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The Slow Moving Meteorite”

From Michael Farmer to Andrew Essex, the demise of the advertising agency is under debate. Steve Hardwick, former President of Grey and FleishmanHillard, made a shift from agency and PR to client side in 2012 when he joined a private equity group to serve as their in-house marketing consultant. Ever since, he’s had time to consider the agency model from an objective, outside perspective. Recently, Steve published this new POV on adland and its impending doomsday. 

The premise of the article can be summarized by its opening statement; “when the agency compensation system moved from commission to fees the equivalent of a slow moving meteorite was launched toward the advertising business.” As the article reads on, Steve discusses how the tech advancements have further plunged the industry into a self-destructive spiral and what he’s personally been doing to adjust. 

“As an agency leader, I’ve lived through all of this. That’s why I chose to work with private equity in the last few years to buy, build and sell companies.”

Read the full article here.

We reached out to Steve to learn more about his bilateral perspective on the industry. With the future of CMO’s and agency relationships in a turmoiled state of uncertainty, Steve’s comments below are a revealing take on how we might craft a new model for the future.

TBD: What motivated you to write the article and what’s the reaction been?

SH: That was actually meant to be a book analyzing the decline that began with the mid 80’s when the industry in general moved from commissions to fees. This was the tipping point that set the meteor in motion. I intended to cover dozens of additional milestones that have sped that meteor up in the book until Michael Farmer’s Madison Avenue Manslaughter released, which covers the same topics in amazing detail. So naturally, I stopped writing the book and opted for an article instead. Surprisingly, I’ve had a lot of people reaching out because of it, but not all of it was constructive. 

Only 2% came at it with valuable insights to a radical way of thinking about the industry. More interestingly, they mostly came from outside of our industry. Most people in our business know that we work in an insular and self-aggrandizing environment and I’ve found that it takes minds outside of it to think about it differently.

TBD: What gave you the idea to leave the agency life to join private equity as an “interim CMO”? 

SH: A private equity group approached me at the right time with a pitch structured around me serving as a marketing expert. My role was to vet their potential investment interests with consumer facing models. Once an investment had been made, I was often placed within the organization to restructure or guide their marketing efforts to improve their reach and potential growth. This whole process gave me an opportunity to look at our industry objectively for the first time.

TBD: Where has this new perspective led you?

SH: I’m now fascinated by the thought of what the new agency model could be. Big clients are still going to want an agency – a team dedicated to their account. But most agency business exchange never exceeds the internal marketing team. They never make it into the boardroom to learn what keeps the CEO up at night. This is an important distinction between an agent and a business consultant. Consultants address the business, not the marketing. 

That’s why the model I see is a combination of business consultancy and creative. Beyond that it will need to capitalize on emerging tech laced with new integrations and transparency all aimed directly at the boardroom – not the CMO. A consultant led communications tool paired with the talent to capitalize on opportunities defined through collaboration.

TBD: Can an existing agency build this or does it need to be a new one?

SH: It’s amazing what you can do when everyone is on the same wave length and believes in the same things. I really believe it can come out of an existing agency. I’ve seen it. I’ve lived and led it, but it has to come from the top because you need the air cover. If you have that, dive straight into the deep end with no hesitation.

Steve’s already pursuing his own vision for how to evolve the “agency” model and we plan to keep an eye out for when it launches. In the meantime, to see how the debate is evolving, check out Steve’s $20 million question here.

Discuss your thoughts and perspectives @tobedisrupted