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Managing Marketing: Building a New World Agency

Jack_Watts

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.

Jack Watts is the Global CEO, of Bastion, Australia’s largest independent agency, with offices in the USA, New Zealand and of course Australia. Founded in 2009 by Jack and his brother, they have grown through developing and acquiring a formidable breadth of specialist capabilities across the communication spectrum. Sharing their foundation story, he demonstrates how two industry outsiders have taken on the large holding companies to create a New World Agency.

You can listen to the podcast here:

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Transcription:

Darren:

Welcome to Managing Marketing, a weekly podcast where we discuss the issues and opportunities facing marketing, media, and advertising with industry thought leaders and practitioners.

Today, I’m sitting down with Jack Watts, the Global CEO of Australia’s largest independent agency, Bastion. Welcome, Jack.

Jack:

Thanks for having me, Darren.

Darren:

Look, I love a couple of things about the largest independent agency in Australia. The first one is independence because I have to tell you I’ve really noticed particularly over the last couple of years, that this idea of independence has really started to get some resonance with a lot of marketers. Have you felt the same thing or is this just who you are?

Jack:

I think absolutely, Darren. We started talking five years ago about the age of independence. It was sort of a snappy marketing line we liked to get more clients to pick independence. But it certainly seems like over particularly, the last couple of years through COVID, it’s really picked up steam as clients … I think what defines independence is agile, number one: that you’re under your own steam. You don’t have to go and ask London or Paris or Tokyo for permission.

Agile, great expertise. Typically, the best people in my mind are in the independent sector, and you’ve got great care. There’s something about being independent, whether it be the guy you buy coffee off downstairs or your local restaurant or cafe or whatever it is — if you are paying to keep the lights on, you do a good job and you care about it. And there’s something about that independent ethos that I just think we resonate with clients today.

Darren:

And Jack, one of the things that I’ve noticed and clients sometimes struggle with it, is the sort of longevity that the management of independent agencies have. Because after all, they’re the ones that have usually got the equity in the company and the name on the door, usually, and so, they’re there for a long time.

What you find in a lot of the network agencies is CEOs come and go, because they’re appointed in there to do a job. And there’s something about that sort of continuous management and ownership that’s really appealing, I think to a lot of marketers.

Jack:

I completely agree. I mean, turnover’s been a problem in this industry since it started. And it is in any professional services industry. But when you’ve got independents, who you know are the rock-solid foundations of the business, and particularly, some of our client relationships date back to the very beginning 12 years ago.

And when you’ve got the continuity of the IP and the client’s business, turnover’s as much a problem in a client’s business as it is an agency business. So, when you’ve got an external source of IP in your agency that can carry through what worked and what hasn’t on the evolution of a business over sometimes more than a decade, I think clients find that very valuable.

Darren:

Well, absolutely because you made me remember Samuelson Talbot years ago before you even got into advertising, but we’ll get to that in a minute — they had the PZ Cussons business in Australia for like 40 years. And when they finally lost the business, I think went at DDB, they ran a full-page ad in the Fin Review (when we ran full-page ads in the Fin Review) that congratulated them and said that in 43 years, they’d had so many CEOs, so many CMOs, but only one agency.

And I thought that was such a powerful message of that continuity and owning, in some ways, the heritage and the tradition of that company in this country: is something that you would only see really in an independent relationship because there are too many moving parts in some of these big multinationals.

But you are in many ways, challenging them because the other line I like in there is “the largest.” And I know people go big is not better necessarily, but you’ve got there fairly quickly. Give us some background on Bastion, and I know it’s gone through Bastion Collective and a few other names. But it’s not that old, relatively speaking, is it? The company started … what? Just over a decade ago?

Jack:

Yes. So, we’ve been going 12 years Darren, and it feels like … I’m 34, so you got-

Darren:

So, you were a baby when it started?

Jack:

Yeah, me at 22 and my brother Fergus at 24 in the genesis of it, in about 2009, 2010.

Darren:

So, also coming out on the back end of the global financial crisis.

Jack:

That’s right. Well, we both lost our jobs. He was a footballer. He played AFL for Adelaide and St. Kilda. And I was there one day at Port Melbourne and he was on the outer wing, got tackled, broke his leg in eight different places. I remember watching him get carted off the ground. And it was like, well, that’s going to be hard to come back from.

I was a currency trader. I thought that was my lot in life and in finance and markets and all that sort of stuff. And I got the sack too in the GFC. So, we were both living together, couldn’t pay the rent, neither of us. And it’s like, well, the options are we got to either find a way to pay the rent or we’re moving back in with our parents, which was the worst-case scenario for a couple of men in their early twenties.

And so, he went off and worked in an advertising agency. I scratched around trying to do a couple things. And in the end, he started a creative agency and I started a sponsorship agency at the same time. So, we got an office together, shared resources, built the things in tandem for the first year until we said, “Well, this makes a lot more sense together.”

So, there’s a good chunk of our twenties, Darren, where we spent a lot of time working up what we were doing. To be honest, I really feel like we’ve only put the pieces together in the business in the last three years, I would say. Thankfully, that really started to come together in late 2019, which had us in good nick when COVID hit, and then we were up against it and every agency was up against it.

So, it’s been a hell of a journey. I mean, every mistake you could possibly make of being an impetuous head strong young man or two young men who thought they were the smartest people in every room they walked into. We made so many mistakes, lost big chunks of money on things that were just obviously, we shouldn’t have been doing. But they were great learning opportunities and got us to the point we’re at today.

Darren:

Well, it’s that old saying, isn’t it? What doesn’t kill you makes you stronger in business, especially-

Jack:

Absolutely.

Darren:

Because I always think it’s funny how we love focusing on success, but really the biggest lessons I’ve learned over 22 years running this business, it’s that all those mistakes that you don’t necessarily go around shouting, “Hey, I made another mistake or I lost a lot of money.”

Though, one of them is in 2007, I opened offices in Singapore and Hong Kong a week before the global financial crisis. So, great moments in poor timing.

Jack:

I used to find that playing football. Like I only played amateur football in Melbourne, but it was like if we lost by a point, we would tear ourselves to pieces, looking for every piece of improvement we possibly could.

If we won by a point, which was typically the bounce of a ball, just luck, we would celebrate all night long and we’re champions and we were going to win the premiership and all that sort of stuff. And really, whether we won or lost that day was down to luck. But just what it said on the scoreboard meant we completely changed our approach post-game and it never made any sense to me. It’s like we should be changing when we’re winning. Like that’s the time to make the changes.

Darren:

Yeah, what did we do that we should do more of to keep winning.

Jack:

Absolutely, absolutely.

Darren:

But Jack, where did the name Bastion come from? Because I love it from the point of it creates this sense of strength and permanence in a way. It’s the bastion of advertising.

Jack:

Well, you’ve got to go back to the genesis, which was in the GFC and what our job was, was to convince clients to spend money when everything suggested they shouldn’t be spending money, and our whole thing was active defense. It’s not enough to just defend. You have to actively defend. And what we’ve been through over the last couple of years, invest when times are tough to grow market share out the back of the pandemic in this case or the global financial crisis 10 years ago.

And so, what a bastion is, it’s a medieval word. So, it was one of the biggest innovations in medieval fighting, which was, you could defend your castle until the enemy was at the gates. And when they were at the gates, you couldn’t shoot arrows down at them because they were too close. So, a bastion was like a triangular sort of jut that was built into these castles so that when the enemy was at the gates, you could fire back upon them.

And our whole analogy was that the enemy’s at the gates, you need to innovate, hence Bastion, which was the original innovation of active defense. It was a good story at the time.

Darren:

Yeah. No, and a good story now, because I think a lot of the times people are focusing on the long term, but in some ways, you only get to the long term through a succession of battles, don’t you?

Jack:

Absolutely.

Darren:

Interesting. So, when did the vision sort of coalesce for you around this idea of building the biggest or was it ever a vision to build the biggest?

Jack:

Look, I would love to say Darren, we started out 12 years ago with this grand vision. The reality is we had no idea what we were doing and the primary objective was pay the rent, not to move back in with our parents. And when that was covered, it was like the secondary objective was, well, let’s avoid getting real jobs for as long as possible because this is good fun.

It was hard work obviously, but this was really good fun. And it wasn’t until we started putting the group together, we just followed the bouncing ball with our clients. It was like, Bob was doing sponsorship, Fergus was doing creative. We started patting out the edges of each service offering. And then what kept coming up was our clients kept asking for PR services because that was the bit that fit in between.

And so, we went and bought a PR business. It was called Undertone Media. It was a friend of a friend, Johnny Martino who started that business in Richmond and we brought that business in. And then all of a sudden, we started to build out this group.

So, it wasn’t until about five years ago that we settled on this objective going, well, hang on, we’re actually building something. What is that? Because we can pay the rent and we don’t have to get real jobs anymore. This is our job. So, it’s like what does this mean?

And so, hence where we settled on building the largest independent agency. And at that point, we had a line about the bastion of Australian ingenuity, rediscovering that sense of Australian ingenuity: innovative problem-solving. And it’s a topic I’m extremely passionate about. I could talk your arm off about the future of Australia as an innovative nation.

But yeah, now, we’re very much as we’ve expanded globally, about building the new world agency.

Darren:

And as you’ve gone global, and particularly you’ve gone into the US — have you taken that Australian culture and ingenuity into that marketplace, and how’s it resonating?

Jack:

Look, absolutely. Everything we’ve done. And that was one of the big mistakes we made along the journey. I think it must have been the mid-2010s, like 2015, 16, we went to London for no good reason. A guy that worked for us who was really good, his girlfriend, his partner was a teacher in a school in Melbourne. She went to New Zealand for a holiday, turned out the school never filed her visa. She got deported back to the UK.

So, he moved back with her and we started a London office. All of a sudden, we had 20 people over there. My brother moved over there, it was actually going quite well. As you know, it’s an extremely competitive market. And the whole thing fell in the heap. We just went too fast and it cost us a million bucks, like a million dollars.

And that was a sinkhole in the middle of the joint that we couldn’t afford and certainly, didn’t know how to deal with it at the time. So, the lesson was we’re going to build each business with locals through an acquisition strategy, largely in the US, on the ground with a US CEO: on New Zealand with a New Zealand CEO, it’s a business built with locals.

But what we’re trying to export is what you said, which is an Australian way of doing things. A sense of what I said before, agility, expertise, a sort of partnership attitude with clients where it’s a no-bullshit approach. Where we do good work, we’re driven, we’re hungry, but we have fun along the way. And that’s the set of values in the business we’re trying to export in every market we operate in.

Darren:

And it’s interesting because part of that is achievable because of the idea of the founders. There’s that concept about the founders actually hold the values and the culture of the organisation in them. It must be really important to find the right local partners to actually export that too, because they’ll have their own values and their own culture that they bring to the table. And then how do you sort of implant that or transfer that to them?

Jack:

It’s a cracking question, Darren. And I mean, particularly with the New Zealand business we bought last October. 60 staff over there, great business, fantastic leader in Simon Curran, been running 15 years, great clients: Air New Zealand, Spark, Genesis — all the big clients over there. It’s pretty much the biggest … if it’s not the biggest independent, it’s neck and neck with the biggest independent over there. And an incredibly intricate culture.

I think Australians sometimes fall in the end of the trap of New Zealand being the ninth state and territory of Australia, but it’s so different and working with the team over there for the last six months, particularly the journey they’re on … the journey on the relationship with the Māori people and the integration of that into New Zealand culture: it’s so intrinsically integrated that I’ve learned so much about that. We’re bringing back to Australia our integration of indigenous culture into our business.

So, we’re trying to build a new world agency model that’s consistent in every market (and I’m sure we’ll talk about that in a second), with regional culture and a consistent set of values. And there are three different things and the balance I’m trying to get right, is what do you say has to be mandated, what has to be the same in every region, and what can be different — because there has to be both. The last thing we want to do is be a WPP or a Dentsu that just goes, “Here’s how you do it, guys. I don’t care about your local customs and local cultures and what local clients want, this is how we do things.”

Darren:

Yeah. It’s interesting you should say that. And one, you’ve mentioned the new world agency, which I want to get to. But before that, when you talk about WPP, the brands within there — and my last agency I worked at before I started TrinityP3 was J. Walter Thompson. And it’s interesting when you see the history.

Walter Thompson was a New York agency. Commodore J. Walter Thompson was a member of the New York Yacht Club and started selling media on behalf of media owners. And then it grew into an advertising agency, but it really wasn’t until the 20th century (that’s the 19th century started it) — the 20th century when they started to expand globally. And there was a guy James Webb Young, who was sort of the architect and the person that carried JWT to virtually every corner of the world.

And he did that on the back of some big clients, like the Krafts of the world, just wherever they had a plant, they opened a J. Walter Thompson office. And while they recruited local people, they exported the culture of the original agency. It was that almost US imperialism of here’s the US culture, here’s our advertising agency and bang, there it is going to work in Melbourne. There, it is gonna work in San Diego, or there it’s gonna work in Shanghai, for instance — not back then, but now.

And I found it really interesting, because it’s such an old imperialist way of thinking. Whereas what you’ve shared is almost quite 21st century, isn’t it?

Jack:

Oh, absolutely. Look, and as an aside, I’m sure we’ll talk about WPP in a second, but such a travesty that the JWT name no longer exists. A great business that was a hundred plus years old, as you said, and yeah, really defined so much about the way advertising is structured.

But I think an Australian set of values, an Australian way of doing things is imminently exportable. And we’ve been doing that in Australia since the modern-day Australia started. And I think that is congruent, absolutely congruent around the world and resonates. And when I go to the US and go and visit our major clients, which I did last month, it’s a way of doing things that resonates with people. There’s a certain amount of spirit that goes with it.

We used to talk about it in the early days … I’m sure you’ve seen Toy Story, but the scene where Woody goes to Buzz, Buzz can’t fly. And then Buzz goes “I can’t fly.” He goes, “Okay, well, prove it.” And Buzz just bounces off things around the room and he ends up landing perfectly. And he goes “There, I can fly.” And Woody goes that wasn’t flying, that was falling with style.

And that was our motto in the early days. You go off, we are young and we’re in our twenties trying to sell big stuff to big clients. If we don’t have 30 years of expertise behind us, we’re going to do it with style. So, if we’re going to fall, we’re going to fall with style.

And so, we used to have elaborate presentations to clients and dress up in all sorts of things. And I remember one time, I did a sports presentation to a client and I had the kit of the sports club underneath my suit and I stripped off in the office. And it was a level of chutzpah, we needed to compete because if we didn’t have the expertise, we had to have the style.

And I’ve tried to keep the ethos of that as we’ve expanded our business globally because often, for clients — and I think we forget this as agencies: we are typically the best part of their day. We’re presenting-

Darren:

Well, you can be.

Jack:

You can be.

Darren:

But it’s up to you. I mean, this is going back to what you said almost at the start of our conversation. It was about this is a job that’s fun compared to foreign exchange fluctuations and training for the weekly AFL match. This is a lot more fun or can be. But don’t you think the industry’s lost?

Jack:

The industry has become far too serious. And I know why: we talked about attributions, direct sales models, particularly in media, which is all about return on investment as it well should be. But the industry’s built on style. And what I love about the industry is the people it attracts.

I’ve always been a proponent, and why I love this industry so much, is you got to have a bit of a screw loose to work in it because you can typically get paid more and work less hours somewhere else in-house typically. So, to be attracted to an agency to start with, you got to want variety and a sense of difference in your life and to be surrounded by enthusiastic, tenacious people.

So, it’s filled with people who wanted to be artists and writers and statisticians, and journalists, and all these walks of life come into the agency industry, which is why I love it so much. I just think the industry’s lost track of how much fun this is.

Darren:

And one of the things that I’ve always noticed is the best advertising people are the ones that love constant challenge. And I say to clients all the time, “You want to know how to get the most value out of your agency? It’s not by squeezing them on the number of hours, it’s about giving them a constant challenge to solve, and then giving them the acknowledgement when they solve it.”

Because I don’t care how many procurement people sit there and work out how many FTEs and average costs per FTE. If you want a strategic person, an account management person, a creative person, a production person, thinking about your problem 24/7 and how to fix it, just give them great problems to solve for you.

Jack:

Absolutely. Typically, the gnarliest briefs are the funnest ones. We’ve been working with a new car rental brand across five or six different services within our business, launching sixth: the German brand in this country on December 1 from scratch.

Hell of an interesting proposition, it’s a brand globally that does really interesting, intriguing communications and advertising. And basically, here, we had carte blanche and an incredible client on that journey that it was a gnarly problem. And it was just so much fun to solve because you had to pull in PR specialists and creatives and yeah, social media people across the business to come together to solve that challenge.

And they’re typically the best when you don’t get … I also think the industry’s gone too much about here’s the advertising brief or here’s the PR brief. It’s like can we just get the problem? Tell us the problem, because it may not be a PR solution or it may not be a social media solution or a creative solution.

Darren:

And look, I absolutely agree with you, but I think the other problem is that the businesses turned into not a business of solving problems, but a business of selling services. And I call this the sort of corporatisation of advertising.

Going back to your point about when we started getting holding companies, holding companies went and bought very good agencies, but then of course, they listed. And so, they were more worried about how to keep the shareholders happy than they were about keeping their clients happy in a way, that it was about running the business better, squeezing the margins to make sure they got their costs down and maximised margins so they could report increased profits.

And so, there was this sort of paradox in a way, how do we keep shareholders happy and how do we keep clients happy? Because I always find it interesting, really switched-on clients sit there and go, “I noticed Omnicom have just announced record profits, is that my money?” It’s like it’s weird. Because again, when you’re an independent private company, you’re not going around telling the world, “Oh, look how much money I’ve made.” What better way to piss off a client that thinks you’re overcharging?

Jack:

Oh, I couldn’t agree more, Darren. And there’s so many topics you raised just there. I mean, one of the great shames in this industry is what listing STW do. That was a great business and much before my time. As I said, I wasn’t around for much of it, but so many people in our business used to work in the Singo’s and STWs and even the Mojos when that got bought.

Just the corporatisation of creative, they’re juxtaposing forces. They’re almost like opposite magnets. And don’t get me wrong, there’s a certain amount of rigour and detail and margin that needs to be driven out of agencies, because I feel very strongly about that. That fundamentally, we got a responsibility to make sure all our staff’s jobs are secure.

So, we’re unashamedly driven by a financially secure business to make sure that everyone’s going to put food on the table for as long as they’ve got a job at Bastion, and Bastion’s going to last a very long time. But just the corporatisation of communications and creative has just strung the life out of this business. And the holding co model is just completely taking the fun out of it.

And I could go on all day about it … I can swear, can I?

Darren:

Yeah.

Jack:

How fucked the holdco model is. I mean, it’s just wrong. Can we just agree there?

Darren:

No, look, I have come to the realisation that it, in many ways, meets the needs of a small, but small number of clients, but very large clients. In some ways, if you’ve got a global business and you are wanting control over that global business, then appointing a global network of agencies to service it is a way of achieving control, but not necessarily doing the best advertising, right?

Jack:

Absolutely.

Darren:

And so, I think it works for those. I feel sorry for advertisers that might be in only two or three markets and are with one of those, because what they don’t realise is that almost all of these holding companies and the networks that belong to the holding companies have to pay a percentage of all their revenue.

Jack:

Of course.

Darren:

And it can be anywhere between, I’ve heard as little as 7 or 8% up to 15%. But that’s even for the independent clients. So, there’s between 8 and 15% of what you’re paying that agency that’s going to run this infrastructure, which you don’t get within, for instance, a local business or an independent business because it just all goes into a pot.

Jack:

Well, if you’re a client of a holdco, as you say, 10% of your fees are going to London, Paris, Tokyo, and New York — fact, and their overheads run at 25%. That’s after the 10% charge back to global. By the time you’ve got offices and you’ve got central services, particularly in listed businesses when you’ve got to have so many resources managing the listed … obviously, WPP’s unlisted locally, but just those central costs kill agencies. And if we can talk about the new world model and what we believe-

Darren:

Well, it’s a good segue there because what is the new world model? What is the new world agency?

Jack:

I’m glad you ask, Darren, because obviously, it’s a topic I’m passionate about, fits into why we’ve structured our business the way we have. But I’ll take a step back more broadly, and outside of communications or the service industry and just going into 10 or 15 years of … digital disruption is the wrong word. It’s customer experience disruption.

What has happened over 10 or 15 years, all of us as consumers, there are businesses that are largely product-led businesses. They sell things you can touch and feel and see, have come from nothing, didn’t exist 10 or 15 years ago — to be the absolute dominant market player. And you know the businesses I’m talking about.

Darren:

Yeah.

Jack:

Amazon, Netflix, Uber, Tesla, they do the same thing. Netflix and Blockbuster deliver the exact same product, except Netflix just deliver in a much more customer friendly way. And that’s why you’ve seen this massive disruption in every part of the product industry where new world players have started from scratch, come through the pack to dominate that industry.

Now, we haven’t seen that so much in the service industry because the benefits of incumbency run much deeper. I’m talking about retail banks, investment banks, consultancies, and marketing agencies lives. There’s a few more like that, but what you haven’t seen is mass disruption in the service industry, and that’s what you’re starting to see now.

You’re starting to see new world models come and challenge all of those, where you look at the big four banks and you look at Judo Bank launching from scratch, a client of ours, go from nothing to a 2 billion plus valuation in five or six years. Those guys, Joseph Healy and everyone at Judo, largely doing the same thing they were doing at NAB.

They all came out of NAB Business Bank, pretty much the same offering with a greater level of customer service, 0 to 2 billion valuation. You see Sayers do it in consultancies. Obviously, Luke Sayers come out of … he was at PWC, I think. Come out of PWC, start Sayers going … I think they’re up to 150 people in Melbourne currently in 18 months.

You see it in investment banks like Barrenjoey in Sydney. Again, everyone out of UBS and a couple other banks, new world model customer service proposition. And that’s what we are trying to do in … well, that’s what we are doing in communications agencies. And let’s talk about how that’s structured because-

Darren:

What’s that actually mean, in a sort of marketers’ experience sense?

Jack:

Yeah. Right. So, we are here to create the new world agency in communications and we’re here to do that in every market around the world. And I’ll talk about why we’ve gone overseas, because there’s been a specific reason, and specific learnings from failed operations abroad.

But when you look at of the holdco model and I’m happy to be discredited, I’m happy for any of the listeners here to write to you or me saying I’m wrong. But the holdco model was built in a Mad Men era of advertising. It was built around a proposition of as many front doors as possible, sacrifice a bit of margin on the front door, make money on the back door.

Bulk media commissions, AVB (agency volume bonuses), which was Harold shtick. That was Harold’s goal and every other media agency, and bulk and volume production. Multiple front doors, competing internal agencies, get the volume, we’ll make the money on the back end.

Obviously, those two rivers of gold, media buying, and production have changed dramatically. Media buying commission’s gone from 10 or 20% to what is it now? 4, 5, 6%? And where you used to make million-dollar ads every week, you now might make one a month, one a quarter. The model of production is a lot harder model to make money out of.

Darren:

Well, and even worse because it’s moved away from the big TV production. And really, the volume is in the thousands of social media updates that are all being-

Jack:

Absolutely, and where you used to make money is in the big ads because you’d be creaming margin at every step of the way, all the multinationals will be. And so, the whole model doesn’t make any sense because the money makers on the back door don’t make money anymore/make nowhere near as much.

Which is why you’re seeing JWT and Wunderman-

Darren:

Consolidation.

Jack:

That’s why you’re saying consolidation because the costs of multiple front doors and competing internal agencies doesn’t make sense anymore, because you can’t make the money on the back end. And so, clients want less agencies, not more, in my opinion. Because the consumer journey has changed so much, the consumer doesn’t … it’s completely the discretion of the consumer when to come in and out of the customer journey, and so you’ve got to be consistent across all channels.

Darren:

Okay, and look, I completely agree with what you’re saying. And yes, there’s an argument for consolidation, but a lot of the holding and companies, Dentsu, for instance, are trying to compress this down so that there’s one door and all the services.

Omnicom and IPG to less, but WPP and Publicis Power of One, they’re all moving in that direction. And in some ways, when I look at the Bastion model, you’ve got the same thing. You’ve got the one name, but then you’ve got these sections underneath that. And I noticed when you changed the name from Bastion Collective to Bastion, it felt like you’re a mini holding company model. How’s it different from replicating what they’re doing?

Jack:

Well, I think what the holding companies are trying to be, the models they’re trying to build today for the modern world is what we’ve already built. They’re trying to be one front door, centres of excellence in every service, fully integrated model to the client, be able to offer one centralised account service team that can pull in and out experts of any discipline to take their campaigns and their marketing across every touch point of consumer journey.

So, are we a holding company? No, we’re one big agency, but with multiple services. You see Chip rebranded a couple of weeks ago. I think they’ve rebranded to look a lot like what we’ve built, which is one name under one roof.

Darren:

Well, it is because, and in some ways, technology’s enabled this, is the customer journey is almost all digital now. Every aspect of the customer journey or the path to purchase is usually some sort of technology format, whether it’s advertising or online or whatever.

And so, trying to manage multiple suppliers at each of those steps becomes incredibly difficult. And so, this continuum, having one place that can help you top of funnel — McKinsey called it full funnel marketing.

Jack:

Absolutely.

Darren:

Being able to go at every … be connected at every level. And technology enables that as well, that all of this technology — I hate the word “disruption” because technology is only ever an enabler. It’s not the actual disruptor.

Jack:

I completely agree.

Darren:

But the thing that’s different is yes, you are one agency whereas a lot of them are still struggling with competing P&Ls apart from Publicis where they’ve got country P&Ls. So, they have broken down the financial barriers of sharing clients but it’s still separate brands because they’ve still got Leo Burnett and they’ve still got Saatchi and you know-

Jack:

Well, whenever you’ve got competing internal agencies, you can never provide a truly integrated service to the client in my opinion, because you’re competing with yourself. And the walls will never be broken down inside the agency to deliver what’s best for the customer because you’re head-to-head, and that’s never going to happen. And that’s my challenge, Darren.

Darren:

So, Jack, your market research, you tell me the names. You’ve got names-

Jack:

Insights, yeah.

Darren:

Insights, right. And you’ve got PR is-

Jack:

Amplify.

Darren:

Amplify: are they separate businesses or are they just labels to help people navigate?

Jack:

They’re separate services. So, we talk about our business being wide, as in we deliver the breadth of communications. Everything but mainstream media, which I’m sure we’ll talk about. But deep, as in every service we offer is delivered by true experts.

We’re never going to be one of those agencies that says, yeah, we can do corporate comms, we can do PR and we’re going to trot out one PR person. It’s like no, there’s 40 PR people sitting over there that are true experts in their field. So, they’re built-in centres of excellence, centres of expertise that all work together as one big agency or as individual services as they may be.

So, to give you stats: 70% of our clients touch more than one part of our business. Most of our largest clients touch four or five parts of our business. And I’ve heard this feedback from a lot of clients, is when they get fully integrated as a large client of ours, they don’t know which services they touch to be honest. They just see it all as Bastion, which is exactly what we want them to see it as.

And the best, best client relationships we have, they tell us their problems and their account service team. And typically, the guard or the MD or whoever is the top of the tree in that account pulls in the right people from across our business, the right expertise to solve that problem. And the client doesn’t see our internal barriers. And we are continually on a journey of removing any roadblock inside our business to collaboration because of course, they come up and my job is to throw them out the window as quickly as I can find them.

Darren:

So, Jack, what I’m hearing is that in some ways, new world agency or the new world approach is to do exactly what the industry has been telling their clients, which is to create a seamless experience for the client.

That they come to you to solve their problems and it’s really not about what the solution would necessarily be, except the fact that you have these labels suggest that you also know that clients have been trained over years to go, “Oh, I need a PR solution.” Is that what the labels are for, to attract people to the discipline?

Jack:

It’s a good question. And it’s hone the craft as much as anything. If you’re a PR practitioner or you’re a corporate communications practitioner, you want to work in an area of true expertise. If you’re creative, you want to come to a red hawk creative agency. And so, hence we need to build a depth of expertise, but it’s part of being wide. So, I think the attraction of any staff member or any client is they can be part of their core craft.

Darren:

No, I get that.

Jack:

But they can grow their communications expertise.

Darren:

Absolutely, because people want to be working with and developing their skill sets in their discipline that they’ve chosen.

Okay. So, you raised it before and I noticed it when I was looking through the services that Bastion offer — no paid media. Where is paid media? Like anyone sitting and listening to this would be going, everyone knows that’s where all the money is, why aren’t you in paid media?

Jack:

It’s a great question. Obviously, we’ve made some acquisitions over the journey, quite a few. All startups where we’ve started a new part of the business with one key person we’ve pulled out of another place. We do a bit of paid social. When I say a bit, it’s a bit — it’s just what has to be done to service the social media products.

Darren:

And you probably do search, Google AdWords, you could do-

Jack:

Not really, but the honest answer is if I could cut a deal with one of three independent media agencies, I consider to be world class, I would have done that by now. And I will continue to try and do that.

Darren:

Okay, IMAA members.

Jack:

But it’s-

Darren:

Pitching yourself to Bastion.

Jack:

We work with some awesome independent media agencies, awesome ones. And we love the relationships we have with them, and they’re seamless. And walking in with creative and media and PR and the full solution, which is obviously what we are selling to clients that we do fully integrated solutions, there’s a big hole without a media offering.

Darren:

Yeah, look, and because it’s more than just about making money, the amount of knowledge information data that sits with publishers that you could access through that, to then enrich the other services must be constantly … you must be aware of it.

Jack:

It is. And we obviously, work with all of the big media agencies on clients, and that’s always been why I’ve been reticent to really launch a media offering, even though I just said if I could, I would. Which absolutely, I stand by that.

But because we work so closely, like obviously, all the government businesses depending on which government, with a multinational media agency, that’s obviously being publicised on IMAA.

Darren:

No, that’s right. And in fact, I think New South Wales got into trouble last year-

Jack:

Exactly.

Darren:

Because they were only going for big-

Jack:

And so, you’ve got to work absolutely hand in glove with these media agencies and we love working with them. Which is why it’s always been a nice to have in our mix as opposed to a must-have. Because I think the last value out of the holding group model is in media. Being able to have the trading desk and the exchange and the tools, and the credit insurance in one place.

I mean, every independent media agency in Australia, largely places their media through OMG or one of the big ones. So, there is absolutely benefits to a global media agency model. I don’t believe there’s benefits in other services in being part of a holdco.

Darren:

Yeah. Hey, you mentioned the STW Group and I’ve been sitting here going ST … oh, so Jack Watts, is there any connection between you and an agency, Jack Watts Currie, which the partners were all sort of from the advertising industry? Because I know some people say to me, “Oh yeah, parents from advertising,” is that-

Jack:

It comes up occasionally and it’s funny because absolutely no connection. The first I heard of it was my old man went on a business trip to Sydney when I was 12 years old and he met with Jack Watts Currie, and he brought me back a business card. I was 12 and before the internet, and it said Jack Watts on it. And I thought it was really cool that I had a business card.

Darren:

Okay. So, on that basis, one of the things that excites me is when I have these conversations with people that have started agencies without having a heritage of advertising, because do you think it’s given you an advantage or a disadvantage in the way that you’ve built the business?

Jack:

And again, this comes up occasionally. and I think it’s been a massive advantage because you go in with no preconceived ideas. And you go in knowing that you need experts around you.

I love the independent sector with a passion. I love independent thinking, I love the independent agility, but I’m very critical of the independent sector that no one joins forces to build a viable alternative to the multinationals that can truly, across sectors, across services, take it up to the multinational agencies.

And that’s because they come out with a skillset, they bring a couple of clients with them from their previous agency, typically. They build that to a certain point, and typically they always hit a cap, whether it’s one person — the typical agency ceilings: one person, 10 people, 30 people, 50 people, 80 people.

And you can count on one hand the amount of independent agencies in Australia, more than … what? 60, 70 people. And because that’s typically one or two services. And what’s been beneficial to us is because we had no fucking idea what we were doing, you went forth with a level of youthful, ignorance and exuberance that said, “Well, we’re going to make this up as we go along and that’s okay.”

Darren:

And look, I think in many ways, you had the true green field because you didn’t have those preconceived ideas of what an agency meant and you’ve created yourself.

Jack Watts, this has been a terrific conversation except we’ve run out of time. I’d love to continue it. Perhaps, we can come back and continue that sometime in the future.

Jack:

I’d love to, Darren. Thanks for having me.

Darren:

I do have a question for you: like 12 years ago, you said before, you really didn’t have any idea. As we sit here today, where do you see Bastion in 12 years’ time?

Ideal for marketers, advertisers, media, and commercial communications professionals, Managing Marketing is a podcast hosted by Darren Woolley and special guests. Find 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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