“You have a big budget that buys you the right to yell the loudest [but] where are you if you don’t have a large marketing budget?  Marketers need options that don’t break the bottom line.”

Today’s Ad Industry Innovator, Claudia Batten hails from Victors & Spoils. Victors & Spoils is a new agency Claudia founded with partners Evan Fry and John Winsor from Crispin Porter & Bogusky.  The big news, besides their bench being A-team advertising super heroes, is that V&S is based on the principles of crowdsourcing. ”We plan to prove that crowdsourcing can be expanded from what we know now into a scalable, manageable and strategic approach to advertising” Batten says.

The merits and flaws of crowdsourcing have been debated all over the web but I was more interested in hearing directly from the source:

What was the aha moment when you realized “our company needs to be doing things differently than we have been?”

Everyday, don’t you think?  I think it’s dangerous to ever think you have it 100% right.  Victors & Spoils launched about three months ago with the mantra that we would deliver a new ad agency model, so we really are setting out to do things differently.  Ultimately we are trying to solve some of the issues we believe to exist in the application of crowdsourcing to Big-Brand Marketing or Advertising Strategy.  I guess the aha moment here is the belief that the rise in digitally savvy consumers, combined with a need for reduction in operating costs from Big-Brands (with marketing budgets being immediate targets), would create room for a new model in the advertising agency world.

What books are on your nightstand or great blogs on your Google reader?

I am reading Hemingway’s The Sun Also Rises, and The Diamond Cutter by Geshe Michael Roach … but I also have a pile of fashion mags too if that helps me redeem myself.  The Diamond Cutter is a great take on how to be generous in your life and business, which is something I am passionate about.  The former – I just love Hemmingway.  Blogs, well there are a lot but I have to say I am more into Twitter at the moment; faster pace and more relevant.  I am trying to get better at posting myself, but I find that I’m too busy reading.

Give me an example of marketing you think is brilliant and why.

I am really into gilt.com right now – super clever.  There are many smart aspects to it, from the fact you don’t sign up to the site but ask for your application to be considered (so snobby, but it does makes it feel that little bit more exclusive, or maybe I am just an easy target) to the fact that they have timed sales, so you are motivated to log in at a certain time each day.  But most clever, to me, is the limited amount of items they have at one time.  You have this pressure to purchase.  It’s just smart – they have figured out their demographic beautifully.

We’ve all read that the pitch / RFP process is broken.  Many agencies aren’t even interested in competing in pitches.  Do you see an alternative to this process?

Well from what we see I think there are a few forces at work. First up, we are moving in a much faster pace and rapidly changing world, so RFPs can start to feel irrelevant as soon as they go out the agency door. In addition, I think we are all so busy these days working on actual work, there’s definitely a resistance to switching gears to go through the somewhat agonizing process of responding to an RFP. However, with procurement and financial departments getting more involved in marketing decisions, there is definitely still going to be a desire for compliance overall and some form of benchmarking for what a brand is spending with agencies. So I would offer that the process is just now really changing shape as both agencies and marketers realize that the current version isn’t working, and there might well be experimentation with several alternatives before either side is happy with the outcome.

What does the agency of the future look like?

Victors & Spoils.  I have to say that.  We do believe it though, if we do our job right.   I think what is key is to help brands connect with their consumers in a more cost-effective way.  I think the future is in having conversations with your customer – like two-way conversations, where you listen and stuff.  Novel, huh?

What do marketers need that agencies are not giving them?

What I hear a lot is that you either have a big budget that buys you the right to yell the loudest, or you need a large budget so your agency can come up with some super-smart “no one’s come up with it before” solution so you can break through all the yellers.  So where are you if you don’t have a large marketing budget?  Marketers need options that don’t break the bottom line.

Who do I admire and why?

I recently moved to Boulder, Colorado and when I look up at the immense mountains I live below and realize what the pioneers must have gone through to get here, its pretty humbling.  I really admire any version of that kind of pioneer and there are still people taking huge risks and embarking into the unknown. I find it hard not to respect that.  Maybe it’s coming from New Zealand, our founders sailed around the world to the promise of a new beginning.  I wish I was actually that gutsy or, lets face it, that hard-working!

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EDITOR’S NOTE: Claudia is only the second woman to appear on this series and that needs to change. I wanted to track down Anne Bologna but we all know that sad story. If anyone knows Mary Wells, Nancy Hill or Natasha Jakubowski, let me know. Click here to nominate your favorite female Ad Executive–the testosterone is thick in here and the diversity is down, so help me out readers.

Hitch is a consultancy that helps marketers hire the right ad agency.

I started getting to know HL2 in a recent ad agency search I conducted for a client in the Pacific Northwest.  Their clients include HTC, SBC, Microsoft, HR Block, ATT Wireless, Hotels.com

There were a few different long chats with Don Low, one of the founding partners which gave me a lot of insight into this group of 70 creative professionals, but I really started to get HL2 watching the pieces in the 4th chamber–more so than seeing their work.

I’d like to hang out at a Fat Burger or shoot hoops with them (I think I could stuff the TaxCut box) –but apparently they’re also pretty good at that marketing thing.  Founded in 1994, they’re more fun than most 15 year olds you know–and they won’t talk back or steal your car.  OK, they won’t steal your car.

What was the aha moment when you realized “Our company needs to be doing things differently than we have been”?

My business partner, Tom Horton says, “Only through suffering do we become wise”. While we love new business wins, it usually takes a major loss for us to get pissed off and make dramatic changes. Two years ago we lost a major pitch and in the ‘loser’ call we heard, “We loved HL2 but the other agency just had a stronger analytics methodology”. We now have an analytics group of 8 and every campaign in the office has accompanying KPI’s with a corresponding dashboard for reporting. It’s transformed our business and the new business effort has never been stronger.

What books are on your nightstand or great blogs on your Google reader?

Soldier of the Great War by Helprin, A Distant Mirror by Tuchman and biographies of Mark Twain and Einstein. My personal reading takes precedent when I get home.  But I’m also working through a book called Crowdsourcing by Jeff Howe. At work I spend time with a few key blogs – Seth Godin, the Dachis Group, Ad age and the Web Analytics blog.

Give me an example of marketing you think is brilliant and why?

Sprint is giving it a good go. Coke media is extremely focused and disciplined. I like the traction that Bing is getting as a start up brand.  The Nike+ Join the Race campaign is experiential and inspirational.  Each of these brands has deployed a multi-disciplined approach that spans TV to event promotion and social media.

We’ve all read that the agency RFP process is broken. Many agencies aren’t even interested in competing in pitches. Do you see an alternative to the process?

I actually believe that, for many companies, the RFP levels the playing field and brings new agencies to the table. I believe you win the work you deserve. Either you’re digging deep, investing and setting up your agency to win or your coasting. The RFP process has allowed HL2 access to clients we never would have met on our own.

However, all clients don’t need to go through this formal process (especially the clients we’re currently pitching). Meet with 4-6 select agencies, get to know their culture, see their work, learn how they think and narrow to two. Then ask for proposals and presentations. While this is more legwork for the client initially, the long-term relationship is more likely to stick. It makes no sense to sit in a room and review 20 written proposals in today’s marketing world.

What does the ad agency of the future look like?

Lean, mean, smart, resourceful, marketing saavy, focused on the numbers, uber-creative.

Yes. That about sums it up. With a really cool space and an interest in the client that goes beyond billable work.

The agency of the future will need to spend more time looking for ways to tell stories and exploit technology to deliver great experiences, participate in the conversation and bring real value to consumer.

What do marketers need that ad agencies are not giving them?

Love. They’re not giving them love. Unconditional, immutable love. I’m-waking-up-in-the-morning-thinking-about-your-business kind of love. As agencies are working to wean their business model away from large media commissions and making their nut on fees, they are squeezed for talent–creative, account, planning, production, analytics talent. Larger agencies are no longer able to over-service accounts like they used to because there just isn’t enough money there. Clients stop feeling the love. Today’s agency is learning to be more nimble and is working to create a culture where the every employee is working to deliver superior strategy, creative and service.

Whom do you admire and why?

Winston Churchill. Primarily because he is proof that you can lead when you get old…. (Many historians now think he was suffering from pre-senile dementia while he was the PM. I think Winston; either drunk or affected was better than the rest of us with all our wits). Churchill is history’s portrait of resilience. A drive that never quit, unwillingness to compromise and foresight that saved the world.

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No, Al Gore did not (re) invent the ad agency today when he said, in effect, that the only sustainable advertising model will be one where clients buy yeoman produced spots for as little as $1000. He did make some valid points, however, and backed them up with facts like ‘Viewer produced spots on his new Current TV network are preferred by his viewers 90% of the time.’

Al Gore is just one of many voices lately who have said we’re in uncharted waters.

• Dan Wieden has no idea what’s coming in advertising, although to his credit he doesn’t think the sky is falling, he sees this as an exciting time and I admire, and choose to share his point-of-view.
• Bootb (yes, I thought it said Boob the first time I read it too. FAIL on the name) in the Netherlands is crowdsourcing the ad agency and turning everyone into a marketer (or so they think). This model had marketers of every stripe with their hackles up this past March at SxSWwith a lot of the wrath focused on Crowdspring by the likes of David Carson and others. Mostly around the sticky spec work issue.
• Accellteon says “Today’s marketing problems will be solved by people with diverse skill sets” and I have to agree with the opening statement of the press release–although I haven’t read the ebook they’re hawking yet.
• Scott Goodson of Strawberry Frog has said “Why not give clients the opportunity to put teams of cherry picked talent together to work on their business and generate the best ideas? If a client decides , “I don’ want an agency, just want that particular team, made up of top talent across these areas” why wouldn’t we agree to collaborate on shared business with shared reward?” 

None of this means the end of the ad agency but it certainly signals the end of the ad agency as we know it. The decline of traditional advertising is a reality that’s been with us for a while now–it didn’t just happen when Oprah got on Twitter.

So what does this all indicate? The rise of classes in marketing? I think, yes. The end of the industrial revolution of marketing as Gore said in the above article? Probably not.   So, what does this new marketing society look like? Dare I say, marketing social democracy! I’ll explore this in part 2.

I’ve  been invited to co-author a book with John Winsor from Crispin, Porter& Bogusky, one of the best ad agencies in the world.  I’m thrilled.  What an opportunity.  I’d like to thank everyone at CP&B  for working with me and say what an honor it is to….

Oh, hi, John.  You’re wha?  Crowd…what? CROWD sourcing it.  

Oh.

Apparently, John Winsor from Crispin, Porter & Bogusky is crowdsourcing the next edition of hisbook Beyond the Brand, which he’s also renamed: Flipped: How Bottom-Up Co-creation is Replacing Top-Down Innovation .  Another bold step from a bold, innovative agency.  

 You can participate too.  

Watching the comments roll in and tracking the evolution is very interesting.   Can’t wait to see how this turns out.

And stay tuned to the Ad Industry Innovators series right here on the Hitch blog,      C, P & G is coming up soon!

All kidding aside, John, it’s still pretty cool.  And we don’t have to tell my Mom what crowdsourcing means do we?