Parker: Australian agencies not built for project based work
Tim Burrowes, Mark Green, Tim Parker, and Travis Johnson at SAGE yesterday.
CEO of Naked Communications Tim Parker has told an audience that Australian agencies are not adequately built for the growing trend of project based work.
Speaking at the Secrets of Agency Excellence Conference (SAGE), hosted by Mumbrella’s industry guide The Source, Parker said most Australian agencies are still geared for retainer business and are struggling as clients push for them towards project-by-project work.
“It’s now so much more project based,” said Parker “What happened to the retainer business?”
“If you’re a large agency, then structurally you’ve got 350 people to feed every month and you’ve got all these overheads, you need the big knees clients, you’re kind of dependent on that. How they adapt to a world of unpredictable project income, I actually have no idea,” he said.
Parker added that this environment meant smaller agencies had to be nimble but also have a strong foundation to ensure their financial viability from project to project.
“In terms of small agencies, I think their ability to be nimble, their ability to adapt to circumstances is great but you also have to have a solid core,” he said, “I’ll quote Abraham Lincoln, he said ‘If character is a tree then shadow is the reputation’ and I think what we’ve got to do is we’ve got to be much better at having a much solid core to business so that it gives us the reputation that enables to respond to the type of briefs we’re getting today and have a business that’s structured towards it.”
Fellow panellist Mark Green, co-founder of The Monkeys, said the trend towards project work is a reflection on the way modern communications are delivered today.
He said: “I think the actual talents you need to employ around the table are very different to what they once where. How we’re trying to evolve is having everyone working on project teams rather then sitting in account teams and sitting with the typical account management, production and creative frontiers and actually bringing people around the table and working as project teams, that’s whether it’s a retained piece of business or its project based.”
He continued: “But it’s the same methodology employed whatever the campaign is and actually thinking of all the business in the agency as a whole collection of projects will probably allow you to use your resources a lot more efficiently and focus on the project and work you’re doing then the retainers and clients you’re servicing.”
While the trend towards more project-based work then retained business, Travis Johnson, CEO of Mnet, told the audience clients are hesitant in entering into new pay systems.
Johnson said: “We need to invest both in the client’s success and we also need to share in the downside. I think on both the client and the agency side there’s a reluctance. We talk about when you do better we want to do better but then we don’t have the dialogue about when you do worse isn’t it only fair that we suffer or bare of some of that brunt.
“The pay for performance type equation is something we encourage with our clients, but not a lot are up for it. A lot of them talk it and say we want you to succeed when we succeed and we go ok cool, here’s a structure to put in place and they say how about we look at a retainer or a percentage.”
Johnson said that change would come from talking to the people who have more at stake in the business success.
“It’s really getting in more than just the marketers bought in – the sales managers, the general managers, the CEO’s; multiple levels who have more at stake in the business success,” he said.
“It’s having holistic conversations about taking the business in the right direction and what you can provide for them.”
Miranda Ward worked for Mumbrella from 2013 to 2017, eventually becoming deputy editor. Miranda joined Mumbrella in September 2013 from Sky News.
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This has been coming for a long time and major agencies refuse to address it. Which, as a smaller, more nimble agency, suits us! I don’t see the problem with project based work – it keeps everyone on their toes and cuts out all the fat in the processes employed.
In fact, with everyone and their dog moving towards ABNs, part-time work and freelance I think there’s a lot that larger agencies could do to cut their overheads and bulk up their resources project to project rather than client to client.
Retainers for long term strategy work I get. Day to day project rollouts though could be based on project fees rather than retainers.
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Working really well for Naked eh Tim?
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