Madison Avenue Makeover: The Transformation of Huge and the Redefinition of the Ad Agency Business
Michael Farmer has been an independent "fly-on-the-wall" recorder of the dramatic transformation of Huge, IPG's Brooklyn-based, global digital creative operation. His new book describes the breathtaking pace of CEO Mat Baxter's first sixteen months on the job -- working with his 23-person top management team to transform the agency into a "growth acceleration company" for its clients -- and abandoning the "agency" label forever.
Bloated Scopes of Work Are Unhealthy for Advertisers and Agencies Alike
Agency scopes of work, like American waistlines, have ballooned during the past several decades, driven by clients' insatiable appetites for digital/social work and accepted by their agency partners, who are keen to demonstrate their integrated capabilities. Agency fees have not kept up with the workload growth. Has it been worth it? Advertisers' sales have been flat for more than a decade, and agency staffs are severely overworked. The bloated scopes of work are not delivering value for either advertisers or their agencies.
Wasting No Time, CEO Mat Baxter Leads a Dramatic Transformation of Huge
We're used to hearing industry talk about the need for agency transformations. Rarely, though, does the talk lead to action or change. Mat Baxter (pictured at top), CEO at Huge since July 2021, launched the company's transformation less than two months after his arrival, mobilizing its top management team to lead a multi-dimensional change program that continues well into 2022. Baxter reviewed transformation progress with the global Huge organization last week. I recently interviewed him about his ambitious program.
It's Buzzword City Out There!
Do you have the bandwidth for digital and social? That's so simp. Meta is the latest thumb-stop. You know Meta, right? It's the thing itself. It's seeing the thing from a higher perspective instead of from within the thing. It's like transparency -- self-internally clear because the finite space has a countably infinite number of liminal layers. But you already know this.
Marla Kaplowitz Engages Philippe Krakowsky At 4A's Decisions 2022
When two industry heavyweights meet and talk about the future of the advertising industry, much is said … and even more cannot be said. Marla Kaplowitz, President and CEO of 4A's for the past five years, earlier this month probed industry issues with Philippe Krakowsky, a 20-year veteran of IPG who recently completed his first year as CEO, at 4A's Decisions 2022.
Fun While It Lasted: Ad Industry Approaches a Reckoning
This is not an industry where you can "fake it until you make it," with the promise of a big payday if you can just get through a difficult phase. It's exactly the opposite. The big payday was in the past, when media commissions made agencies rich in the '60s, '70s and '80s. It's now an industry that wonders how long it can hang on before commodity fees and overwork finally drive out its talent. That day is getting closer.
Outlining the Challenges Ahead for Agency Holding Companies
The top four holding companies have evolved enormously in the past four decades, from simple (but growth-obsessed) financial owners of agencies to integrated operating companies. At the integrated extremes today are WPP (a "creative transformation company") and Publicis Groupe (a "connected age platform company"), while Omnicom ("an interconnected global network of leading marketing communications companies") and IPG ("we support and invest in our brands") remain solidly agency centric. All of them, though, have invested in holding company headcounts and organization, and each of them face the same strategic problems: commodity pricing for their services, excessive client churn, bloated Scopes of Work, depressed salaries for their people, "overburn" working conditions, talent gaps and growth ambitions that outstrip industry realities. Fiscal year 2022 will put many of them to the test.
Military Veterans in Marketing, Sales and Business: Celebration and Support from BOLD Vets
On Veterans Day, November 11, we honor our military veterans, living and dead, who served in the U.S. Armed Forces. Living veterans are a distinct but invisible minority in our society, accounting for only 5.7% of the current U.S. population (versus 13.4% of African Americans and 18.5% of Hispanic or Latinos). Their average age is 58 years old. (Editor's Note: MediaVillage is proud to connect the students and alumni of the D'Aniello Institute for Veterans and Military Families and the National Veterans Resource Center at Syracuse University to NBCUniversal and their BOLD Vets program for a virtual Career MeetUP on November 9th.)
Diversity Executives are Rewriting Corporate Organizational Practices
Diversity executives (or more accurately DEIB executives -- diversity, equity, inclusion and belonging) are thoughtful, passionate, articulate and committed to their specialty and cause. They describe with pride the initiatives that they and their CEO leaders have taken in corporate or agency settings to make diverse employees feel more valued and welcomed. They survey employee satisfaction and show the progress that they are achieving. They humbly describe how much more they want and need to achieve.
Advancing Diversity Week 2021: Confronting the Diversity Challenge
You have to admire the optimism, energy and determination of the practitioners / executives who are leading DEIB (diversity, equity, inclusion and belonging) initiatives at ad agencies and their clients. What they're taking on is the complex job of changing organizational cultures and attitudes -- without any formal power or time-tested tools that can assure success. If this were not difficult enough, they're doing so at a time when agency and marketing cultures have been under enormous threats from technological and financial upheavals in the industry. DEIB initiatives, which might flourish in growing and successful organizations, have a much tougher time when growth is low and employee retention is already problematic. MediaVillage's virtual Advancing Diversity Week event (Sept. 20-23) brought together many executives who are engaged in DEIB initiatives. Here are some of their thoughts and concerns as expressed during the panel "4As and 4As Foundation Presents: Embracing a Comprehensive Vision of DEIB." (You can watch the entire panel in the video above. A video of a related Advancing Diversity Week conversation, "Building Inclusive Leaders," can be found below.)
Ad Agencies and Their Clients Need to Escape the Commodity Trap
Sadly, and without intent, agencies and their clients have seen their partnerships slip away to become vendorships, with relationships bought and sold on price. These commodity relationships have benefited neither party. Clients underperform in the marketplace, and agencies have liquidated their talent through downsizings. Agencies and their clients need to escape the commodity trap they created for themselves.
"Nobody Knows Anything" About What Works in the Film Business. The Same is True About Marketing.
"Nobody knows anything," summed up William Goldman, the most successful Hollywood scriptwriter ever (he wrote 33 produced screenplays), in a memoir written at the peak of his success. "Nobody knows anything. Not one person in the entire motion picture field knows for a certainty what's going to work. Every time out it's a guess and, if you're lucky, an educated one." The same should be said about marketing, particularly for integrated marketing.
My Amazing and Diverse Grad Students at CCNY: On Track for Madison Avenue Careers
Forget the Ivy League. The grad students in my class did not go to lacrosse camps or Outward-Bound programs during their summer breaks. Instead, they toughed it out in real life, finishing their undergraduate degrees between jobs and geographical upheavals. They worked at McDonald’s, Home Depot and Uber; in Hispanic law firms, dance schools, The NY Public Library, The Red Cross, USAID, Univision, Ford and many other companies. Ten are women; two are men; three are African American. They come from the U.S. and many other countries. All of them are smart and focused -- committed to becoming expert in Branding and Integrated Communications (BIC), focused on landing great jobs in our industry. They are tough and demanding, and I feel very lucky to be teaching them.
Client Heads are Front-Line Troops for Agency Transformation -- But They Need Better Support
Client Heads endure the daily combat of client-agency relationships. They get no glory for their efforts or sacrifices. They suffer the consequences of scope of work increases, fee reductions, inadequate resources and relationship threats. They hold the line and try to keep things from getting worse. They're on their own. This is not right -- agency transformations depend on Client Head successes in battle. Client Heads are receiving inadequate support from their leaders.
Agency Transformations 2021: Top Down or Bottom Up?
Global creative agencies are among the most decentralized business organizations in the world. Office heads and the client heads within their offices have complete independence in the way they manage their operations. Client heads are virtually unsupervised -- no one above them knows what work they are leading and whether or not fees and resources are appropriate for the work. C-suite executives focus more on the hunt for new business than on the management of their fragmented organizations. This makes agency transformations particularly tricky.
Post-COVID Forecast: A Resurgence of Marketing and the Beginning of the End for Madison Avenue’s Manslaughter
Marketers and agencies have had a tough time since the financial crisis of 2008. Despite a dramatic increase in media possibilities, major advertisers did not discover the right formula to drive growth. Twenty of the top fifty advertisers in the U.S., representing $1.1 trillion in sales in 2009, grew between -2.9% and +1.9% per year and saw their overall sales (as a group) shrink by 4% during the most recent decade. (The twenty advertisers include -- in order of their annual growth rate between -2.9% to +1.9% -- AstraZeneca, Bank of America, IBM, P&G, McDonald’s, Best Buy, Citi, GSK, Sanofi, Eli Lilly, Macy’s, Unilever, Pfizer, Wells Fargo, Novartis, Sony, Diageo, The Gap, Target and Coca-Cola.) COVID made things worse in 2020. But this is about to change, as marketers confront the failures of the past decade and set a new course for their post-COVID futures.
Comcast NBCUniversal Continues Commitment to Veterans with Annual Veterans Day Event
10,000 Veterans Already on Board at NBCUniversal. Scroll down to learn more about NBCU's Upcoming Virtual Veterans Day event.
Cost-Cutting is "Coping" -- A Poor Substitute for Effective Marketing
Ever since the financial crisis of 2008, advertisers and agencies have been 'coping' with revenue stagnation. Despite the massive availability of media alternatives and the promise of targeted digital advertising, brands and revenue have languished. Nevertheless, the need to maintain share price growth has never ceased — that's how C-Suite executives earn their bonuses. This explains their obsession with corporate cost-cutting, which has become a de facto substitute for effective marketing. It's an unfortunate outcome.
Hispanic Hutzpah! Alma Draws on Resilience and Partnerships to Weather the Storm
An Interview with Isaac Mizrahi, co-president and COO of Alma. How do agencies handle the operational challenges of COVID-19, client and holding company pressures, competition, and price-cutting — at a time when Scopes of Work are expanding? How does Alma, a Hispanic / multicultural / mainstream agency, part of DDB and Omnicom, manage itself in this environment? Isaac Mizrahi (pictured at top), co-president and COO of Alma, spoke recently with Michael Farmer to describe Alma and its operating philosophy.
Ad Agencies are Complex Businesses. New Metrics are Needed for Improved Management
Advertising agencies are exceptionally complex businesses, driven by digital / social media innovations, large and fragmented scopes of work, procurement-led fee reductions, holding company-led downsizings, and client pressures to get brands moving again. Agencies have developed hyper-targeted digital executions and ROI tracking tools to help their clients. What they have not done is develop new and better metrics for managing their own businesses.
