Evolving the agency business model

Evolving the agency business model

Ian Priest, IPA President & Founding Partner VCCP

Trends in client/agency relationships mirroring trends in profitability 8 7

7.2

6 5 rs a e Y

4 3

3.0

2 1 0 1984 Source: Bedford Group Consulting

2013

My ADAPT agenda Who are we talking to?

The marketing and communications industry What do we want to achieve?

Better commercial creativity To reshape the business model to reflect an evolving and dynamic Why? industry By adapting faster and better in 5 key areas How do we do that?

The 5 key areas A D

Alliances

Diversification A P

Agility Performance

T

Talent

less pitches /more partnerships less one-dimensional/more multi-dimensional less set piece/more real time less time-based/more value-based less traditional/more diverse

Adaptathon Schedule  3rd October 2013

Alliances Adaptathon+experiments

3/4/5th February 2014 Diversification Adaptathon+experiments 7th/ 8th May 2014 8th July 2014 7th October 2014

Agility Adaptathon+experiments Performance Adaptathon+experiments Talent Adaptathon+experiments

Cross industry participation  C L I E N T S

Client Council and Ambassadors

IPA Council (plus IPA Groups)

Industry bodies Intermediaries Influencers

A G E N C I E S

Client Council

Sara Bennison :

Nigel Gilbert :

Will Orr :

Wendy Proctor : Government

Chris MacLeod :

Roisin Donnelly :

David Magliano :

David Pemsell : Steve Vranakis :

Andy Fennell :

Jonathan Mildenhall :

Sally Cowdry :

5 Chapters

The value of long-term partnerships 2013

3 cars in the top 10 list of best-selling cars of all time

1950

The cost of pitching Agencies

Clients It takes 6 to 9 months to bed down a new relationship David Magliano, The Co-operative Group

We estimate their internal pitch costs amount to ÂŁ31,756 Debbie Morrison, ISBA

Source: IPA/ISBA New Business Survey 2009

Better relationships = better work +37% for Creative/+21% for Media

Agency Output Copyright Š 2013 APRAIS Ltd.

14

Relationship contract

Marketing Feature July 2014

Add marketing article

The wider context “After 3 years of negative prospects (2009 -2012) , we have now had over a year of positive trading” (Bellwether) “58% of corporate value globally now resides in intangibles” (Brand Finance) “Brands which invest in A+P outperform the market by 30% on average” (DeutscheBank) “The more enlightened members of the marketing procurement industry are beginning to adopt the language of marketing investment ” (Buying less for less)

A new evidence base

Towards Win-Win Performance IPA/ISBA Workshop – May 2014

“All parties committed to a re-evaluation of time-based remuneration” “We need to focus less on cost, and more on value to the business” “It ends up being a trust issues between the client and the agency” “Scope of work needs to be clearer so we can cost accurately”

Keen to explore the Coca-Cola approach Source: Unleashing the Creative in Everyone, November 3013: Jonathan Mildenhall in conversation with Ian Priest www.youtube.com/watch?v=G1P3r2EsAos

Interested to make PBR work better

An appetite for new investment models

VS

OpEx

CapEx

Towards a new model Grow

26

Outperform

Transform

Campaign KPIs

Performance Metrics

Business Case

INPUTS Time = Fee

OUTPUTS Value + Performance=PBR

OUTCOMES Performance + Risk/ Reward=JV

— Video

3 Performances ADAPTLABS

TIME BASED

VALUE BASED

CFO Omnicom Media Group

Head of Procurement EE

RISK/REWARD BASED

Managing Director Sapient Nitro

Marketing Feature August 2014

Add marketing article

Less one-dimensional, more diverse

We are doing lots already

Better together •

Industry wide

•

Co-ordinated initiatives

•

Celebrate talent

•

Client engagement

•

Job swaps

•

Joint Training

3 Performances ADAPTLABS

FILLING THE FUTURE SKILLS GAP

Mark Bell DARE and Chairman IPA Digital

RETAINING TALENT

Andrew Pinkess AMV BBDO IPA Professional Developmen t Group

MAKING THE INDUSTRY MORE DIVERSE

Julian Douglas VCCP, IPA Diversity Forum

The ultimate outcome

Marketing

Procurement

WIN

Agency

WIN

Commercial Creative Contract

Book and Video