Digiday Confessions are back. We took a break from them for a bit in order to make sure they remained high quality. We’ve returned with the tales of a top digital executive at a big agency. In this confession, the executive explains the frustration felt in trying to change a huge agency infrastructure and why the task is impossible. Find the full collection of Digiday Confessions here.
Why do big agencies hire chief innovation officers/chief digital officers?
It’s tempting to say that big agencies are so desperate that they will literally do anything to try to look modern. So they hire “innovation” people to do just that even though I don’t think there is a one single example of an innovation person or department doing well at a big agency. It’s the same as putting a digital person in as chief creative officer. On paper, it’s an interesting move, but in reality there is again not a single example of this ever working out. Each agency thinks it will be the first agency to do that, but there is a fine line between believing that anything is possible and willfully ignoring the facts.
Why is it that digital people who have been extremely successful at pureplay, smaller digital shops seem to struggle in driving change at big agencies?
Clients who engage a digital agency want a digital product. They have a budget, a deadline and a need. Clients at traditional shops are being sold something, often quite hard, that they have not asked for. So a person with good digital skills should be able to produce something pretty good with a willing client. Also, there is an understanding as to why that work is being produced, both from an internal point of view and external. Often in bigger traditional agencies, there is no real brief, and people are just asked to get some digital work out to show capabilities. You can probably do that once with a reluctant but malleable client, but unless it’s really answering their genuine needs rather than just trying to win an award, the client will see straight through this. So again, the cycle is head of innovation person gets the agency stoked up for a piece of work, it launches (having cost the agency a fortune), people talk about it, but it does nothing for the client and is terrible for the bottom line of the agency. It’s a false way of working. The digital shops have no need to play that game so people can concentrate on doing good work.
Why do agencies struggle with innovation so much?
All agencies get the clients they deserve. That will never change. Most big ad agencies have big clients that have a scale need rather than a creative need. The majority of middle American clients do not want innovation. And if by some miracle they do, they have a handful of alternative agencies that are better placed to do digital or innovation. Let’s just say for the sake of this piece that innovation means cool digital shit and the odd interesting experiential thing. Most big clients don’t even want their big ad agency to handle normal digital stuff like banners or Facebook pages. They have smaller shops that will do a better job for less money. Why on earth would they look to those agencies to do even more technically difficult jobs?
Why do clients often not trust their general agencies in digital?
Clients have been burnt too many times by the big agencies that every year or so will hire a new bunch of digital people to try and go win some more digital business. The big agencies do this because their normal revenue is shrinking. So they are on the defensive. But there is nothing worse than an agency being on the defense. If you are not 100 percent confident that you can deliver a piece of innovation as good as a pure-play digital shop, then it will show, straight away. Clients can smell that from a mile off. So they don’t give innovation jobs to the agencies and then the innovation officer gets canned along with the department until six months later when the CEO of the big agency realizes there is no one in the building who knows how to make anything other than a TV spot. And so the cycle is repeated again. This has been happening since around 1998. Why would anyone ever think that is going to change, other than the desperate thought of, “Well, it has to change; otherwise, we are going out of business.” That’s like denying global warming.
So why would anyone take a job that seems doomed from the start?
All of these people are very smart. Many have run their own businesses, won multiple awards and made interesting things. So why would they ignore the cycle? Why would anyone take any job? The answers are different person by person. Sometimes it’s money. Probably most of these people are taking home around half a million. Sometimes it’s security – or at least the perceived notion of security. Sometimes it’s a change of scenery; people want to live in New York or LA and so take big jobs in big agencies to do that. The problem is that they come in and then take staff from other agencies to build a department, and to do that, they need to pay higher salaries. Then when that department inevitably dismantles, these people have become used to a certain paycheck. And rather than doing what they know they should do, take a cut and go work for a small digital shop that actually make things, they move on to the next big agency that is at the start of the cycle and so promising great things.
Big agencies seem to often fall back on the playbook of paying a hotshot a huge amount and thinking it will fix a lot of things. Does that have a lower success rate in digital than traditional creative?
I think that goes back to what I was saying about inflated salaries. You have to pay someone a lot to get them to go somewhere that in their hearts they know sucks, but they do it for a paycheck or a move to another city.
Is the current vogue of “making things” just a bunch of B.S.?
No, I think everyone is being judged on what they make. Of course, it has become a mantra, but if people stick to that, there are certainly worse things to adhere to. The proof is in the pudding though. Big agencies seem to spend more time making PowerPoint slides than anything else. I think the current term of “rapid prototyping” is total agency bullshit. Big agencies wouldn’t know where to start with truly implementing an agile system that pumps out prototypes and lets them loose on the world warts and all. They are just not set up that way from a structural and emotional point of view. Software companies put out a release and say to people: “We know it’s not perfect, tell us the bugs and we’ll fix it.” No client is prepared to do that. They are all too scared of losing their jobs. But, of course, making a decision to do nothing is still a decision that has as many implications long term as putting out an ad that is not perfect. And just for the record, define perfect. Most ads that have gone through the normal rounds of expensive research and feedback suck.
What’s the one thing agencies should do to modernize but won’t?
They can’t win. It’s just not possible. The new CEO of JC Penney was head of retail at Apple. He had done all these wonderful things at Apple to create an amazing retail experience. And now he is finding it hard at JC Penney. It’s not that he is doing anything wrong. He is doing everything right and is clearly very smart, but there is just no way he can win. There are too many inherent obstacles. It’s the same with the big agencies. If they want to modernize, then they need new clients. But new clients won’t pay what their existing clients are paying. The global networks are remaining in business because the emerging markets are making them money. These smaller offices have grown in the last five years because they started from scratch and have been able to operate on a small budget and, through necessity, have become good at making things other than TV spots. Where once a New York head office paid for the outposts, that will be reversed until it becomes no longer financially viable to have anything other than a nominal presence in North America. The question is not whether that will happen but how long it takes. Again, it’s like global warming.
If you were to start an agency from scratch, what would it look like?
You have to work out why you are doing what you do. If you want to make money, then there are two ways. Go to a big agency and just wait it out. Play by the rules, don’t try to change too much, but make the appearance that you are changing. Don’t fight for any real change or interesting work but enough not to get fired. But you probably have five years of that left. If you are lucky. Or start a small digital/innovation-focused agency and build that quickly into a network and then sell it to Maurice Levy or Martin Sorrell for a ridiculous amount of money. If you just want to have some fun and do some interesting work, then you have to be more realistic about how much money you will make and go to work for a production company or a small digital boutique. The days of doing both are over. No one who is making over 500k a year is happy in their job.