Agency: Starting a Creative Firm in the Age of Digital Marketing

324 Pages·2015·1.5 MB·English

by  Rick Webb (auth.)

More Praise for Rick Webb’s
Agency: Starting a Creative Firm in the Age of Digital Marketing
“A compendium of everything that all the smartest people in agencies have ever told me,
but that I’d long forgotten. This is less of a book, more of a call to action. I found myself
plotting my own start-up well before the halfway mark.”
—Ben Malbon, Marketing Director, Creative Partnerships, Google
“Agency is the unvarnished truth about starting and running an agency. Its thoroughness
will change the lives of many agency owners. But its transparency might have a larger
impact—asking ‘why are you doing this?’ and possibly even rescuing some from going
down a path that is not for the faint of heart.”
—Michael Lebowitz, Founder and CEO, Big Spaceship
“Webb’s Agency dives deep into all the things you could, should, and will probably end up
doing when you build your own agency. Webb shares invaluable lessons from the advertis-
ing/marketing world and beyond. This is necessary reading for anyone who has dreamt of
building their own company.”
—Doug Jaeger, Partner, JaegerSloan, Former President, Art Directors Club
“This is the book I wish I was able to read before I started my agency. It’s fi lled with lessons
I learned the hard way. If you’re even considering starting an agency, read this book before
you do. It will either scare you out of doing it, or inspire and lead you toward building the
next great shop. Agency will be your Hitchhiker’s Guide to the Galaxy.”
—Ian Schafer, CEO, Deep Focus
“When I sat down to take a look at Webb’s book, I grabbed a pen in case there were a
few gems worth underlining. Webb is bright and brutally honest. Turns out I underlined,
exclamation-pointed, and asterisked almost the entire book. Anyone in business would
benefi t from giving Agency a read.”
—Susan Credle, Chief Creative Offi cer, Leo Burnett, USA
“There aren’t many tools out there for folks building modern creative fi rms, because so
much has changed in terms of what clients and consumers want. Webb has done an excel-
lent job of ripping the bedsheet off of the old agency model and making us all stare at
how strange it is to operate that way in today’s world. He has actually been in the trenches,
successfully doing the work that he is writing about, so his advice is relevant and credible,
which makes it easier to get behind and put into practice.”
—James Moody, Cofounder and CEO, Guerilla Suit
AGENCY
STARTING A CREATIVE FIRM IN THE
AGE OF DIGITAL MARKETING
RICK WEBB
AGENCY
Copyright © Rick Webb, 2015.
All rights reserved.
First published in 2015 by
PALGRAVE MACMILLAN®
in the United States— a division of St. Martin’s Press LLC,
175 Fifth Avenue, New York, NY 10010.
Where this book is distributed in the UK, Europe and the rest of the world,
this is by Palgrave Macmillan, a division of Macmillan Publishers Limited,
registered in England, company number 785998, of Houndmills,
Basingstoke, Hampshire RG21 6XS.
Palgrave Macmillan is the global academic imprint of the above companies
and has companies and representatives throughout the world.
Palgrave® and Macmillan® are registered trademarks in the United States,
the United Kingdom, Europe and other countries.
ISBN 978-1-137-27986-6 ISBN 978-1-137-50122-6 (eBook)
DOI 10.1007/978-1-137-50122-6
Library of Congress Cataloging-in-Publication Data
Webb, Rick.
Agency : starting a creative fi rm in the age of digital marketing / Rick
Webb.
pages cm.—(Advertising age)
1. Advertising agencies—Management. 2. Internet marketing.
3. Marketing—Management. 4. New business enterprises—Management.
5. Small business—Management. 6. Entrepreneurship. I. Title.
HF6178.W43 2014
659.1068(cid:2)1—dc23 2014024464
A catalogue record of the book is available from the British Library.
Design by Newgen Knowledge Works (P) Ltd., Chennai, India.
First edition: January 2015
10 9 8 7 6 5 4 3 2 1
For Mallory, who inspired me to write it all down.
CONTENTS
Acknowledgments ix
Introduction 1
PART I Culture and Vision
CHAPTER 1 Why am I Doing Th is? 7
CHAPTER 2 Th e Vision 9
CHAPTER 3 Th e Value Proposition of Culture 15
CHAPTER 4 Culture and Vision 19
CHAPTER 5 Communication 25
PART II Th e Work
CHAPTER 6 What Is Good? 33
CHAPTER 7 Ideas 39
CHAPTER 8 Process 45
CHAPTER 9 Working for Other Agencies 75
CHAPTER 10 Pro Bono Work 87
PART III New Business
CHAPTER 11 Th e Basics 95
CHAPTER 12 Th e Emotional 103
CHAPTER 13 Th e Pitch 111
CHAPTER 14 Th e Rational 135
PART IV Th e People
CHAPTER 15 On Partners and Partnership 157
CHAPTER 16 Th e Team 161
viii CONTENTS
CHAPTER 17 Employee Retention 171
CHAPTER 18 Employee Departures 183
PART V Money
CHAPTER 19 Bootstrapping 199
CHAPTER 20 “I Want to Get Rich” 207
CHAPTER 21 On Growth 213
CHAPTER 22 Banks and Funding 217
PART VI Operations
CHAPTER 23 Starting Up 233
CHAPTER 24 How Much to Charge? 243
CHAPTER 25 SOWs, MSAs, and In-Pros 249
CHAPTER 26 Tracking Time 255
CHAPTER 27 Billing, Collections, and Cash Flow 257
CHAPTER 28 Working with Vendors 261
CHAPTER 29 Employee Expenses 265
PART VII What’s Next?
CHAPTER 30 Expanding Beyond Your Core 271
CHAPTER 31 How Much Is My Company Worth? 275
CHAPTER 32 Creating a Product in Your Service Firm 281
CHAPTER 33 Case Studies of Start-Ups within an Agency 295
CHAPTER 34 Working for Start-Ups 303
CHAPTER 35 Getting Acquired 307
CHAPTER 36 Th e Fear 323
Notes 327
Index 335
ACKNOWLEDGMENTS
Thanks fi rst go to my partners and coworkers at The Barbarian Group. Benja-
min Palmer, Keith Butters, Robert Hodgin, Aubrey Anderson, Jay Sun, Bruce
Winterton, and Brian Costello were some of the best partners a man could
hope to work for. Among the present and former Barbarian ranks, Rob Allen,
Noah Brier, Chet Gulland, Tim Hwang, Shelby MacLeod, Frank Marquardt,
Eva McCloskey, Doug McDermott, Ryan McManus, Colin Nagy, Mike Paulo,
Doug Pfeffer, Kenji Ross, Mike Rubenstein, Stephanie Smeriglio, Cheryl
Swirnow, and Nat Wales deserve particular recognition. Last but not least,
the irreplaceable Jen Jonsson taught me a good chunk of what lies in these
pages.
T hanks to those whom I interviewed for the book, who read it for me,
or who offered invaluable advice, including Mallory Blair, Zac Blume, Rick
Boyko, John Bragg, David Catalano, Peter Coughter, Sue Credle, Cindy Gal-
lop, Ron Goldin, Steve Hayden, Doug Jaeger, Gareth Kay, Kevin Kearney,
Diana Kimball, Lydia Kim, Michael Lebowitz, Glynnis MacNicol, Ben Mal-
bon, Jenna Matecki, Megan McCarthy, Josh Miller, James Moody, Chris Puck-
ett, Paul Rush, Ian Schafer, Elizabeth Spiers, Helayne Spivack and everyone at
the Brandcenter, Gabriel Stuart, Baratunde Thurston, Ronen V, Sam Valenti,
Alex Van Buren, and Gino Zahnd.
T hanks to everyone at AdAge, most notably Allison Arden, who helped
me get this project off the ground. Thanks to Laurie Harting for editing the
book and easing me gently into the world of publishing, Alexis Nelson, and
everyone at Palgrave Macmillan. Thanks, too, to Cynthia Mason, without
whose help this never would have happened.
Finally, personal thanks to go to my parents, my sister, Val, and my wife,
Emma, who pops up once or twice in the book despite her grave concerns.
Love.
INTRODUCTION
Agency. Services fi rm. Creative services. Consultancy. Studio. So many dif-
ferent terms that all come to the same point: you are growing your craft into
something larger than you.
Are there how-to manuals for starting such a company? David Ogilvy’s
Confessions of an Ad Man comes to mind. There is none greater. It’s still a
wonderful read. If you haven’t read it, you should go read that fi rst. It’s aston-
ishing how much of it is still applicable today. But other than that, I have not
found much useful information out there. My shop had to wing it. We had to
learn as we went, and, boy, did we make a lot of mistakes. I would have killed
for a book that told me concretely what the hell was going on and how to
handle it.
What are out there are pithy books by famous ad execs talking about the
work. They offer inspirational quotes, like, “I wouldn’t hesitate for a second to
choose the plain looking ad that is alive and vital and meaningful, over the ad
that is beautiful and dumb” (Bill Bernbach).1 Your head is fi lled with visions
of creating great ads, of changing culture, of pounding your fi sts on the table
and telling the clients, “Damn it, man. This ad is genius. You must run it.”
They look at you with a mixture of awe and fear and buy your work. You walk
out the door. Your colleagues are amazed.
Sure, there are tons of great ad books written by great ad creatives. They are
books about the process of making a great campaign. What’s different here?
M any people starting out agencies come to me asking for advice. My old
agency did some great work, but by and large, the vast majority of questions
people ask me have nothing to do with coming up with a great idea, or how to
sell great work. They already know how to do great work.
Instead, what people tend to ask is a litany of pedestrian questions about
billing, about human resources (HR), about hiring people, fi ring people. They
want to know about dealing with banks, information technology (IT) depart-
ments, and (shudder) procurement offi cers. People ask questions about how
to make money and how to sell their agency.
Things have changed in advertising and marketing. A lot. The technol-
ogy, the processes. Everything you read about in the ad press every day. But
2 AGENCY
more importantly, the people starting agencies are different. Ad people still
start big, traditional agencies, like they did in the old days. An art director, an
account director, a fi nance offi cer, and a copywriter branch off from a preex-
isting agency and hang out their shingle. They might not know jack about the
Internet or everything that’s changing in the world, and you might, but they
sure know how agencies are supposed to work. And most agency manage-
ment books are written for these people.
Generally speaking, however, this is a rarity these days.
T hese days, most of the coolest, dynamic new shops launched in the last
few years have been founded by outsiders. Designers, PR people, product
people, developers. People who sense an opportunity to offer their services to
marketers, but don’t know where to start. This may well be you.
These people—your people!—need to know different things about agency
life. They don’t need to be told that the Internet isn’t a scary place and that it’s
important. They need to understand what the hell weird terms like “below-
the-line” mean. They need to understand the mechanics of bootstrapping,
since in the beautiful tech start-up land that they read about in T echCrunch ,
everyone is funded. They need to know about making products at agencies.
They need to know how to price and bill a job. They defi nitely need to know
what a “media agency” is. And many of them don’t. When I came to advertis-
ing, it took me years to fi gure out what a “media agency” was. No one told me.
I was embarrassed to ask.
Marketing companies used to be started by marketing people. Now they
are started by Internet people. They need a different education.
F inally, let’s face it: most of the books on this subject are no fun. They
don’t tell you the truth. Well, I mean, they don’t lie, but they hardly tell you
how things play out on the ground. This is what has made Ogilvy’s book so
timeless—it’s so much more than a manual. It offers proper advice, yes, but it
also has a point of view. It says controversial things once in a while. It speaks
from experience and isn’t afraid to share it.
So that’s what I’m setting out to do here. Hopefully you’ll understand
what it means to run one of these companies, and you’ll get practical advice
out of this book. But ideally it’ll also help you think. It’ll help you think about
what you’re even doing in this business. It’ll cover things like billing and HR
and procurement, yes, but it’ll also cover such vital topics as the existential
freak-out, the bum of a partner, the joys and miseries of trying to build a
product inside your agency. Should you work for equity? Can I get rich out