Naked Communications faces the sad fact that being clever doesn’t make money any more
Naked – the agency that once terrified the global media agency networks by out-thinking them – is dropping its last unique piece of DNA, argues Tim Burrowes.
The most depressing thing I’ve read today came in the latest annual report from industry holding group Enero.
Published yesterday, Enero’s annual report offers an accentuating-the-positive state of play on each of its key agencies. These days, the organisation once known as Photon Group describes itself as a “boutique network of marketing and communications businesses”.
Ad agency BMF is repositioning around the vision of “long ideas”; Hotwire PR is looking to the US; research company The Digital Edge is doing lots of, um, research; Jigsaw Research has got a “fresh new team”; The Leading Edge is “navigating complexity”; Frank PR is going to get into “SEO-PR”. And so on, goes the report.
In many ways, it’s heartening that there is still one group headquartered in Australia that aspires to have a global reach.
But it was in the lukewarm write-up about Naked that made my heart sink. It was all talk of “re-aligned cost base”, “stabilised revenue” and profitability, until it got to the final paragraph. It said:
“In the next financial year we’ll continue our momentum, completing our transition from being “thinkers” to “makers”.
You see, when Naked launched in the UK in 2000, it changed the communications world. It did the same to the local market when it launched in Australia three or four years later.
The founders of Naked pointed to the fact that the media agency model worked against marketers. When agencies stood to get the biggest rebates by putting their clients onto TV schedules, the answer in every media plan was, not surprisingly, television. As a result, media agencies didn’t feel the need to offer particularly clever or innovative thinking.
But what if marketers hired a “media neutral” agency to do their media thinking for them? Just thinking, not execution. Like those rare non-scumbag financial planners who aren’t being bribed by the financial services companies they recommend, a client could actually get a better return on the marketing investment.
If the agency doesn’t stand to gain by pushing a client on a particular course, then the advice would better. But the agency offering that advice would have to be smart as hell.
And along came Naked to offer that service. What made them different was that they were only “thinkers”.
And it worked. Marketers got innovative thinking. Naked showed that it understood the value of earned media as part of a wider media strategy before anyone was even calling it earned media.
And Naked scared the hell out of their media agency competitors.
Along the track, Naked became an Australian-owned company when Photon acquired it.
But market forces ensured that Naked’s moment was a passing one. The media agencies improved their strategic capabilities, and gave it away for free. So clients didn’t need to pay a second time.
From then on, it was only a matter of time. Which brings us to this repositioning by Enero – thinkers no more.
It’s not the fault of the agency, or Enero. If the market won’t pay for the thing that makes you great, then you have to be something else, or go out of business.
So it looks like Naked is going to be that something else: a “maker”.
While “maker” has become overused hipster jargon for DIY and craft, I presume that what they mean is an ad agency, creating ads. Kind of like everyone else. But perhaps facing tougher odds against creating great creative work because of not having a deep creative heritage within the agency.
Which is a pity, because I wonder if Naked could only have hung on, whether it would have had a second coming as an agency of thinkers.
I can’t remember the last time I saw a piece of strategy work from a media agency that was really inspiring. I think they’ve gone off the boil.
Which either means there’s a gap in the market for a Naked 2, or it may mean that media agencies are failing to tell the world what they’re capable of.
(Looking down today’s shortlist for the Media Federation Awards, I was surprised by how little of the work rang a bell, so it is possible there is great thinking going on that isn’t getting the publicity. But it is a pretty small number of agencies on that list.)
And it also strikes me that it is interesting to trace the paths of the three local founders of Naked, who have thrived in the years since they left.
They are all back in traditional agencies. Mat Baxter is currently CEO of the media agency that claims it’s not a media agency UM (and industry gossip expects him to follow his boss Henry Tajer to New York any day now although he denies it); Adam Ferrier is at creative agency (and occasional full service offering) Cummins & Partners; and Mike Wilson is boss of Havas Media.
And wouldn’t you know it – all three of their current agencies made it onto the MFA shortlist. No work from Naked is on that list though.
Which raises the question: where is the next model-busting agency going to come from?
There’ve been a few that have successfully tweaked the model. Creative agency Happy Soldiers was strategy led but closed when the partners fell out. The Hallway has successfully put digital thinking at the heart of its offering.
And Emotive – unusually, owned by a media company, APN – is on the map thanks to its recent work for the likes of Optus and Subway. With Collective, blending data with creativity will be worth watching. I’m also watching the newer Common Ventures, which positions itself as “a strategic and creative agency” with interest.
Regardless, for its survival, the communications industry needs that next model to emerge. The creative agency model is creaking. Media agencies struggle to cleanly deliver to their global owners the profit levels they demand. PR agencies risk having their lunch eaten if they don’t start taking seriously the invaders who want a slice of earned media.
And therein lies a potential answer I think – there’s a slice of territory to be had sitting between the media/ creative agencies and the PR world that remains no-man’s land.
And in all this, marketers find themselves mired in greater complexity than ever before, and with less certainty about what works than ever before.
Yet it feels that most agencies are ill equipped to help them by having enough clever thinkers who can offer that rigorous strategic thinking they desperately need. Perhaps in time, marketers will once again be willing to pay for that. I wonder if the next Naked is out there somewhere?
- Tim Burrowes is content director of Mumbrella
To be fair Bellamyhayden was a media neutral strat planning agency before Naked here in Australia. But both agencies were great thinkers (not only because I was at both of them ?).
Sorry you’ve not come across much great strategy recently. If you got a strategy itch that needs scratching then come down to Slingshot and I’ll show you some to make you happy!
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Hi Mumbrella this article is not very well considered and typically sensationalist and negative. Getting Naked to remove thinkers, (transition from thinkers to makers), is a strong move as it now aligns with Enero’s corporate strategy.
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I think an interesting comparison in this category is Nota Bene, a communications strategy agency founded by Pete Vogel in South Africa slightly before Naked was born. Their solution when faced with the same business problem was to become a strategically driven, full service media agency and sell to WPP. If you look at their success since, it was an infinitely better decision than Naked’s…
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I think this is an accurate and insightful summary.
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@Not thought through – I think that’s Tim’s point, ‘aligning with Enero’s corporate strategy’ has recently proven to be how agencies die not prosper. A unique brave agency position offering something different is what shakes up the industry, not doffing one’s cap to the parent holding company.
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Thinkers to makers? In the truly creative world, we need Both Thinkers and Makers, that they should be able to work together is the blissful wish of all who seek to create in a rich and exciting way.
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It is really sad, and sadly very true. Naked pre-Photon / Enero was the best agency in the world. There was a genuine belief that we were doing something different, better and useful. We attracted the best talent, the best briefs and produced the best ‘unbiased’ product.
Now it’s sadly apparent that Naked is just interested in making things. I guess that’s what happens when a bias towards bottomlines instead of brilliance occurs and when fear and finance determine the future.
So long you wonderfully ‘disruptive misfits’ – it was a pleasure to serve along side you.
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Long before Enero, Naked’s Australian founders saw the need to shift from ‘thinking to making’, as early as a year or so after they opened their doors. What I don’t think they saw until much later was how quickly this would subvert their own – at first genuinely unique – business model.
When they were just ‘thinking’, the Naked founders were able to partner with clients, media and creative agencies alike. And they did so successfully as a truly ‘channel agnostic’ strategic consultancy that was happy, at first, to be paid for its thinking and leave the making to everyone else. But then they got greedy.
They saw the $ they were missing out on that were going through the media and creative agency coffers, often initiated and amplified by their own strategic thinking, and decided it was time to get into the making game themselves.
Only problem was, they’d already introduced themselves to those very same clients, media and creative agencies as a complementary and collaborative – not competitive – agency partner. Oh, and the one other problem was, they weren’t nearly as good at making as they were at thinking (and selling).
Either way, as soon as they started competing for those making dollars themselves, the game was up. Who wants to collaborate with someone who’s constantly trying to cut everybody else’s lunch?
Matt, Adam and Mike were the first to see the writing on the wall for Naked. Enero are the last. Truth is, the Naked model died when those three founders all jumped ship. Enero are just hammering the last couple of nails into the coffin.
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“Like those rare non-scumbag financial planners who aren’t being bribed by the financial services companies they recommend, a client could actually get a better return on the marketing investment.”
Love the way you write, Tim.
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@Naked ambition – I think the writing was on the wall a year after they launched. Not because they did not have external success, which they did, but for the reasons you state. It was clear their business model was not scalable or sustainable. Hence the lure of $ initially from the experiential space was too great to ignore and why quite early on relationships with the likes of Telstra and Unilever became much more project based.
This is not just a Naked issue but one for all strategic comms agencies. The fact is that unless you implement you will not be sustainable. Rightly or wrongly marketing clients do not identify the value of standalone ‘strategy’, certainly not at a scale large enough to sustain a multi-person/multi-office business over the long term.
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Did that girl ever find her jacket?
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Naked going from “thinking” to “making” is a case of post-rationalisation which Adam F would be better at explaining. When all the thinkers leave, left are people who aren’t capable of it. And whoops, all of a sudden “doing” and “making’ is the new thing.
Look how well they’re doing that at the moment. Great people create great work regardless of what spin they put on it…
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come on, we are all pretending that Naked was this shining symbol of creativity and genius… fact is that left the business long, long ago, Naked had become a caricature of its “brilliant misfits” positioning, dropping the former and becoming the latter.
While i agree in the brilliance of the individuals, working together Naked had become an aging rock star – overweight, a wee bit arrogant and still intent on busting up hotel rooms. Far from the collaborative spirit that had ignited them, they had taken a position against most creative and media agencies and didn’t want to play nicely with anyone (they were far to clever and important).
As a result of their missfit, they stopped making money. If a holding company could afford to own an agency for its attitude and PR value, then fantastic, but again lets be honest Enero cannot. Besides, if they had that kind of cash, there are plenty of organisations or models and invest in to champion and test new thinking, Naked wasn’t set up for it and they failed to innovate.
I think the story here is far less the damage created by Enero and far more a warning for agencies to continue to innovate and not get complacent (something that coincides as founders begin to lose interest)
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a real shame because naked were a lone independent voice that now is sadly lacking from our industry
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There are a few independent thinkers left out here, Zuni being one of them. We’ve spent the last 5 years working closely with clients using thinking around the digital space to drive innovation, exceptional business outcomes and great results, primarily working with their internal teams and other agencies.
The interesting thing is that because most of our work is focused on business outcomes and new products and revenue streams for businesses, rather than cool creative campaigns, so we seldom hit the radar of the award shows or create cool case study videos. (although a campaign we did with DAN last year was a finalist for 5 Effies) But we do continue to offer channel neutral, execution neutral thinking that adds value and drives business outcomes.
So don’t give up on independent thinking just yet!
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“Can it be that it was all so simple then,
Or has time re-written every line?”
Get over it, they had their time in the spotlight. And then a little boy shouted out, “The Emperor has no clothes!”
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Makers who think.
Thinking makers.
Anyone wanna buy my model?
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The problem with Naked was they believed their own bullshit.. It probably needed more thought.
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Hey Diana, please, a little more naked insight, some deeper research and greater thinking, Barbara Streisand and at a stretch Gladys Knight.
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Naked ‘made’ a global strategy led business pre Enero. That’s pretty makey.
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Love the creative on the annual report.
Hopefully the ‘makers’ will give the reboot Naked needs.
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That all of these guys ended up back at traditional agencies is a pretty fair indicator as to why Naked failed. Looking and acting like misfits is not the same as being one.
If they were true to what Naked was about then they would be off doing things entrepreneurs do.
In fact 99% of all people that worked for Naked Sydney did exactly the same thing. It was all a bit of a sham to make some cash off a promising business idea from another part of the world.
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HI Fake Pioneer
Im sure most people have moved on from this discussion, and are letting the good people currently at Naked get about their business.
However, just want to say that all three of us who you are talking about are again in non-traditional agencies, and having fun playing with and hopefully breaking the established and traditional models that exist.
Mike is heading up the media arm of Havas, an agency fast merging the lines between several communications disiplines.
Mat was CEO at UM and openly declared he’s changing the busines to beyond a media agency to something else. His new role is global creative and strategy officer at mediabrands – is in itself a model busting role
And I’m with C&P an agency with aspirations to be a global independent creative:media agency network – i.e. a model we’ve created.
So be a pessimist and a dick if you must, but do so with the knowledge you’re incorrect.
Adam
PS please – if you respond have the decency to identify yourself. Why wouldn’t you – unless you’re not proud of your actions?
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Well said Adam!
Anonimity is coward’s argument.
Great retort @adam ferrier
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