This year, Dublin-based independent creative agency, Rothco are sponsoring Cannes’ Young Lions. As advertising agencies try to remain relevant in an ever-changing industry, Managing Director & Partner at Rothco, Richard Carr, tells us why young talent should be viewed as ‘super-stock’ and the way to save agencies from a catastrophic crash.
The Wall Street Journal recently published an article about the best performing stocks over the last 30 years and the professional stock pickers who picked them. Most of the best performers were names you would never have heard of, including a US animal feed firm that has grown its stock price by 107,099% since 1985.
More interesting, was that every one of these star-performing companies had been caught in a dramatic death spiral at some stage in the last 30 years. Nearly all were potentially going out of business in the face of a catastrophic failure.
What the shrewdest stock pickers betted on, was the idea that if a company went into rapid decline, it either crashed completely or flipped into a dramatic upswing and turned into super-stocks. There was no middle ground. Amazing growth or death. Simple as that.
The real headline grabber was that the report concluded that a company had to have a near death experience in order to become a super performer. In other words you had to fail (and badly!) in order to succeed.
There is a long list of super-performing companies who have done just that; Apple, Marvel, Lego, Ryanair, General Motors, Netflix. All have suffered near death experiences and then surged. Today there are thousands of companies and industries around the world fighting for their very survival.
Booksellers Waterstones nearly went out of business in 2007, as the Amazon Reader and Kindle decimated high street bookshops and the need for physical books. Waterstones were about to pull the shutters down but then they started to fight back. They re-engineered their business, hiring different kinds of talent and allowing each outlet to sell the books they wanted to sell. They got rid of their flawed remuneration model that was based on publisher payouts, and embraced the digital world - even selling Kindles in stores. More recently they encouraged publishers to innovate with attractive book covers and have courted celebrity endorsement.
This year, physical book sales have increased for the first time in a decade. This is a phenomenal turnaround considering that in 2007 there were books written about the end of book stores.
Today cinema is the latest industry in turmoil. Movie attendance is in a slow but steady decline since 2002. It is about to receive the ultimate body blow from Napster founder, Sean Parker with ‘The Screening Room’, a home box top set that will allow people to stream films the same day they arrive in the cinema. But no doubt, in years to come, cinema will reinvent…
So what’s all this got to do with sponsoring the Young Lions?
We work in an industry that is having a near death experience. Amongst a multitude of factors including decreasing margins, working with a business model that isn’t fit for purpose and the emergence of dozens of new competitors (from big consultancies to data processing firms), we have been facing real challenges in advertising. There’s been a collective loss in industry self-confidence. The once high profile and sexy career has lost its direction and its edge, making it a difficult and somewhat uninviting prospect for young people. Recently I asked a group of 13 year olds if they would ever want to work in advertising and they just looked puzzled. The business they all dream of working in is Google.
We are on that mine cart in an Indiana Jones movie, pursued by bad guys. But just like Indiana Jones’ plotline, this is good news. As anyone in a creative agency anywhere in the world knows, the upswing has begun. The revolution is underway and we’re on the cusp of getting the treasure and the girl, with a few adventures in between.
At Rothco, we believe our best work is ahead of us, and our starting point has been the reinvention of whom we recruit. We now work in a diverse, incredibly collaborative, and ever-changing business that demands relentless curiosity. So, we have cast our recruitment net wider than ever before and are looking for diverse people who are collaborative, curious and ever-changing to match.
Luckily, Dublin is in the busy hub of most of Silicon Valley’s European HQs. This has led curious minds to Ireland, in search of experience with the dozens of tech firms including Google, Facebook and Dropbox and more. However we can’t stop at curiosity. How do we become as attractive as the tech giants? We are now seeking individuals outside the traditional system of university graduates. We’re looking for people who have started businesses or have been filmmakers or YouTubers or artists.
And, how do we attract those new people? We have ditched the 1950’s pairing of art director with copywriter in favor of multi-disciplinary ‘gangs’. Our ‘gangs’ sit in independent business units with their own clients. There are no hierarchical bottle-necks and everyone has an equal voice and input to the creative process, from junior right through to director. What’s more – we have turned the old remuneration model back to front, to make it fit for purpose. We are moving to deliver on a value-based pricing scheme rather than cost-based. The industry, and what we deliver, has moved on so much in the past 50 years, so why hasn’t pricing? We’re phasing out time sheets and looking at deliverables. Margins needn’t be fixed low forever. Young people have the opportunity to be a part of the financial benefit of the upswing – a real growth in profit. Finally, and not surprisingly, we have become obsessive about the results we help deliver for our clients. Agencies need to live up to the fact that we get paid to deliver outcomes for clients. Nothing matters more.
In sponsoring the Cannes Young Lions we seek to find great people who want to join this journey and be a part of the most exciting time in the industry. We must remember that we still have our special power – the ability to inject a brand into the cultural zeitgeist. Even with all the data science, all the robotic media buying, and all the analytics – creative agencies preform alchemy, with brands and their stories, which few can.
As the Wall Street stock pickers know, our industry can only go two ways, death or greatest upswing ever - and we have a plan for the way up. It is going to be one hell of a ride. Jump in!