The official blog of Ignition Consulting Group
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-Business Innovation-
Exceptionally talented professional firms are distinguished not by what they do, but what they believe. Their work is unique because their beliefs are unique. They create dissimilar solutions because they have a dissimilar mindset. In a business context, our paradigm about the business we’re in is the mental map that guides our daily decisions. So having the right paradigm — an accurate map — is essential to effectiveness. No amount of “hard work” will compensate for a faulty field guide …
While no one can predict the future, one thing is abundantly clear regarding what it will take for agencies and other professional services firms to be successful in times to come: we need much more innovation infused into our offerings …
There’s new money to be made in the agency business, but it lies in the white space of our business model – the unmet needs of today’s marketers. Unfortunately, most firms are too busy selling yesterday’s services to uncover and develop the solutions...
If there's more money being If there’s more money being spent in marketing than ever before, why is average agency income (and agency profit) declining? Let’s count the ways...
The vast majority of agencies are focused on delivering “overdeveloped services” – services that are widely available, offered by many providers. By definition, if you’re offering the same type of services that thousands of other agencies do, all across the world, you’ll be living in the world of low margins and intense price competition …
Advertising agency income “per unit of work” has fallen 40% during a steady 20-year decline. So reports agency consultant and advisor Michael Farmer, whose research demonstrates that agency staffs are being squeezed to deliver increasing workloads at a time when fees are declining faster than costs. The solution to better margins is obviously not to work harder or do a better job of collecting timesheets. To be able to return to the profit margins they had 20 years ago, agencies need new, different revenue streams …
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One view of the future of our business is that increasingly agencies will make the majority of their revenues from the intellectual property they create instead of the hours they work. The “work for hire” model that has persisted for the last half-century is becoming a less and less profitable way to make a living.
