Confessions of a former agency innovation head: ‘It’s all smoke and mirrors to get more money’

Just because it’s harder to quantify innovation doesn’t mean that you shouldn’t do it.
There are certain CEOs that have an appetite for innovation, and there are others that can’t see a need to invest in it because it doesn’t affect their day job. You can spot the difference between the two by whether the agency boss has insisted on a set of robust KPIs. When there’s a clearly defined set of KPIs against the word innovation — which means anything that is bigger, better, stronger and different — then you’re able to see a lot of growth. The way forward is almost certainly a hybrid model but heavily grounded in client outcomes and metrics and based on models that promote mutual value — unlike many of the traditional agency models.

Are the agencies without KPIs for innovation just doing it to win additional budgets from clients?
It’s all smoke and mirrors to get more money. Outwardly, agencies will have an innovation hub or an in-house specialist to look trendy and forward-thinking, but actually, they’re just delivering a business that hasn’t changed in 60 years. I’m seeing so many agencies doing exactly the same as they’ve always done.

So agencies are using innovation to mask shortcomings elsewhere in the business?
Look at Publicis Groupe, for example. The group has announced it won’t be spending any money on awards so that they can concentrate on the artificial intelligence they’re building — Marcel — to benefit the company and its clients. But it could be smoke and mirrors. It could be that they don’t want to spend money on awards, and so, therefore, they’ve decided to put out a PR story about putting money into startups, whereas it’s easier to see the more money that goes into awards.

How are brands responding to this?
Clients, [on the whole], are much wiser as to how agencies make their money — technology means it is all transparent, no smoke and mirrors — and have many more direct alternatives coming to them via all means on social media. They are looking for evidence-based solutions and are not always convinced by superficial partnerships or cobbled-together alliances.

How can agencies fix that issue?
It is still not seen as mission-critical with most CEOs to make the changes needed to truly innovate. It is enough for them to “sprinkle innovation and new and shiny pixie dust” to make their clients happy. The clients are not brave either in terms of buying innovative work. But most of all, many companies don’t realize it is all part of business transformation, and when they see what would need to be done to really embed innovation or innovative thinking at the heart of their company, it is just too difficult for them to get their heads around — hence so many disrupters out there disrupting the existing models, a la Uber, Airbnb, etc. The new models of agile nimble players are coming through.