This blogpost 18 months ago from W+K London’s MD Neil Christie was one of the catalysts for the Agency Future project. The recession was decimating ad revenues and chatter about new agency models was at fever pitch. An idea took root.

Which is why it’s only right and proper that this project’s first Agency Viewpoint should come from Mr Christie himself. I recently sent him some questions via email. This is what he had to say:

Do you still see a distinction between digital and ‘traditional’ agencies?

Yes, there’s still a distinction. Some digital agencies lack credibility and experience beyond that specialism and some traditional agencies are relatively weak in some aspects of digital. But the boundaries are blurring all the time as we converge on the same space.

Crowdsourcing is the flavour of the month – what’s your take?

I think it’s an interesting trend that has resulted in some fun one-off ideas. Anything that results in more, better ideas is a good thing.

Do you envisage any fundamental shifts in business models for agencies in the coming years?

I think changes in media, technology, the economy and increasing globalisation are already affecting the traditional model. Advertisers no longer need an agency network of hundreds of offices to create and manage a global campaign. And clients don’t want to pay for those big networks. If this trend continues, it will have major implications for network business models.

There’s a lot of talk currently about partnerships and equity exchanges between clients and agencies rather than fee arrangements. Personally, I’d generally rather have the fees in cash than a share in the client’s company.

The other potential driver of change is the question of whether agencies can use their creativity on their own behalf to create brands, utilities, tools, content, other methods of revenue generation, without client involvement. Interesting to see whether any agency can in the coming years make a fundamental shift from being predominantly funded by client fees to mainly funded by revenue from its own projects.

How do you see W + K developing over the next 5-10 years? In what ways do you think the network is well-placed to meet future challenges in terms of media habits and securing revenue?

Ten years is way, way too long to try to predict. But I think we’re well placed for the foreseeable future because we’re independent and will stay independent. We don’t have to worry about holding company pressure to merge, or acquire, or do anything else. I think the fundamental values of this place – creativity, innovation, willingness to learn, collaboration, openness – will help us meet the challenges as they arise. Our strategy and tactics will change, but our values won’t.

How is the integration of creative technologists into creative teams working out?

It’s OK so far and we have some great work we can point to as examples of success. But I don’t think it’s just about adding technologists to traditional teams – it’s about putting together the right talent to get the job done – ideas people, strategists, tech people, doers, etc. Every job is different so there should be no assumption that each task needs the same sort of team line-up.

How does the network share inspiration and foster innovation?

We talk to each other! Only seven offices, so it’s not so hard. Plus we have loads of internal blogs, sites, places to share and swap stuff.

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There’ll be more Agency Viewpoints to come over the next few weeks. We’ll also be starting a series of in-depth Agency Profiles soon. First up will be Made by Many and Guided. Do get in contact if you’d like your agency to be featured.

We would have loved to  have been there but the Internet, as always, is the next best thing. Here’s some of the best write-ups from the Crowdsourcery panel from Social Media Week.

Edward Boches was quick off the bat with a terrific post – Is advertising giving crowdsourcing a bad name? He argues:

“If you’re an agency, stop thinking about crowdsourcing for nothing other than creative (even though it can be a great tool for this, too) and consider your clients’ most important business challenges: faster development of new products; improved customers service; alternative distribution channels; new ways to give customers a chance to participate. All of these objectives could be crowdsourced, making an agency more of an asset in the process.”

BBH Labs’s Ben Malbon’s take-out was that crowdsourcing seems to be accelerating the slide towards more permeable agency business models:

“Creative agencies need to move towards becoming permeable organizations. Those in networks need to be reconfigured as networked organizations versus simply organizations within networks.

“Creative business must be able to draw on not just the talent within the building, but the many skills and areas of expertise that lie beyond those walls. And they need to be able to draw on this external resource. Like immediately. Certainly within BBH Labs we believe this is the *only* way the future can look; and of course it comes with challenges.”

Lastly, Attention Digital’s Johnny Makkar has also provided a truly comprehensive recap.

Forrester’s Sean Corcoran is on a very similar mission to me – discovering what the future holds for the advertising agency.

He’s interviewing heavyweights in the industry and gathering views from interested parties. There’s already a plethora of interesting insights on the original blog post.

We’re really excited (and a little jealous) about this. The Forrester brand obviously lends Sean’s research a lot of credibility, not to mention access to a much bigger network than our own humble project can call on.

But if nothing else, it confirms what we’ve been thinking for a while. A spirit of change is abroad in the industry… what agencies do now will shape the landscape for years to come. Exciting times.

A few weeks ago I learnt that I’d won the DRRB’s Ole Stig Lommer travel scholarship, an annual grant awarded to the person from the Danish advertising business who submits the most interesting proposal for an industry-related project.

I proposed a project centred around this website. I’d use the 60,000 Danish kroner to travel and engage with various visionary individuals – people at the forefront of the creative industry, forging new opportunities, new business models, and new directions for creative agencies. From my application:

“These interviews will be recorded and uploaded to YouTube and agencyfuture.com and the resulting publicity would be used to generate awareness of the project.

“From this point, the project will take shape organically and I will allow my future actions to be led by feedback, both from the people I interview, and from people who contribute to the debates on the site.

“Half documentary, half social media experiment, my ultimate ambition is to produce a snapshot of an industry in flux, while also showcasing the collaborative and transformative power of the tools that are powering such upheavals.”

Anyway, no further ado, the time has come for action. Use the Have Your Say form on the right and get involved. Tell me who I should be talking to, what agencies I should visit, what’s inspiring you. Get specific – talk business models, remuneration, client failings, procurement… whatever.

Many possible scenarios lie ahead and the changes to the structure of our industry are real and will have lasting consequences. Every agency is dealing with media fragmentation and profound upheavals in the relationship between brands and consumers. As a result, every agency is reconsidering what they do and the way they do it to ensure they remain relevant and profitable.

What ab0ut your agency? How are you adapting? What are you going to do?

Agency Future was at Marketing Week’s Agency Evolution conference earlier this week. A little under-attended and a lot over-priced, it was nevertheless a very useful day with plenty of good talks and nuanced debate around the usual issues of integration, remuneration and the role of the consumer. Particularly helpful were the talks from clients, but more on those later.

Fallon MD Karina Wilsher chaired the event and opened with an appeal to move the debate past business models: ‘Model schmodel, the old-fashioned supertanker model is already dead. Clients want smaller collections of people tied to nimble, innovative, evolving structures that can shape and mould themselves into whatever form is needed to best solve their problems.’

Karina ended by saying that the agency of the future would not be unrecognisable from what we see today: ‘The best agencies will still have the best people, the best ideas and the best culture. Good ideas will still be central to what we do. Actions speak louder than words and any new model should still be servant to the idea.’

Up next was Ian Milner from Iris who gave a well-received talk that proclaimed the death of the ‘old-fashioned’ ad network but also spelt out how he saw the solution: ‘The advertising industry as we know it is facing an armageddon moment; there’s too many agencies and we don’t have a divine right to exist. If we want to remain relevant, we need to start playing a broader role all along the value chain. It’s about effectiveness. Clients want outcomes, not outputs.’

Ian even had some fancy graphics to illustrate this last point. One was a triangle with the words ‘Create advantage (not just pretty pictures and nice films’ in the top segment. The bottom segment contained the words ‘Faster, action-oriented partner’ which would become a theme of the day.

He ended with some very useful thoughts around the need for agencies to be more commercially minded: ‘Most of us are pretty crap at business. We need to be more inventive around how we bill, whether it be shared equity arrangements or performance-related schemes. Agencies should employ more people from the client side who are better at engineering more time in the value chain.’

Will Harris, marketing director from Nokia, was next at the lectern. He announced that while he was very much ‘pro agency’, there was a pressing need for most of them to reclaim their relevance: ‘At Nokia we are using those agencies that can get our message to the right people in ways that can enable those people to share the message. We’re looking at smaller, agile agencies with smart people and cohesive offerings.

‘We see the right agencies as partners, not suppliers. They need to understand our business more. We value truely transparent relationships and that means getting remuneration off the table as soon as possible. Lastly it’s about people. The best agencies have the best people.’

Mike Parsons from Tribal DDB pitched in with the digital perspective: ‘Clients are dramatically changing the way they want to build their brand. The move away from paid media to earned media is accelerating fast. At DDB, VW now spend more on digital than traditional, and that spend is mostly on web utility, not broadcast media like search or banner ads.’

I liked Mike. He had the approach of a genuine enthusiast and wasn’t shy when it came to detailing the necessary improvements around digital communication: ‘There needs to be better standards around measurement. No matter what some software companies might tell you there’s still no compelling measurement of sentiment out there and clients want it.’

There then followed a pretty wide-ranging panel debate, chaired by Alex West, global innovations director at Mother. Here’s the highlights from a discussion which focused strongly on remuneration and client/agency relationships:

Alex: ‘Clients are looking to us for more interesting remuneration models. We have to be inventive and push for fair reward for what we do.’

Laurent Ezekiel, client services director for LBi: ‘New remuneration models are all well and good but the reality is that the vast majority of blue-chip companies are too structured to allow for any significant changes to the model.’

Kerry Glazer, chief executive at AAR: ‘Clients don’t care about the size of your agency. Even the biggest agencies in the world are small-fry in corporate terms.’

Ian Pearman, managing director at AMV BBDO: ‘Clients would be well advised to look at how spread their prospective agency’s revenue is. Those agencies with the overwhelming majority of their revenue coming from one client might not be your best choice.’

Kerry: ‘The split between clients’ procurement and marketing departments is not a good thing. Many agencies just don’t make any money thanks to procurement guys coming in and renegotiating fees down.’

James Tipple, UK marketing director for Yahoo, agreed that cost-squeezing can be counter-productive: ‘We need to be closer partners with our agencies. We’re taking a more collaborative approach at Yahoo and trying to phase out the project-by-project mentality and think more coherently.’

Graeme Dignan, founder and CEO at Erasmus Partners: ‘There needs to be much less ‘them and us’. If you were trying to build an amazing building and you treated your architect the way some companies treated their agency, you’d end up with a shit building. We need to get closer and share common goals with clients.’

Kerry: ‘We know that the value and power of our ideas goes beyond the time it took to have them and we need to start acting like we know it. Why is it that KPIs are always around the agency performance and never about the client’s?’

Ian: ‘Why not try and institutionalise the right to play? Take the last 5% of any budget and use it for experimental, innovative communication that moves the brand forward in other channels and other ways.’

Phil Rumbol, UK marketing director for Cadbury’s, was among the last speakers on the day and his focus was very much on how agencies’ main role should be to help brands earn, create and maintain cultural relevance: ‘I see an agency’s main role as working much closer with its client and acting as a purveyor of brand ideas and as guardians of brand behaviour.’

The three preconditions for this to take place were as follows:

- Stronger client/agency relationship (agencies need to be more flexible and responsive to clients’ needs)
- Reconcile artistic and commercial tensions
- Volume of activity up and cost per unit down

Overall, a worthwhile day. Maybe nothing really new but it was good to see some industry heavyweights clarify their thoughts, and to get the clients’ thoughts.

Thought-provoking piece from Alan Wolk at his Toad Stool blog hammering home the message that the traditional definition of creativity (as understood by most established agencies) is way too narrow:

“Now these changes do not signal the death knell of creativity, but rather the narrow definition the ad industry bestowed upon it. Creativity is a much broader term these days, as it encompasses everything from a media strategy to a product development cycle to the content strategy on a Facebook page. And the agency of the future is going to have to jump on all these loose threads and tie them together into some sort of cohesive something.”

Alan’s post has already drawn some interesting comments, notably from Dave Wilkie of Where’s My Jetpack fame. His riposte:

“The more people involved in the production, the more watered down the product. Trust someone, or at the most, TWO someones, (one from the Creative side, one from the Account side) to create something that grabs – and sells. Social Media is one thing, but let’s not try to turn everything, including brand strategy and ad creation, into some “everyone gets a say” democracy.”

Where do you stand? We like to sit on the fence here at Agency Future and so we agree with both Alan and Dave. Ad agencies are changing for the better (witness the rise of the creative technologist) but we also recognise the risk of an overly touch-feely approach where nobody’s wrong and everybody’s right.

A separate question that I’ve been wrestling with recently (though still vaguely relevant to this post) is how genuine visionaries will fare in the future agency ecosystem. How will they fit into an agency where the traditional notion of creative teams with prescribed roles doesn’t exist? Who will be willing to back their ideas? Will flatter hierarchical structures actually create more visionaries?

As if confirming Agency Future’s reason for existing, this panel at next year’s SXSW looks like a must for anyone who, like us, spends their time pondering the ways agencies are facing up to changing times:

What will the digital studio, content shop, creative agency look like in the coming years? With the world’s of interactive, broadcast, and mobile colliding, who will be best suited to serve the client compelling content as a one stop shop?

This timely Adweek post on the post-recession advertising biz has some nuggets of insight hidden amidst the usual filler of baseless predictions. Here’s a few:

- There’s an unlikely catalyst to the digital trend: the green movement. Kenny argues that growing sensitivity over the environment and the movement against conspicuous consumption will force real change in the way advertisers communicate with consumers. “Now is the time for responsible advertising,” Kenny says. “It will be the most meaningful transformation in the history of advertising.”

- Digital technology, Kenny argues, will be in the vanguard of that transformation. “It’s waste-free,” he says. “It doesn’t scream and shout at people, but rather it has true potential to add meaning to their lives by connecting when and where people are most receptive to the content and messaging.”

- Experts also predict that agency compensation models will continue to evolve in a post-recessionary climate, with both procurement- and performance-based models gaining greater traction. Russ Sapienza, a partner in PwC’s entertainment, media and communications practice, says agencies have to be “black belt in working with procurement and striking a balance between the agency and the client’s procurement teams and brand managers.”

We’ve been away for a little while but we haven’t been idle. Here’s some of the best pieces we’ve read recently; as always with a focus on new and exciting directions for creative agencies and the future of creative communication:

- We met Razorfish employee Johannes Kleske at Reboot 11. He’s a super-smart guy and his post on why firms should ditch their ’so-called digital agencies’ is a must-read.

- Johannes’ piece touches on the latest findings from Forrester, which predict a massive budgetary swing away from traditional to interactive over the next few years.

- PSFK point us toward the case of YouTuber Kristina Horner who was accused of selling out by her community after she ‘worked’ with Ford. The fall-out – as documented on Kristina’s YouTube channel – is highly instructive if you’re interested in the intersection of blogger relations, social media and brand messaging.

- Last but not least, BBH Labs deliver a highly convincing case for why we still need Big Ideas.

Well, if the magazine is Monocle, quite a lot apparently. That’s the premise of PSFK’s latest thought-provoking post detailing many of the clever ways the magazine helps advertisers create content that people actually want to read.

Partnerships between brands and publishers are nothing new but, as PSFK point out, Monocle have raised the bar and completely reimagined the advertorial. It’s working too, with Monocle’s revenues up 30% year on year.

Read the article in full here, and be sure to add PSFK to your Reader if it’s not already there.