Take it from the leaders in advertising and learn about advertising tips, trends and movements happening in the advertising business.
Michael Lee| Forbes | September 10, 2015
Everything is up for grabs.
New ideas are being put together, tested and learned from, and tested and learned from a little more, to get both agencies and clients operating at a higher level.
Clients are looking at new ways of driving down cost, upping value, efficiency and output, keeping the agency on their toes and it’s ideas heading for the bleachers.
Agencies are also working out how to keep their agency on their toes, ideas also heading for said bleachers, keeping all those new start-up company’s clammy hands stuffed with dollars away their talent, and being grown-up partners to their clients.
So, lot’s happening, but here’s 5 things to ponder.
1. What’s the idea behind the incentive plan?
Coca-Cola’s Director of Worldwide Agency Operations, Sarah Armstrong, introduced their new 70-20-10 rule for incenting their agencies.
The rule still provides standard performance-based compensation for the 70% of work that agencies are most used to doing. But the company is providing a guaranteed minimum bonus for the 20% of projects labeled “evolved” or the 10% of projects that agencies are tackling for the first time. Plus, there’s the opportunity to earn another 5% of the guaranteed minimum in Coca-Cola’s new agency bonus structure.
The bigger idea here is the reason for the incentive beyond another pot of gold for a talented agency. Coke’s reason was “We need more work in newer and groundbreaking areas”.
Client note: be very specific about the role of the incentive. It can’t be just about money. It has to have an idea.
2. What’s the point in hiring an agency if they can’t keep their talent?
It’s the single biggest issue for agencies. Even the best of them: Attracting, incentivizing, and retaining top talent.
Not only are other agencies competing for that talent but they now compete with the multitude of technology start-ups that are popping up in every cubbyhole (not even a garage anymore) from Brooklyn to San Francisco.
Jonathan Mildenhall, CMO of Airbnb has a perspective on this and laments that the traditional agency compensation model is “squeezing the life out of creativity” and is now incentivizing his agency (TBWA) to create work that will help business growth and in turn allow them to recruit the best talent.
Airbnb’s agencies are paid on a “per night” basis where they take a cut every time accommodation is booked through the site.
From an agency perspective, Kit Krugman, Chief Curator at Co:Collective is suggesting that innovative companies need to think beyond money to engage their most valuable asset; their people, and that ”to incentivize and retain our most valuable asset in a talent economy–our intellectual capital–we need to re-align salaries with what drives both them and the company forward.”
Talent is massively important to both agency and client. And maybe where the future of compensation would do well to focus.
3. The world’s first brand-tech group.
Technology companies are rarely very good at building brands, and companies who are traditionally good at building brands are poor at technology.
Well, that’s the theory behind the recently launched You&MrJones.
“Were setting out to offer both to clients, and at a global scale. It will be a different and new way of delivering creativity for brands.” Says You&MrJones founder David Jones (Ex-Global CEO of HAVAS).
“Technology now enables every part of the brand-building process to be done better, faster and cheaper – from creating content, to producing it, to sharing it, to targeting and measuring.”
“And it’s also created a global creative department of more than 1 billion people, all of whom can now create, produce and share. We’re building a new technology group that aims to leverage all of this for brands.”
Mr Jones is not going to build a big legacy businesses (which he built at Havas) “a flawed model that charges a fortune for a commodity (i.e. people’s time) and gives the added value (that is, the business-changing creative idea) away for free.”
For the last two points, read the rest of the article on Forbes.