The document discusses how agencies can thrive in a post-AOR world where clients work with multiple specialized agencies rather than a single full-service agency. It recommends that agencies (1) focus on developing expertise in specific categories, (2) adopt agile project management practices like breaking work into small increments, (3) price work based on delivering value rather than hours worked, and (4) operate teams at less than full capacity to improve quality and delivery.

1. Presented by Tim Williams
Ignition Consulting Group
www.ignitiongroup.com
How to Thrive
in a Post-AOR World

2. The “Balkanization” of
the agency business

3. SOME
SIGNS OF
THE TIMES

6. ANA Client/Agency Report 2015
“Briefings are more complicated now than ever.
Media is hyper-fragmented, clients are working
with multiple agencies, there is more project
work, the pace of change is faster than ever, and
agencies have been disintermediated due to
factors including clients using more in-house
resources, production decoupling, and clients
working directly with media companies.”
Enhancing
CLIENT AGENCY
Relationships
Sharing Marketing Excellence
2015 ANA Survey Research Executive Summary
ANA surveys are based on topics identified by the ANA and its membership
as critical issues and emerging trends that nearly all marketers face today.

7. Enhancing
CLIENT AGENCY
Relationships
Sharing Marketing Excellence
2015 ANA Survey Research Executive Summary
ANA surveys are based on topics identified by the ANA and its membership
as critical issues and emerging trends that nearly all marketers face today.

8. “Recognizing the world’s best achievements
in advertising collaboration.”

9. “A collection of the best campaigns in the world, harnessing
the power of multiple agencies and multiple stakeholders.”

10. How and why
is this happening?
YOUR AGENCY’S PLACE IN THE AGE OF SPECIALIZATION

11. Explosion of products and brands
Globalization of marketing
Increasing complexity of channels
Proliferation of different message types
Mashups of agency services through acquisitions
Growing expertise and sophistication of clients
= Specific agencies hired for specific needs

12. Clayton Christensen
Harvard Business School
Author and leading thinker on disruptive innovation
“Their growing sophistication leads
clients to disaggregate services,
reducing their reliance on one-stop
providers. They are becoming savvy
about assessing the jobs they need
done and funnel work to the firms
most appropriate for those jobs.”

14. How agencies can
effectively respond
YOUR AGENCY’S PLACE IN THE AGE OF SPECIALIZATION

15. Create Value
Deliver ValueCapture Value
Value
Based on the work of Rich Horwath in Elevate: The Three Disciplines of Advanced Strategic Thinking
BUSINESS
MODEL

16. Solve better
Deliver better
Price better
YOUR AGENCY’S PLACE IN THE AGE OF SPECIALIZATION

17. Solve better
“We have years of
experience in the
hospital category, so
developing a campaign
to announce your new
cardiac center will be a
great fit for us. We’ll be
able to start developing
ideas right away.”
“The fact that we don’t
have a lot of hospital
marketing experience
means we’ll be able to
bring fresh thinking to
the category. We can
develop ideas for your
new cardiac center that
will break new ground.”
PROSPECTIVE CLIENT: NEW HOSPITAL CARDIAC CENTER

18. Solve better
“We have years of
experience in the
hospital category, so
developing a campaign
to announce your new
cardiac center will be a
great fit for us. We’ll be
able to start developing
ideas right away.”
The fact that we don’t
have a lot of hospital
marketing experience
means we’ll be able to
bring fresh thinking to
the category. We can
develop ideas for your
new cardiac center that
will break new ground.
In a post-AOR
environment,
category experience
is a not only a strong
external competitive
advantage, but
produces important
internal advantages
as well.

19. Solve better

20. Solve better
Assign your team based on:
1. Category experience
2. Functional expertise

21. Solve better
Concept or finished ad?

22. Solve better
Generate lots of ideas (fast). You need to cover a lot of ground in
order to best solve the problem. Use broad gestures and leave the
finishing work for later. (Can 100 options be generated in an hour?)
Use low-fidelity prototyping. The goal is to solve the problem, so work
as loose as possible early in the process. Think in terms of “minimum
viable product.”
Eric Karjaluoto
smashLAB
Tim Malbon
Made By Many
X

23. Solve better
100 MPH THINKING
The goal: 50 ideas in 15 minutes
Combines two fundamental principles of
creative thinking: quantity and speed.
Aim for quantity; the quality will emerge.
Tom Monahan
Creative Coach,
Author

24. Solve better

25. Solve better
SCOPE OF WORK
“What are you trying to
accomplish?”
“What do you need?”
SCOPE OF VALUE

26. Solve better
SCOPE OF VALUE
“What are you trying to
accomplish?”
Beyond on-time
and on-budget,
what are the KPIs
for this project?
Transactional Incremental sales, cost per lead, store
traffic, trial rate, gross impressions, etc.
Behavioral
Website unique visitors, page views,
inquiries, social media analytics, etc.
Attitudinal Brand consideration, brand preference,
intent to purchase, brand likeability, etc.

27. (1) Identify and nurture your expertise in selected categories.
(2) When assigning teams to projects, make category experience
your first and most important filter.
(3) Invest your ideation time in ideation, not execution.
(4) Put Scope of Value (SOV) ahead of Scope of Work (SOW).
Solve better
YOUR AGENCY’S PLACE IN THE AGE OF SPECIALIZATION

28. Solve better
Deliver better
Price better
YOUR AGENCY’S PLACE IN THE AGE OF SPECIALIZATION

29. How long does it
take to build a new
three-bedroom house?
Deliver better

30. The Three-Hour House
Deliver better

31. Deliver better MANUFACTURING
Activities are
standardized,
predictable and
repeatable.
Near 100%
capacity is
theoretically
possible.
KNOWLEDGE WORK Activities are
customized,
variable, and
subject to change.
Operating near or
over capacity (true
for most agencies)
means chronic
problems with
past-due work,
errors, and sub-
optimal quality.

32. Deliver better
High utilization in agencies almost always
leads to delays in workflow.
Queuing Theory
Stop running the agency at maximum capacity

33. Deliver better

34. Deliver better
AGILESmall multidisciplinary teams, empowered to make decisions.
Hyper-collaborative approach (daily scrums).
Break down projects into individual components, completed
one at a time (in “iterations” or “sprints”).
Work together on pieces of work from start to finish.
Includes the client as a team member, the earlier the better.

35. Deliver better
AGILE

36. ONE PIECE WORKFLOW
Deliver better

37. Deliver better
1. Mandate the use of workflow management software.
2. Break projects into small increments (WBS: Work Breakdown Structure).
3. Prevent interruptions and avoid unnecessary task switching.
4. Adopt “one piece workflow” methodologies where possible.
5. Run teams at less than 100% capacity.
6. Avoid overtime (chronic) as a means of accelerating progress.
7. Use agile estimation methodologies in place of traditional hours to plan
resources and forecast costs.
8. Stop managing hours and start managing scope.
The agile philosophy
applied to agency work

38. Deliver better
Engagement
Management Project
Management

39. Deliver better

40. Depending on time sheets to manage a
project is like depending on the smell of burnt
cookies to monitor the heat of your oven.
Deliver better

41. Deliver better
(1) Break free of the illusion that maximum capacity is
optimum capacity.
(2) Learn and borrow from the principles of agile
development.
(3) Practice professional project management (not just
traditional “account management”)
(4) Trade the time and energy traditionally spent on
managing time for the more effective practice of
managing scope.
YOUR AGENCY’S PLACE IN THE AGE OF SPECIALIZATION

42. Solve better
Deliver better
Price better
YOUR AGENCY’S PLACE IN THE AGE OF SPECIALIZATION

43. Price better
Not a fair fight
OUR CLIENTS ARE
PROFESSIONAL BUYERS

44. Price better
Not a fair fight
PROFESSIONAL BUYERS
AMATEUR SELLERS

45. Price better
Outcomes
Outputs
Inputs
PERCEIVED
VALUE

46. Strategy
Concept
Production
Distribution
Implementation
Analysis
Measurement
Insights Optimization
Perceived value
to the client
The Agency “Smile Curve”
Price better
Price charged by
the agency

47. Price better
TWO TYPES OF
WORK
Ideation
Innovation
Problem Solving
Production
Implementation
Distribution
TWO TYPES OF
EXPERTISE
Production Solutions
Specifications
Solutions Architecture
Conceptual Solutions
Prototypes
Brand Architecture
TWO TYPES OF
VALUE
Higher Perceived Value
Customized
High Client Involvement
Lower Perceived Value
Standardized
Low Client Involvement

48. Price better
Not just better pricing, but also better costing

49. Price better
Task: Writing 1,500 words of copy for an email campaign
Duration
“Normal” amount of time required to accomplish this task
4.0
Difficulty
Requirements for specialized knowledge, which may require additional
personal research; likelihood this task unexpected complexity
Difficulty = Duration x 100%
4.0
Dependency
Degree to which this task will be affected by an unresponsive/indecisive
client or complicated approval process that is likely to cause rework
Dependency = Duration x 50%
2.0
10.0
Not just better pricing, but also better costing

50. A user story is a tool used in agile
software development to capture a
description of a software feature from an
end-user perspective. Based on the user
story, an agile team determines the
resources required using a system of
story points.
Better ways than hours to forecast resources

51. Better ways than hours to forecast resources
NUTs Nebulous Units of Time

52. Price better
NO SUCH THING AS
ABSOLUTE VALUE

53. Price better
Offering options in
your pricing helps put
your value in context

54. A technology stack is
designed to help your
firm deliver an array of
marketing marketing
technology solutions to
your clients.

55. FIXED PRICE OPTIONS
A compensation stack is
the same concept, giving
your firm the ability to
draw upon a number of
different compensation
models and solutions.
REVENUE-SHARING
ROYALTIES
LICENSING
SUBSCRIPTION-BASED
OUTCOME-BASED

56. (1) Internalize what you’re really selling (the answer is not
“time.”)
(2) Use the language of value instead of the language of costs.
Change the labels on all your forms, RFP responses, etc.
(3) Adopt a more comprehensive, dynamic approach to
forecasting your costs.
(4) Always provide pricing options.
(5) Change pricing practices to the match the “smile curve.”
Make your margins on the quality of your higher-value work
instead of the quantity of your lower-value work.
Price better
YOUR AGENCY’S PLACE IN THE AGE OF SPECIALIZATION

57. Don’t spend so much time working
in “today” that you don’t have any
time left to work on “tomorrow.”
Peter Drucker

58. Presented by Tim Williams
Ignition Consulting Group
@TimWilliamsICG
www.ignitiongroup.com
twilliams@ignitiongroup.com
www.linkedin.com/in/TimWilliamsICG
www.IgnitionPropulsion.comBLOG
HOW TO THRIVE
IN A POST-AOR WORLD
http://bit.ly/agencyplace