The advertising-agency model is flawed. The good news is it’s simpler to fix than everyone thinks.



The advertising-agency model is flawed. As an industry we do more and more for less and less money. Timelines are shrinking. And with the onslaught of social media and real-time marketing, we’re asked to find new ways to “go viral” and earn media without incremental compensation. When clients need new thinking, they go to pitch. Sometimes we even give away our best ideas. Some clients think of an agency’s “product” as a commodity readily available for a continually reduced price. But let’s not just blame clients and their procurement departments.

Much of this is our own doing. We show up for every pitch and we keep delivering more work for less. We pass all the benefits of efficiency and effectiveness on to our clients and only get paid for the time it takes to come up with an idea and to create an ad.

The good news is that it’s simpler to fix than everyone thinks. There are only three things we need to do to not only fix the flawed business model of advertising, but reinvent it:

Recognize we’re not in the ad business 
We’re competing with consultants and tech giants like McKinsey and Google and must be in the business of making the products, services and the brands of our clients relevant. Without an emotional and rational value, consumers won’t care. And if nobody cares, brands won’t see an increase in sales or lead their category’s conversation. So it’s relevance, not ads, that creates value for clients. A great example of this in action is Nike+ Fuelband, the tech fitness product developed around the idea of movement. It creates value for the consumer and is incredibly relevant to the category. We are communications consultants and have the staff to advise our clients on brand relevance where other general business consultants do not.

Redefine creativity
Creativity isn’t about the best-executed ad idea. Creativity is defined by innovative and effective solutions that meet our clients’ business objectives. If we do that in an exceptional way, we’ll generate customers, sales and market share for our clients. If we could refocus on this definition of creativity as our sole mission, we would develop a different product.

Take Wieden & Kennedy. It looked at the modern agency model differently with the launch of “W&K Garage,” a venture that will focus on creating and investing in innovative experiences, content and technology. If we started to work that way, we’d have a different process and might find new ways to get paid: by measures of new customers, increased sales and improved market share that reflect the real value that we add.

Capture our golden opportunity: data intelligence 
The most important thing data can bring is insights, but a client needs to partner with people who are able to connect the dots among all of the different types of data. Our industry has always used insights to inspire marketing, but the availability of data gives us so many more avenues to pursue. Through outlets like Twitter and Facebook, we can identify relevant trends that are happening in real time. For example, McDonald’s in Australia launched a “Track My Maccas” menu app created by DDB Sydney that allowed consumers to track the origins of the ingredients in their food. We used GPS, image-recognition software, date/time and supply-chain data to be transparent to people about the quality of their food at McDonald’s.

No matter what happens, agencies will still need the talent of creative thinkers. But it will become increasingly important that they’re able to apply both data and creativity to business problems.

This article originally appeared in Advertising Age, December 30, 2013