I am interested in the changing dynamics of agency business. So I tend to read whatever I can about new efforts being made to reinvent businesses. Some of the efforts are truly astounding – the AI agency Born, for example – sounds very interesting. Then there is Maana, a big data company that helps make sense of internal data. I don’t completely understand them yet, but I know what need they are fulfilling and how they are relevant. They are trying fairly interesting new things.
And then I come across news from advertising agencies – and it feels as if all that ad agencies do is bullshit, not actually innovate. Just came across an article on adage that I had to read twice to make sense of. Here it is. So the article packages the desperate efforts of some small agencies to stay relevant as ‘new business models’. Sure, what they are doing is indeed a new ‘business model’ – like depending on freelancers instead of investing in teams and infrastructure or to charge only by hours instead of guaranteed scope under contract. But is any of it in their own long term interest? If you are not engaging in contractual partnerships, you are simply creating a cheaper alternative to traditional agencies while absorbing the uncertainty for yourself.
A ‘business model’ that essentially creates ‘less value’ is similar to a ‘business model’ of outsourcing manufacturing jobs to ever poorer countries. The client gets a cheap deal and the labour at home suffers. That is not innovation. It is desperation.
In the article, BETC LA, (a dance company? an agency?) boasts about spending ‘only’ a quarter of a million dollars on a launch campaign. I tried to dig a bit deeper trying to understand why would an agency need to spend that kind of colossal sum on a ‘launch’? The agency website still say that it ‘will’ launch in oct 2017. Doesn’t compute.
It feels like somebody had to do wild mental gymnastics to portray these various precarious agencies as pursuing bold new ‘business models’. If you get into cost wars, the cheapness spiral will only drive down the industry.
In a way it is poetic justice. The industry that played a role (even if indirect) in destroying unions and collectivist utopia of 20th century finds itself on the other side of the table – capitalism draining it out and rendering it into a commodity.
1. Recognise your precariousness and Unionise to gain strength.
2. Recognise your human potential and look for opportunities ‘beyond ads’
3. Learn from beyond the narrow world of advertising and create new value, don’t sell old wine in new cheaper bottle.
May you find your way out of precariousness.