Today on the podcast we discuss with Darren Woolley – Global CEO & Founder of Trinity P3. Darren gives us his insights to the future of the marketing & advertising world, how agencies work and how they are are adapting to an ever changing industry. We also touch on the importance of technology and automation in businesses as well as how agencies can work more effectively in the future.

 

Welcome back to another episode of Talks, we have a really remarkable guest online today or on the podcast today, someone who I’ve been following for a while. His name is Darren Woolley. Darren is the founder and CEO of Trinity P3. Welcome aboard the podcast.

Thanks, Cooper.

 

I guess, yeah, as a as a sort of marketing agency seven or eight years in, it’s really cool to be able to speak with you just around the industry as a whole. You’ve got a pretty big wealth of experience in the industry just to set the discussion up for everyone that’s listening. Can you give a quick background around what you’ve done from a career perspective, as well as the core mission for Trinity P3 and what it is that you do?

Absolutely. So my background is actually working in medical research. I was one of those people that did a STEM course at university and ended up working in medical research.

That’s so different. Well, at five years in suddenly realised there’s not much of a career path unless I wanted to go and do further studies such as a PHD. And I managed to get into advertising as a copywriter. There was an industry course called Copy School at the time that was looking for bright young talent. And apparently I fit the bill and started working as a copywriter, became a creative director. But really it was out of that, that the genesis of Trinity P3 emerged because I was doing a lot of new business and I was also the president of the Melbourne Advertising and Design Club. And in new business, I was seeing that there was a gap between what clients wanted and what agencies were giving -and rather than go out and start another agency…

Yeah there’s so many of us.

Well, I say it’s what the world needs is another advertising agency. But clearly they do. I set up an independent consultancy. And our task, our purpose is really to work with marketers and their agencies to improve the productivity and the performance of that relationship. That’s why the P3 stands for helping people achieve commercial purpose through creative process. The Trinity defines the parties that we work with. So the first one is marketers and advertisers. The second one was/is agencies and other supplies the marketers work with, and the third one which came later, but it’s actually procurement and finance because around 2005 – 2006, we suddenly found ourselves spending more time talking with the procurement teams than we were with either the agencies or the marketers.

 

Yeah, right. That’s definitely been a big trend in the industry for some time now. That third sort of wheel. Before we get too deep into it, I sort of wanted to ask the cliche covid-19 question and then side car it a bit so we don’t get too bogged down in that world, I guess – operating conditions this year, just a global economic upheaval, the trillions of dollars of government debt worldwide. Advertisers see soaring budgets all over the place. You’ve got this really unique position where you’re sort of God mode, you’re seeing a lot of different things in a lot of different lights. What would be your summary of the situation overall, both from from your consultancy…

Cooper that is so large, that is such a large topic. On a personal level – Our business took a major hit back in March. I got back from Singapore and we had four pitches on, two of which stopped. The other two we immediately had to redesign the whole pitch process literally in a weekend to do it all remotely. So that was the first big challenge. Secondly, we’re seeing a lot of pitches happening at the moment and a lot of it is being driven by, first of all, marketers suddenly having to what’s the word everyone’s using – pivot.

They’re having to realign their strategy to where consumers are at the moment. And so it’s partly driven by that. But it’s also more prosaically and practically driven by the fact that everyone is short of money, that the economy is down 40% and employment is down. And so people are looking for more efficient ways of working. Unfortunately, what that often means is, oh, I’ll just go to pitch and someone will do the same job for less, which is just accelerating the ‘race to zero’ or ‘the race to the bottom’.

 

Race to the bottom. Yeah, yeah. That’s that’s not easy. So I guess just bouncing out of that then and it could be this next point could be covid related or it could be perhaps more appropriately the industry as a whole, in your opinion, with your unique insights and position in the marketplace. What is the future going to look like? Agency models, how agencies operate, how they work with clients. Where do you see it going?

I think the first big thing we have to acknowledge is that in the past six to eight months, we’ve already seen years of digital transformation. Retailers are now selling online. Companies, marketers, brands that in the past were happy to go through traditional distribution channels are now looking at director customer. E-commerce has become a big part of it. And so that acceleration is also accelerated. The role of agencies. The idea that originally when I was I was in advertising, it was brand building and it was all about brand & brand. And then along came the digital agencies, the tech specialists, and then they started to merge together. I think what we’re going to see is that technology is going to fundamentally change the way marketers work. And there’s going to be a group of agencies that will get on board with helping marketers not just implement that technology, but run it for them. Because I think one of the things that the consultants do very well is they help design a strategy and then choose the platform and probably embedded but they’re never there to help run it. And I think agencies can do that. The other direction will be to move more upstream and be doing a lot more around innovation and creativity from a more strategic point of view rather than executional point of view. The traditional problem with that is agencies have been never, never been good at getting paid for doing that type of strategic thinking and work.

 

Yeah, yeah, I understand what you’re saying there. So just on your point around implementation of technology and then the running of that technology, are you saying that that’s sort of that’s where you’re seeing the agency versus consultancy situation right now? 

Yeah, absolutely. So what we’re seeing is the deloittes the center interactives are going in and they’re saying, right, well, you need to market a brand, you need to transform, you need this CRM platform. You need this customer data platform. And all this technology, you know it’s more an I.T. process than it is a marketing process. And then they’ll embedded, but then they largely go away by that stage. And so suddenly the marketers are left there going, well, now I need people to actually help me run this, because one of the things all of these technologies do is there are huge consumers of content.

If you’re going to deliver personalized messaging or even customized messaging to particular audiences based on the data, their data profile, then you still need an engine to produce huge amounts of content to go in. And I’ll give you a small a small fact. A brand back in 2005 would traditionally produce between two hundred and two hundred and fifty pieces of work in a year. So that’s the agency would produce somewhere between two hundred and two hundred and fifty.

Today that number is close to five thousand plus. Because social media the Facebook’s, the Instagram’s, the God forbid, the tick-toks and all this,  are now consuming huge amounts of content. And so the agency model, which was almost craftsman like, oh, we need to make one of these, but we’ll get all the pieces and and very linear production line. But everything was bespoked, is being replaced by technology with mass scale, personalized or customized executions that can do five thousand, ten thousand – fifty thousand for the same cost that it took the agency to do one or two.

 

Yeah, it’s pretty wild. It’s almost, you hear a lot of talk in the industry about – ah the models broken, the models broken. When you’re talking about numbers like that and realities like that, you can see how the rapid rate of change in the different processes and the iteration behind those processes really would cause a lot of that change to really speed up. You can see why people are saying models are broken.

Well, it is broken. You imagine if you had a craftsman / craftsperson making a model, then you came in and you said, right, what we want now one hundred thousand of those you are get one hundred thousand people all doing the same job or you find a way to automate it. Now, the thing that holds agencies back is this traditional idea that every piece is a winner. No, the idea is the winner. What we have to do is start to adapt to actually being able to implement or or replicate the idea across thousands of channels and hundreds of thousands of variations without having to do each one as a handmade piece of craft.

 

Yeah, yeah. It’s such a different way of thinking and that actually – that’s a good segway into… You’ve got you know, you mentioned the the Trinity, if you will, agencies, clients or marketers, if you will, advertisers and then procurement. Interested to get your take on platforms, Google, Facebook, like you said, LinkedIn, Tic-tok, etc, and how platforms – a lot of these guys have creative agencies inside them now. These big platforms, they have big sales orbs they’re building around agencies to continue that relationship, much the way that TV and agencies have played in the past. How do you see these new digital platforms that have emerged in the last 10, 15 years? How do you see them working with agencies and clients? Is it different? Is it the same?

Look, the first thing is that I think publishers have discovered that anyone that comes offering a free nirvana is never going to be your friend because nothing comes for free. All the traditional publishers – “isn’t Facebook right? Isn’t Google great? We get our content distributed”. Yes, you get it distributed, but you get paid nothing for it. You know, you’re filling up the channels with things that will attract their audience that they sell their advertising to and then they keep the money.

Agencies have fallen for the same trap because Google and Facebook and all the platforms are very good at quickly setting up an agency sales team. And they don’t call them the sales team. They’ll call them agency relationships teams and get out there and build relationships with the agencies and make them their best friend. At the same time, they’re going direct to the agency’s clients and building relationships that make them their best friends as well. They’re everyone’s friend, and they’re big enough now that no one can afford to stand up to them and say, I don’t want to be your friend because you’ll just get frozen out. So this is this is the big issue for agencies, is that the people that you think are your friends are actually competitors. And don’t be mistaken that ultimately their end game is to get more of a share of your client’s budget, than you get.

which inadvertently pretty well always happens.

Well, because they make it so easy. People talk to me all the time. Oh, why isn’t programmatic more popular? Well, you know what? Google, Google through YouTube and Facebook make it very easy for people to buy advertising on their platforms, whereas programmatic makes it really difficult because there are so many players in the supply chain all taking a clip. Whereas Google and Facebook create the illusion that it’s just them?

 

Yeah, it’s so it’s so direct. And so they make it so clear. Yeah. And just, I guess jumping off the back of that then. So we’re sort of talking agencies, talking platforms, very much within the marketing wheelhouse. Do you see agencies expanding beyond that? Do you see situations where agencies are moving into. Because I’ve seen all these different hybrid’s, consultancies, you know, technology, implementation firms, all these different sort of buzzwords, Do you see agencies that typically work in the marketing space, moving into know implementation of tech stacks in finance, operations, logistics, these other areas. Have you seen much of that happening or is that is that really sitting with the consultants only?

Look, it’s primarily sitting with the consultants is is the truth, except that there are a group of agencies and I use the term very loosely, you know, Sapience of the World, Publicis Group, the RGA’s of the world that say that their agencies. But let’s be honest, they really technology companies. Their technology companies working in the comms area. And I think they’ve got the best opportunity. Now, what we’re seeing is the holding companies are now wanting to make a bigger play in this area. And so we could start to see either through acquisition because a lot of them are talking about acquisition, buying more of these technology companies to really boost their ability to deliver in that space of being a technology facilitator. Even the media agencies inside the big holding companies are increasingly having a consulting arm.

Yeah i’ve noticed that!

And they don’t promote it generally. But it’s interesting because they are out there working with the Adobe’s and the Salesforce and the like, all out there recommending platforms to clients, one, because they have a relationship through having the media relationship, and two, because they get rge commission for recommending in those platforms into the clients.

So that’s an additional revenue stream on top of the consulting fees that they can charge their clients, which are usually heavily subsidized.

 

Yeah, yeah. It’s yeah, it’s interesting to see the convergence, the meshing up of all of these different. Areas. Who do you think is going to win, do you think, the consultants? There’s always talk of the consultants just going to gobble up the whole of the advertising agency sort of industry or the traditional industry. Like you mentioned, there are some agencies that are really fighting back or carving out their own piece in the market. Do you think there’s going to be, are you seeing a front runner emerging yet?

OK, so there’s something that I think we all should be aware of. The market capitalization of Accenture globally is larger than WPP, Publicis, Omnicom. And we’ll throw in Havards for good measure. But those five holding companies could literally be bought up by Accenture. For not quite chump change. It’s quite a big investment, but they can buy any one of them at any time. They just have to work out which one. And so I think this idea we’ve seen Accenture Interactive, they’ve been going around cherry picking the best agencies in their categories. And then you’ve got Sir Martin Sorrell with his S4 Capital. He’s going around doing the same thing on on a potentially a smaller scale. But he saw the writing on the wall because this is what Accenture, Deloitte, any of them E Y could all do this. They could all go out and just pick out the best one and then implemented or integrated into what is largely a technology offering to say, now we can do the technology and the content.

 

Yeah, that is interesting. Just off the back of agencies and trying to create their own operating model in a fragmented market. How do you see agencies working more effectively in the future? I know we touched before we hit the record button. I know we touched on technology and how technology does and does not support agencies. Do you see technology being a bigger part of how agencies operate, how they work? How they think, is that going to change? Is it already changing?

 Yeah, look, I think the really smart agencies will eventually wake up and realize that they can integrate technology into their operating system, especially around things like AI to automate a lot of what is labor intensive paper pushing. Now, don’t get me wrong, back of office they’ve done a lot of work around consolidating accounts and H.R. and that type thing, but not with technology. They’ve done that just by grouping people together and getting economies of scale. I’m talking about actually embracing technology so that it speeds up and makes the whole agency process more efficient so that there’s less bits of paper and emails and things flying around and that it’s actually more streamlined and automated so that reports in media can be generated in minutes rather than days.

In fact, I had one global agency, media agency CEO say on one client. They have five FTE’s doing nothing but generating media reports. Now, that is the most inefficient, clearly the most inefficient way possible. What those people should be doing is not generating the reports, but reviewing the reports that were produced, by let’s say by an AI and bringing human insight to it.

But this is what’s not happening. And there’s a couple of reasons for it. One is they’re not willing to invest in that technology.

It’s not cheap.

It’s not cheap, but it would make them infinitely more competitive. The second is that the way they get paid is they charge for the number of hours. So if I stay inefficient, I can then justify extra hours, which is extra cost. I had a what’s regarded as quite a good digital agency tell me that they couldn’t do display ads, digital display ads any cheaper because it took that long to do the seven different sizes on the Mac. You do realize there’s technology that automates it, and they go “but how would we charge for that?” Because if it’s a piece of machinery I can’t charge by the hour.

 

Interesting. And is it still this? Do you see most of the industry still going as a as a buy by hour or FTE charge out rate?. Is there not like a like a flat fee or performance fee. There has been talk of like performance at risk performance components for so long that it seems to be a small part of the market.

Oh tiny, and there’s two reasons for that. One is a lot of the work that agencies do is not directly accountable to performance. So if you’re in a performance media or growth media area, sure, you could get paid on performance, you could get paid on a fee for cost of acquisition, based on cost of acquisition. But very few agencies are happy with the model because it often means that the results, even though they’ve worked really hard, haven’t been as good because of something outside their control.

The other side of it is clients have trouble budgeting for those fees because the marketing budget is not based on sales. So if you sell more staff, you don’t get a bigger marketing budget to pay the agency fee. So if you’re budgeted for X million dollars for the agency fee and you sell five times as much, where are you going to get the five x to pay that bonus? I struggle with it because it’s a cost of business. It’s not a you know, it is not a direct return on investment.

 

Yeah. Yeah, that’s fair enough. That’s fair enough. Maybe just to wrap it up, just a bit of a side side question on agencies or whatever the new term is for an agency in 2020 that are on their growth journey. So you’ve got massive agencies, you’ve got freelancers, and then you’ve got the agencies that sit in all those different slots in between. I mean, TALK, where we’re seven years in. We’ve got some good clients. We’re pitching for more business. We’re always looking to grow, looking to optimize. What is your advice for growing agencies that are growing and trying to carve out a bigger position in the market? What advice would you give to those types of agencies?

Well, I think the best advice is that your current clients are your best source of growth to start with because you’ve already got a relationship with them. They’re also the ones that can recommend you to other people. I know, because you’ve got to remember all your clients know someone. And so getting them to be your champion is the next best thing happen. The next is to be really focused in your growth strategy. So have a strategy that’s based around where are the opportunities for us, where are the gaps in the marketplace, where can we compete and who are the particular clients that we should be targeting?

This idea of sitting around waiting for a piece of business to land in your lap as a possible pitch is not a great way to build a business. You need to have a really robust strategy that you execute on. And if you’re going to have a strategy and execute on it, you need to be willing to invest money and resources to make that happen. So I see a lot of agencies that really struggle with growth because they’ve had a burst of growth through sheer luck. And then hoping that continues and then they just plateau out, you know, and unless you’ve got an ongoing strategy that you’re executing on, growth is going to be in fits and starts. Yeah.

 

Yeah, OK. All right. Any any parting words, anything else that you wanted to cover off as we as we wrap up?

Look, I think the biggest opportunity is for agencies to start to realize that they can reinvent themselves. Most agencies are relatively, most independent agencies are relatively small compared to their clients, the clients are big organizations. You need to reinvent yourself on the basis of what it is your client wants. And so rather than going and talk to your client about what can I do as far as the services I provide, have conversations around what it is that they if I could have anything happen,  what is it? And can we do it?

Good advice!

And start to really challenge the client as to what role you play in their business?

 

Yeah, that’s good advice. OK. Thank you so much, Darren. Don’t take it lightly that you’ve made the time to speak with us because we know how hard it is to find time these days. So I really appreciate it. Thank you.

It’s been my pleasure. Thanks very much.

Hope to keep in touch.