Agencies urged to add value after being branded ‘factories’ churning out ‘crap’
Agencies have been described as “factories” churning out “crap” when they really should be selling value to their clients, developing intellectual property and innovating.
In a blunt assessment of the industry, TrinityP3 managing director Darren Woolley said agencies have only themselves to blame at seeing their fees squeezed as too many companies offer the same services with little differentiation.
Agencies have become a “commodity”, he said, “with literally thousands of people offering largely the same services”.
The result is a “race to the bottom” where the the cheapest offer will win the business.
“When you are a commodity the only way is down and this is what is causing this race to zero,” Woolley told agencies at the Secrets of Agency Excellence masterclass in Sydney yesterday.
“Most, if not all of you, are factory workers, producing the collateral that goes into the media and marketplace, and then you decry the fact that people want to lower the cost of the factory. They can get someone overseas in the global market to produce what you produce for a tenth of the price.
“As much as it’s easy to blame procurement, to blame clients and everyone else, the people responsible for this situation are the people in this room. You have become a commodity because there are just too many agencies which are too undifferentiated.”
He said “so many agencies are purely here to create collateral, create crap, and create more advertising” when they should be demonstrating their abilities and insisting to existing and potential clients that they are “value creators”.
Woolley urged agencies to move the conversation with clients away from cost to one where there are articulating the value they bring.
“The whole conversation you have with clients is about the cost of your business and how you recover that,” he said. “All that that does is reinforce you as a cost.
“When negotiating with a procurement person and they ask about the cost of your staff and your overheads, you should be saying we are not about cost, we are about value creation. Don’t have a conversation about cost recovery with a client, keep the focus on the upside which is value creation.
“Most agency people also talk about efficiency, especially with the increase in technology. But technology is replacing traditional agencies as it is allowing many clients to take the services you provide in-house. Don’t talk about the benefits of technology unless it’s a way of adding value and effectiveness.”
While admitting many brands will only ever be interested in price, every agency will have clients who will be open to conversations about genuine value, he said.
“There is an opportunity to become premium, to stand out from the rest. Change the way you think and stop whining about costs and start talking about the upside. Everyone seems to be obsessed about cost.
“If you are just a service supplier then get used to the fact that someone will always come along and take business off you because they can do it cheaper. Turn the conversation around to where you can add value,” he said.
The real winners in the agency environment will be those who develop IP, innovate and provide material “before the client even knows they need it”. But the Australian industry creates zero IP, Woolley said.
“You need to think about what you create as being intellectual property. If you are creating IP you have the start of having real value. But it is only worth what someone is willing to pay for it and the IP created by the advertising industry in this country is worth zero because I do not know a single client who pays an agency for their IP. We give it away.”
He urged agencies to exploit technology to innovate and develop products in-house which can then be licensed to a client.
“Anyone can take an order but a real innovator creates things for people before they know they need it. Why can’t agencies do that? It is a great way of proving your ability.”
Woolley warned agencies that those who remain wedded to the “factory” mentality risk being “wiped out” by global production companies “who will make you look archaic and can produce what you produce for a lower cost, faster and with more efficiency”.
Steve Jones
Utter garbage.
Darren if you’re so brilliant why don’t you have your own agency?
It’s just more spin to feed your own business….
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Sorry but isn’t this guy part of the problem? What bloody value do he and his like add?
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He does have one solid point, lots of us have been churning out crap.
However in many cause, it’s because generally its safe and it’s all the client will sign off, as they’re not prepared to take a risk.
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The quality of work here (comparative to overseas) is a joke. TV is a prime example- switch it on and the commercial break is pretty much the same ad for every product/service. Great work! Really thinking outside the box! Get it? Outside the box? I should work in advertising.
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It may seem a bit harsh, but isn’t far from the truth. There are too many agencies in Australia and the differentiation is minimal.
Check most CV’s, they have been through most of them, it’s a mediocre merry-go-round.
Stating the obvious a bit, but still needs to be said. Get out of your agency bubble and have a look around at the other agencies, they aren’t that different to you.
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Is this article an example of what the kids call “native advertising” on behalf of Trinity P3?
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Having spent the majority of my career agency side and now being on the client side, I’m incredibly embarrassed by the way agencies present themselves in order to gain business. Yes Darren, they do all appear to be the same dishing out the same bright new shiny things and buzzwords.
And when you bring them into the loop by sharing a detailed marketing plan, their only response is to come back with either a process with dollar amounts against it or worse still jump straight to execution with a fully developed campaign without even being briefed.
I’m looking for their depth of business knowledge and to share some thinking with me not place me on their factory like production line with a process or bring me creative trinkets to buy.
I’ll buy their solid business thinking where they add real value but they have very little IP to offer and Darren you’re so right…agencies have become a commodity. Bland and baseless process workers or headline and trinket merchants.
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It just isn’t productive or healthy for our industry to speak about ourselves this way. Can anyone honestly point to a corporate creative industry that is consistently more innovative? Are architects or graphic designers changing their industries with every brief? No they aren’t, because not all their clients want that.
Are all the posters on here condemning our industry seriously suggesting that our agencies are full of people who wouldn’t want to produce more innovative work given the chance?
Besides, i don’t see clients abandoning advertising agencies in droves either.
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Some valid points on differentiation and churning out crap.
However, Darren’s charter in helping selecting an agency is by virtue comparing like for like. The very act of filling out the different sections in a pitch bid is centred around that. The agencies have to bend their offering to fit within those confines. So in effect, Darren, you’re part of the problem.
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@NaileditDarren – nailed it. There are some good people out there but there are many that are not adding value, just adding time sheet charges.
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even this conversation is boring and predictable
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Darren is spot on! And the crap-churners will naturally not like hearing this. But out of adversity comes opportunity – get your shit together and stop producing the same old stuff and add some value to your clients’ businesses. Alternately, go and work for the radio station commercial production factories that we as an industry like to criticise for the same reasons.
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Sadly the comments are mostly true. Not sure it was a very constructive monologue, however. I saw Darren at a Procurement breakfast and he was just part of the wall of silence -no value add.
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so true…focus on returns for the client and the agency will continue to get work
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To paraphrase Prof byron, on prototypicality.
i.e. attributes that describe the category ‘score well’.
If something matters in a category it matters to everyone on the category.
Talk of differentiation in advertising agencies is a nonsense.
But some are more creative than others.
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This is not news. This is value add selling from the 70’s rebadged. Seriously Darren, you live in a vacuum inside a time warp wrapped in a Tardis.
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Instead of attacking Darren, why not consider his views at least for a moment or two before ditching them, you may find the odd nugget in the wash.
I have noticed that television and radio advertising has been getting gradually worse .
I remember a peak in the late sixties early seventies, and another in the late eighties early nineties. There has always been dross, but real innovation has come and gone, right now it is almost absent.
Radio has been treated worse than any other medium I believe, and television has been down graded and even thrown to the dogs in places.
It seems that familiarity has been allowed to breed contempt in places, with clients questioning the science of advertising and looking for those crystal ball predictions, it is also a time of rise for the dilettante, with any Tom, Dick or Mary taking charge of production and talent by some process akin to proficiency by declaration.
I am also doubtful about the “degree in media” innovation, which threatens a kind of rubber stamp approach to the industry if applied too often and/or too soon.
PC is also a major problem for drama and comedy production, as it is for story telling. Good drama and comedy require the rule of, life with the boring bits cut out, rather than earnestly considered.
Just a few of my personal views on the subject
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