Michael Farmer has developed a fame for taking agencies to task. In his widely read “Madison Avenue Manslaughter,” from 2015, the seasoned consultant dissects how modern business realities and scandals have clashed with an industry still clinging to a faded “Mad Men” mythos. More recently, Farmer has turned his critic’s gaze in a different direction: toward an agency overhaul he admires for its unconventional approach to productization, pricing and scopes of labor, at the same time as the bottom-line impact of the strategy has yet to be proven.
“Madison Avenue Makeover: The Transformation of Huge and Redefinition of the Ad Agency Business,” released by LID publishing in July, tracks the turnaround plans of Interpublic Group’s Huge, a digital specialist shop that made its mark throughout the dot-com boom. As Huge expanded, so did its range of services and physical footprint, eventually spanning 12 offices across the globe. IPG acquired the agency in 2008, looking for to shore up its digital know-how. But growth tapered off, Huge’s vision clouded and its edgy appeal and sense of identity diminished — a familiar agency narrative.
Enter Mat Baxter, who was brought on as Huge’s CEO in 2021 to offer the brand a jolt of energy after previously helping revitalize IPG’s Initiative media group. Baxter, an Australian whose media background differentiated him from past Huge leadership, was the agency’s fifth CEO in 4 years and took the reins within the thick of the pandemic.
In “Makeover,” Farmer acts as a fly on the wall as Baxter’s plans come along with aid from London-based consulting firm The Business Model Company (TBMC). Farmer, who halted his work with Huge to don his reporter cap, was invited by Baxter to bear witness to the highs and lows of this journey, including a transition to making offices co-working and experience spaces and taking a productized, fixed-price approach to client services, which Farmer dubbed “radical.”
Huge’s gambles have yet to yield the specified results. The firm this summer went through a round of layoffs and an executive reorganization and has been called out by parent IPG as a soft performer amid larger struggles on the ad-holding group, which has lagged competitors.
This interview has been edited for clarity and brevity.
MARKETING DIVE: Your past work with “Manslaughter” was a macro industry view while “Makeover” focuses on the transformation of 1 agency. Why was that angle appealing?
MICHAEL FARMER: If you concentrate on “Manslaughter,” it was a 250-page consulting report on the industry born out of all my experience. It was my idea, I controlled the content. Baxter is the primary CEO I’ve encountered in 30 years who actually understands what’s unhealthy concerning the industry.
I’ve all the time felt a little guilty that, over my 30 years of consulting experience, I had not been capable of help the CEOs that I’d worked with get to that time. I all the time would suggest to them that there is just one thing that you’ve got to do to start with: You have to ascertain a policy that, for each client you serve, you document and measure your scopes of labor in a uniform agency way.
Baxter was a month into the job and Huge’s fifth CEO in 4 years. What do you’re thinking that his psychology was in asking you to do that?
FARMER: I’m paraphrasing, but he said, “I felt that you simply can be Jiminy Cricket on my shoulder, whispering in my ear after I was going off beam. I actually felt like I needed external pressure on me to do the job on the pace at which it probably needed to be done.” He felt, given his relative inexperience with creative agencies and making a massive structural and cultural change, he needed a witness to maintain him honest and to maintain his mind focused on the job.
It surely didn’t simplify his life with IPG, even to today. He’s caught between doing a transformation that he felt they needed to do but he also had the duty to make his numbers at a time of great uncertainty. In the balance, I believe the holding company cared more concerning the numbers.
Huge, within the time because you made your observations, has undergone more layoffs and one other executive restructuring. What do you make of the strain between the transformation and the fact?
FARMER: If Huge were a private company, Baxter can be lauded as a genius. To succeed with this transformation, he has to get his client heads to sit down down with CMOs and say, “Let’s not speak about what you’re in search of. Let’s speak about what your problems are, and then I can offer you a proposal.” But that may not the best way the industry works. There’s a big must retrain all the client heads and develop enough of a portfolio of business that the brand new stuff will begin to outweigh the old stuff.
It will take a while to do the tweaking and for people to get their rhythm in having those sorts of meetings. If it were a private company, people would say, “It’s going to take a couple of years to sort this out, but you set them on the best course.” Being a part of IPG, they’re more sensitive to the numbers than they’re to the long-term.
In terms of the turnaround plan, what are the insights you’d hope other agencies would come away with?
FARMER: I might hope that agency CEOs would take away that Mat wasn’t afraid to claim his leadership over the 12 office heads and all of the department heads, unequivocally. What I’ve seen amongst the large holding company agency CEOs is that they are afraid that they don’t really have any power over their organization.
Agency CEOs one way or the other feel that their office persons are really vital; the one way they’re vital is that they get on the market to develop latest clients to interchange those which might be leaving. I believe agency CEOs are very insecure about their power, they don’t wish to push it very far and they don’t need to be embarrassed. They don’t take into consideration their organization as something that they run. They think it runs itself.
Baxter and TBMC choose 45 products that Huge will offer. Did the streamlining effort not go far enough? Forty-five products looks as if a lot.
FARMER: Actually, it isn’t. When you undergo all the various permutations of the media type, the media detail and whether it’s low, average or high creative complexity, that adds up.
I believe 45 is greater than they’ll find yourself with. But to say, we have got a suite of 45 products when a current agency might find yourself with a scope of labor that has several hundred if not 1000’s of several types of deliverables — because clients want all the things from TV to Facebook posts — it’s a very extraordinary simplification.
When Mat says we have got 45 products which might be designed to unravel three generic client performance problems, then he’s on top of things. That is a really different dialog, and it’s hard for the client heads to get their heads wrapped around it. They’re not used to being that proactive. They’re used to saying, “What is it you wish? Yeah, we will do this” and then worrying about how big the fee can be and if it is going to cover enough people.
The book also talks about how each product has a fixed price and it’s non-negotiable. How unique is that arrangement for an agency?
FARMER: There’s no one that does that. I actually have worked with everybody during the last 30 years and I actually have never known anybody who had anything aside from the classic scope of labor, which is a list of deliverables in a fuzzy format that changes on a regular basis.
What Mat is doing is completely 100% unique. It’s what consultants do. You get a sense of the client’s problem and you then offer a work plan. What Mat’s 45 products are are really invisible work plans. Huge gives it a descriptive name and it has a price but it surely doesn’t have a duration. The price isn’t per week or per day. The client leads have all been used to dragging things out because they’ve been capable of sell hours to clients. Mat’s saying, no, when you’ve got a fixed-price product, you need to do it as fast as you’ll be able to and you need to work with the client to beat barriers to hurry. That’s one other cultural shift.
Did any of this receive trepidation from the established Huge people?
FARMER: People may need had their private thoughts but often, to an outsider like me, they’d find a approach to express them.
During the third executive retreat Baxter held, some doubts got here out. The doubts really centered on how Huge could change the culture if it’s in a distant working situation and has eliminated the office heads, which is a very practical query.
There’s also been some pruning. Part of that’s numbers-based, a part of that’s there have been some those that probably either didn’t wish to take part in the long run of Huge or possibly were deemed to not have the skill set. Here’s one other thing: I believe Mat is clearing the decks to rent a whole bunch of AI people since he’s not selling hours, he’s selling work.
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