The disruptive advantage

Disruption is the word of the moment for business books: YouTube is disrupting TV; Skype is disrupting telecomms; free is disrupting, well, everything. If you’re the incumbent, disruption spells disaster. So it’s a surprise to find a global incumbent, advertising agency TBWA—recently named 24th in the Top 50 Most Creative Companies by Fast Company magazine—make disruption a core plan for business development. I asked TBWA\Whybin chief executive David Walden and executive creative director Andy Blood: just what’s wrong with the status quo?

Why does an advertising agency win an innovation award? I thought advertising was dead.

I think advertising as some people know it is dead. ‘Advertising agency’ is now a bit of a misnomer for what we do. TBWA is seen as a clever company and a creative company, but you don’t automatically go “Where’s the ad?” anymore. That’s the old paradigm.

Why has the group won the award?

It comes back to people. You’ve got a couple of really clever people who have made a big impact around the world. But the TBWA network was never a network in its true sense; it was a slightly dysfunctional grouping of highly talented individuals that either had their own business—like Scott Whybin in Melbourne or Reg Lascaris and John Hunt in South Africa—who had been approached and become involved with TBWA.

Andy Blood & David Walden

See also: Andy Blood & David Walden in Idealog TV

JWT had been around a hundred years, and DDB. TBWA didn’t start until the late ’70s, so they had to catch up by buying established creative agencies and creating a network. They went to South Africa and bought that, they went to Melbourne and bought Scott Whybin. They funded us into doing a startup here and in Sydney. They went to America and bought Chiat Day.

So when you have agencies with entrepreneurial people who have built up their own business that TBWA has become involved with, you get a greater sense of people in the network who are a bit more interesting. And they’re probably a bit edgier, and a bit smarter.

Over ten years it’s become a group of agencies that share a way of thinking and doing. The thinking is about the discipline of disruption, which is a way of going in a different direction, and a thing called ‘media ask’. That’s the way in which we communicate ideas. We’ve gone from media planning to channel planning, and now we do audience planning. Audiences are who we’re talking to and how we engage with them is approached in a different way in TBWA agencies.

You started a decade ago?

April Fool’s Day 1997—the best day to start an agency with someone else’s money.

There’s an Apple ad upstairs: “Here’s to the crazies, here’s to the thinkers, here’s to the dreamers. They think they can change the world—they probably can.” That almost became the mantra for the network, even though it was done for a client.

Does that work in New Zealand? We like to think of ourselves as innovative, or are we quite conservative?

The New Zealand advertising industry has always punched above its weight. Our size has been to our advantage. Because we’re small, the risks haven’t been so great. We’ve been given more licence because there’s not quite as much at stake.

And having that first-light advantage here helps too. You can be firing things off to the rest of the world while they’re sleeping.

Has your business model and the way you charge people changed with the times?

Absolutely. When I started we acted like real estate agents, and clipped the ticket on the media spend—like 90 percent of the industry here. Now we’re almost entirely based on fees. Some are still related to time involved, some are incentives … if they succeed we succeed. And some are just based on a monthly fee that allows them access to us. We haven’t cracked the magic formula yet of getting paid for the thinking in every respect of the business, but we’re closer to it now than ten years ago.

We’ve asked for IP in the past, but clients are unwilling to give that away because they realise they’re giving up far more than they pay in fees.

How does a client meeting work now?

It used to be that clients would bring a problem to a traditional advertising agency to solve. The mantra used to be: a bit of creativity will help you sell it faster, better and more efficiently.

There are still clients that behave in a traditional manner, and want those kinds of meetings. But often now we initiate things and say: “Hey, we’ve been thinking about what would happen if you did this”. That’s where the paradigm shift is. Now it’s not about sitting back waiting for a client to ask us to do something to help them. It’s about us looking at clients, how they’re structured, where their expertise is, and saying: “What would happen if we had an idea that would bring that to life?” It’s ideas, and what-ifs.

Are there opportunities coming out of the recession?

Recession times have always been incredibly creative times.

In a recession, clients either rejig their activity or re-prioritise what they’re doing. Some are now asking for something a bit more measurable so they can go back to the CEO and say: “I’m spending this money, but look what it’s doing.”

I used to tell clients: It can either be fast, good, or cheap—pick two. If it’s going to be fast and good, it won’t be cheap. If it’s going to be good and cheap, it won’t be fast. Now our clients want all three, so agencies have to change that mantra.

Are people reinventing their businesses, changing their models, asking you for a different way to run things?

They’re either thinking about it, or are doing it. We’ve seen some major changes. One client has gone from a traditional approach of awareness building, likeability, to wanting a more aggressive conquest strategy against their competitors. Very different tactics.

People are changing quite dramatically. There’s a greater awareness, even with big clients, of the power of new audiences and channels.

The challenge for us is that to do this, and do it well, is a lot more time intensive, more resource intensive.

And clients go: “This looks complicated. How are we going to do all this?” You need an enlightened kind of client, a client with some balls, as well as a desire. When it comes off, the rewards are incredibly exciting.

Agencies are notorious for egos or difficult people, but you’ve worked together for five years. Do you still enjoy each other’s company?

We get on like a house on fire. We’re both sitting there pouring petrol onto it.

I’ve been really lucky in my life that I’ve always been able to, at critical moments, end up with a creative partner—whether it was Roy Meares, Scott Whybin and now Andy—that I can relate to as a person, as well as my business partner. The ‘Andy and me thing’ is extraordinary because it’s effortless. We don’t have to work at it. We often arrive at the same place and we haven’t even spoken to each other. Or I’ll say something, and he’ll go: “Yeah, it’s exactly what I was thinking”. And then it’s just—mutual respect sounds sort of boring, but it is. I have absolute confidence that he does his bit really well, and he always backs me in the bits I do.

We don’t have the traditional agency bullshit of creative dominance, or suit dominance. It’s been a group of people all coming together to have some fun and get on with it—do some ads, find some solutions, make money and have fun.

Part of that was because you were able to start with a fresh slate?

People who leave here are normally leaving to write a book, go overseas, go and do something. Very rarely do we have anyone who’s leaving us to go up the road to DDB. It’s not that kind of place. And people talk about how they get a family sort of feel. But it does have a lower staff turnover than other agencies.

Which is amazing for an organisation that has disruption at its core.

I think it’s the way you hire people. We’re both really careful about who we hire. The only thing you have to absolutely ensure is that you hire people who get you.

It’s the old story about hiring attitude and teaching skills. And then collectively, we both try to create an environment where the people we hire end up doing more than they believe they thought possible.

We reached a stage, about a year ago, of looking out across the room and thinking: “If I went out for a long lunch, things would still happen”.

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