From communication experts to idea factories

A couple days ago I was talking with a creative director about how we have often found ourselves giving away ideas and tips to our clients about potential new products, or improvements of old ones: though most of these ideas get lost along the way, sometimes they eventually become financially-relevant products, and all we get out of that is a handshake. If we’re lucky, a “thank you, we’ll not pitch you for a while…”

Fastforward 24 hours, and I stumble upon this article from AdAge, listing a number of agencies that have been addressing this same issue in the most obvious way: by becoming marketers themselves.

They develop and market their own proprietary ideas, thus evolving from consultants to entrepreneurs: from “communication experts” to “idea factories”.

 The first implication of all this is quite immediate: money. You need lots of money to finance your ideas, develop and market them, before you can see any ROI. But if you do see a ROI, is much more rewarding than current agency fees.

The second keyword is risk: entrepreneurial risk. Agencies have always been preaching brave risk-taking, but have never really been keen to take any risk themselves.  We still hang on to the same structure and business model of the last many decades.

Speaking of that, what kind of structure can support such a business model? Most likely one with a few selected talents and low fixed costs. Which is pretty much the opposite of the agency structure of today: very high fixed costs (lotsa people), but real talents have been fleeing our industry for years, in search for better opportunities and, well, more money.

I’m still gathering the thoughts, but it seems one of those topics worth tracking.

Final Burp: if agencies start succesfully marketing their own products, will clients quit saying that we can’t fucking sell, and we just don’t get figures?

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3 responses to “From communication experts to idea factories

  1. I’m sorry but I really don’t get it: How do you expect this to happen exactly?
    Agencies have ONLY ONE reason to be there in the marketplace, and that’s exactly that they have no idea whatsoever of the technicalities of one’s business. That’s how they sometimes can give bright ideas that no entrepreneur or marketing guy would ever had. Because they should see things as consumers do (that’s also the reason why so many people there have little to no know how whatsoever on anything, because that’s actually a good thing).
    When you “market your products” your worldview changes radically, because suddenly you have to think about stuff like building a salesforce and keeping them happy, building and mantaining an infrastructure, buying stationary and renting some buildings, invoicing and manufacturing just to name a few.

    Of course you can do that (and many agency outcast have become successful entrepreneurs in the past), but by the very act of becoming an entrepreneur a strange thing happens: well… you become an entrepreneur. And entrepreneurs (you told me) need agencies because they don’t think as their users and therefore need somebody to speak in their name. So the whole discussion is totally pointless to me.

    Now, if you just mean that you foresee agencies to give product ideas and get paid for that (ideally as a % of the profit that product is generating), I’m sure you’ll find a lot of entrepreneurs happy to work on that as long as you share the loss in case of a failure. Otherwise this really looks like a child’s complaining that she’s not allowed to play as much as she would like to.

    BTW:

    1) the reason why agencies are “preaching brave risk-taking” is exactly because it’s not their head that is on the line. That’s why I admire brave risk-taking entrepreneurs and hate brave risk-taking preaching assholes.

    2) We naturally tend to think to ideas that we gave that were successes. That’s because we have lots of cognitive biases (have a look here: http://haraelsblog.blogspot.com/2007/05/26-reasons-what-you-think-is-right-is.html). What about all those crappy ideas that we gave that were a complete failure or were so bad that the actual product never saw the light of day? Should we be charged for that?

    C’mon, I know you can blog smarter than that…

  2. See, part of your assumptions are wrong.
    Advertising agencies DO NOT know consumers, and in a way don’t even think like them. We’re not research agencies.

    Advertising agencies that claim they know consumers mistake their job. And companies that buy that help that mistake spread farther.

    We “know how” to communicate to consumers, and in a certain extent “what to” communicate to them. As I said, we’re communication experts. The difference is huge, and that’s why we need research agencies to investigate habits and attitudes (but not necessarily creative work)

    When we communicate a product, we take it into a fictional world where we experiment with it: we stretch it, turn it upside-down, deny it, and so on…
    This whole process leads to a number of ideas, and some of them don’t need to be fictional, but can find a relevant value if made real.

    That’s why there could be a business for us in selling them. As real, not as communication fictions.

    Besides that, I disagree with you on two issues:

    1) when you market your product your point of view doesn’t change dramatically because you have to think at salesforce, and infrastructure and so on… That’s not the point. Your point of view changes because:
    a) you fall in love with your product, and
    b) you want to sell that product to make money, instead of offering that product to provide a benefit.
    (How many times did you develop a product just for revenues’ sake, and then persuaded yourself that it was an absolutely needed breakthrough in everyone’s life, when noone outside your company gave a damn about it?)

    2) Even though ad agencies actually do build their own salesforce and mantain an infrastructure (which you deny), that’s not what qualifies an entrepreneur. How many entrepreneurs outsource their salesforce, or even start a business model that has no saleforce at all?

    An entrepreneur is qualified by its determination to invest on an idea, and face a somewhat relevant risk in doing so. And agencies are currently far, far away from this.

    C’mon, even though I agree with your point on sharing profits and losses, I know you can argue smarter than that…

  3. Pingback: More news from Cannes: making money brings awards « Final Burp

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