Why agencies must make room for innovation

There are enormous opportunities for agencies and big brands to collaborate

I’ve been extoling the virtues of innovation in the agency space for a few years now. During my time as the rather anachronistically titled ‘head of labs’ at a top London marketing agency I weathered the storm of the great innovation cull – when having been in love with roles like ‘chief innovation officer’ and ‘director of unlimited thinking’, agency land closed down their labs and innovation departments.

Most high profile of these was Ogilvy’s closure of its various innovation functions and the exit of Nicole Yershon.

In my time as head of labs, I saw my role morph from being mainly concerned with the opportunities offered by new technology (3D printing anyone?) and become more about linking startups and entrepreneurs with our clients.

The idea was simple, agencies have relationships with a broad range of companies from financial and automotive to FMCG and retail. Every sector is facing a range of challenges that transcend marketing; like distribution, learning and development, recruitment and so on.

A brand’s marketing agency should be well placed to help it articulate and define these challenges and then use a combination of learnings from other sectors and knowledge of the startup world to provide solutions.

These solutions could take the form of tools to help companies on their journey to become more innovative in their thinking or it may be as simple as facilitating a connection with a startup that could enable them to evolve or change their business.

That’s the theory. So why are so many agencies moving away from offering innovation as a service to clients? There are several reasons.

Cost centre

Agencies struggle to find ways of monetising the labs proposition. It should be relatively straight forward to offer the services of an innovation consultant to a company for a fee. Said fee could be linked to results or some kind of flat rate for a rolling program of introductions and other activities – like workshops and seminars. Indeed, there are a number of companies and individuals operating successfully with this model and without the access that agencies have.

In today’s race to the bottom around pricing, many agencies are charging less and less for their services. Clients will typically start the financial year by telling their agency how much their [marketing] budget has been cut. Conversations with client services about charging for services that live outside marketing bubble become difficult because they are trying to maximise the amount of money available for their business-as-usual marketing activity.

This is frustrating because more budget is always available, just not necessarily from the marketing pot. However, accessing other budgets requires conversations with other parts of their business. Which is not helped by the next reason…

Jealous lovers

Many agencies rely on their client service people to sell their wares, but account managers are not sales people. At best, their job is to anticipate their clients’ needs and offer solutions to their marketing requirements.

At worst they become a kind of conservative version of their client – pre-filtering any ideas that get put in front of their client so that they only see things that they know the client will like.

In either case, client services are really only interested in pursuing conversations with their clients that will sell more marketing.

Client service people can also be like jealous spouses. They will bend over backwards to show their client how good they are at catering to every whim while simultaneously ‘protecting’ them from anything that might come between them.

Allowing access to their client is hard for account people to do. The possibility that there may be conversations going on that they are unable to control is really painful for some account managers.

However, if agencies are to help their clients navigate the world of disruption and innovation, they need to be talking to people outside of the marketing department. These conversations can only happen if account teams become less controlling with their client relationships.

Internal momentum

Trying to get an agency to get behind a new proposition requires effort. Agencies like to list their many services, trying to tick as many boxes as they can in an attempt to create some point of difference in a crowded market.

However, saying you do something is not the same as believing you do it and if your core talent doesn’t get what you’re trying to do, then you have a struggle on your hands.

Part of the problem is the nebulous nature of the word ‘innovation’. To some it brings to mind new technology - 3D printers, Oculus Rifts and drones, to others business disruption like Uber or Airbnb, but to many traditional creatives innovation often seems like a solution in search of a problem.

This stems from the way in which creatives in agencies work. A brief comes in, a creative team (still, after all these years, a copywriter and a pictures guy) go off with an A3 pad and a pocket full of sharpies to sit in a coffee shop for two days. Eventually they will re-emerge with a sheaf of ideas.

The ideas will suffer the inevitable filtering of planning and account managers, and those that are left – the least bold normally – are sometimes run past the innovation person to see if anything innovative can be added.

This tried and tested method has two big problems. Firstly, by trying bolt on innovation to the end of a process the agency is narrowing the options for exploring new solutions. Secondly, this process pigeonholes innovation as more of a technology add-on to a campaign, rather than a process that we can work on with our clients.

There is a definite place for innovative technologies to be used to support campaign activity. However, this narrow articulation of innovation limits the possibilities of working with clients on some of their more fundamental challenges.

Know your place

Maybe all this is proof that within the context of the agency environment, innovation is simply about what shiny new gadget can be used to sell soap powder. Maybe agencies should limit themselves to only working with startups in the MadTech (marketing and advertising technology) space.

The evidence suggests that many marketing and advertising agencies are moving away from working with startups and trying to solve their clients’ bigger problems through disruptive innovation to focus more on their traditional core offering.

This is a flawed and ultimately fatal mistake. Companies that are not looking at new business models, that are not looking at the changing needs of their clients and responding to them with new product and service offerings will continue to shrink.

The evidence of big shifts in client requirements and the industry’s plans to meet them can be evidenced in the way the big consultancy firms and media agencies are diversifying and moving into the creative agency space at the same time as they continue to offer innovation and consultancy.

Big brands are looking to simplify their agency relationships, and agencies that focus on a narrow part of the broad requirements these companies have will continue to see their budgets cut.

Is there a future for innovation in agency land?

Now that I am ‘client side’, one of the more frustrating realisations I’ve had in the last few weeks is that big companies really want to work with companies who understand the complex interplay of disruptive innovation and marketing.

I’ve seen that there are enormous opportunities for agencies and big brands to collaborate, but only if they are able to offer a wide spectrum of services of which marketing is just one item in the mix.

I still strongly believe that agencies are perfectly placed to help their clients navigate the rapidly changing world of retail, B2B, privacy, AI, voice interfaces, smart city and all the other things that creatives and client service people would rather ignore. They just need to understand that it’s something that requires investment and support.

Any agency that is not paying attention to the seismic shifts occurring in technology, disruption and the startup world may as well be designing an email campaign for a new deckchair seat sale on the Titanic.

Marc Curtis is ideation manager at Lyerco Group he tweets @exmonkey

Get The Drum Newsletter

Build your marketing knowledge by choosing from daily news bulletins or a weekly special.

Come on in, it’s free.

This isn’t a paywall. It’s a freewall. We don’t want to get in the way of what you came here for, so this will only take a few seconds.