Media Agency Innovation and the ‘Labs’ Conundrum

Sept 2011 - New NW BW crop for social mediaBy Nigel Walley

Last week I was struck (but not surprised) by the news that Ogilvy have decided to shut their ‘media innovation’ function – Ogilvy Labs.  I have run the only commercially independent media lab – iBurbia Studios – for the last 10 years and understood some of the pain they had gone through.  However, seeing the articles in the press from their labs team protesting about ‘lack of investment in innovation within agencies’ struck a chord. But probably not in a way they would like.

iBurbia Studios was a spin out from the media innovation consultancy Decipher, that I have run since 1998.  Older readers will remember that Decipher itself was first conceived as a ‘change agency’ within Interpublic Group creative agency Lowe Howard Spink.  iBurbia was first conceived in the old Lowe’s HQ at Bowater House.  So I know a little bit about running media innovation labs in agencies.

The first thing to put on record is that the agency world is full of failed ‘media innovation labs’.  Many agencies have tried to build these, just so that they can be seen to have one.  The majority were set up by agency heads giving a junior staff member a budget to buy kit for an ill-defined ‘room of the future’.  Clients were wheeled in to have the tech demonstrated by the agency’s pet techno-gimp, while the main agency people stood and smiled.  After a while, they ended up with rooms full of redundant tech that no-one knows how to use, because the person who set it up has left.

When visiting agency-owned media labs over the years, we have always laughed at how much money has been thrown at them.  Most agency owned ‘media innovation labs’ will have spent more on furniture and shop-fitting than we have spent on core tech at iBurbia over the last 10 years. This clearly causes problems with agency budgets.  Since setting up iBurbia as a stand-alone company ten years ago, we have had a succession of agency MDs take me out to lunch to ask me how we make money with a media innovation lab.

My answer to the agency heads is always simple – be clear what the lab is for.  Most agencies have multiple, confused objectives for the lab, its staff and its relationship to the rest of the agency.  To talk them up as ‘R&D’ facility is to grant them an importance they don’t merit.  Most often they are tokenism at best.  To get to a clear objective the agency needs to reflect on three things:

Firstly – the agency has to define what ‘media innovation’ or ‘R&D’ means for them.  I suspect that Ogilvy Labs wasn’t doing either of those things.  The most seismic changes that are affecting agencies at the moment are coming from computing innovation not new hardware or devices. The algorithms behind the ad-tech revolution are not being created in media labs. They are coming out of university campuses. The Ogilvy Labs were mainly some nice rooms with the latest gadgets.

Secondly – the agency can’t use them to avoid training and development in the main agency.   Agency ‘labs’ get used to demo the agency’s work when it appears on strange new devices or services that aren’t available in the agency board room. (We love it when a media agency gets convinced to run a campaign on Virgin or Sky because we know they won’t be able to show their clients).   To get round this, every agency meeting room should be able to function as a ‘media demo room’ and should be equipped with the devices and services to demonstrate any new creative format to clients.  More importantly every member of agency staff should be versed in the knowledge to demonstrate any creative format being worked on.  However, many agencies use their ‘media innovation labs’ as an excuse not to invest in main agency facilities or train main agency staff in new formats and services.

Thirdly you need to understand the relevant timescales.  Many supposed ‘innovation’ groups fall into the trap of misunderstanding the pace of change.  Anything new and interesting gets wrapped into the mystique of ‘media R&D’. Virtual reality is a prime example of this with many media innovation labs quick to spend huge sums to get an Occulus Rift installed.  But this is to be seduced by technology for technology sake. Demonstrating a technology that is ten years away from landing on a media-plan is nonsense and demonstrates an agency without tech insight, not the reverse.

With this in mind, we believe that there are four potential roles an agency-owned media lab can and should fulfil.    They can be:  a client/staff gadget demo facility (which is fun, but ultimately self-defeating); or they can be a posh meeting facility with nice A/V to impress clients who want off-site workshops (again, nice but involves running an expensive meeting suite).  However, if they are really to work there are two functions which would make a difference: they should either be an educational facility with a hard-nosed curriculum tied into to the agency CPD programme; or a formal media research lab with a strong research agenda tied to understanding changes in media consumption.

Each of these potential functions needs a separate kind of plan, budget, reporting line and potentially, different staff to run it.  Most agency-owned labs try a bit of all of these functions and end up doing all of them badly.

I have significant reservations about what Ogilvy Labs were doing, however that doesn’t mean that the main agency is blameless here.  Most agencies only care about this stuff when there is a pitch on, or if the client is angling to do an agency review.  Outside of those moments the media innovation labs are just viewed as a cost centre – even if they rent it out for a client event occasionally.

I also have reservations about whether media innovation can be driven out of a creative agency like Ogilvy. We tried and failed at it.  If it has to be agency owned, then this kind of media innovation sits better within ‘media’ agencies not creative agencies.  Done right, it can be the function which helps these agencies integrate their ‘digital’ and traditional media functions.

A difficult truth is that agencies, and particularly creative agencies, are incredibly old fashioned, slow-moving businesses.  At a time of great change the notion of a ‘media lab’ allows them to park any thoughts of innovation in a separate silo rather than address the truly challenging process of redefining and reskilling the agency.

For the Ogilvy staff laid off, this is clearly a difficult time, but it was the blind narcissism of their piece in Campaign last week that was most jarring. ‘Our small team thrived on what most people fear: change’. This is clearly nonsense. They thrived on not being accountable; having no requirement to build track record or to deliver a body of work that supports the agency mission.  They were free to do this whilst ‘attending conferences around the world’.  Great work if you can get it, but it doesn’t add up to being a media innovation or R&D lab.

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