The latest agency evolution with Robert Rose

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, please welcome your host, Drew McLellan.

Drew McLellan:

Hey, everybody. Welcome to another episode of Build A Better Agency. Today, we are going to talk about the evolution of agencies and what’s coming next for us as a business model. Let me tell you a little bit about our guest. You will probably recognize his name and are familiar with him, but I will tell you about him anyway. So Robert Rose is my guest today, and he is the founder and chief strategy officer of The Content Advisory, which is a consulting and advisory group of the Content Marketing Institute. As a strategist, Robert has worked with over 500 companies including global brands like Capital One, Dell, Ernst and Young, HP, and the Bill and Melinda Gates Foundation. He’s the author of four books now, right?

Robert Rose:

Three books actually.

Drew McLellan:

Three?

Robert Rose:

Yeah.

Drew McLellan:

So this includes the current one?

Robert Rose:

Yeah.

Drew McLellan:

So three books, and two of them in particular, we’re going to talk about today. So there’s a book called Experiences: The 7th Era of Marketing, which is really about how marketing is shifting. In fact, it was called a treatise and a call to arms for marketers to lead business innovation in the 21st century. So again, as we think about how do we help our clients build their business, not just their marketing, I think we’re going to love having that conversation. He and Joe Pulizzi also just launched a book in September called Killing Marketing, which is really fascinating, and we’re going to talk about agency’s role in how marketing is evolving and how we need to evolve to stay current. Robert and Joe also do a great weekly podcast called This Old Marketing, which if you are not a listener, I highly recommend. Robert also is an early-stage investor and advisor to a number of technology startups and serves on advisory boards for several companies like… Is it Akoonu? Robert, is that right?

Robert Rose:

That’s right.

Drew McLellan:

Yeah. DivvyHQ and Tint. So, Robert, welcome to the podcast.

Robert Rose:

Oh, thank you so much, Drew. This is awesome. I’m a long-time listener and a long-time fan, first-time guest. So I’m excited to be here.

Drew McLellan:

Well, happy to have you. So this is an exciting time for you with the book launch and lots of interesting conversations, I suspect.

Robert Rose:

It is indeed. I think it’s an incredibly exciting time to be in marketing and advertising broadly speaking. I think it’s just probably… I hate doing this because I’ve got the gray hair to show it. I’ve been in marketing now 30 years, and so I cannot remember a time when it has been more challenging and yet more exciting. So yeah, lots of fun conversations.

Drew McLellan:

Yeah. I teach some AE Bootcamps, and one of the things that I tell the, in air quotes, “kids” is I’ve been in the business for 30 years, and I don’t remember a time where the changes come so fast and so furious, and then so big. It’s not little change. It’s big change.

Robert Rose:

Right.

Drew McLellan:

Which is exciting and accelerating, but also a little exhausting.

Robert Rose:

It is. It is.

Drew McLellan:

Yeah.

Robert Rose:

The fascinating thing that’s changing that wasn’t changing when you and I were those kids in those classes is how the fundamentals of what we do as agencies, you know?

Drew McLellan:

Yeah.

Robert Rose:

And how that is changing the very nature of what it is we offer value to clients and providing. That is something because when you and I were coming up through the ranks on the agency side anyway, we were worried about reach and frequency, and trying to figure out media buying, and trying to figure out the strategy of how we take advantage of print, and radio, and television, and even fax marketing for those of us who were in the B2B [crosstalk 00:04:08].

Drew McLellan:

Oh, I remember that. Yeah.

Robert Rose:

Yeah? And all of those wonderful… Somebody asked me one time. They said, “Yo, what was your open rate when you were doing fax marketing?” I said, “Well, it was 100% if you had the right phone number, so.”

Drew McLellan:

Yeah, right.

Robert Rose:

But those things are all out the window now that we are dealing with everything from the different multiple fragmented channels, and platforms, and audiences, and internet of things, and artificial intelligence. It’s all just fundamentally changing what we do.

Drew McLellan:

Yeah, and again, for agencies and for all the folks listening, on the one hand, that sounds exciting until it’s your business, and how you pay the mortgage, and all of that. Then, it’s a little daunting, I think.

Robert Rose:

Yeah, there’s doubt. Well, this is true on the client side as well, right?

Drew McLellan:

Sure.

Robert Rose:

I mean, all of the clients that we are dealing with now are undergoing the same fundamental transitions in their business, right? So talk to a retailer or a publisher these days and ask them how they’re feeling. There is a sea change of foot here. As the wonderful, famous Chinese quote goes, “A crisis is simply an opportunity riding the dangerous wind.”

Drew McLellan:

Right.

Robert Rose:

It is ours to take. Those that can adapt can truly evolve into something that will take advantage of all of these changes that are going on and succeed. That’s why I think it’s so exciting.

Drew McLellan:

Well, and I think the other part of it that is exciting is that the spoils will go to those brave enough to step out quickly. Right?

Robert Rose:

Yes, indeed, and truly make the investment. Right?

Drew McLellan:

Yeah.

Robert Rose:

Those that are actually making the change and not just pretending to make the change where they’re throwing somebody over into a corner with the red stapler and saying, “Hey, you’re going to be that change person,” but they’re not really looking at any serious investment. That is exactly right. The spoils will go to those who actually make the change.

Drew McLellan:

The upside of that as I’m listening to you talk is that agency owners by nature are risk-takers.

Robert Rose:

Yeah.

Drew McLellan:

But interestingly, they’re also not often willing to make big investments. So they’re willing to take risks, but they are slow to actually invest. So as you’re talking about not just splashing around in the water, but really getting into the water, that’s how I think a lot of agencies approach content today is they’re in the water, and they’re splashing around and making it look like they’re super active in it, but the reality is they’re staying on the surface.

Robert Rose:

It’s very true. I mean, look, I’ve grown up enough through the agency both on the small and large side of agencies to know that… Look, big agencies aren’t making big investments either. There may be more zeroes behind the dollar sign, but quite frankly, it’s not. It’s incremental as well, and look, there’s good reason for that. Right? In the agency side, we’re looking at our utilization and realization rates because our business is built on the back of people who go deliver services for clients.

Drew McLellan:

Right.

Robert Rose:

So the more that those people are sitting on the bench, that is a very dangerous thing for us as we’re trying to meet payroll every week. So when we start thinking about making investments into things that may not pay off for some time, that’s the true risk, right? We’re looking at putting people on things where their realization and utilization rates are going to be woefully low for some amount of time while we figure out how we actually monetize this new service.

I think when it comes to content and the investment there, the biggest mistake I see making is we’re taking the low-hanging fruit of execution of content. So turning ourselves into these content creation agencies, whether we’re evolving out of SEO, or some other website building, or whatever it is, and we call ourselves “a content service,” we’re just delivering content as an executional on-demand service from our client’s blog post, and tweets, and social, and all of those things rather than taking a step back and saying, “Let’s talk about the strategy.” Right?

Drew McLellan:

Right.

Robert Rose:

Remember back in the day, again, when you and I were coming up through the… even the late ’80s and into the ’90s, and as digital started to rear its head, and we started talking about things like, “What is a website, and what is digital?”

Drew McLellan:

Right.

Robert Rose:

The big thing that we all talked about was, “Let’s get strategic.” That’s not just, “Build a website.” Let’s talk about your marketing and your digital marketing, and talk about strategy. It’s the same thing with content now. Let’s not just talk about content. Let’s talk about the strategy and why you’re actually creating a content marketing approach.

Drew McLellan:

Right, and I think you’re exactly right. I think the reason why agencies haven’t delved into this for themselves, not necessarily for clients, but is because… Okay. A billable hour is a billable hour, and if I pull somebody off and they’re creating content for us, that’s a cost to me. So one of the things that I found fascinating in killing marketing was the whole discussion around cost savings, and let me back for a second. I also think that agencies have got to get out of the selling stuff mentality, right?

Robert Rose:

Right.

Drew McLellan:

Because that’s being commoditized.

Robert Rose:

Right.

Drew McLellan:

You can go on e-lancing and get somebody to make stuff for you.

Robert Rose:

That’s right.

Drew McLellan:

You can go to any of the logo farm companies, and for $400, you can get 50 or 60 logos. What kills me to say this as an agency person is… Okay. If you get 60 logos, 40 of them suck, but 20 of them are bad.

Robert Rose:

Right. Right.

Drew McLellan:

For $400, and so we’ve got to get out of the commoditized part of our work, and we have to really start thinking about, “How do we impact our client’s business?”

Robert Rose:

That’s right.

Drew McLellan:

So as I was reading your book and the whole idea of this cost savings, I was like, “Now, that’s when agency can really partner with a client and have impact in a way that most agencies are not going to be able to do.” So can you talk us through a little bit about the whole concept of how content and media can impact cost, and how agencies can play a role in that for their clients and for themselves?

Robert Rose:

Sure, and it’s such an important point because how I start out my workshops these days is to talk about that very thing that you just mentioned, which is this, the idea… What we hear, whether we’re an agency or on the client side, what we hear these days is this idea that content has been democratized, or commoditized, or whatever it is. The difference is, is that the creation of content has not been democratized or commoditized. It is the production and distribution of it.

Drew McLellan:

Right.

Robert Rose:

So just to your point, right? Creating stuff, whether it’s a logo, or a banner ad, or a website template, or a look and feel of a press release, or whatever it is, that’s the commoditization. It’s the container of which the design is in has been commoditized. What hasn’t been commoditized is the depth of what’s there, and content provides us a unique opportunity to get to that depth. Now, the key mistake to avoid and where we get the cost savings is not looking at the content purely as a replacement, as a banner ad or a logo, or looking at a tweet, or a blog post, or whatever as a direct replacement for direct marketing.

Drew McLellan:

Right.

Robert Rose:

For generating leads. The key is, is that we look at content as building the valuable thing because the content, quite frankly, doesn’t have value, unless it does one thing, which is to build an audience. That’s where agencies can truly start to look at the cost savings as well as the revenue and profitable side of what content can provide. I’ll just give you an example of this. Building an audience. This is on B2B or B2C, and you have an audience that has data rich. I don’t mean just an email address with [email protected] and all of those kinds of things. I mean, an audience that wants to subscribe to the content that you are creating, whether you’re creating it for your agency or you’re creating it for a client. An audience that wants to subscribe to that.

So they’re willing and trustingly giving you first name, last name, email address, physical address, company name, budget size. They’re participating in polls. They’re consuming content, so you’re measuring behavior. All of those things provide you a rich audience dataset that you can start using to optimize your other marketing services that you’re providing. Great example of this is what, for example, Kraft does with their Food and Family Magazine. They have three and a half million opt-in subscribers to their online recipes database, and they use that to upload into Facebook, and do lookalike targeting, and get a 4X media buy effectiveness on what they’re doing on social media, paid media.

Drew McLellan:

Right.

Robert Rose:

They’re uploading it or B2B companies are uploading their audience databases in LinkedIn and getting an effectiveness on the buy media that they’re doing on LinkedIn. They’re looking at doing cross-advertising and lookalike advertising across the Google network, whether it’s YouTube or across whatever double-click is supporting these days on publishers’ websites. The other thing is they’re starting to use it to generate insight, and what I mean by that is, for example, I know a company, and this is a smaller B2B company that’s working with a smaller agency. They’re using their audience to actually figure out where they should be holding events, where they should be regionally marketing because with the subscribed database, they actually have better research on their primary audience than any of the research companies. So they’re saving hundreds of thousands of dollars in retail research cost because they quite frankly have a better insight to their audience and where they live, what they do, what they care about than the research companies.

Drew McLellan:

Are they monetizing that too? So are they taking that data, and then packaging it like a research study or research data, and then either sponsoring it or selling it to non-competitive audiences?

Robert Rose:

Well, that’s exactly right. Right now, that turns over from the cost savings actually into what Joe loves to talk about, which is the revenue side of creating and monetizing an audience, which is actually taking that audience, and then providing access to it to either partners or whatever it is, however you want to syndicate it out, and providing revenue opportunities for you as well. So yes, both sides of that. The cost savings is really in looking at… At the end of the day, the bottom line about what an audience can provide is, what does the audience do that a regular person that we’re trying to reach through our classic methods don’t do? So audiences tend to do things more in our favor, and because we have the intelligence and insight about who they are, we can actually use them. I use “use” in the kindest, most possible way.

Drew McLellan:

Right.

Robert Rose:

We use them to help us deliver more value through our traditional marketing programs. They will talk about us more. A wonderful example of this, and I know it’s a big company again, but we talk about Red Bull a lot, right? Everybody talks about Red Bull [crosstalk 00:15:32].

Drew McLellan:

Right, right.

Robert Rose:

Of course, the thing I love about Red Bull is I think we can all agree, the soft drink tastes like crap.

Drew McLellan:

Yeah.

Robert Rose:

I mean, it’s just a horrific-tasting drink, and it’s, by the way, the most expensive drink in the soft drink aisle. The thing is what they’ve done, and they know their audience well enough to know this is their audience will recommend the audience that, by the way, has neither tasted or has tasted and hated Red Bull will recommend Red Bull to their friends merely because they’ve consumed content, and so we can have… Because we’re creating an audience, they can reach the hard-to-reach consumers that we’re… So through sharing, through evangelizing our product or our content, can reach the hard-to-reach consumers that we’re just having difficulty doing through paid media. So there’s lots of cost savings there, but the bonus is having that subscribed audience. That’s the asset that we’re building.

Drew McLellan:

Well, A, I think that’s why people mix Red Bull with liquor so that you don’t have the yucky taste.

Robert Rose:

Right. Fair enough. That’s a fair point.

Drew McLellan:

But B, as I’m listening to you, I’m thinking, “How does an agency begin that kind of a conversation with a client or a prospect?” What kind of questions would you ask to uncover where you might be able to impact cost with either an existing client or in a prospect situation?

Robert Rose:

I realized what I’m about to say here is a difficult conversation in many cases because one of the challenges is, of course, is that we’re not having that conversation with a new client. We’re having it with one where we’re already delivering some amount of tactical, probably unstrategic content related services. So back-filling that, and going in, and saying, “Hey, by the way, you know all that content we’ve been creating for you, we should probably talk about the strategy.” Right?

Drew McLellan:

Yeah.

Robert Rose:

So I know that this is a difficult transition in some cases, but the point is, is that…

Drew McLellan:

If anyone can spin that though, an agency person can, right? Right?

Robert Rose:

They may be better able.

Drew McLellan:

Right.

Robert Rose:

Yeah, that’s their business. So what we need to do is go have an honest conversation before, ideally, we start getting into the content production side of things and really try to understand what is it that we’re actually trying to build here because if we just are upfront and say, “Listen, we know that you want to get into content. We want you to get into content too. We believe that this is the right thing. Let’s talk about all of the different potential strategic value that this content program can provide to the business because there are many, and we can list them all out just like we just did.”

“There are media effectiveness. There’s cost savings. There’s insight into your audience. There’s awareness. There’s lead generation. There’s creating a better customer, one that spends more. There’s creating events. There’s many, many different and integrated sets of value that we can create by creating an audience through the creation of a content program. So let’s just agree with that, and let’s list those out on the board. Which are the ones that are important? Let’s circle them all and say, ‘Great. Now, we at least have some business goals for which we are trying to create a content platform.’”

“Let’s talk about what we’re going to build. Rather than just creating random pieces of content for your corporate blog, let’s build something that actually demands a subscribed audience because that’s where the value will be created. It will not be created in the content. The value will be created in what action we can get a customer to take. Whether it’s to subscribe, buy now, move through the funnel a little faster, and meet any one of these goals that we’ve just circled on the whiteboard here.”

Once we’ve started to look at what it is we’re going to build, whether we call that a blog, or a digital magazine, or a resource center, or an online university, or an event, or a webinar series, or a talk, whatever the expression of that content, now we have a vision. Now, we have a plan, and so look at this like a product. It is a product that we are building for this company. We are going to build a media product whose purpose is to build an audience to drive value. Now, we have a reason to create scads of content.

Drew McLellan:

Right.

Robert Rose:

Now, we have a reason to go get influencers. Now, we have a reason to promote this content in a paid manner because we have a measure ability there that we didn’t have before, which is, how are we doing toward meeting these business goals? That’s the true conversation we need to have, and now, all of a sudden, the content production has reason to exist, and now we know why we’re creating four blog posts a month.

Drew McLellan:

Well, and now, all of a sudden, when the client goes, “X number of dollars for a blog post? I can hire a kid to write a blog post.”

Robert Rose:

That’s exactly right.

Drew McLellan:

They get why that’s not possible.

Robert Rose:

That’s it.

Drew McLellan:

That they have to have the level of skill and acumen that your agency offers to make the bigger picture work.

Robert Rose:

That’s exactly right, and by the way, my response to that is whatever product or service business that that client happens to be in, I say, “Yeah, you’re right. I could actually go 3D print your sneaker too.”

Drew McLellan:

Right.

Robert Rose:

“I could actually go hire a kid to deliver that legal service. Would you do that?”

Drew McLellan:

Right.

Robert Rose:

Of course, the lawyer goes, “Well, no. Of course not. That would be malpractice, and of course, I wouldn’t do that.” “Well, then that…” End scene, right?

Drew McLellan:

Yeah, right.

Robert Rose:

Yeah.

Drew McLellan:

Yeah. So in terms of looking at their own business, so put on your agency owner hat for a second, how does this cost…

Robert Rose:

I’m already worried.

Drew McLellan:

How does this cost savings idea actually apply to our own business as well?

Robert Rose:

Yeah. It’s great. I mean, because look, as an agency owner, and I’ve had plenteous bosses in my day, we’re the worst marketers in the world. Right?

Drew McLellan:

Right. [Pablo’s 00:21:10] children. Blah, blah, blah. Right.

Robert Rose:

We are the classic [Pablo’s 00:21:13] children, right? We don’t market ourselves. Now, I will tell you. When I’ve had clients say, “Hey, which agency should we be looking at?” I say, “Go look at the agencies that are doing content marketing well for themselves because that’s the agency you want because they get it.”

Drew McLellan:

Right.

Robert Rose:

So we need to invest in our own marketing, and agencies in particular need to invest in content because that’s what we do. We are, at the end of the day, services companies that pronounce that our thought leadership is differentiating. So we have to demonstrate that. We have to demonstrate that we are thought leaders in whatever vertical and/or horizontal space that we cover as an agency. So the idea there is exactly the same because what we’re trying to do is build an audience. We’re trying to build an audience that reaches the customers, our clients that we are trying to reach. So in any ways, we are ourselves trying to get to a place where the word of mouth, or the referral, or the wonderful awareness of what we do is demonstrated in our content, and thus, we get in front of the clients that we want to get in front of, and they’re increasingly hard to get in front of with paid media.

Now, it will take many, many… One of the things that I often will tell a small agency is, “Yeah, it may or may not be worth it to have your blog be the platform for you, right, because nobody is coming to agencysomeagency.com, the small little agency out in the suburbs, and trying to figure out how you’re differentiating.” Get yourself out on a speaking [inaudible 00:22:49]. Write a book. Figure out your whitepapers and get them placed places. Figure out where your network and audiences living, and breathing, and activating. Then, create a content program that reaches those audiences in the places that they are. For a small or medium-sized agency, that can be the best way to do it. Now, I’m not saying neglect your home base and your… as I would call it, your owned media strategy.

Drew McLellan:

Right.

Robert Rose:

Have a place, and hub, and a place where all that stuff lives anyway, and really activate your own visitors as they come in, but utilize your network and the ability to get out and about in the wonderful hinterlands of the internet and the places where your audiences are gathering to make your thought leadership known to the world. Start writing for Harvard Business Review. Get a speaking engagement and go pay for a speaking engagement if you have to. There are great ways to use your thought leadership, and demonstrate it, and start bringing people into your center of gravity, wherever that may be, but it’s truly a time, and it’s what every CEO should be doing. The CEO that spends his or her time of a mid-sized agency behind their desk is one that’s wasting their time.

Drew McLellan:

Or in a client meeting.

Robert Rose:

Exactly. The true mid-sized and small agency owner should be on the road, almost constantly trying to scare up, and use, and demonstrate their thought leadership in the space that they’re in.

Drew McLellan:

Talk a little bit about topic around that. So am I speaking on 12 tips to make your marketing better everyone in the world, or am I speaking to the diamond industry because I’m the expert in selling diamonds to X audience?

Robert Rose:

Yeah, probably the latter, right? I mean, because the world does not need another marketing blog. Let’s just be honest.

Drew McLellan:

Right.

Robert Rose:

I mean, the world does not need another top 10 ways to make marketing automation work for your business. I mean, that you just don’t need to go do that. It’s been covered ad nauseam, and so stop.

Drew McLellan:

Right.

Robert Rose:

Figure out where your… because I dare say if I had dinner with you, Mr. Agency Owner, and I said, “What is your differentiator?” and you said to me, “Marketing automation,” or, “We help businesses deal with digital marketing,” and I looked at you and went, “Really? That’s your differentiator between every other agency out there that you’re competing with?” and you would go, “Okay. Yeah. No, I get it. That’s not differentiating.” What is your differentiator? Are you the best marketer in a specific vertical like diamonds or… which would be cool, right, by the way?

Drew McLellan:

It would be cool. Yeah, yeah.

Robert Rose:

Yeah, it would be really cool, or are you the financial services expert? You deal with institutional financial services companies better than anybody. You know social media for healthcare better than anybody because you can help them navigate the real…

Drew McLellan:

The HIPAA stuff. Right. Yeah.

Robert Rose:

Yeah, the clients and regulatory issues. Are you the best in retail or consumer packaged goods, or are you the… There’s so many different ways to go at it and be specific, and become, and demonstrate your differentiation in whatever it is you do best. If you can’t figure out what you do best, you got to figure that out first.

Drew McLellan:

Yeah, yeah. I think for a lot of agencies, ironically, they’re great at helping other companies figure that out, but they struggle with doing it for themselves.

Robert Rose:

They just never asked the question, right? Again, in many ways, there is no fault here. This is the way many… I mean, I’ve just watched it happen. I’ve been a part of so many agencies in my life and career. I’ve just watched it happen where we grow up as leading agencies saying yes all the time. “Can you do this?” “Yes, we can. Yes.”

Drew McLellan:

Right.

Robert Rose:

Because why? We’re, again, coming back to those utilization and realization rates. We need to keep our people busy.

Drew McLellan:

Right.

Robert Rose:

So if it’s going to be a billable hour and it’s going to keep our people busy, damn right we’re going to say yes. The question is, is that over… You look back over the last two years of your experience and client experience, and you start looking at it and going, “Wow, we’re really generalists now.”

Drew McLellan:

Right.

Robert Rose:

We need to sit down and sit down with our leadership team. Whether that’s me and my wife, or whether it’s me and my 14 account strategies, or whatever it is, we need to sit in a meeting and go… I tell this to everybody I talk to. Market where you’re going, not where you are.

Drew McLellan:

Right.

Robert Rose:

Right? So where are we going? What are we trying to get to? Not, “Where are we today?” but, “Where do we want to be, and what do we want to be known for?”

Drew McLellan:

Yeah, absolutely. The whole idea of where we’re going is the very next topic I want to dig in, but first, first, let’s take a quick break, and then we’ll come back and talk about that.

One of my favorite parts of AMI are our live workshops. I love to teach. I love to spend two days immersed in a topic with either agency leaders, agency owners, or AEs in our AE Bootcamps. But most of all, I love sharing what I’ve learned from other agencies from 30 years in the business and all the best practices that we teach. If you have some interest in those workshops, they range from everything from money matters, which is all about your financial health of your agency, to best management practices of agency owners, to new business, to AE Bootcamps, and a plethora of other topics. Go check out the list and the schedule at agencymanagementinstitute.com/livetraining. Okay. Let’s get back to the show.

Okay, everybody. Welcome back. I am here talking to Robert Rose, and we’re talking about… We spent the first half of the podcast really talking about this idea of how to deliver content both for your own agency and then how to leverage the whole idea of content marketing for your clients around this idea of cost savings and how you can plus the work you’re doing, which also justifies your very reasonable, but to some clients, crazy costs compared to having their brother-in-law do it in the basement.

So what I want to talk about after the break though is Robert started down the road of where are we going and how do we follow the puck where it’s headed rather than where it’s at today. I know, Robert, you have written about and spoken at a lot of conferences about the future of marketing, particularly in relation to innovation, and so I dawn. When I listen to that with my agency owner hat on, I start thinking about like, “Here’s another way an agency can look very different from all the other agencies in a competitive set.” If I’m coming in and I’m talking to clients about innovation and helping them evolve their business, that’s a different conversation than, “Hey, we can sell you some stuff.” So can you talk to us a little bit about, A, how you see marketing and innovation, business innovation dovetailing and what marketing’s role is in that, and B, specifically, how agencies play a role in that?

Robert Rose:

Yeah. It’s something that I have… I mean, I get kidded around a bit because I’m a such a student of the history of marketing and advertising, and became geeky that way. It was Drucker, I mean, who said 60 years ago that the business has two functions, marketing and innovation.

Drew McLellan:

Yeah.

Robert Rose:

Everything else is a cost, and so we have very much in marketing… Now, I’m talking client side. I mean, maybe agency side too, but on the client side, we have very much lost touch with that idea of innovation and marketing being the two sole strategic functions of a business. We have instead made marketing a… “Yeah, that’s the thing we got to do when I’m not doing other stuff.” Right? It’s a cost. It’s a tax on the system, and so I’m going to do it as efficiently and as cost-effectively as I can where all marketing becomes about, “How do I get to the lowest, lowest, lowest denominator that I possibly can?” because that’s the way I measure success is how cheaply I can get it done, which is completely the wrong-headed move, but okay.

Drew McLellan:

Right.

Robert Rose:

Let’s just accept that that may be the world that we live in for a moment, especially as we put on our agency owner hat here, and I start looking at innovation. As we have said, marketing or content marketing now and using content is truly something that is a business strategy. Because of all the things that we talked about before the break, this idea that content must… because it’s more expensive, because it takes longer, because it is treated like a product and not a campaign, it must provide integrated value. Thus, it must provide strategic business value, not just simple-oriented campaign value.

Drew McLellan:

Right.

Robert Rose:

So it has to become an innovative piece. Now, the real key here is, how can we help the company that we are trying to help transform into that? That’s, by the way, how I make my living these days is helping companies transform into this new operation. As an agency, you can start looking at your clientele and saying, “Listen. They’re going through the same fundamental transitions that we all are. How can…”

Drew McLellan:

Right.

Robert Rose:

Instead of just offering them stuff like you said before, if we can start looking at our clients as in the midst of some fundamental transformation for my people, process, technology, content, and other things, where can we leverage our skills? Whether we quite frankly have the skills today to do this or not, where can we start leveraging our skills to help our clients evolve through that, evolve into something and innovate into something new?

It may be a tiny little thing that we can help them do. Help a financial services company evolve into some kind of social operation. Help a consumer packaged goods company figure out what retail really means in the world of Amazon, Walmart, and those things. Help a retailer figure out what it means when… becoming a media company like Amazon and Alibaba are doing is really truly transforming what it means to be a big-box retailer these days. Figuring out how we help our companies transform, whether or not we are an agency that provides CMO level services or quite frankly, services at the rank and file, and practitioner level, is truly the way to get to the heart and become the trusted advisor of whoever it is we are in our clients’ lives and ultimately add the value that keeps us billing every month.

Drew McLellan:

Well, in some ways, it’s really flipping the mat. So the Accentures and the McKenzies of the world, they’ve also sat at the C-suite, helping businesses decide how to evolve their business, and now they’re attacking agency offerings. So what we’re really talking about is doing the opposite way, right? So we have the agency offer… We’ve always been able to make this stuff. But now, one of the things I hear agency owners talk about all the time is that one of the things that has happened certainly since the recession is that they no longer… It’s not as common for them to have a seat at the C-suite anymore, that they really have been pushed down to a director level or something like them, and they’re not really, as much as they used to be, a part of the decision-making, planning set. This would be a way to escalate yourself back into that role, right?

Robert Rose:

That’s exactly right. So one of the things that I’ll commonly do when I talk to an agency, or an agency owner, or a senior team at agency is I draw this… This is part of the consulting work that we do. I draw on a whiteboard a smile, right? So think of a smile on the whiteboard, and it can be a broad smile or a very sharp smile, but basically, a U, right? So a smile.

Drew McLellan:

Yeah.

Robert Rose:

At the top left-hand corner of that smile, you have strategy. At the bottom, very bottom chin of that smile, you have content creation and stuff, and creative services, production and technology services. So either implementing technology, creating websites, creating banner ads, all that stuff.

Drew McLellan:

Yeah.

Robert Rose:

At the upper end of that smile, you have measurement on the upper right. There are some things in between that we could talk about, but basically, all the services that we can provide as the strategic consultancy are contained along that spectrum of that smile. What you have seen the McKenzies, and the Accentures, and the PWCs, and all the big consulting companies do is basically they were at either end of that smile, and they have been moving down. That is infinitely easy. That is one of the easiest things to do.

Drew McLellan:

Right.

Robert Rose:

The more challenging thing is to start at the chin, and try and move up.

Drew McLellan:

Yeah.

Robert Rose:

But that’s what we have to do. You have to start moving your services up because everything in between, the left-hand corner of strategy and the right-hand corner of measurement, is all incremental commoditized value. But if you haven’t captured the two most valuable pieces, which are the strategy and the measurement piece or either one, then you’re always going to be stuck in the middle, and you’re always going to be something that can be disposed of.

Drew McLellan:

And you’re competing on price.

Robert Rose:

Exactly. You’re always competing, and basically, you’re competing on how much. Yeah. I mean, look. There are a few creative agencies in the world that have the talent that can command the prices that are truly not commoditized, right?

Drew McLellan:

Right.

Robert Rose:

They have a handful of clients like Apple or Nike and those kinds of companies, and they command those level of design prices.

Drew McLellan:

Yeah.

Robert Rose:

You’re not one of them.

Drew McLellan:

No. Right, right, right. It really is the general practitioner versus the brain surgeon model, right?

Robert Rose:

Yeah.

Drew McLellan:

Yeah, and so how do you recommend agencies begin to move up the smile, if you will?

Robert Rose:

Yeah. One of the ways that it is and because… Just to your point, many of these mid-sized and small-sized agencies are stuck. Basically, their main client is going to be someone who’s not sitting at the big management table, right?

Drew McLellan:

Right.

Robert Rose:

They don’t have the ear of the CMO, or they’re managing some of the more tactical and more managed pieces of the puzzle. But the key is to just start to move up iteratively through your client contacts and move through your skills, right? Move through the competent things that you already have. So, for example, if your agency is excellent in developing content management through WordPress and Drupal, and you basically… That’s how you spend your time is designing websites through WordPress and Drupal. Great. What’s the next level up from that on the smile?

Well, the next level up from that is, of course, is what it is, what’s going in, the technology, the content, the strategy, the marketing. How can you start introducing your client and either asking, “Hey, are you the right person to talk to, or can we make you a hero to this other person and start networking up and networking through the organization to introduce ourselves because we actually feel like we got a really great solution for you to be able to accomplish more strategic goals, right? Either help you do it, Mr. Client,