If The Population’s demise means big social media agencies don’t work, there may still be room for small ones

Before anyone starts dancing on the grave of social media agencies too vigorously, I’m not sure The Population’s demise (sorry, merger) necessarily spells the end of the social media agency concept.  

But it does demonstrate that not every model works.

For starters, The Population always had a relatively big cost base. Eight staff including boss Tony Thomas who’d come from a couple of big marketing director roles, was never going to be cheap.

I’d imagine that outgoings over The Population’s 15 months would certainly have been more than half a million bucks, and possibly a bit more again.

But I suspect that this is a specialty that demands that everyone gets their hands dirty. I never felt that Tony Thomas was particularly active on the social media scene.

His blog hasn’t been updated since June, while he hasn’t been on Twitter for more than a month, and only ever tweeted about 100 times in total. It doesn’t smack of someone who was leading the social media charge from the front. In other agency structures that may not matter – the MD brings other skills.

And with the sort of head count it was carrying, The Population was going to need to pick up a lot of projects just to break even.

However, its launch – which was prominent in the AFR at the time – probably did Photon’s image no harm at a time when it needed it. Its failure will have a far lower profile with Photon’s investors, I’m sure.

So what is the model? Something far more lower cost, I reckon. A small head count, with everyone working directly on clients.

With clients sceptical about signing up for recurring cost, the model may well be about helping marketing teams get set up to maintain their own social media profiles, and perhaps occasional involvement in campaigns.

But the retreat to a tie-in with C4 does make sense for The Population’s corpse. There are some elements of social media campaigns that need easy access to traditional production facilities.

For instance, there’s no way that One Green Bean’s social media campaigns like American Werewolf In A Yaris or iSpyLevis would have been as successful without having the solid in-house facilities of sister agency Host to call on.

But I’m not sure though that digital agencies (or PR agencies) simply hiring a social media person is the answer. For social media campaigns to work they need to be front and centre of an agency or team’s thinking and culture.

I reckon the next successful  social media agency will be small, and attached to a traditional, PR or digital agency. Or at the very least have easy call on a collective of supporting disciplines.

For now the big social media start-up has lost credibility – at least until marketing budgets have shifted. But there are other social media agency models which will work, I’m sure.

The time for the big Australian social media agency will come, but as the Population has proved, the moment is not yet.

Tim Burrowes

Comments


  1. matt bateman
    7 Dec 09
    5:55 pm

  2. Tim, totally agree – I think there’s lots of good work being done out there in social media land, but you have to live and breathe it. You can’t dip in and out of social, and it fits really well either as a small consultancy, or as part of a bigger whole.

    Interesting that after delivering rosy news on the digital front recently, Photon is undergoing a lot of restructuring…

    cheers
    matt

  3. Peter Applebaum
    7 Dec 09
    6:13 pm

  4. 2009 was the year of clients desperately seeking reasons / ways to get involved with social media that made sound commercial sense. If our pipeline is anything to go by, 2010 will be the year that all the talk is replaced by action.

    Social Media is essentially good old fashioned relationship marketing with the latest, coolest clothes. This critical distinction is lost on many agencies – and consequently many of their clients – which leads of course to a whole lot of facebook fan pages, twitter accounts and not much more.

    It’s not about the nature of the company supplying the service, it’s about the vision and intelligence of the people buying and driving the programs. Creating and implementing Social Media programs is not easy. The rewards when done well, of course are enormous but it requires a combination of a killer strategy, grit and patience, particularly when you’re marketing something that aint that exciting or sexy.

    The market is ripe right now for Social Marketers who get this.

  5. kim
    7 Dec 09
    6:27 pm

  6. Tim, I couldn’t agree more. While this will may seem to many as a plug for our team at Klick Communications I think it’s timely to explain our approach, as it is just as you have outlined above.
    We set up shop 15 months ago, as a collective with both traditional PR skills and
    social media ability.
    Our team are all specialists who have skills across both traditional and digital PR and are active in Social Media. Each specialist works with their own clients, goes direct to media and works within the appropriate social media platforms. This ensures that communications are extremely consistent and nothing gets lost in translation.
    Having Social Media as a separate team or department reminds me of the days when IT were responsible for companies websites – how times have changed! As communicators we need to be well versed in all applications and reach audiences however they like to be reached.

  7. Larry
    7 Dec 09
    6:47 pm

  8. noble idea but was always going to struggle to scale with it’s reasonably narrow initial positioning.

    i think it’s difficult to position yourself as a ‘specialist’ in something that is so new. i don’t think the population would have expected that in the past 15 months everyone has become a social media specialist.

  9. Anonymous
    7 Dec 09
    7:03 pm

  10. Tony is a lovely guy who should have stayed in the area he knows best. His blog posts were evidence enough of that.

  11. The Races
    7 Dec 09
    8:43 pm

  12. @kim
    Yes, you’re right, your post does come across like a plug, and as such certainly isn’t at home in a social media environment in my opinion.

  13. AnonymousCoward
    7 Dec 09
    10:32 pm

  14. According to Photon’s records The Population was seed funded with $1,000,000 AUD
    and they may have received additional funding in 09/10.

    http://www.photongroup.com/inv.....eports.asp

  15. tony thomas
    7 Dec 09
    10:40 pm

  16. Thanks for the opinion piece Tim however given some of your opinion is leveled at whether or not I got my hands dirty I thought it was worth responding.

    I completely agree that having a social profile is important and whilst I might not win the Mumbrella readers choice awards for the most tweets or the most timely blog, another pretty important aspect of leading the social media agency charge from the front is actually rolling your sleeves up and doing work for those people that pay the bills, you know clients. And given I cant remember you being a clients of ours, thought that it was an interesting ‘opinion’ to be able to make.

    We had a team that have a pretty high social media profile (benhamin and ad-space pioneers) and were never afraid to share industry case studies. We also spent alot of time up and down the street talking to marketers about social. This is also a key aspect of getting your hands dirty in my opinion.

    I feel like my hands are so dirty that I should wash them from the same basin as you. Can you spare me some holy water?

    The team are proud of what we have done with the business and are in a position to merge it with another great agency to continue the work. If you can find a negative in that, I’m sure you will!

  17. Kimota
    7 Dec 09
    11:00 pm

  18. The Population and Tony Thomas aside, I do think there’s something in the point you makes that the future may be more about training marketing teams to handle social themselves. After all, social media isn’t really a ‘campaign’ medium insofar as customers and the audience expect interaction and ongoing engagement beyond the closing date. Sure, there are successful campaigns, but these should always be part of a holistic and ongoing social strategy that delivers service and engagement whether there’s a current promotion or product launch or not.

    To me this means that, in the longer term, social media is something best not outsourced but kept within the brand or organisation’s own people. We all know that a tweet stream from the CEO is better than a tweet stream from their agency. In which case, I think the future agency model may be more about setting up, training and establishing ongoing strategies, creating experts within the companies capable of doing it themselves, with only occasional campaigns to punctuate special events or promos. But as agencies aren’t necessarily that used to giving their secrets away and allowing clients to become self-sufficient, this is new ground.

  19. Mike Watkins
    8 Dec 09
    12:51 am

  20. Hey Tim, great article and big respect to the population and the team behind it. They’ve done some great stuff over the past 15 months.

    Personally I think it was 18 months ahead of it’s time.

    My experience over the past 18 months of my little agencies life is that the overwhelming majority of marketing departments want/need a consultant or pointman to come into the company to firstly educate the organisation on social, then develop strategy that the company can develop and execute inhouse.

    A two man team built up over the past 6 months more than compensates for the amount of work required as we effectively act as a consultancy.

    The most poignant point I take away from your post Tim is that the agency who suceeds in this space will be the one with a production arm available to it. This allows the agency to not only develop strategy, but also create, implement and maintain the more technical side of things such as media rich applications that need to be developed on social platforms like facebook.

    Lastly, I think the agency that works will have someone in their ranks who has significant experience in the traditional marketing landscape and will act as the conduit to the right people and right opportunites that a young team would otherwise not have access to.

    The next 6 months are going to be facinating times in adland.

  21. Peter Applebaum
    8 Dec 09
    5:04 am

  22. It’s a great theory, Kimotta. And of course a regular blog or twitter account from the CEO is an ideal strategy for those organisations that do it.

    But most organisations don’t do it. Just the same as most organisations do’nt create or book their own ad or PR campaigns. Simply put, they’re not set up to resource a content hungry beast that is a truly effective social media program. This is a comment I get regularly get from clients.

    Matt Bateman’s point about social media not being the sort of thing you can dip in and out of is spot on. That’s why a lot of agencies with their short-term campaign focus struggle with it.

  23. mumbrella
    8 Dec 09
    8:53 am

  24. Hi Tony,

    Thanks for your comments.

    I’m sure you were getting your hands dirty on the client side of things. I don’t think for one moment that you had your feet up on the desk, smoking a big fat cigar while your minnions scurried about.

    You put together a team very effective at interacting and engaging with the social media community, and using that on clients’ behalf. To use a wanky phrase, they’ve all got big social media footprints as a result. c4 will now have the benefit of one of the best social media teams in Australia.

    But that’s clearly not what your role was, and one of the points I was making is that the market may not yet be ready for that larger style of agency where there’s a big boss handling the clients and presenting (very well) at conferences, while the rest of the team does the social media stuff.

    Cheers,

    Tim – Mumbrella

  25. Journalist
    8 Dec 09
    9:05 am

  26. I can’t believe you guys take all this stuff seriously – must be like going to work at Disneyland.

  27. Kimota
    8 Dec 09
    9:28 am

  28. Hi Peter. I fully agree that most organisations still haven’t reached this conclusion themselves – but I think it’s pretty well established now that social media engagement is rapidly becoming a brand ‘must-have’ rather than a ‘nice to have if we had the resources, time and inclination’. As social media continues to shift from the ‘fad’ column into the ‘central to our entire communications strategy because people are our business’ column, more businesses are going to start bringing social media in house. Maybe not in 2010 – but within the next few years I think the change will be complete and clever agencies will drive the change by training, consulting and advising rather than producing outsourced complete time-bounded campaigns.

    Essentially, I don’t think we’re talking about social media agencies more than we’re talking about agencies having departments or partners devoted to comms strategy – of which social media is a key part.

  29. Chris Walton
    8 Dec 09
    9:58 am

  30. Tim – the bigger issue you touch upon here is one that agencies have struggled with since long before social media came on the scene – how to balance expertise and thought-leadership in all aspects of communication whilst not weighing down an organisation, or clients, with truckloads of cost and bureaucracy.

    Clients often view the one-stop-shop with scepticism, yet gathering a collection of experts from various disciplines often breeds politics and territorialism, as well of course higher fees.

    Time will tell the extent to which there is a market for standalone social media agencies. However, it is no secret that in the main those agencies that do well (whatever their core competence) excel in one thing – their ability to operate in a team, regardless of the logo on their namecards, and deliver on what it is their clients need.

  31. Matthew Gain
    8 Dec 09
    11:40 am

  32. Interesting article Tim, and I agree with many of your thoughts. From my experience the amount of budget clients have been willing to invest in social media in isolation is limited. However, when combined with a more holistic marketing strategy involving PR, ATL and experiential the unifying component of social media is understood by clients and investment flows.

    The Population has no doubt done good work and been very generous with their case studies and learnings, but ultimately I wonder if a specialist social media agency make sense. Perhaps it makes no more sense than a specialist media agency, or PR agency (disclosure I work for Weber Shandwick), but the margins are big enough in those businesses for now. For me, unlike @Mike, I don’t think the Population was 18 months ahead of its time, instead I think it was applying an old agency logic to a new medium – i.e. let’s specialise. Collaboration across marketing disciplines typically delivers the best results, adding more siloed agencies into the mix doesn’t. IMHO anyway.

  33. Conflict of disinterest
    8 Dec 09
    1:56 pm

  34. Nice one, Tony. Well said mate.

  35. Marc Loveridge
    8 Dec 09
    2:54 pm

  36. SM isn’t a product, it’s a change in Internet behaviour.

    As it’s always been, the agencies that respond to this change and evidence their understanding through their campaign ideas are the one’s that will succeed.

    I think “social media thinking” can exist as a stand alone offering (the US has SM agencies of 30+ staff) but it is more likely, in Australia, to rest with a small group of well rounded “planners” who’s job it is to understand internet consumer behaviour, whatever that may be.

  37. Daniel Young
    8 Dec 09
    3:01 pm

  38. The bottom line is that social media doesn’ t exist in a silo and it only ever did for about 5 minutes. Smart marketers now realise that social media is part of the complete mix. An offline activity is often the trigger for a social media / viral / digital campaign and firms need partners that have the relationships and the expertise to pull off this combination. Social media agencies may be au fait with the bells and whistles of the web but they are by nature siloed and therefore compromised as social media becomes an increasingly core and integrated component of marketing business.

  39. Larry
    8 Dec 09
    3:22 pm

  40. do we really need 10 expert comments saying the same thing around social media apparently being a long term not tactical activity?

  41. Sam Granleese
    8 Dec 09
    4:05 pm

  42. I never saw the business case of creating a specialist agency for a medium that hardly any advertisers were spending much actual money in at the time. As a medium carrying some risk, the growth in spend was primarily going to come from those with big pockets, and via their rostered comms agency partners.

    The model that has failed needs scale – clients with intensive social media presences – but most large scale social media projects end up being run by the client themselves (i.e. customer service) as they are more empowered than an external agency staffer or they want more control (i.e. in community management) or have certain legal requirements.

    Even if the Population had grown a client to the point where they had 4-5 people working on a single client – most of that work (the day-to-day community management/customer service/etc) would probably be taken in house by the client, with the strategy/consulting/media-buying stuff left with the agency.

    The commercially viable business for social media is still a) full-service or larger digital agencies, where it is included in the media mix – perhaps at the centre for many. Or b) as a owner-operator consultant writing strategy and policy frameworks for 10 or so clients at a time.

  43. Tim
    9 Dec 09
    1:58 pm

  44. Never understood the ongoing hoo ha about scoail media.

    Take care of your customers and social media takes care of itself.

    Pretty simple, really.

  45. Matt Granfield
    9 Dec 09
    2:30 pm

  46. Social media marketing is what happens when good PR and good digital get married. That’s why One Green Bean and Host are killing it. That’s the model. Case closed.

  47. John Grono
    9 Dec 09
    2:37 pm

  48. Tim … now that just makes too much bloody sense!

  49. Sean
    9 Dec 09
    3:07 pm

  50. @Matt – Gotta agree with you there mate.

    Social media marketing can’t exist in a vacuum nor can it look at itself as a stand alone solution that will tick all the boxes.

    Human behaviour is as varied as it comes and therefore so should be your marketing strategy..blah blah blah

    My formula for a good SM outcome? Provocative and compelling talking points meets as many and highly varied touch points as technologically possible. Open every channel available and give people a reason to use them.

    Btw – I don’t understand the ongoing belief that a Social media MD/specialist would need to be active in social media themselves to be effective. I know many amazing PRs and to my knowledge, none of them write or edit or contribute to any publications ongoing.

    Someone can deeply understand the nuances of a social media platform withouth having to spend 3 hours a day on it.

    Hell! I’m too busy running around after clients and my team to spend my day twittering but that doesn’t mean I’m less effective as a SM strategist.

    (commenting on Mumbrella is different of course!)

  51. Larry
    9 Dec 09
    3:28 pm

  52. where is laurel to put this one to bed with some analysis

    don’t send gary!!!!!

  53. Anonymous
    9 Dec 09
    8:02 pm

  54. Having a blog and tweeting = Social Media Guru, cleary not, The Population RIP

  55. echo echo
    10 Dec 09
    9:44 am

  56. so The Population say they are integrating then 20 different people all say in a slightly different way that the right model for social media agencies is fully integrated. echo echo echo

    Matt – your tone continues to reinforce your reputation…

  57. aplet
    13 Dec 09
    4:01 pm

  58. Anyone here from Agency Land, raise your hand. Now keep it raised if you’re billings haven’t decreased in the last 18 months.

    That’s right people – there was a little thing called the Global Financial Crisis that meant that marketers have reduced their budgets, and consequently a lot of agencies have been doing it tough.

    As a new agency, The Population were up against it during this economic period. There fate isn’t a result of agency structure, creative or strategic capability or focus on a niche. I think it is because the world very nearly went into depression! A victim of timing!