

What do you think? Let me know if I am being too harsh by leaving some examples of business innovation you have seen in agencies, where they have not been forced to adopt it by the economy or the client.

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About Darren Woolley

Darren is considered a thought leader on all aspects of marketing management. A Problem Solver, Negotiator, Founder & Global CEO of TrinityP3 - Marketing Management Consultants, founding member of the Marketing FIRST Forum and Author. He is also a Past-Chair of the Australian Marketing Institute, Ex-Medical Scientist and Ex-Creative Director. And in his spare time he sleeps. Darren's Bio Here Email:
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10 Responses to Cultural barriers to change in advertising agencies

  1. Mike Wilson says:

    Darren, great post. Naked was originally founded in 2000 because there was a more appropriate model for the 21st century than the limited, anachronistic model which prevailed.. 12 years on, it seems that not a lot has changed. Agencies still promote advertising-centred solutions, media agencies still drive clients to paid media as a first port of call.I'm generalising, of course, (and good luck to the few dynamic challengers), but your observation about Mad Men-era structures still rings true.

    • TrinityP3 says:

      I think marketers also contribute to this, because while many say that want something different, when confronted with a different offering they either question it into oblivion or reject it outright. It would help if they could actually articulate what they want the difference to be and then the industry can re-shape to suit. But like I have often observed, they only know what they want when they see it.

  2. Having worked as a marketer on the client side for 10 years prior to working in an agency, I can still remember how stunned I was that few people on the agency side had any involvement in the business outcomes of the work they were producing.

    Marketing in all of its forms is only relevant with regards to the value it creates for a business.

    Advertising in isolation from considerations about other marketing activities, systems, processes, resources and procedures throughout the entire organisation is akin to a doctor prescribing medicine for a single issue without considering the impact it will have on the rest of the body.

    You have to take responsibility for the work and it's impacts right throughout the chain.

    It's not good enough to just say "That's the clients responsibility", particularly when it's often obvious that the client hasn't considered that themselves.

    • TrinityP3 says:

      That is true Jamie. But how do you think this impacts what is seen as a lack of business innovation in agencies? How does this lack of business focus you see in agencies impact on their ability to to innovate their own offering in any meaningful way? I would be really interested in your perspective as someone who has experienced both the marketer and the agency perspective.

  3. Nice piece Darren. What about if there are enough bananas for everyone?
    The industry seems to be stuck in vortex of inaction and ignorance which is a shame because if the fine minds that undeniably exist in marketing/communications/advertising/media could re-calibrate then who knows might eventuate.
    Here's my view

    • TrinityP3 says:

      Thanks Martyn. If only there were enough bananas for everyone.

      I think the problem is that marketers are expecting the agencies to change and the agencies are waiting for the marketers to tell them how to change. It become a convenient excuse to maintain the status quo.

      Interestingly some start up agencies have tried to make structural innovations only to end up conforming to the traditional default model. This is often because the innovations are structural and not based on a strategic need.

      These attempts at innovation are also not widely supported by the industry with many cynical about many of these new arrangements.

  4. Inertia often stems from a state of fear….time for new leaders to step up…not the same old saged heads who have vested interests to protect.
    Here's a good post as a glimpse in to not too distant future

    • TrinityP3 says:

      Martyn, courage and bravery are the values and attributes agencies often complain are lacking in their clients, but are you suggesting that it is these same attributes lacking in most agencies?

  5. sounds like a headline grabbing opportunity………….
    The thing is agencies need to make revenue, cover overheads and ideally make a profit, so its less about lacking courage and bravery and more about keeping the $$$$ flowing.
    The step-change to the new requires transition not radical shifts BUT inherent with this is that agencies will need to invest in new thinking and new resources with limited short term returns.
    That can be a scary proposition for a market which seems transfixed on the short term.
    Making sense?

  6. TrinityP3 says:

    Sure. I think there is a demand from advertisers for agencies to change. My disappointment and the reason I wrote this post is it is the agencies resisting change. The marketers want change. The agencies are complaining about the status quo. Yet the change is painfully slow and it appears to me that the agencies could be doing more to embrace and even drive the change.

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