Uber-rival Gett hires St Luke's for creative brief with risky remuneration model
On-demand taxi app Gett has tapped creative agency St Luke's to help launch a service allowing people to travel a set route for just £2. Its success will be predicated on the ability to convince people to ride-share with strangers; if it manages, the creative agency should reap significant rewards thanks to experiments with a new remuneration model.
Gett experiments with agency remuneration
The brief was won following a pitch against five agencies that Gett - which recently attracted $300m investment from German car giant Volkswagen - had directly contacted. The self-described ‘tech scale-up’ was on the hunt for a shop that could work as fast as it does, be equally focused on scaling the new service and deliver tangible business growth, not just a good creative ad.
Not a novel request; agencies have – and continue to – show how creativity can drive bottom line results. However, few risk their own service fee should the advertising not play out as expected and even with a ‘payment-by-results’ contract, the risk to the agency is low.
"[We're] trying to look at a model that’s not just a fee for service and about getting [the agency] involved deeply in our business," Mark Bloxham, marketing director at Gett told The Drum. "You can look at the negative in the fact there are pain points if we don’t achieve the goals and objectives, but there are massive benefits too."
In Gett’s case, it was St Luke's that put a number of different models forward, including pay-per-ride (akin to the agreement Airbnb had with TBWA) which would see the agency take a cut of every £2 someone spent through the ‘Get Together’ service. In the end that didn’t work out and while the details of the current payment model are still being ironed out, the proposal under discussion has been described as a “pendulum” of risk and reward.
“When agencies are looking for remuneration a lot of time it’s based on intermediary measures, like an increase in brand awareness or an increase in brand consideration. Things that ultimately [a client] wants to reward an agency for but don’t necessarily hit the bottom line. Then it all gets a bit vague," said Neil Henderson, chief executive of the independent creative agency.
“We’d rather be a business partner working towards an ultimate [sales] goal and the best way to get into that conversation is to risk more of our fee and then get the upside if the sales go well."
Henderson explained that a typical pay-for-performance agreement will see the agency risk around 15% of its overall fee. So, if the work delivers results above the client’s target it can stand to see a 7.5% bonus, but if it’s under target the agency will be out 7.5%.
“We’ve gone three times bigger, we’re more like 20% [each way],” he said. "It absolutely establishes a better, longer-term relationship with Gett. Agencies are good at being proactive but the question from clients often is: are they proactive about a creative opportunity or about something that will genuinely drive my business?"
What St Luke's is promising it that because it has so much at risk and so much to win, the client has to believe that whatever creative it pushes is done so solely on the belief that there will be a sales return at the end of it.
Work will begin on the account immediately, with the first campaign explaining the concept and benefits of Gett’s fixed route cab sharing service – Gett Together – set to run across print, outdoor, screen and social in London and Manchester.
Neither Henderson nor Bloxham elaborated on what the agreed upon target is (or exactly what the potential contract is worth) but St Luke's said the fact that it’s independent has allowed it to be take the leap.
“Being able to be bolder with remuneration models is one of the benefits of being an independent agency; we can be more flexible in our attitude to risk,” he said.
But, that’s not to say it hasn’t invested heavily within its own walls in every effort to deliver and avoid the potentially huge pitfall if it fails, a real risk in a market saturated with ride-hailing apps.
The campaign’s execution will pivot around three or four launches of new Gett Together routes each month for the rest of the year. “So, we’ll know by the end of the month how it went and then can try something different the next month [if it’s not performed]," Henderson continued.
“We’re much more keenly interested in how measurement is done and what’s working or not. With high tech companies it’s about AB test, optimise, fail fast…we’re incredibly involved in that because we want to hit the target,” he said, saying that it has recruited specialists in performance media to bolster that internal expertise.
Meanwhile, for Gett’s Bloxham, it is also having to change its expectations from the agency.
“St Luke's have been particularly progressive in the way they’ve adopted in and early on realised what we were trying to do, what are targets were and what our growth aspirations are. But they needed to accept there might be some failures and to a certain extent it’s us accepting that they're testing and trialing as well.”