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Managing Marketing: The Journey Building A Successful Agency In The 21st Century

Mark Green

Managing Marketing is a podcast hosted by TrinityP3 Founder and Global CEO, Darren Woolley. Each podcast is a conversation with a thought-leader, professional or practitioner of marketing and communications on the issues, insights and opportunities in the marketing management category. Ideal for marketers, advertisers, media and commercial communications professionals.

Mark Green is the Chief Executive and Co-Founder of The Monkeys and the Chair of the Communications Council in Australia. Here Mark shares with Darren the 12 year journey from opening the doors of the Three Drunk Monkeys until today with the successful sale to Accenture Interactive. He talks about the challenges, the success factors and the lessons learnt on the way.

You can listen to the podcast here:

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Transcription:

Darren:

Welcome to Managing Marketing. This is twelve years in the making; I get to sit down with Mark Green who’s the group Chief Executive Officer and co-founder of The Monkeys and the new Chair of the Communications Council, welcome Mark.

Mark:

Thanks Darren, good to be here.

Darren:

I say twelve years in the making because it was about twelve years ago that I turned up in Surrey Hills or Redfern?

Mark:

Redfern.

Darren:

At your invitation to come and see the agency that you and Scott and Justin had just formed called The Three Drunk Monkeys.

Mark:

Yeah it was pretty rough and ready our first office. I think we took the keys, the agent gave them to us and we walked into the building and there was a pool of blood in the foyer. We looked at each other and thought the worst and the agent reassured us that it’s okay. That’s just usually some drug addicts that have tried to break into the building. By the time they get to your studio they’ve run out of energy. They don’t usually get all the way to the end of the corridors, so that was the first office.

Darren:

I remember the elevator was quite slow; more like a goods lift than an elevator. Walking down the hallway there were a couple of holes in the wall that suspiciously looked like someone had put their fist or their head through it.

Mark:

Yeah that’s what the agent was referring to out trying to kick through the plaster board. But yes the lift was special; it was full of graffiti from coin scratches which we actually painted when we were pitching for Foxtail. That was the first major piece of business that we won. But the night before the pitch we realised we probably needed to do something about the lift so Justin’s wife, Simone got some white paint and painted the lift. Thankfully it didn’t come off on our client’s jackets on the way out the next day.

Darren:

One of the things I remember very clearly is the absolute optimism. I say that because I walked into what was quite a big room with one table and the three of you sitting there. I thought to myself these guys have got significant plans to grow because there’s all this empty space around them. The table was actually an old door wasn’t it?

Mark:

Yeah it was a door on a couple of trestles. We had one internet connection that we used to pass around kind of the wireless cord and put into our computers. I think naivety served us very well back then.

I think the first creative team we hired were earning twice as much as we were. The second creative team we hired we did a worldwide search for. I don’t know why we thought we had to do a worldwide search but one of the creatives ending up coming from America.

When he arrived one of the guys picked him up from the airport, he came to the office, he looked around and said, this isn’t an agency, this is just a few dudes in a room. But he stayed with us for a number of years as we just went for it, pinned our ears back and had a go.

Darren:

I go and see a lot of agencies, especially small start-up agencies but not a lot of them end up where you guys are. Like twelve years later you are one of the dominant players, you’ve recently, almost two years ago sold equity to one of the big consulting firms. You have to say you’ve certainly left a significant imprint on the market place. That journey must be phenomenal?

Mark:

I think in the early days it was about trying to find clients that would just give us the opportunity to show what we could do. And thankfully some of those earlier clients saw what we could do and gave us more work. And the more work and variety you have the more you can actually tell a story of a business that can do things across a number of different clients.

I think after the first year we’d worked with Pepsi, Yahoo, and Foxtail and we’d made the most of briefs that weren’t necessarily big briefs but were a great opportunities to show what we could do. So we took the opportunity and did some good work, work that showcased that we weren’t just trying to be the same as the other agencies in town, but we were trying to do things differently.

Whether it was a short film, a piece of content, or books it was about showing an idea that lived in the nexus between advertising entertainment and technology. That is where we saw the future of marketing communications going at that point in time. We wanted to show that we could work in that world.

Darren:

I remember at that time and it’s still true, that a lot of agencies still struggle with trying to convince their clients they don’t just do TV ads or they don’t just do websites or whatever. You guys were definitely from day one focused on creating popular culture in a way. As soon as you make an ad it’s something that sits within popular culture.

Mark:

Yes.

Darren:

You were creating things (and this is my interpretation) that actually contributed to popular culture.

Mark:

Again, I think that’s just the best opportunity for a brand to be seen and heard today. consumers control how they receive messages and unless they want to take part in that message they’re going to shut it out. The work needs to get into popular culture for it to have an impact so you need to work strategically and creatively to get there.

Most of the time we’re doing that so the outcome is a result of sound thinking that the client understands exactly why they need to do that. I think MLA is a great example of that; a very clear strategy which hasn’t changed over five years. And every time we’ve done a campaign whether you like it or not, whether the general public likes it or not it’s heard, understood, shared, and discussed widely.

What has come as a result of that are sales and significant growth over time. It won long-term effectiveness gold at the Effie’s this year so it showcases that this type of thinking is the best weapon for a marketer as well.

Darren:

On your own brand, you did start with a very distinctive name: Three Drunk Monkeys. Where did the name come from?

Mark:

I think Justin was at an industry event and his observation was we were a bunch of drunk monkeys in the advertising industry and when we started the business it became the Three Drunk Monkeys as a consequence of that.

It was memorable, different, it’s still, as The Monkeys, seen as different in the industry. I think ultimately, a brand name is what you make of it. Everything we did subsequently built its distinctiveness over time. We’re always asking our clients to be brave and stand out and be distinctive and we’ve certainly done that.

Darren:

I like that point about making it mean something. I remember you first of all you dropping the drunk part was because an alcohol beverages client said they wanted to appoint you but couldn’t appoint a group of drunks.

But just the monkey part—you’ve actually managed to embody this fun, mischievous, playful but also quite communal and effective as well.

Mark:

I think the brand we’ve created has served us well. It’s not just the name that’s just part of the symbolism as well and the outward piece of a brand. Our essence is built on provocative thinking, our purpose is to make provocative things happen and I think that clarity has served us really well because that’s what we tell clients we’re here to do.

And they either buy it or they don’t but they at least understand what we do and why we do it versus another agency.

Darren:

That’s quite challenging for a lot of clients and especially big corporate clients, which you have quite a large number in your portfolio. To turn around to a big corporate, especially if they’re asset-listed or they’ve got boards, shareholders and say we’re going to be provocative. And provocative is one of those words the risk averse will run from isn’t it?

Mark:

Well, it hasn’t and we do work with some of Australia’s biggest brands; Telstra, NRMA, CTU, Qantas, Australia Post, and Holden are some of those brands. I think in today’s age there’s a lot of talk of disruption, of industry change and I think there’s a general acceptance that the same old shits not going to make a difference. When that is the case when clients are looking for something they are probably already predetermined to look for something different.

I think that’s what the Monkeys have probably represented in an industry that hasn’t changed that much over many decades. But I think the necessity to stand out as a brand to be understood, and we always talk about provoking with a purpose so there’s a strategic intent behind a provocation. A provocation could be emotional; it could be to be seen without doubt. There’s a whole bunch of ways and feelings etc that you can provoke that would suit a brand and might not suit another brand.

Darren:

I also wonder if part of it is when business, corporations think about advertising and being provocative in advertising, they often misunderstand and think it’s creativity for the sake of creativity. When in actual fact one of the things that you guys have been particularly strong at is the strategic development and having a methodology of getting the communication strategy right so you can then launch being provocative from there.

Mark:

Yeah, I think divorcing the strategy and the execution or find of separating them and being very strategic up front serves you much better in terms of the type of work you can then leap from. I think for every client we work with we have a clear purpose, a clear blueprint for that client and we find it really hard if we don’t start there. Just making ads was never part of what we wanted to do.

We did want to actually try and transform businesses and brands and I think that is also part of why we chose to eventual sell to a management consultancy like Accenture was because it was additive to the ability to transform a business. They do things that we don’t and vice versa.

Darren:

Over the years there’s been rumours you’ve been approached by Saatchi and I‘m sure there’s been lots of people knocking at the door because you were drawing so much attention to yourself.

Selling out to one of the holding companies; what would that have meant for you compared with where you’ve ended up?

Mark:

It’s been a journey right and it’s interesting because we started the business and we wanted to be in business. Just head down, it was about creating great work, working with great clients and great people and we did and suddenly you get noticed. You’re doing some interesting things and someone knocks on your door and says they’d like to buy your company. It’s an interesting moment because suddenly you are thinking about all these existential things that you haven’t previously had to think about. You didn’t start out thinking about them.

Darren:

You mean you didn’t go to the Gerry McGuire school of negotiation and say, show me the money.

Mark:

No, absolutely in the beginning there was a real purist kind of notion to The Monkeys about just trying to do the work that we always wanted to do but felt wasn’t always achievable in the agencies that we’d worked in.

Darren:

Because all three of you have had significant careers in major agencies hadn’t you?

Mark:

We had, we hadn’t done the big jobs in major agencies but were certainly on the path to that. But what we were seeing in the industry was it was changing at warp speed and we felt like we wanted to try and shape a business that was set up to work with that change not to have to re-orientate a legacy kind of business.

They were interesting approaches and over time we got to understand what it is that we wanted out of the business we had created and where we wanted to take it to next. With the timing it was good to kind of evolve and bet on something different, which being part of Accenture Interactive is certainly about. It brings in creativity, consultancy and technology; I think all those things are highly relevant today.

Darren:

One of the other issues obviously is, as you’ve grown and I’m stereotyping here, but Justin Scott had the ultimate responsibility for the product you know the output is there so your role has been managing and creating the business to support that.

What has been the biggest challenge from that perspective? Not from the creative but from managing the business. You started twelve years from today; you must have learnt so many things about running a business.

Mark:

I’ve never run a business before, this is the first business that I’ve run and over that time you just get better at understanding the mechanics of running an organisation. In our business it’s about people and clients, it’s pretty simple.

Darren:

You say it’s simple but it’s complex in dealing with people and clients.

Mark:

You kind of deal with growth and growing pains and all the set up costs around a business; cash flow etc working with a finance department and juggling the demands of work that is going through the business at that moment in time but also with an eye to future, what business you need to become to get to the next stage.

At different points of time that was more challenging than others. There were points in time where it got difficult; you had a group of clients today that was going to change and you had to get on the front foot in terms of new business to get to the next stage.

You go from working with small clients on projects to longer term retained relationships and those dynamics change the nature of your organisation. As you grow you need a management team, you need structures in place that can deliver not only the product but a process that allows the product to be as good as it was when you had a handful of people around the table.

They are good challenges and I think the great thing about the partnership that we have had is, that it has worked because we have all complimented each other and found a way to get through the tough times with a healthy level of debate, sometimes argument but ultimately we’ve brushed ourselves down and moved forward and not looked back.

There’s a bit of determination, tenacity, smarts, naivety, good luck, all the factors in play are always there at any moment in time but ultimately you make your own luck by working harder than anyone to try and deliver and make sure you have high standards.

The standard of work across the client base we’ve had and the commitment to the clients has proven to always be there. That’s meant clients have stayed with us for long periods of time which has meant you can build on that foundation.

We are incredibly thankful to those clients in the early days that just backed us. Foxtel was the only big client that we had. It was a bold choice to go to Three Drunk Monkeys at the time in Redfern with a big and successful company run by Kim Williams, Graham Walsh, Patrick Delaney, all those characters were part of the team that gave us our first go. Subsequently there are other clients that have also stayed with us for a long time. The likes of Ubank, Parmalat, Ikea, Telstra, they’ve been long term partners.

Darren:

We’ve seen in the last decade the churning agency-client relationship and you’ve managed to hold those clients.

You mentioned people are so important. The Australian market is relatively small, and earlier on you mentioned you went and recruited around the world, I was going to ask you, is there a Monkey type person that fits in but then also I get the feeling it’s quite a diverse group as well?

Mark:

Yeah, we’ve never wanted to just cookie-cutter the perfect monkey. I think part of having a creative business is allowing people to be themselves and express the opportunity in front of them. I think if there are a few characteristics that we like it’s that people are down-to-earth, straight up, smart and can really try and find ways through but we’ve always had a really diverse group of people from various different backgrounds.

We’ve taken some punts on people you wouldn’t typically put in roles because the circumstances of the business at the time necessitated that. But just being open-minded and not trying to be too rigid with how you view people and what they can do in your organisation—just to allow them to be good at what they do.

Darren:

And find people who have the right attitude or aptitude. It is more an attitude rather than a particular type of person isn’t it?

Mark:

I think so. A lot of agencies spend a lot of time complaining about their clients. It seems to be a bit of a thing in our industry but they are ultimately our lifeblood. I think when you run a business and own it you’re responsible for turning the lights on every day and keeping them on. You have a different level of respect for that business and also probably a different level of commitment to it as well. That’s served us well.

There are a lot of talented people who have had a go at starting a business and it might be the wrong combination of people or maybe they just didn’t want to stay the path. There were times over the 13 years when you’d go, ‘oh my god, let’s just end’.

Darren:

But I can’t imagine you ever had ground-hog days; it was never the same crap. It was always new challenges?

Mark:

There’s never been a dull moment. I think that’s the greatest thing about the business—it is a great business to be a part of. It’s dynamic, it’s creative, there are always new challenges, new ways of solving a problem. And I think with the state of the market and where technology is taking us the opportunities for creativity are even bigger and better than they have ever been.

Darren:

It’s interesting you raise that because one of the things we’re seeing is that technology is from an output point of view is creating more and more demand for production, producing all these assets.

Marketing budgets are staying virtually flat, if in real terms going backwards and so many agencies have hitched their remuneration to producing things rather than the value of the ideas.

Mark:

And this is a pillar of the Comms Council strategy; trying to find an alternative to the cost plus pricing model that’s in market and I think value-based pricing is a big part of the agenda for the Comms Council.

Trying to find really tangible case studies that demonstrate its success both for the client and an agency. It does have to change. Someone pointed out (I think it was Ron Baker in one of his courses); he highlighted during the era of the madmen in the 50s advertising agencies were making a margin of 30%.

Today it’s lucky to be 10. At the same time there is an explosion of channels and agencies are being asked to do 5 to 10 times more than what they ever been asked in the past so it has to change.

Darren:

My business partner in the U.S, Mike Farmer, he’s tracked it from ’95 to now; he says the breakeven point for agencies was around 2006. So, from 1995 the actual fees that have been paid have gone down while the scopes of work have increased.

Mark:

It’s unsustainable.

Darren:

2006—it’s 12 years and the industry have been running on empty if not in the negative.

Mark:

And clients need that to change as well because they need bright, creative people that can solve challenges for their businesses. I think the role for the agency has never been greater but the challenge around remuneration is significant and it has to evolve. That’s a big part of the agenda for the Comms Council.

Darren:

We’ve been doing value-based pricing since 2007.

Mark:

There are some great examples of agencies out there trying to change the game in that respect. From the odd deal here and there it’s got to become more commonplace.

Darren:

Pitching; you guys have been particularly successful and one of the things I’ve always admired is if I phone an agency CEO and say, ‘I’ve got a…’ ‘yes, we’re in’ whereas you don’t do that.

Mark:

Agencies are always optimistic when it comes to pitching. It’s the nature of the type of business we are. We’re a creative business and we always kind of look for the bright side but the reality is not every agency and client are a match and if you pick the wrong clients they will ruin your business.

And we’ve seen examples in recent years of agencies that have taken on clients and it’s just been a terrible fit. And at the time those clients will tell you they’re changing and it’s going to be different but the reality is…

Darren:

It’s very hard for them to change their spots.

Mark:

That’s it and they’re not going to change. Agencies are small businesses in comparison to the clients they serve and they’re never going to change for the agency they work with.

So, you’ve got to be really particular on the type of clients you bring into the company; culturally in terms of the work and output they want to achieve and also the style of business and who’s running that marketing department at the time.

Darren:

And not only are client/agency relationships churning but CMOs and Heads of Marketing are churning as well. So you win a piece of business with one person who has a particular view and before you know it they’ve moved on and there’s someone else running the show.

Mark:

And I think that’s where agencies need to do the right job not necessarily always the job the client asks of them at that moment of time because often what clients are asking for isn’t actually what they need and I think great advice from great agencies is always to deliver what they need and that serves you longer than the two years the CMO might be in a job. I think that’s really important and probably why we have worked for clients over that time there have been many changes in CMO’s we worked with but the strategies have stayed in place.

Darren:

So that’s a good point because we are seeing a rise supposedly in in-house agencies. How’s an in-house agency ever going to give the organisation what they need when they are part of the system that’s demanding what they want.

Mark:

Look I think again it’s down to probably what you raised earlier around hitching your wagon to production as opposed to the value of what you are delivering for a client because the production side of it can always be commoditized or bought and in some way shape or form can be bought in-house. Now that’s not to say that obviously there’s varying degrees of quality in production, but there’s a large part of what an agency does that is repeating material or replicating it.

Darren:

Or just producing versions.

Mark:

Versions, that’s right.

Darren:

We use the automotive industry as a metaphor. When you look at any major auto business, they will spend millions and millions of dollars doing the research and designing and building a prototype. But then once that’s approved they will do everything possible to make the production line fast, efficient and low cost without compromising quality so that they can produce the red one silver one green one with whatever combinations you want in real time.

And I think especially all the digital channels, that’s where it’s coming to. You’re either going to be the part that creates the prototype and defines it and specifies it in a way that you are willing to hand it over to the production line. Then the production line is going to be a very small margin business.

Mark:

It is, it is and I think again that’s what is going to challenge agencies to rethink how they do business.

Darren:

We are still seeing agencies that just to do the seven resizes of a set of display ads are doing it manually and charging thousands of dollars when there’s already technology platforms that will automate it.

Mark:

That’s right, and we are seeing outsourcing to India and Chile and places like that to do it even cheaper. I welcome some of those changes because it is going to force a rethink around the value of what an ad agency delivers and that’s good for the industry.

It’s forced and it’s going to hurt for a bit but ultimately that’s where the new breed of agency and clients will start doing business.

Darren:

People worry about the creative talent within agencies but if you embrace that prototype model, creative people like solving problems creatively and they do like to create the solution, not just speculate the solution. So, if you get to create the prototype it’s then learning to let go of it.

Mark:

Yeah, I think most creative businesses are happy to let go and the versioning etc is probably the stuff that most people would be happy to let go.

Darren:

Unless your pricing model is all on making your margin on the versioning because you’ve taken a bath on the actual value that you created in the first place.

Mark:

It’s a great conversation and it’s at the forefront of where the industry needs to go next and where we’re going to play a role. I’ll play a role as Chair of the Comms Council but also the Monkeys as part of Accenture Interactive. It’s no different in management consulting I might add.

They’re also looking at value-based pricing and ways of getting some skin in the game, to put some risk and reward into contracts.

Darren:

Other than savings, hopefully.

Mark:

Absolutely.

Darren:

Like real value not just costs reduction.

Mark:

There are some great case studies around the world on that activity happening both in agencies and management consulting.

Darren:

Now, you’ve brought up Accenture a couple of times. So, when they came knocking on the door or did you approach them?

Mark:

Having received many approaches we felt like the best way to get an outcome that we wanted to be part of was to take it into our own hands. So, we looked at a couple of emerging areas where we thought there was a future or something interesting and a combination of companies that could create something different.

Obviously, there are the holding companies. We looked at the media/ text based and then we looked in the consulting world. What we liked about Accenture Interactive specifically was their capability in technology.

And that’s global scale where we found our brand and capability in combination with that was interesting and different.

Darren:

The Karmarama deal had gone ahead just prior to this or were you talking to them?

Mark:

We were already talking to them and then that got announced so it was serendipity.

Darren:

Great minds often think alike.

Mark:

There was obviously something in the water, right? In the last 12 months globally Deloitte, PWC, BCG, McKinsey etc. have all made plays in this kind of marketing communications.

Darren:

All these CMO advisories mean we’re bumping up against them all the time. You have publicly stated many times that it’s not really an acquisition, that they’ve taken over; that you really get on with the job. You’re now able to access the resources and the capabilities of that broader group.

Mark:

The standalone Monkey’s business is continuing to flourish and thrive; we’ve had a great 12 months. But what’s interesting is where we’ve worked with Fjord, which is a products and services design business and Accenture to deliver something at scale which we couldn’t have dome previously.

And there have been a number of projects like that that have allowed us to include a branded communications solution with a product and service design and technology solution combined and that’s starting to get to a point where you’re bringing together brand and customer experience but being able to deliver that spectrum of brand-led thinking.

The team is starting to learn new things and vice versa but I think everybody starts to bring something together that everybody’s done in isolation and that benefits the client but it also benefits the general sense of The Monkeys’ business learning and evolving.

Just doing the same old thing over and over again, you get very good at it but there’s a certain point in time where there are diminishing returns and the interest wanes and fatigue and complacency sets in.

Darren:

Innovation comes from getting various perspectives.

Mark:

Yeah, and you need a certain amount of restlessness. We’ve always been comfortable doing things we haven’t done before.

Darren:

A lot of people talked about cultural clashes. It’s interesting that that was seen as one of the hurdles that’s going to happen.

Mark:

It’s allowing cultures to survive. I think, ultimately in business today you need a combination of right and left brain talents to come together to get something significant done. And that’s always been the case whether it’s creating a film or TV series or a piece of technology that’s brand led.

It’s the same open-mindedness to collaborate and deliver something unique, and to learn, to evolve, and not dig your heels in and stick with what you know. I really enjoy the culture differences that you need to have around the table to deliver something unique.

And I think that people who are around that table also feel like they’re doing something new and different, and that’s a good place to be.

Darren:

Well it’s challenging people to rethink their perceptions.

Mark:

It’s not easy but nothing is that changes an industry or the game as it’s always been played.

Darren:

Mark, this has been fantastic; worth that 12 year wait. Just before we go, I’ve got one question for you. How much exactly was it you guys walked away with?

 

Ideal for marketers, advertisers, media and commercial communications professionals, Managing Marketing is a podcast hosted by Darren Woolley. Access all the episodes here

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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: darren@trinityp3.com

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