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David Jowett of NFA on Why the Agency Business Model Needs to Evolve

In this installment of Canadian Growth Hackers, Vitaly interviews David Jowett, partner and head of Media at No Fixed Address. They discuss the evolving role of the marketing agency vis-à-vis brands, technology, and the opportunities agencies have in coming years. The interview originally appeared on Betakit.

David, tell us how did No Fixed Address came about.

Two years ago, ad veterans Serge Rancourt and Dave Lafond saw a solution for the diminishment of the traditional agency model. The opportunity was clear. For a whole host of reasons, the agency business had sidelined itself. It was losing its relevance. Clients questioned what value, what thinking, what leadership agencies were bringing to the table.

“Trust your gut and do what you believe is right. Don’t do things because the rule books say so.”

The answer was simple: go back to basics and put clients first. Get rid of unnecessary internal processes, pointless meetings, and give clients what they actually need: innovative strategy, original insights, and custom-made solutions that drive businesses forward. They realized that they needed collaborative, cross-functional, experienced, and strategic thinking – the antithesis to a “fixed” mindset.

Rancourt and Lafond’s philosophy is embedded in our name: No Fixed Address. There are no fixed rules in the ‘nine-to-five’ sense at NFA. NFA people take ownership of their careers, take responsibility for delivering spectacular work for their clients and can adapt to their working conditions. The NFA promise is to deliver custom-made solutions to its clients.

Many holding companies are struggling right now. What are some of the recent trends that have put pressure on their business model?

First, the dizzying change in technology and consumer behaviour has forced agencies to look inwards into their own structures to deal with today’s interconnected world. Huge organizations often struggle with structural change – holding companies are no different. It’s challenging to teach creatives and the media to work together after three decades of “best practice” siloing.

Clients have started to jump into the fray by in-housing creative and media solutions at speed, further diminishing agency revenue. Meanwhile, consultancies such as Accenture and Deloitte – who can consolidate the grid, connecting data, technology (and now media and creatives) – are making huge inroads into the marketing space, often through preexisting relationships with C-Suite executives.

Finally, a lack of transparency around hidden incomes has resulted in clients losing their trust in agencies. This distrust has spread to agencies’ use of data and technology – particularly in media – where some have created hidden structures to yield financial windfalls within the programmatic arena.

What changes to the business or operational model do agencies need to make to closer align their success metrics with those of the brands they represent?

Creative agencies tend to sell preconceived ideas and processes to their clients. Agencies have to get back to putting clients first; they need to obsess with solving business problems with customized solutions, created specifically for the challenge at hand.

Many agencies send their clients to channels that they have pre-existing deals with, rather than sending them to the channels that make the most sense. What’s needed is more transparency. There needs to be a cultural shift that puts clients — rather than agencies (and their financial interests) – first.

Agencies should be rewarded when they drive business results. At NFA, one striking way that we have achieved this is corresponding our fees with the client’s stock.

Brands and agencies today have access to many of the same technologies. When should brands turn to an agency rather than in-housing the solution?

The only real reason a brand should involve an agency is if the agency can provide a better way of getting results. It’s as simple as that. The decision should not be driven by cost-cutting. Penny-wise and pound-foolish.

Disruption is an everyday part of life for all businesses. Embrace it or be left in the dust.

Having said that, not all brands have a creative environment that constructively challenges the ‘norm’. In such cases, brands need to outsource to make an impact. Small firms that aren’t big enough to build teams of media specialists (creative, web development, UX, production, media buying, strategy, etc.) should consider outsourcing to agencies to get the job done right.

It’s very cool to see that you aren’t afraid of brands bringing technology in-house. How can agencies take advantage of this?

Many agencies are terrified about change and slipping revenue. However, we ultimately have to change our modus operandi. Disruption is an everyday part of life for all businesses. Embrace it or be left in the dust. At NFA, we call it “complement and enhance.”

If a client wants to take something in-house, we will provide the skills to help them do what they don’t want or can’t do themselves (complement). And even more radical, we will help clients in-house the skills they currently lack (enhance). That is what a real partner does. We support our clients at every turn.

Let’s switch gears. Breaking through the noise is incredibly difficult these days, especially for new brands. What advice would you give to companies that have a limited budget but want to scale?

Keep your mind open but focused. Don’t get distracted or seduced by the many shiny objects out there. The best way to do this is to let your data guide you. Once you have consolidated your data and your learning, test, and measure. Test and evolve.

Bonus questions

What will it take to be successful in 2020?

Whatever type of brand or agency you are, know precisely what makes you unique. Obsess with delivering that uniqueness but remain aware that the sands will keep shifting and be ready to evolve your uniqueness – without losing your core.

If you were to give one piece of advice to other agency executives on building a great company culture, what would it be?

Trust your gut and do what you believe is right. Don’t do things because the rule books say so. People will know if you are faking it, and it will betray a lack of confidence and vision.

What is one book every business person should read?

Control Your Destiny or Someone Else Will by Jack Welch. It’s not new, but it’s foundational.

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