Evolving the agency business model
Ian Priest, IPA President & Founding Partner VCCP
Trends in client/agency relationships mirroring trends in profitability 8 7
7.2
6 5 rs a e Y
4 3
3.0
2 1 0 1984 Source: Bedford Group Consulting
2013
My ADAPT agenda Who are we talking to? The marketing and communications industry What do we want to achieve? Better commercial creativity To reshape the business model to reflect an evolving and dynamic Why? industry By adapting faster and better in 5 key areas How do we do that?
The 5 key areas A D
Alliances
Diversification A P
Agility Performance
T
Talent
less pitches /more partnerships less one-dimensional/more multi-dimensional less set piece/more real time less time-based/more value-based less traditional/more diverse
Adaptathon Schedule  3rd October 2013
Alliances Adaptathon+experiments
3/4/5th February 2014 Diversification Adaptathon+experiments 7th/ 8th May 2014 8th July 2014 7th October 2014
Agility Adaptathon+experiments Performance Adaptathon+experiments Talent Adaptathon+experiments
Cross industry participation  C L I E N T S
Client Council and Ambassadors
IPA Council (plus IPA Groups)
Industry bodies Intermediaries Influencers
A G E N C I E S
Client Council
Sara Bennison :
Nigel Gilbert :
Will Orr :
Wendy Proctor : Government
Chris MacLeod :
Roisin Donnelly :
David Magliano :
David Pemsell : Steve Vranakis :
Andy Fennell :
Jonathan Mildenhall :
Sally Cowdry :
5 Chapters
The value of long-term partnerships 2013
3 cars in the top 10 list of best-selling cars of all time
1950
The cost of pitching Agencies
Clients It takes 6 to 9 months to bed down a new relationship David Magliano, The Co-operative Group
We estimate their internal pitch costs amount to ÂŁ31,756 Debbie Morrison, ISBA
Source: IPA/ISBA New Business Survey 2009
Better relationships = better work +37% for Creative/+21% for Media
Agency Output Copyright Š 2013 APRAIS Ltd.
14
Relationship contract
Marketing Feature July 2014
Add marketing article
The wider context “After 3 years of negative prospects (2009 -2012) , we have now had over a year of positive trading” (Bellwether) “58% of corporate value globally now resides in intangibles” (Brand Finance) “Brands which invest in A+P outperform the market by 30% on average” (DeutscheBank) “The more enlightened members of the marketing procurement industry are beginning to adopt the language of marketing investment ” (Buying less for less)
A new evidence base
Towards Win-Win Performance IPA/ISBA Workshop – May 2014
“All parties committed to a re-evaluation of time-based remuneration” “We need to focus less on cost, and more on value to the business” “It ends up being a trust issues between the client and the agency” “Scope of work needs to be clearer so we can cost accurately”
Keen to explore the Coca-Cola approach Source: Unleashing the Creative in Everyone, November 3013: Jonathan Mildenhall in conversation with Ian Priest www.youtube.com/watch?v=G1P3r2EsAos
Interested to make PBR work better
An appetite for new investment models
VS
OpEx
CapEx
Towards a new model Grow
26
Outperform
Transform
Campaign KPIs
Performance Metrics
Business Case
INPUTS Time = Fee
OUTPUTS Value + Performance=PBR
OUTCOMES Performance + Risk/ Reward=JV
— Video
3 Performances ADAPTLABS
TIME BASED
VALUE BASED
CFO Omnicom Media Group
Head of Procurement EE
RISK/REWARD BASED
Managing Director Sapient Nitro
Marketing Feature August 2014
Add marketing article
Less one-dimensional, more diverse
We are doing lots already
Better together •
Industry wide
•
Co-ordinated initiatives
•
Celebrate talent
•
Client engagement
•
Job swaps
•
Joint Training
3 Performances ADAPTLABS
FILLING THE FUTURE SKILLS GAP
Mark Bell DARE and Chairman IPA Digital
RETAINING TALENT
Andrew Pinkess AMV BBDO IPA Professional Developmen t Group
MAKING THE INDUSTRY MORE DIVERSE
Julian Douglas VCCP, IPA Diversity Forum
The ultimate outcome
Marketing
Procurement
WIN
Agency
WIN
Commercial Creative Contract
Book and Video