In Casting for Big Ideas, Andrew Jaffe, industry veteran and Director of the Clio Awards, details important lessons on the management and growth of advertising agencies. He shows how the forty-year-old agency business model is breaking down because the work is becoming marginalized, as clients cut back ad budgets and hire outside marketing services and strategy firms. If agencies are to survive, Jaffe says, they must become idea-focused again and, instead of just making ads, master the art of devising the kind of non-advertising-type promotions that more quickly move a brand into the culture. Based on his long experience in the advertising industry, Jaffe offers practical advice and important lessons for agency heads who want their businesses to stand the test of time. This one-of-a-kind resource covers a subject often ignored-the business side of running an ad agency. Andrew Jaffe (New Canaan, CT) is the founding Publishing Director of Wiley's Adweek and Brandweek books imprints. He is also the Executive Director of the Clio Awards, one of the largest and most famous advertising awards programs in the world, with over 18,000 pieces submitted from agencies and production facilities in fifty-nine countries.
About the Author
ANDREW JAFFE is the Executive Director of the Clio Awards, which salutes the best efforts in advertising every year. He is also the President of Compass Consulting of Norwalk, Connecticut, a consulting group that advises advertising agencies on organizational and management issues and conducts agency searches for clients. He is a former editorial director and vice president at Adweek.
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CASTING FOR BIG IDEASA NEW MANIFESTO FOR AGENCY MANAGERS
By ANDREW JAFFE
John Wiley & Sons, Inc.Copyright © 2003 Andrew Jaffe
All right reserved.
Chapter OneAgency Architecture: Getting It Right from the Beginning
There is a form of fly fishing that is like a spent spinner, fading and dying.... The venerable winged wet fly, once popular and a staple in a trout fisher's fly book, has lost favor.
This book is about the ingredients that go into the making of a successful agency. There are certain givens. The first is the bedrock tenet of modern marketing: Differentiate your brand. Agencies must learn early on to develop unique cultures and capabilities that separate them from the competition. Otherwise, they risk being marginalized by clients.
Even the label full service is suspect in today's marketplace. No young agency can afford to offer all the above-the-line and below-the-line specialties such a phrase suggests, and, if it did, would that agency be any different from more established agencies making the same claim?
How do you go about making your agency unique and competitive? You might start by looking at your agency's architecture.
The internal structure of most agencies is like Roger Menard's "spent spinner." It is built on a rigid, silo-like departmental model that goes back more than 50 years. This was the time of the Organization Man, when agencies and their clients were built like the Pentagon-with everything neatly in its place. Since then, the structures of clients have been updated and streamlined-but agencies never were.
Under the silo model, everyone has a function and reports to a silo leader. If you're a media buyer, you sit in the media department. If you're a creative person, you get to sit, work, and play in the creative department. Occasionally you see people from other silos in meeting rooms, in the cafeteria, or on company picnics. The only time you physically work as a team is in a new business pitch, where for a time everyone gets to eat from the same pizza carton, spending hours rehearsing and polishing the pitch.
Does this really make sense? Shouldn't agencies be discipline-neutral, freewheeling structures that form and re-form for a specific purpose, without regard to titles, departments, and seniority? Shouldn't they exhibit an open architecture, in design, purpose, and business model, that is inclusive and makes everyone feel equally part of the creative process?
To be idea-neutral, you need a brief and very little else. But in advertising, everyone brings a preconceived notion of what is required. The pressure is on to make ads, not necessarily to achieve quantifiable results. Results growing out of advertising are very ephemeral things, because in actual fact you cannot measure, except in rare instances, the precise impact of a communication on consumer behavior. Sure, the famous Aaron Burr commercial in the "Got milk?" campaign made people think of how nice it would be to drink a glass milk after eating a peanut butter sandwich. But did the ad drive milk sales? Well, it's hard to tell. If you ask consumers why they buy a product, they don't usually answer, "Because I saw a great ad last night on television." They say something like, "Because I need it and I trust this brand."
Eventually, your gut will tell you what works. Great advertising is memorable and strikes an emotional chord with the target. That should translate into sales results or brand awareness. How do you get great advertising? Well, not by assembling your ad team and saying, "Guys, we've got to come up with a great TV campaign." Whoa! Slow down. What you need first is an idea.
Really good ideas usually spring from very open thinking. Don't start by defining the media channel or the celebrity you want in an ad or the music to go behind it. Start with the idea.
That may be harder than you think. Especially in this new environment where clients are looking for ways to communicate an idea beyond traditional media. For agencies to support a media-neutral approach, there is a critical need for a new architecture-one that breaks down the silo model. First, cultures of mature agencies need to be overhauled to reignite the attitudes and work ethics of their people. Furthermore, every five years or so, the agency partners should assemble and reconsider their current model, asking themselves the consultant's standard question, "If you were starting this company tomorrow, how would you design it?"
If the answer isn't, "Make an exact replica of what we are today," then you have your work cut out for you.
The first issue in redefining culture is to agree on your mission. What do you want your agency to do? The obvious next question: How should we organize to best perform that mission? Everything in advertising seems to resist change. Ossification of culture begins to take place in months, sometimes weeks after an agency is born. Perhaps such an early definition is a natural development that allows people to define their roles and get on to the more serious business of client service and idea creation. But advertising is an ever-changing endeavor. Agencies have to reform every few years to ensure their relevance and ability to deliver a superior product.
This is not a new thought. As the great manufacturing companies started to experience the recession and market dislocations of the late 1980s and early 1990s, the call went out for something called process reengineering. Reengineering was meant to refer to the study of the processes and organization structures that go into the making of an efficient factory or business. But in the 1989-1990 recession, the phrase came to stand for laying off large numbers of people and downsizing.
In fact, process reengineering, when done right, is a tremendously energizing exercise. Interestingly, there were conferences on the subject throughout the advertising industry, but few agencies ever seriously tried it.
One that did is Pittsburgh-based MARC Advertising, which dared to knock down walls and endure a traumatic, formal reengineering process. MARC USA CEO Tony Bucci recalls the epiphany he had while attending an American Association of Advertising Agencies annual meeting in 1992: "We had been growing, but the problem was that as we added revenues, we added costs, too. People were working nights and weekends. I didn't see how they could work any harder. But we couldn't improve our margins. I knew there was something inherently wrong. I knew I needed to do something dramatically different, but didn't know what it was."
At the annual meeting, he slipped into a workshop on process reengineering led by a consultant from Arthur Andersen. "He told how he had gone into the media department of an agency and slashed what he saw as a duplication of activities. I thought, 'Holy cow, this might be just what we need.'"
Bucci got paired with the speaker on the golf course and eventually decided to hire Arthur Andersen and to turn MARC (which in 1993 was billing about $64 million) on its ear. The Andersen team spent six months studying the agency's problems and then began changing people's tasks, reforming departments, and cutting down the number of steps it took to make ads and to service clients. The result was not only that profitability soared, but also that people felt energized. Within a few months of the completion of its new structure, the agency started to add new clients and billings. In 1994 it jumped to $79 million and the following year almost doubled to $154 million. Then it began acquiring agencies in other cities-two years later it was billing $300 million.
The reengineering process of the silo model that existed at MARC has never really stopped, Bucci notes, because the agency now is constantly reexamining itself as it grows-especially as it adds new offices. As Bucci says, "Too many people get into process reengineering and think they're finished. But you have to change the mentality of people-most importantly of senior management. You have to move from process to mind-set-and not just of staff but of their leaders."
The MARC system of reorganization is based on a multistep process involving planning, discussion, and training by every constituency-even clients. Every move is preceded by weeks and months of discussion about employees' roles and functions. Bucci is very logical. He likes to work according to a plan-one that is understood and supported by senior staff. He spends a lot of time in meetings and retreats, discussing various approaches and trying to gain consensus from his associates on ways to attack problems. When there is agreement, though, the agency is not afraid to tear down walls and processes and introduce new approaches and architecture.
Bucci feels he's now about halfway to his goal. "I laid out what I call a vision horizon-an outline of where we wanted to be in 10 years. We've done it in three-year increments. We're growing, but we're still in the formulation of our first stage," he says. A decade later the agency has grown tenfold and is billing about $650 million, with offices in Pittsburgh, Chicago, Indianapolis, Miami, and Dallas. As such, it stands, with The Richards Group and Wieden + Kennedy, as one of the top five independently owned agencies in the United States.
Bucci is tough on himself and the industry. "We're not anything yet," he said in an interview in late 2002, "because we're still recreating as we acquire and constantly adjusting what are to be our strengths and what will be our product niche. Come back and look at us in a couple of years-by then I would bet that we'll be on the West Coast and probably in Boston and billing above $1 billion."
As for his friends in the AAAA, Bucci says, "The biggest problem for this industry is that it's not training its young people to be leaders. Everyone is so focused on technical magic. What we need are business leaders who can help clients find the answers to their problems."
IMMERSING YOUR TEAM IN THE WORK
Some agencies, following the lead of Messner Vetere Berger McNamee Schmetterer Euro RSCG in New York, have created "war rooms" for clients. In this mode, the teams put all the work relating to the client and the competition on moving or layered walls. The team is thus surrounded with "windows" of data in much the same way a computer desktop can be made to represent all the ideas critical to the strategic evolution of the brand.
But such war rooms are a temporary affair. Few agencies can afford permanently to allocate communal space to a single client. After the meeting ends, the team disperses and all the materials are packed into a cabinet. It is a momentary thing.
In trying to create a company devoted solely to the creation of ideas, some agencies might decide to take the war room's communal space to a new level. They might surround everyone with ideas, good and bad, and keep them working in close proximity to one another.
These agencies might ask: Isn't there a more productive structure that would better define people by mission rather than discipline? Function follows form in a service business. Just because everyone knows where to sit when they come into work doesn't mean they are organized properly to fight the battles of a modern idea agency. In fact, with the advent of computers, most people spend the day focused on the screen in front of them and physical architecture has become less important.
Consider what it would mean to organize the creative department to include media planners, account planners, art directors, and copywriters. Another department might be called "production" and include traffic people, media buyers, and junior account people, all focused on keeping the work on budget and on schedule-the action part of the agency rather than the thinking part.
Strategic planning, senior account management, and research could be isolated into a third grouping. Even better, this group could operate under a separate brand name and be sited on another floor or in a different building-so that clients meeting this group would get the impression they were in the presence of strategists whose work was not included in the advertising budget.
Imagine the effect this would have on everyone. Certainly account people might complain that they had been excluded from the creative process, but at least they would be asking to be part of that process rather than to control it. Creatives would gain a broader focus.
Strategic planning would be recognized as a premium service. Traffic people might teach account people their negotiating skills-and learn from their new teammates more about the client business they were servicing. Media buyers might just enjoy the hustle and bustle of the traffic department. As Tony Bucci can tell you, even moving around the desks and retitling people has a dramatic, energizing effect on an agency's culture. The point of the exercise is that this kind of reengineering serves to redefine an agency's mission and reexamine its functionality.
DEPARTMENTS VERSUS BRAND TEAMS
For a time, many leading creative agencies in the late 1980s and early 1990s-Chiat/Day and Carmichael Lynch, to name a few-played with the idea of reorganizing themselves into brand units rather than on the traditional department model. Instead of separating accounting and creative functions, people were seated together in account teams. Agencies contracted with architects to redesign their interiors and bring in movable furniture and walls so that account people, planners, creatives, and others devoted to a single account could be grouped together on a single floor or within a walled area.
Jack Supple, creative director of Carmichael Lynch, recalls with some horror an experiment with what he calls "the group system." He says, "We would form into groups where they actually had their own P&L built around the accounts they managed. In those days, account people really had the numbers of the creatives-we were pretty much captive, right under the thumb of the account people who ran the accounts."
Supple continues, "I remember once I was sitting in the office of a creative, kicking around an idea, when from the next office someone said: 'No, you can't do that.' The account guy was sitting right next door. He didn't understand that creatives need to have an opportunity to be stupid and think things you can't do. We like to put them on the wall and consider them and then take them down. But he was already telling us what we couldn't think about."
"When we moved offices a few years later to our present building, I insisted creative people sit in proximity so that they can bounce ideas off each other. Because a lot of our creative power comes from just casually checking things out.
Excerpted from CASTING FOR BIG IDEAS by ANDREW JAFFE Copyright © 2003 by Andrew Jaffe. Excerpted by permission.
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Table of Contents
Foreword by Neil French, Worldwide Creative Director, Ogilvy & Mather Advertising.
Introduction: The Call for a New, Smarter Agency Architecture.
PART 1: Agency Architecture.
CHAPTER 1: Agency Architecture: Getting It Right from the Beginning.
CHAPTER 2: The Pitch: Matching the Hatch and Deciding What Would Make the Client Bite Down on Your Lure.
CHAPTER 3: Creative Department: How Long Can It Survive as Idea Central?
CHAPTER 4: Media Department: Can It Replace Creative as the Primary Source for Brand-Building Ideas?
CHAPTER 5: The Internet and the Agency.
CHAPTER 6: Prioritizing Strategic Planning.
PART 2: Management Lessons.
CHAPTER 7: Growing Your Agency.
CHAPTER 8: Smart Ownership Principles.
CHAPTER 9: Integrating and Refocusing the Agency Network.
CHAPTER 10: The Future.
APPENDIX A: Advertising’s Invisible Values.
APPENDIX B: A Big Future for Big ideas.
APPENDIX C: The IDEO Difference.