Advertising agencies need business creativity

Management innovation should over time transform the way many functions and activities work in advertising agencies. We should see more and more implementation of new management practices, processes, and structures that represent a significant departure from current norms. The process of developing radical new ways of working will always have some dose of luck and randomness to it. However, agency leaders can certainly tilt the odds in their agencies’ favor by keeping these ideas in mind.

Management innovation is definitely a key driver for competitive advantage. For agencies that invest in capacity for pursuing management innovation systematically, the potential returns can be rather substantial. Look at the business model: majority of advertising agencies don’t make money unless they’re recording hours on a timesheet or ‘creatively’ leverage agency fee. Today, it doesn’t have to be this way.

Jobs-to-be-done

At most agencies, the profit problems can be correlated directly with a service offering that underlying process, problem to be solved or job the client is trying to get done. The times have passed when agencies charged a premium price for something clients perceive they can get down the street at half the price. Instead, turn your energies to the job-to-be-done or problem to be solved designed service to meet the unmet needs of the client.

Develop solutions for the unmet needs of client.

Business design

Adopt a way of thinking and working that applies human-centered design to improving or transforming business activities. Draw upon social science, design, and strategy to create business value, from innovative new products, services, and processes, to creative strategies and models. Involve developing a mindset to find, frame and ultimately solve business problems. Learn from experiences and get better and better at developing more creative, more effective ways of capturing the value you create for your clients.

Connect with clients, make strategic decisions, 
and incentivize creativity and opportunities for innovation.

Products and programs

Labor-based services on their own are not very scalable. But products and programs are. By transforming selected agency services into products or programs, you enhance the perceived value of your offerings and create the potential for new ways to charge for what your agency does.

Turn agency services into products and programs.

Solution-driven pricing

Besides being remarkably uncreative, in the world of today, a standard list of hourly rates or agency fee is not the best way to capture the value you create for your clients. When asked by a new client to supply your rate card, respond instead with your selection of pricing, different ways your agency pricing its services. These can include such approaches like subscription, fixed price, revenue share, etc.

Replace agency rate card with a selection of revenue options.

I believe that any agency has a chance to unlock innovation potential inside their organization. @andrea_stimac