Agency of the Future

Advertising Agency Outsourcing: An Opportunity and… New Competition

Peter · February 17, 2020 · 2 Comments

I wrote this post about advertising agency outsourcing seven years ago. I am resurrecting it for a couple of reasons.

First, the use of outsourced freelance talent, as in not full-time employees (FTE), is a solid part of running a 2020 agency in a world of business uncertainty:

Will I win that new client? Will I lose our largest client? Will I ever get an agency of record client again or just get used to living with projects?

As an ex-agency owner, I know that keeping FTE costs down is a good idea. Given ad agency gross margins, having a bunch of FTE’s at a 70% utilization rate is not sustainable. Duh. That’s why I was initially intrigued by Victor’s & Spoils agency model. If there ever was an industry that needed to explore new models… it was/is advertising.

Second, it is worth noting that the Vistors & Spoils’ outsourced advertising agency model (actually crowdsourcing model) discussed below did not work. The agency, which was acquired by Havas in 2012, closed in August 2018. Why did it close? There are lots of thoughts about what happened. Consider…

Was crowdsourcing itself simply unmanageable? Is crowdsourcing a tool versus the basis for an agency? Was it’s possibly brutal system too unfair to freelancers? Did clients not get it? Is it simply too difficult to build and manage a complex marketing program using “anonymous” outsourcing?

And, on.

Finally and just an FYI. Here is the Victor’s & Spoils crowdsourcing competition that netted the agency’s logo. So, $2,400 to the winner of an advertising agency logo? That’s it? No comment.

Advertising Agency Outsourcing

Note: This blog post was originally posted in 2013. The primary points remain relevant.

The advertising industry has been outsourcing for decades. Freelancers are woven into our daily fabric. We use copywriters to write website copy and gun-slinging art directors to beef up new business pitch concepts. In the past few years, advertising agencies have gone beyond the traditional freelancer to add technologists and digital service firms to work in the background to make us look like sharp database, mobile, and social media experts.

Our outsourcing options have grown exponentially through the use of digital tools. We now have easier access to more talent marketplaces which have also resulted in new threats to the advertising agency model itself.

There is the power of emerging market labor: Ogilvy, Wieden+Kennedy, and Sapient all have offices in India that tap into the subcontinent’s skilled lower-cost talent. Most multinational ad agencies also use into their vast systems to find talent in other lower-cost countries. According to Firstpost, “Group FMG produces video, print, digital and mobile ads and has more than half its employees based in India. “We are applying all the clichés of Thomas Friedman’s “The World is Flat” to the advertising world,” Aditya Sharma, co-founder and chief business development officer at Group FMG. And, why not? The latest rounds of Clios have been won by art directors in faraway lands.

Interest in crowdsourcing is on a growth spurt, see Google’s trend line for the term “crowdsourcing” on the left, and has become a new freelance agency model. Victors & Spoils is known for its use of distributed problem solving to create advertising campaigns for blue-chip clients like Axe, General Mills, Harley-Davidson, and Levis. For sure, despite the benefits from having a more open market, freelancers have had issues with this model. However, the efficiency of freelance crowdsourcing works for clients. I suspect that Victors & Spoils is finding the middle ground.

Online freelance markets are booming. Elance reported 345,000 new freelancers and 826,000 jobs posted in 2012. Behance reported serious growth last May when they received an infusion of VC capital. According to their blog, “Users’ projects have received over 1 billion views and over 75 million views in just the past 30 days. Behance now showcases more than 2 million creative projects – after passing our first 1 million-project milestone just eight months ago.” I can imagine that many agencies are posting projects in this heavily trafficked marketplace.

The new world of freelance services may become one of the tools that agencies use to resolve the social media beast – social media authorship and management is, to put it mildly, labor-intensive. I have been using an ODesk freelancer in the Philippines to assist me with pinning “every advertising agency” website to my Pinterest agency site. In this case, I have a simple task that can be easily managed. In just a couple of weeks, he has efficiently pined over 1,000 ad and digital agency websites. This has freed up my time to write mini-website reviews.

On the SEO side, I have worked with a search engine marketing company based in Budapest that uses excellent English speaking writers across the globe to help their clients write guest posts.

The opportunities for agencies to leverage the flat-earth marketplace of freelance services are clear. Given the current and expanding outsourcing options, agencies need to continually explore how the Internet has dramatically expanded their freelance network, talent base, technology resources and can lower the costs of doing business.

On the other hand, many of these new services pose a significant threat. Just as the Victors & Spoils model is often criticized (feared?), we need to keep up with and continually review new Internet-powered services because they represent a growing form of competition. Just like you, savvy clients can directly outsource their work to India, Behance and 99 Designs too.

Advertising Agency Models

If you are interested in exploring new advertising agency models, give me a shout. I’ve examined many options.

Fire Your Advertising Copywriter

Peter · October 25, 2019 · Leave a Comment

Is it time to fire your advertising copywriter? OK, I am just kidding. I like copywriters. In fact, many of my best friends are copywriters.

OK, OK. I recently played with an AI writing tool called Talk To A Transformer. From the website:

Built by Adam King (@adamdanielking) as an easier way to play with OpenAI’s new machine learning model. In February, OpenAI unveiled a language model called GPT-2 that generates coherent paragraphs of text one word at a time.

For now OpenAI has decided only to release three smaller versions of it which aren’t as coherent but still produce interesting results. This site runs the largest released model, 774M, which is half the size of the full model.

Play with this. It just might write your next novel… or headline. (Yes, that is Bill Bernbach in the pic.)

Go here to see Talk To A Transformer.

Need More AI Copy?

Ad Age recently wrote about another AI writing tool.

Here is what Ad Age wrote:

Which ad copy for a banking service is more effective?

A) “Access cash from the equity in your home.”

or

B) “It’s true—You can unlock cash from the equity in your home.”

If you answered B, you are correct. It did better with Chase Bank customers than A did.

Answer B was written by a machine learning language model developed by Persado, “a New York-based company that applies artificial intelligence to marketing creative.”

Kristin Lemkau, chief marketing officer of JPMorgan Chase, noted that machine learning can actually help achieve more humanity in marketing. “Persado’s technology is incredibly promising,” she said in a statement. “It rewrote copy and headlines that a marketer, using subjective judgment and their experience, likely wouldn’t have.”

Chase plans to use Persado for the ideation stage of creating marketing copy on display ads, Facebook ads and in direct mail, according to Yuval Efrati, chief customer officer at seven-year-old Persado. He says that the AI company works alongside Chase’s marketing team and its agencies.

By The Way – I’m A Genius:

I put this copy into Talk To A Transformer: “Peter Levitan is a marketing genius.” Here is what I got back.

Levitan’s marketing plan for this film is genius. It should’ve been called The Greatest Marketing Plan Since The Great Depression.

This film should’ve debuted on the Oscars, but they gave it an A. It should’ve been called The Greatest Movie in Hollywood History.

Maybe with this tool, even I can become an official advertising copywriter.

Ad Age Small Agency Conference Podcast

Peter · September 3, 2019 · Leave a Comment

The Ad Age Ad Lib podcast recently interviewed Sunday Dinner’s Lindsey Slaby just ahead of her appearance at the 2019 Ad Age Small Agency Conference. Since many of you did not attend the conference or religiously listen to the Ad Age podcast (sooo, much to do!), I thought I’d share a few of Lindsey’s insider gems to give her perspective on the advertising industry and what clients want.

From Lindsey’s Twitter account: Founder of Sunday Dinner. Helping brands navigate how to work with the best and brightest agencies through consulting, workshops & partnership search. … Made In Brooklyn Summit speaker, Lindsey Slaby @lasslaby, is the founder of groundbreaking brand consultancy firm, Sunday Dinner.

Lindsey works with a wide range of well-known clients including Diageo, Target, Union Pacific, NBCU, Microsoft, Nickelodeon, Kate Spade, & MassMutual and sits with dozens of advertising agencies a year (she mentions that she had sat through over thirty pitches in a recent month.) Her perspective offers a deep inside look at today’s advertising industry – what it gets right and wrong.

To help isolate Lindsey’s golden nuggets, I transcribed the podcast interview and pulled out a few of the shiny bits. I’ve edited some of the copy for clarity and brevity. I also offer some of my own thoughts… Of course.

Lindsey Slaby’s Ad Age Golden Nuggets

Small Agencies Are Doing Well, But

Lindsey: There’s so much appeal right now to work with the smaller agencies. They’re incredibly busy, incredibly busy.They’re building these businesses. My fear is sometimes that they are, they started, they got a client, they got going, they got a lot of momentum, they have relationships, and they’re just going to keep driving towards revenue, versus actually figuring out, what’s the business model we want to have internally? How are we attracting and retaining great talent?

How do you scale the right way? And how do you make sure you really deliver for those clients? Because one of the things I guess I say a lot is, if you get an A in client service, you’re going to keep my business and earn my business, even if you get a C in creative. If we’re hiring, especially if you’re a brand that’s taking a risk to hire a new agency, which is essentially working with a startup, you need them to deliver for you, keep you informed, and have amazing client service.

More Advertising Agency Resources

Peter · August 30, 2019 · Leave a Comment

Even More Advertising Agency Resources – August 2019

Its Friday 30 August, the ‘end‘ of summer, so I thought I’d shoot y’all some new advertising agency resources that could help you grow your agency. Or, at least, provide some much-needed efficiency. I’ll list these here and then add them to my The Big Advertising Agency Resource List.

Side note, thanks to all of the people that send me their favorite resources that I can have my huge staff of resource-munchkins review and pass on.

Go Ahead Play With These

Awesome Screenshot. Awesome Screenshot captures images, the whole image or a selected area, and records my screen so I can put the images on this very blog or use in my white papers and recommendations. For convenience, it sits on my Chrome bar.

Bulk.ly. I use Buffer to schedule and send out (as in LinkedIn and Twitter) my current and best-of past blog posts. But, I have to admit that it can be a pain in the ass to remember to do it on a regular basis. Bulky helps to automate the system and keeps a Buffer queue full-up.

Checkbot. Checkbot check’s your site (or others) to see and fix SEO, speed and security issues. Are you doing better than your competition? How are your clients doing?

ContactOut. I’ll use ContactOut’s words: “Find anyone’s personal email and phone number.” And, “ContacOut is used by recruiters at 30% of the Fortune 500.”

FormSwift. FormSwift has forty or so forms on their website that you can use to create and edit important documents. Documents include employee handbooks; employment contracts, non-competes, lease agreements, balance sheets, and my favorite: a resignation letter.

No Mas Verano

That’s it for summer, well soon. And for today.

Seasonality is interesting. I know from my years of working with advertising agencies on their growth and profitability strategies, that my incoming lead email will light up a bit once the summer passes. While I know that we’ve moved beyond the days when ad agencies got real quiet in the summer, there is still a deep-seated sense that September means that we all should get our business development acts in order. So, go ahead… give me a shout.

Let’s talk about growing your business. You are in a hurry, right?

Contact me now and take me up on my impossible to refuse 15-minute Vito Corleone offer.

A New Advertising Award

Peter · August 26, 2019 · 1 Comment

Actually, A New Advertising Award And A Pat On My Back

I’m about to digress before I get to the new (to me) advertising award.

I’ve had zillions of conversations with advertising agencies about why their agency blogs get little to no traffic. I have lots of reasons. However, a key one is that essentially, in many cases, nobody wants to read their shit – see what I mean here.

But… There is simply no good reason that agencies should write stuff that either nobody wants to read or is simply a kind of a rehash of what other agencies have already written. Therefore, my award, listed below, is for demonstrating that if you write about things that your target market/audience wants to read, they will actually read your shit.

End of digression.

Award Number One: Ad Stars

I’ve added a new award to my award list. Go check out Ad Stars on my master award list at Top Advertising and Design Awards.

Thanks to my friend Bobby McGill and his must-read branding in asia magazine for alerting me to Ad Stars. As the article says, “Ad Stars wraps up its 12th year with winners chosen from 20,645 entries submitted from 60 countries.”

Here’s the winner’s list.

Go win this award next year. Put it on you ad award list. You have one, right?

Award Number Two: Me

I am giving this award to myself for writing about a subject that appears to be rather dear to the hearts of advertising agencies. The subject is the desire to win an advertising award. I know this because my 2019 blog post, Top Advertising and Design Awards has + 7,400 views as of today.

My point? I deliver valuable information to my prospective clients. I know that you can “own” a subject that matters to your readership. The readership (as in new clients) you really want.