Nishad's Blog: An Agency of Makers

In a first for a non-technology company, Unilever brand AXE had called for a developers’ day in early October that I believe has a strong message for agencies.

Digital is the way ahead. Yes!

While there’s nothing pathbreaking about this fact, I’d like to argue that agencies can participate in the digital revolution in ways we have never imagined. Not just by being partners of our clients as we have always been, but by making things for ourselves, and profiting from them.

Planner Griffin Farley is one of the smartest minds out there. He makes an interesting point in this presentation on Fringe Planning, and I borrow shamelessly (God bless the Internet).  Slides 16 and 17 are noteworthy.  “Ad Agencies have recruited some of the smartest creative people out there.” And 17, “the byproduct of agencies are ideas that don’t get sold, or are not appropriate for a particular client.”

I see the second point as particularly appropriate. With agencies thinking up more business ideas as part of the integrated marketing communications mix these days, than merely communication ideas as they did in the past. For example, this Cannes winner from Tesco is not so much a communication idea as much as a business changing idea. Or the recent announcement from Shoppers Stop of setting up a Facebook store is a business idea, and less of a marketing idea.

So how are agencies taking advantage of the rich stream of “by products” they create? Griffin has listed out a few in his deck.

Anomaly, an agency with offices out of New York and London discovered YouTube amateur Lauren Luke and helped her develop, manufacture and market her own range of cosmetics. This is not a one off from Anomaly. They have developed a few IPable ideas, including ShopText, a mobile based shopping and couponing and commerce service.

There are other agencies too who think alike. Among the better known ones, BBH has Zag, a brand inventions agency. Deutsch has Consigliere, Kirshenbaum Bond Senecal and Partners  have KBSP Ventures. While independent traditional agencies have set up innovation shops, there are a new bunch of agencies that are building things and creating a niche for themselves. Breakfast out of New York, Definition6 , the guys behind the Coke Happiness Machine, Deep Local, who built the NikeChalk bot, or London based agency, ustwo, which has a portfolio of client work and a bunch of independent products.

What connects these new agencies? Unlike traditional agencies that spend their energies creating communications ideas, the new ones are focusing on out and out innovation for their clients and for themselves.They are thinking about product ideas, which can be patented to create intellectual property and build new revenue streams in the future.

'Making' (Picture courtesy @samrudh4)

A simple way for agencies to take advantage of “making” opportunities, is to go beyond the campaign mentality. For example, this can be done with mobile apps, since they are now accepted as a tool for marketing. (Most traditional agencies have an app or two to show off these days which means we have cracked the model of how to imagine and make them.) So instead of doing an app for, say, a diwali mela campaign, could we think long term? We can understand the key reason for a person to buy a brand or use a service and then build something that fulfills an unmet need.

As this story in Fast Company points, can agencies think more like startups, and less like communication partners? Or as advertising planner Russell Davies goads us so eloquently in Wired UK, make things, not messaging platforms.

In a changed world, there are ways of making them happen. Thomas Freidman pointed us to some mega trends in his bestselling tome The World if Flat. For this story, the key ones from the book are outsourcing, rapid prototyping, workflow software and supply chaining.

So an idea, that comes up in a brainstorm, ideas that we agencies are so good at spotting, can be scaled up with help from partners who the agency has relationships with, and taken to market with the support of a client, or independently.

To do this we will need to add new skill sets though. Which is where agencies will have to have the startup mentality. We have rarely hired to build revenues in the future. But an agency with a headcount that runs into many hundreds can afford a small team of geeks, engineers and project managers for sure.

In a state of the union address early this year, Barack Obama told his country that their future lies in taking leadership of innovation. I believe the same should apply to the communication business that is seeing its fundamentals shifting with the arrival of the digital revolution.

DIY (Do it yourself) culture is a growing trend. This trend is spawning whole revolution, led by small groups of people who are using technology, easy connectivity, access to venture capital and microfinance.  

Advertising as an industry has a rich history of identifying and nurturing creativity. Unlike engineers, we are masters at finding a way to make things that make an emotional connection with people. Could an agency create the next Angry Birds, Instagram, Klout or Hipstamatic, asks this story. I believe we have the credentials. The inclination? Let’s wait to hear from the winners of the Axe developers’ day.

Nishad Ramachandran, vice president and head iContract, probably has the best job in the world surfing the net and talking stuff about Facebook, Twitter and YouTube.