BakerTweet from Poke

Poke is a London-based creative company that "focuses on inventing and making interactive things."

They're not an ad agency in the way Crispin or Wieden or Goodby are ad agencies. But they do enough interactive work that you could argue they're in the leagues of the Barbarian Group or R/GA. Still, on their FAQs, they answer the question, "Are you an online advertising agency?" like this:

In a word: "Yno."

Poke is currently getting a lot of press from their BakerTweet invention - an industrial looking box that sends Tweets announcing croissants and buns are fresh out of the oven.

So Poke is a web agency. But also a design agency. And also an agency that can't really be categorized at all.

Is this what ad agencies need to become? Or does Poke live in its world and let the Goodbys and Fallons of the world live in theirs?

In a word: Yno.

I think when an agency positions itself as an "ad agency" it becomes much more difficult to sell anything but advertising to the client. Even media-savvy clients are likely to say, "Yes, you handle our advertising, but we've got other suppliers to handle special promotions, online work and other marketing."

If you want to sell more than advertising to your clients - even ambient media installations and PR events - you've got to begin by positioning yourself as more than an ad agency. And that's got to be a top-down decision. It probably won't happen just because a writer and an art director had a pretty cool idea that went beyond the print brief.

The Irv Blitz model of business

Irv Blitz is director in LA. I’ve worked with him on a couple projects. Really nice guy. Very hard worker.

From what I understand, Irv owns all his own equipment – the lights, the cameras, everything. So while most directors have to rent their equipment from the studios, Irv rents everything from himself. He gets paid as the director, and he gets paid through his rental company when he uses his equipment. I’m not sure, but I imagine the margins on that help him outbid competitors when he needs to.

Shouldn’t agencies be doing this? Why couldn’t an agency have an in-house production company. For every project, the agency would see two streams of income: the clients pay them for a concept, and for production. It could work in broadcast as well as print.

One reason might be the hedgehog and the fox theory of business. It would be tough to be a Wieden-caliber agency and have a Smuggler-caliber production wing. Still, that’s not a reason to try it.

Last thought: An agency/production house hybrid – I think that’s exactly what digital agencies are.

Maurice Levy on the future of print

Ad Age recently reported that Publicis Groupe’s CEO Maruice Levy encouraged a group of magazine publishers to innovate or die. “This is a profound structural revolution,” he said. “Don’t be like the auto industry that waited too long.”

Magazines are losing money that advertisers are diverting to digital media. And according to Mr. Levy, “Advertisers are not expected to go back to print after discarding the media…We live in a world where two words on a search engine’s results pages are considered more effective that a TV spot.”

At the same conference, Unilever’s Simon Clift said, “I spend ten or twenty times more time thinking about digital as about magazines.” He added, “We are coming close to a point where we can’t make ads any longer that consumers won’t actively engage with.”

I’m sure some members of the FIPP World Magazine Congress walked away from this session very bummed. (Although making magazines relevant is not an impossible task. Wired did a fantastic job with their recent J.J. Abrams issue with puzzles and a DaVinci Code-type mystery that simply wouldn’t have worked online.)

But Levy’s warning isn’t just to magazines. It’s to every agency that has a reputation as a print agency (look through a Communication Arts from the late 1990s, and you’ll find an entire roster of them).

I think there are currently two kinds of digital agencies: those that are pure digital shops (e.g., R/GA or The Bavarian Group) and shops that had enough broadcast and print clout to will themselves into the digital area (e.g., Cripsin, Porter + Bogusky and Goodby Silverstein & Partners).

If you’re an upstart agency with just a few years or less under your belt, my guess is you need to be purely digital, or do everything you can to bring digital into every project you tackle. Because simply doing a series of print ads and TV spots won’t be sustainable.

Coke's Pay-For-Performance

Ad Age reports that Coca-Cola is adopting a pay-for-performance model for its agencies that will promise nothing more than recouped costs if their AOR’s don’t perform, “but margins as high as 30% if their work hits top targets.”

The magazine quotes Sarah Armstrong, director of worldwide media and communication operations as saying, “We need [Coke’s agencies] to be profitable and healthy, but they have to earn it through performance.”

Under this new model, the clients determine the “value” of a project in two ways: First they determine how important the project is and set the price tag accordingly; Second, the client sets the goals of what the campaign needs to achieve. The more goals the agency meets, the more it’s paid. So hours worked is no longer a factor. Theoretically, you could put in a day’s worth of work and be paid the entire sum, or several 80-hour weeks and get paid nothing but recouped production costs.

Here’s what I like about the idea: It pushes agencies toward accountability and innovation.

Here’s what I don’t like about the idea: It places the onus on communication and not on the actual product. Bill Bernbach said “A great ad campaign will make a bad product fail faster. It will get more people to know it’s bad.”

Pay-for-performance works depending upon the agency’s control of the product. We’ve all worked on campaigns that the client has whittled and morphed and rearranged beyond what the agency originally recommended. Should the agency suffer losses because the client mandated several changes to the campaign which ultimately didn’t perform well?

Coke is probably not such a client. They’ve hired agencies like Wieden & Kennedy, Crispin Porter & Bogusky and Mother for a reason. And there’s a lot of room to play with a brand that doesn’t have a list of bullet-pointed product benefits.

Ultimately, I think pay-for-performance is a model that must first be dictated by the client, and then accepted by the agency on their own terms. Otherwise, clients would be just as well off producing their work in-house.

Welcome to Titanium Bound

When I graduated from the VCU Adcenter in 2000, my student portfolio contained five print campaigns, three one-offs, and my resume. And that was good enough to get me a job at an award-winning agency within two months of graduation.

There’s no way that would cut it today. Not for students looking for their first job. And definitely not for agencies.

There are some great agencies doing some great work in the old standbys: print, TV, radio, and outdoor. Flip through the latest annuals and you’ll still see amazing examples of long copy ads and direct mail pieces.

People thought radio would kill newsprint. And that TV would kill radio. And that the web would kill them all. So I don’t believe in the death of the 30-second spot. (At least not anytime soon.) But I do believe in evolution. And I do believe that the agencies that are going to stand out and thrive are the ones who continue to challenge the definition of what an “advertising agency” is.

As a creative with a copywriter background, I have no idea what kind of agency I’m going to be working for in 10 years. And I have no idea what kind of shop I want to build. Because I have no idea what kind of shops are going to be viable.

This blog is meant to be a receptacle of ideas – the kind that are going to shape the industry. It’s not a place for industry gossip and it’s not a place to post the latest campaigns (unless they’re really Titanium Lion material).

It’s a place to collect the ideas that are challenging, scary and exciting. And to try to figure out where exactly this industry’s going and how we can all have a good time getting there.

Hope you enjoy.

If you’d like to contribute a piece or pitch and idea, please contact me at davisspaulding@gmail.com.

Greg