Answering Adam: Agencies need ideas as their engine

This week in his Answers for Adam column Adam Ferrier asked whether agencies should imitate startups. Here Nic Hodges argues agencies need to focus on their ideas, but modernise processes.

In his column this week Adam Ferrier asks  “would your agency be doing better work if it put data, behavioural sciences, and technology up on pedestal along with creativity? Or is a single-minded focus on creativity still the answer?”.

Here’s a secret – nobody at a startup is sitting around caring about acting more like an advertising agency.

Nic HodgesIt wasn’t just this question that got my interest, it was the fact that the question was posed only after the now common call for agencies to act more like startups – Ferrier even asks “is it cooler to attend the Cannes Lions or tweet about the latest gadget unveiled at SXSW?”.

Agencies don’t need to act more like startups. Agencies need to act more like modern agencies – ones that have evolved in response to new technology, tools, and thinking. Because that’s exactly what startups have done.Here’s a secret – nobody at a startup is sitting around caring about acting more like an advertising agency.

For startups, technology such as social networks have allowed rapid distribution due to network effects. New tools like Amazon Web Services and Django mean two guys in a garage can launch and scale a billion dollar idea like Instagram. New thinking around agile development, lean methodology, and user validation means startups can get to the right answer faster.

These technologies, tools, and thinking do not define what a startup is though. They are simply components that have been be added to the underlying engine. That engine, according to Lean Startup author Eric Ries, is the desire to “deliver a new product or service under conditions of extreme uncertainty”.

When Gordon Moore and Bob Noyce founded Fairchild Semiconductors in 1957 (essentially founding Silicon Valley in the process), their engine was akin to the 4-litre dual-carburetored V6 engine available in a Chevy at the time.

With the components that have been created since, today’s startups have an engine resembling the modern turbo-charged, electronically assisted, hyper-efficient F1 engines. There’s a lot of technology, tools, and thinking there, but underneath it’s still an internal combustion engine.

The engine of advertising agencies is the creative idea. Without the underlying engine, it doesn’t matter what components you throw in – whether it’s startups, behavioural economics, or big data – the fundamental purpose of the agency is absent.

If agencies stop putting ideas at the centre of what they do, if the idea ceases to be the engine, then agencies are no longer agencies.

This is not to say that data, behavioural science, technology, or whatever else is in vogue should be ignored. But these things need to be considered as components for the engine, not a replacement for it. As an industry, we’re not terribly good at recognising this and creating new components. I’ve spent the last decade around both agencies and startups, and the evolution of how startups operate is orders of magnitude more than that of agencies.

The call to act more like startups bears a striking resemblance to previous calls for agencies to act differently – a couple years back it was big data, before that it was behavioural economics. We are quite adept at creating a convenient fiction of what other domains look like, and how we need to be more like ‘them’, how we need to completely change our engine. But we don’t, and we shouldn’t.

We shouldn’t ignore other domains altogether – there is plenty agencies can learn from startups. But creative ideas have always been, and should always be, at the heart of what agencies do. We don’t need to change that engine, we just need to create better components.

Nic Hodges is head of innovation and technology at MediaCom Australia


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