Episode 105

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Drew McLellan is the Top Dog at Agency Management Institute. For the past 23 years, he has also owned and operated his own agency. Drew’s unique vantage point as being both an active agency owner and working with 250+ small- to mid-size agencies throughout the year gives him a unique perspective on running an agency today.

AMI works with agency owners by:

  • Leading agency owner peer groups
  • Offering workshops for owners and their leadership teams
  • Offering AE bootcamps
  • Conducting individual agency owner coaching
  • Doing on-site consulting
  • Offering online courses in agency new business and account service

Because he works with those 250+ agencies every year — he has the unique opportunity to see the patterns and the habits (both good and bad) that happen over and over again. He has also written two books and been featured in The New York Times, Entrepreneur Magazine, and Fortune Small Business. The Wall Street Journal called his blog “One of 10 blogs every entrepreneur should read.”


What you’ll learn about in this episode:

  • Why the days where creative led agencies have passed and why creative has been replaced by strategy, content, and lead gen
  • The shortage of writers compared to the abundance of art directors and why that’s a pretty big issue for agencies
  • Why creative directors aren’t in that high of demand anymore, and what traditional creative directors look like in the agencies that have them
  • Administrative, account service, and creative services: the three departments that make up most agencies today
  • The triad of leadership – a writer, art director, and digital producer lead the creative services department in lieu of a creative director
  • Why you don’t usually even need to produce spec creative for a pitch anymore
  • Figuring out which roles inside your agency you still need
  • Allocating funds from cut positions elsewhere to serve your clients better


The Golden Nugget:

“Reassess every role inside your agency to see if it’s still one you need to fill.” – @DrewMcLellan Click To Tweet


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Ways to contact Drew McLellan:

We’re proud to announce that Hubspot is now the presenting sponsor of the Build A Better Agency podcast! Many thanks to them for their support!

Speaker 1: If you’re going to take the risk of running an agency, shouldn’t you get the benefits too? Welcome to Agency Management Institute’s Build A Better Agency podcast presented by HubSpot. We’ll show you how to build an agency that can scale and grow with better clients, invested employees and best of all, more money to the bottom line. Bringing his 25 plus years of experience as both an agency owner and agency consultant to you, please welcome your host, Drew McLellan.


Drew McLellan: Hey, everybody Drew McLellan here with another episode of Build A Better agency. This is episode 105 and it is one of my solo casts. So if you are a regular listener, you know that what that means is I don’t have a guest with me today. It’s just you and me talking about something that I’ve been chatting with a lot of agency owners about, and I want to make sure that we talk about it too. So I don’t know if you know it or not, and again, if you are a regular listener, you may have picked up on the clues of this. But when I started in the business 30 years ago, I actually started on the creative side. I was a copywriter. And so back in the day, a copywriter was paired up with an art director and it was our responsibility to create concepts, sell those concepts, and then execute against those concepts for our client’s advertising needs.


  And the lion’s share of that work an agency did back then was indeed advertising. But the reality is today that that’s not the case anymore. In fact, less than 10% of small to mid-sized agencies survive on creative. For most of us, unless you are a big box agency in a big market and you do a lot of consumer packaged goods kind of clients. For most of us, if you look at the revenue you bring into the agency based on the deliverables, traditional advertising creative is a pretty small part of that mix. For some of you, it may not exist at all, but for most of you, it’s a pretty small percentage of the revenue that your agency generates.


  The truth of the matter is today creative is not king anymore. For most of us today, strategy is king. Content is king. Lead gen is king. Being able to say to our client, “If you give us a dollar, we will be able to measure and monitor the results of that and we’re going to be able to show you leads and sales that exceed the spend. We are going to be able to prove to you a positive ROI. And if we can’t do that, oftentimes our clients get fired and we get fired.”


  So for many agencies, the need for big creative campaigns and big traditional advertising is really pretty minuscule or non-existent. One of the outcomes of that is for many agencies the staff that we have sitting around the table today may or may not be perfectly aligned with the outcomes that we’re being asked to produce. For many of you, especially if you have great longevity in your staff, if you look around the table, you may have some people at the table that are not in as much demand as they used to be. Most agencies that we work with today, if they came out of the traditional path, they didn’t start as a digital shop, or they’re not a media buying agency or a PR shop, but if most of you that started as a traditional ad agency, even though you’re probably not that today.


  But if you have a lot of senior people that have been with you for a while, I’m going to bet that you are overstaffed in the art department and that if anything, you were scrambling like mad to find and hire enough writers. It used to be that the work was pretty evenly allocated. So if you had worked for a writer, you had about the same amount of work for the art director. And that was why we got paired together that way. But today, most agencies need two or three writers for every art director that they have. So if you are carrying some senior staff from 10 or 15 or 20 years ago, it may very well be that you’ve got too many art directors around the table. The other position that is not in the same kind of demand anymore is the traditional creative director.


  For many agencies, that position back when I was a kid in the business, that was a vital position. And that was the one person in the agency, they were always a little crazy. They came in at 10 o’clock. They always wore black and they were a little wacky, but they came up with the big brilliant ideas. And that was really all they were tasked with doing, was to come up with these big, bold ideas that we would execute. In today’s agency, there’s not anywhere near that kind of demand for that kind of creative anymore. In fact, it may be something you need every once in a while, but for most agencies, it is not an everyday need anymore. In fact, when I think about all of the creative directors or all the creative director positions that have been vacated through agencies that we work with, so the 250 or so agencies that we see every year, when an agency had lost an art director … I don’t mean art director, creative director, or they wanted to hire that position because they were growing, they did one of two things.


  Either if they were going to actually make someone the creative director, can’t think of one instance in the last two or three years when that person had an art background. If agencies are adding creative directors, they’re writers by background. And the reason for that is, is because so much of the creative product today is tied to content. So much of the creative product goes from strategy to insight to content/creative and then to execution. And so little of it is art driven or visually driven. I’m not saying that visuals aren’t important. I think they’re vitally important to what we do, but they’re not typically where the agency is starting. It tends to be down the road further. And so every agency that has hired a creative director that I have observed has hired a writer, but most of them quite honestly have not hired a creative director at all.


  And by the way, if they did hire a writer/creative director, that creative director is serving in a very different function in the agency than back in the good old days. And what I mean by that is the old creative directors really didn’t actually produce a lot of work. They produced ideas, but they weren’t really strapped to a layout table or a computer and they weren’t cranking out work. Today’s creative director in every agency I can think of is really a working creative director, which means that they are producing work while they are leading the department.


  And with that, it seems like a really great time to take a brief pause and then we will get right back to the show. If you’ve been enjoying the podcasts and you find that you’re nodding your head and taking some notes and maybe even taking some action based on some of the things we talk about, you might be interested in doing a deeper dive. One of the options you have is the AMI Remote Coaching. That’s a monthly phone call with homework in between. We start off by setting some goals and prioritizing those goals, and we just work together to get through them. It’s a little bit of coaching. It’s a little bit of best practice teaching and sharing. It’s a little bit of cheerleading sometimes, on occasion you’re going to feel our boot on your rear end, whatever it takes to help you make sure that you hit the goals that you set. If you would like more information about that, check out agencymanagementinstitute.com/coaching. Okay, let’s get back to the show.


  That’s very different, but honestly, the biggest shift is most of you are opting not to replace your creative director with another creative director. In fact, you’re realigning your entire agency based on these new demands for the business. So right now today, the most common agency structure is you have an administrative department, that’s HR, finance, sales, the people who are running the agency. If you are buying and placing media, you have a media department and you’re doing both traditional and digital out of that media department, although I will say most of you don’t have that in-house anymore. Then you’ve got your account service department, your strategists, your account people, your client facing folks who are serving the same role that in many cases they have done for quite a while. And then instead of a creative department, what you have is what’s now being often called the creative services department. And that looks very different than the traditional creative department. Some elements are the same. You still have writers there. You still have your graphic designers and art directors there, but now you also have the digital producers there.


  So whether you’re doing web dev or some digital assets for your clients where you’re turning things into infographics, that might come out of a more digital focused art director than a traditional art director. But those three disciplines are living under the same umbrella. And rather than being led by a single creative director, in many cases what’s happening is the agency is identifying a super senior really good writer, art director and digital producer. And the three of those people together are forming a triad of leadership and they together are running the department and they are working very hard to weave those disciplines together to make sure that the outputs for the agency are meeting the client’s needs, are delivering on the strategy and all of that. They understand that it’s very difficult for those disciplines to live in a vacuum anymore. That almost everything we do, those three things are woven together, and you need to have a department that is able to do that.


  So rather than hoping that one person has an equal acumen over all of it, they are charging three people with running the department together. They’re each typically supervising the people who have their same core skillset. So whoever your senior writer is, is overseeing all of the other writers. And by the way, they’re typically overseeing, not only your staff writers, but any 1099s or contract writers you’re working with. And the same thing for the art folks and the digital folks. So it’s a very different model and it’s a model that acknowledges that the kind of work we’re doing is very different. Now, some of you are thinking, “That’s great, Drew, but we need a powerhouse creative director for new business.” I’m going to challenge that a little bit. So first of all, if you really do need killer creative to go into a new business pitch, what a lot of agencies are doing is they’re hiring a freelance creative director to help them come up with the concepts and then their team is executing on those concepts.


  Sometimes with that hired guns help and sometimes not. Or in other cases what they’re doing, and in most cases what they’re doing is most of you are going into new business pitches without creative. Unless they ask for spec creative, many of you are leading with strategy, with outcomes, with metrics and measurement. That’s one of the biggest changes in our business. In the good old days, if you will, we lead our new business pitches with creative. We would paper the walls with creative concepts. Today the clients aren’t asking for that as much, and they don’t even want it. They want to know that we can deliver results, and so we’re having very different new business conversations than we used to. Again, I’m being generalist. So for some of you, this may not be the case.


  If you are more of a traditional agency still, you may have to go in with a lot of spec creative and really wow them with both the steak and the sizzle. But for many agencies, that is no longer the case, that we are going in, leading with strategy and having a creative director inside the shop is less and less critical to us winning your business. The reason I’m talking to you about all of this is because I think it’s difficult sometimes when you are knee deep in the trees to step back and see the forest, to see that the business that you’ve grown up in with all of the traditional rules that you’re used to is no longer the business that you’re in. And I think it takes some time for us to absorb the idea that it’s easy when you add a whole new discipline.


  When I started in the business, there was no digital department because we didn’t do digital back then. It didn’t exist. So it’s easy for all of us to see, “Oh, I see how we need to add that into our agency’s offerings.” But when it comes to the core products that we’re used to delivering, strategy and creative, the fact that those are changing is challenging for us to wrap our heads around. And in some cases it’s challenging for us to wrap our hearts around it because we might’ve come from the creative side or we love that part of the business. We love the big idea. We love producing the TV spots or the videos or whatever it is. And it’s hard to say goodbye to that. But the marketplace is asking us to come to them with a different model, to come to them with different tools in the toolbox to help them get to where they want to go.


  And as an agency owner, you’ve got to be ready to build your agency to meet the demands and needs of today’s clients. So one of the things I just want you to think about is I want you to look at your agency. I want you to look at the kind of clients you serve. I want you to look at the business that is on the horizon for you, the kind of clients that you’re chasing and ask yourself, not just about the creative director, but about every role in the agency. Is this really still a seat on the bus that I need to fill? And if I don’t need to fill it, then what else can I do with that money? Where else could I reallocate those dollars that would better serve our clients? That’s what I want you to think about. Well, how can I build the right toolbox so that I have everything I need to serve the clients and to give them what they want so that we delight them, we help them meet their goals, they stick around, they make more money, we make more money and it’s all good?


  And sometimes that comes with some painful truths, some painful changes. And I think for many agencies, the evolution and what I think will be the eventual extinction of the creative director is one of those painful truths. That’s what I have for you today. So here’s a couple other things I want to put on your radar screen before I let you go. We have some killer workshops in January. If you’re listening to this in real time. So if you’re listening to this in the fall of 2017, we have some amazing workshops in January that I want to call your attention to. One of them is actually aligned with this topic. So we’re doing a workshop called Creating Content That Creates Revenue. Many agencies, in fact, every agency today is creating content for themselves, a thought leadership position.


  But most of you see it as an expense, as a drudgery, a drain on your staff. And for two days, we’re going to teach you that that is not how it has to be. That you can create killer content that you get paid to create that generates more revenue for you and it really ends up being a profit center rather than a cost center. The other workshop we’re doing is two days talking about new business. So we are partnering with Mercer Island Group and we are bringing them in to teach us. They’re an agency search firm. Robin Boehler, one of the partners was on a podcast probably about 10 or 15 podcasts ago talking about new business, and they marry agencies and clients, and they see everything that we do wrong and they are incredible coaches and helping agencies get better at new business.


  So both of those workshops are in January. Both of them are in Orlando, on Disney property. Let’s face it, being in Florida in January for most of us does not stink. So check those out on agencymanagementinstitute.com website, and if you have questions about them, fire me an email and I will answer them for you, but I highly, highly recommend both of them. They’re going to be great. You’re going to walk away with so much knowledge. You’re going to be fired up. It’s a great way to start the new year. And as always, if you don’t like our workshop, we will give you your money back. Haven’t had to do it yet, but I’m always happy to offer.


  In the meantime, you know how to get ahold of me. I’m Drew at Agency Management Institute. You can find me on the web. You can find me in social. Please go and think about how to retool your agency for the future. Ask yourself the tough questions. And if I can be helpful, give me a shout. Talk to you next week where I will have a guest who’s going to help us think bigger and broader about our businesses and how to make them more profitable, serve our clients better, serve our team better and ultimately reward us for taking the risk that we did when we started our agency in the first place. All right, I’ll catch you next week.


Speaker 1: That’s all for this episode of AMI’s Build A Better Agency brought to you by HubSpot. Be sure to visit agencymanagementinstitute.com to learn more about our workshops, online courses, and other ways we serve small to mid-sized agencies. Don’t miss an episode as we help you build the agency you’ve always dreamed of owning.