The Video Agency is Now

All right, welcome back everyone to Studio 3. We're going to be talking about the video agency model and the agency model and I can personally say that having spent 20 plus years in that industry, I've tried all kinds of different things. Most recently as general manager for AKQA, it's a huge global agency and we won a shitload of awards for videos and brand films. And looking back, I'm not sure we really managed to integrate that into a bigger, broader sort of marketing engine or commercial strategy for the companies that we work with. So it was more like an isolated thing. We did a video over here, then we did another one by popular demand. And it wasn't really an integrated part of the ecosystem. So whether the agency model is dead or not, looking at you guys, we're going to dive into that. So I'm going to be curious to hear about that, but also obviously how we can then work with this in a more sort of streamlined professional manner so that it doesn't continue to be these sort of isolated, you know, events here and there. To speak more about this topic from TwentyThree, Dan Duffett will join me here on the show. And not on stage, but right here with a cup of coffee is my good friend Jon, whose voice is about to be... You've been talking since early morning. But you'll be joining from down there. So please give it up for Dan. Thank you. Thank you very much for that great introduction. I think you've highlighted a lot of the interesting things that we're going to cover. And I hope you've all been enjoying the show. I think you've all been enjoying the summit so far. I certainly have. And I hope what's started to come out is that the summit's a lot about community. It's about us getting together and building things with our customers and with our clients. And it's creating that ecosystem. And Jon is, I think, a primary example of one of those kind of great clients. He's been with us for a huge amount of time. And knows what we do incredibly well. And knows this area incredibly well too. So he's had a very busy morning. But Jon is going to give some perspectives on what I'm going to talk about at kind of key points. And I suppose to also contextualize it from our perspective. Why we care about the agency model so much and the video agency. Because we really try to focus on growing the category. And keeping an eye on how it's developing. We need that ecosystem to exist. And one thing that we've certainly been seeing over the last couple of years is a kind of bit of change in the production landscape. And what's been happening there. Which we certainly found very interesting. And the shift that we think we're seeing is about where effectively the value of the product is. Effectively the value is sitting. Is it sitting with production? Or is it actually sitting somewhere else? So that is a lot of what we want to talk about today. And the heart of what we want to get into. So in this session I'll unpack, or try to unpack anyway, the journey that we've been on. And then start to have a look at in terms of the video agency and that model. Then I'll start to look at some of the trends. That we see in the market as well. So it's going to be the video agency model. What's going on in the market. And then a bit of a way to operationalise a video agency. Forgive this sea sync photo. This is actually I think our founder jumping into Canal. But we're going to dive into all of that right now. To go back a little bit in time. It was two years ago at the summit I think that we talked about this idea of the video agency model. And let's cover a couple of points about why we thought it was important. And with it why we believe the video agency is important. And why the video agency category was coming along. To a degree I think we'd seen a model exist before. And we thought that there was something that was recurring. And particularly if you had heard Thomas' keynote on yesterday. He'd have mentioned that he started a web agency a long time ago. So if we kind of reverse it a little bit. And we, for those that might remember. For those that don't. You kind of go back 30 odd years. Literally to the previous century. To the previous millennium in fact. There was a point at which there were worldwide web production companies. Right. And what did they do? What was the point of them? And in a world where brands didn't have websites. What they did is they built a website. And that was very much about an outcome. Your brand needs to exist in the digital world. It doesn't exist in the digital world. Okay. So you kind of got that phase one. Then you kind of think about phase two. Okay. Then everything evolves. Everything evolves. And tools kind of evolved to make creating websites that little bit easier. So the businesses that were building websites. Couldn't then have that single superiority. Okay. We can just build your website. Not many other people can. They needed to think more about what they could offer. So it was then about how can we help you with web marketing? So you kind of have, you know, a progression from around 1995, 1996. To the middle of the early 2000s. Then as, you know, obviously the world was changing. The web becomes more than a website. And the broader field of digital comes into play. With all the experiences that are involved in that. Everything kind of moves on from there. And you move out from the simple idea of a web agency. And you move to a digital agency. So we've kind of had that progression. We've seen that progression before. From effectively a website production company. All the way through. To a digital agency. So we took that similar kind of concept. That just idea. Okay. Everything evolves. And what if we kind of impose that on the kind of production landscape? What does that mean? And what does that look like? So we took that same sort of thing. And we thought about, okay. What services might be required actually? In this kind of new era of video. And we found out, you know, not surprisingly, there were quite a few of them. And it was moving from an area of making something. From making something. Was not enough. You had to make something that you could do something with. So that's. How we kind of thought about the services required for a potential video agency. And then we thought about the names. Okay. And in that previous model we obviously talked about, you know, the web agency. And then that moves to the digital agency. And how should they be named? And so there's a whole kind of smorgasbord of different names here. That could potentially have been used. And arguably, unimaginatively, with a kind of keep it simple, stupid method. Video agency. Was where we thought the category, or how we thought the category could be defined. The next logical step was to think about, okay. We've talked about those services that might exist. How can you logically group them together? And we put them into these kind of three categories. Creative, strategy, and enablement. And this has been this model has been around now for around two years or so. And since talking with different customers and partners, this has kind of has certainly got some traction. So. We think there's something in it. And here's another kind of look to see the kind of things that sit within each of these areas. So I guess the point to underline here is looking back to go forward has been a very kind of useful tool here. Which is how we've kind of come across with this idea of the video agency as a name. And the video agency model. Now before I go on to talk about what I think are some important kind of tailwinds for market. I just want to ask Jon at this point, who was pretty integral into the development of this model. If he's got anything to add. I should find something. No, no. I just think it's a solid strategy. I think it does work really well. I think the nice thing is it's scalable. It can be for small agencies where you're buying a little bit of strategy, a little bit of creative. But also you can build in media buying. You can build in all the other areas of marketing. And it just becomes a video first marketing agency. Or whatever you call it. It enables a lot of growth. And clients understand it. Yeah. Because, oh, we thought we were getting production. No, you're getting all this other stuff. So it works out in the market. I think it's solid. Yeah. Excellent. Thank you. On message. Absolutely. Yeah. So let's have a little think about what's going on in the market. And we genuinely believe the future of video agencies is incredibly bright. But obviously with the model in mind, we certainly think that there's an evolution of the journey going on. So I want to kind of dig into about five or six key areas that I think are really interesting points regarding what the future looks like. Some data. Yeah. And I think it's always good to have a look at this and kind of see what the numbers are saying. And if I were to pick out some favorites, it would be these. I mean, they're kind of obvious. If video entertains, if video clarifies, and if video is preferred. That's a pretty good thing. And it is doing a whole smorgasbord of things. But if increasingly people want video, then it's going to be a good thing. And if it's not, then there's undeniably a market for creating them as much as possible. And this does highlight, I certainly believe that it's the king of mediums. And if you kind of dissect how much people prefer one medium to the other and the share that each has, video continually comes out on top. And you layer onto this the idea that our brains process video so much better because of the way that we're wired, it again reinforces the importance of video. And something that I am genuinely fascinated by is there's a kind of self-fulfilling loop that's taking place with video. And actually just thinking back to Jon's talk about decision design this morning and in the final summary that he talked about. In the first part of that decision making process, Jon talked about effectively a hook. And if you extrapolate that hook to be real hardcore quick engagement in the kind of 1.5 to 2 second period. That's certainly what we're going to see. If you're going to be doing a lot of what we are seeing in shorts and we're certainly seeing in kind of commercials, then there's that need to lock you in. But what that's also doing is it's training us to need and want that engagement and that hit. So it fuels a dopamine hit within us. And the more this circle evolves. The more we require the hit. And the fortunate or unfortunate truth, depending on which way you look at this, is that there's only really one medium that's capable of doing that. And that is video. So I 100% believe the future is incredibly bright for video. Because I think we are inadvertently being trained to want video. And want more video. So I think as a medium, it's got legs. Then to just kind of put a little bit of data behind growth. Now, okay, this talks about digital. Yeah. I would certainly argue that a video is now a fundamental backbone of digital. I know on the keynote yesterday we talked about actually video sitting separately almost. And it should be celebrated as the only thing. I don't disagree with that. But actually for overall purposes, if you want to look at video, looking at digital is a very useful way of doing it. And since 2003, there's kind of a double-digit growth, about 11.3% growth in digital. So it's on the up. So it's a very useful way of doing it. Now, this might not seem like a tailwind. And does anyone know what this ad is? You do. Okay. Got some things. I'll play it. Sorry. Sorry. Sorry. Sorry. Sorry. Just a quick. I was actually warned by Jon. I might be booed for sharing this. Because that has happened. But just a quick post. Who actually thinks that's any good? Yeah? It's good. Yeah. Yeah. And I've got to say, I wouldn't disagree. And I think I was lucky enough to work on Rolex for a number of years in America, running their global advertising. And the funny thing about this is that actually making a watch ad, the hard bit is actually writing a clever watch ad. That's the hard bit. Because otherwise, it's their luxury brands, and you just see some wrist shot, basically. And then you see the product with some appealing line about heritage or something like that. Rolex stands apart. I would obviously say. But here, this ad was written by a human. It was produced by AI. So actually, it's very useful to show AI's capabilities. However, it also shows a big shortcoming, which is it has not created a great watch ad. It has not created a great watch ad. It has brought to life a script pretty well. Right? So with this ad. And within that, the point is that there's still, you know, production can be commoditized. But there's still space. Right? There's still space within that. Because you can't create brilliance necessarily yet with AI. You still need a human behind that. You might not be able to do this kind of thing consistently and at scale. And the other piece on the right-hand side is. It's done the States. It was a match between. It was. It's a galaxy, isn't it? It's a galaxy and another team. Not a massive footballer. But it was all shot on the iPhone 17 Pro. So guess the point here as well is that the tools to get into production are in your pocket. And in this very room yesterday afternoon, I think there was a session. Which. You talked about brilliant this morning. How everyone just went out and made stuff on their phones. So the production side is kind of being commoditized. But there's space out there. There is still space. And it's that space that becomes, I think, really, really important. And that is, without a doubt, an opportunity. Then moving on to, I guess, thinking more classically about. What is the role of the agency and the brand in this environment? And. I certainly over the years have had a lot of sympathy working with CMOs. I spent a lot of time at WPP about 18 years. And by the end, I. My. The title I gave myself was the throat to choke. And the reason I gave myself the throat to choke was because I didn't work. I was working. And then. I moved into WPP where I looked after six agencies for one particular client of Johnson & Johnson. And if there was a problem. I would be the person, any problem at all that was big, I'd be the problem that would be called to solve it. And the reason I was put there was because they had become sick of having lots of different agencies and having to manage the relationship between those. Different agencies. It was called horizontality. And. You know, I think that, you know, as many of you, I'm sure, have experienced the the the the client relationship with agencies would oscillate. Some would want that model, some wouldn't. And so you would get some lead agencies and you would get a satellite agencies. And it often came down to to a finance issue. But there was a strong argument to have, you know, a a. The strong to have an agency at the lead. And so if we kind of look at that with respect to the video agency, it is actually not a huge jump to think that the video agency has the opportunity to be that new agency. And it is exactly the territory of the ad agency used to sit in or still does to a great degree sit in. And if you kind of look at the requirements that sit around a client and what they need. Video. Is so embedded in so many of those. So if you just think about so me and case in point with what Jon does right now, so much of what he's doing in SoMe is video digital. We kind of talked about that. That's a kind of you can have that that video encompasses that the CRM system making sure that you have brilliant attribution. So actually a CRM agency now you can think of it. OK, well, so much of what they need to think about is video attribution. And that's connected to video marketing platforms and brand and design. That might be easy to kind of categorize as well. OK, you know, that's that's typography and that's logos and that's fonts and that's making brand books and stuff like that. And that people but so much of brand design now has to kind of figure out how to think about motion and video and the brands that are being built today. The new brands are being built. I mean, FLEXeCHARGE was on the stage there yesterday. I mean, all their brand is being built on video. So brand and design agency now has to understand video better than anything else, because it's the primary way that a brand actually wants to express itself or is trying to express itself. So right in the middle here, you actually have an opportunity for for for a video agency to be a lead agency. And I'm not going to say that's going to happen overnight. But again, if you kind of look back and then project forward, you've got a story that's been that's existed, absolutely existed. And it can be adopted, I think. And so. Who's kind of moving into this space? And here's just a list of three that are moving into this space. But it is without a doubt is creative entrepreneurs. You know, they just think and you you you are those and they're out there in other studios right now. They are people that understand they can do so much more themselves and are seeing the opportunity to be able to build out a video agency from a small number of people to a large number of people. The video production companies and obviously so much of this is about that move from this video production model to something else. They're understanding that with the pressures on production that and that being commoditized, they have to be moving and looking for new opportunities in new space. And then those in digital agencies understanding. Well, website, I mean, websites are changing. So much of what they they're doing has to have video at its heart. So actually, where's where's the opportunity? How can they create a new engine of revenue generation? It comes from thinking about how they can work with video. So so these these these are just three kind of paths that we're seeing pushing towards a video agency. And we track. Around. I think it's 30,000 production companies in Europe. And we're watching for the evolution from production company to video agency. And whilst that's not always easiest to see, but what we can see is we can see a year on year 10% growth in video agencies. So right now we think there are 6600 video agencies and that's 10% more than last year. So that's not a small amount. So another interesting tailwind for one part of the overall creative industry and a headwind for another. Independence in this is an advertising world and holdcos. Right. I don't know how much you kind of look at what holdcos are doing. But, you know, if you think of the IPG, I think the Omnicom's, the Publicis, the WPP, which ones are there? IPG, well IPG's gone. Yeah. WPP struggling. WPP struggling. Dentsu. OK, so Mads was at AKQA. Your founder decided to start Studio One. And he's decided he's decided to start Studio One because the holdco. Well, he was I mean, he sold to WPP, but he basically thought the model needed to change. Right. So he saw immediately. He saw immediately that being part of WPP was a non-starter anymore. Despite the fact it was one of the very few remaining brands within within WPP creative. Dentsu is trying to sell Merkle. It can't sell Merkle. But then you look at Uncommon. Jon showed the British Airways ad that didn't show British Airways at all, but just the brewer kind of thing that was done by Uncommon. Uncommon is an incredible indie agency that's grown over the last six years. So the scale was the benefit of the holdco, they could scale and they could offer everything clients needed, across many different markets, and that was a great benefit to them. That's no longer a benefit to them. And it's agility that these smaller, hunger agencies that can change and adapt and understand the services that clients require that are starting to win and grow. So if you think about that as in a very, very adjacent part of the creative industries, and you think, okay, well, what does that mean for video agency? Well, it's pretty compelling, right? It's pretty compelling that actually there's an opportunity in video agency, the agility and understanding of what needs to be done, we can move into that space. Yes. Then in-housing. Now, and what I mean by that is quite literally production teams, creative teams moving into brands. And we've got, I mean, Allianz was on the stage yesterday. There's an example of that, Bird and Bird, similarly example there. IKEA, I think were here and I've probably got a slide on that. There it is. There it is. Okay. So these agencies are forming within clients. And why is that actually beneficial? It might seem counterintuitive, but it is actually beneficial because they still need help. They often cannot do everything. They're starting video teams, but they are not necessarily fully fledged. And, actually, understanding that you can work with them opposed to against them. And they need some structure, and you are their scaling opportunity, is where that opportunity actually does lie. So hopefully those kind of, those kind of points I've just hit, beats I've hit on, give you a good steer also why I think we collectively think nex that there's an opportunity there. And before I go on to my next section, Mr. Mowat, anything to add? Yeah. I mean, I think you're back. I genuinely think it's bang on, so I'll turn around. I'll casually sit on stage. The notes I made while you were there, I think the magic has gone from the big global agencies like the WPPs, the publicisers, and I think brands like they don't need it. So that's a massive opportunity for us. But only if we have the strategy and the deliverables and the execution to step into that space because a client who's used to WPP is going to expect, well, I need some paid media, I need some strategy. So that's, I think, more of a reason to have this. I think in-housing is actually an opportunity for us. It doesn't sound like it is, but it is. So like we built Bird and Bird Studio, right? It's like this thing. And we're working with Avanti Rail in the UK. I've got a team of three, but they've only got capacity. And then you're in a meeting, because they're doing your sort of helping them a bit. You're in a meeting every week with the in-house team. You become much more sort of part of the furniture. So I think it's really good. And then finally, that watch ad, I know it, yeah, it's AI, but again, it underlines why we have to make this move because you still need a writer, still need strategy, still need all that thing. It wasn't cheap, that. If you think about the rendering credits and the colour grading, they probably spent a fortune. So it's like, it's not a cheap option, but again, underlines why we need these mix of strategies and executions and deliverables. Yeah. Yeah. It's good. Cheers, dude. Thank you, thank you. Right, to the last piece, it's all well and good kind of saying, okay, here's a model, and here's some reasons why we're doing this. Why everyone should be so optimistic. How to operationalise it. So last year, Jon and a selection of video agencies came to TwentyThree to just have a workshop and just explore what a playbook might look like to help video agencies move forward and to... to sharpen some of what they needed to do. And we kind of started off with this kind of quite simple insight that... which we'd all kind of experienced in some shape or form. Lots of companies are kind of asking for some video, and it's not particularly... The brief isn't always brilliant, but they want it, and it's ad hoc, and it's a bit one-off. And all the video agencies there were like, this happens so often. Yes, we can always do this, but what they really need, is a system where they can do kind of... a repeatable format and do them efficiently. And that's, you know, that's not kind of rocket science, but it's just understanding. I get this brief, you know, four times a year, and it's roughly, and I could actually build you a system where you could get more output more consistently, probably on the same money, if there's some order behind it. So we started off there with that insight, and then one of the first things we did, we kind of reviewed kind of the model. So you've seen this before, obviously the three key areas, and then actually what now do we think's in it? So there's a little bit of evolution about what's in these pieces, and this will continue to grow and evolve, all right? But it's just a steer and say, okay, well, these are the kind of things we should be thinking about. And we then kind of wanted to label what it was, what's kind of, what's our offering? And we came up with Video Engine, okay, you can argue that's not incredibly creative, but this is about, I'm just driving stuff forward. But the metaphor of Video Engine actually was quite important. It was important because it talks to a mechanic, right? And it almost like a flywheel, you know? That's what we're trying to do. We're trying to get a system that just goes like this, right? And it moves and it moves, and that helps the client. And if you can offer that, you can move them forward. Next thing we looked at was talent. And I think this is a truly fascinating area. Because if you reverse 20 years, you'll be talking about producers, directors, editors, very specifically and having their roles. And this isn't to say that they don't exist and they aren't valuable today. Absolutely they are. But what we're certainly seeing is a morphing of roles, particularly in the producing, editing, kind of directing arena. There are people that can do all that together, and they are. So there's this idea of, and we call them video marketeers, of having these and recruiting these kind of individuals who would kind of sit around a central core, which is not rocket science. It's got the MD, it's got the strat, it's got the finance and operations kind of all together. So you've got that as a hub, and they can manage those client relationships on the kind of the top level, understand the strategic direction they want to go, put them on that strategic direction, but then execute with these, these kind of VMs who can then be dropped, body shopped accordingly, and you can scale with those. So I think that's an interesting way of looking at the kind of talent and then actually how you can deploy them. Then, and I'm starting to speak a little bit fast because I know I'm starting to run out of time. So apologies if I'm starting to speak fast. So then it comes down to the operating system or the playbook. And in many ways, you know, this isn't, it isn't rocket science, but it was an idea to just kind of structure the business so that it was clear you had, you know, a rhythm, you had some core principles and an understanding about the finances and the margins. And that comes down to, okay, well, we're going to standardize formats. You know, we're going to have monthly filming days. And, you know, in those core principles, that's what we will deliver. So it was very clear what was being said, it was very clear what was being bought. And it was very clear, or it is very clear to the client, like we're here all the time. And this is the day we're going to do this. And we're going to get it done. And that's efficient. And that works. And then from a kind of process perspective, you just make sure you've got your, you know, your weekly, monthly sessions and things like that. So having a clear system of, and what you're selling and what they're buying becomes, I think, fairly key and important in this. And that leads, not surprisingly, towards a scope of work. And this really is a kind of a byword for what is your business model, right? And at the heart of this is trying to get to the idea of a retainer. And this is kind of a bit of an example of the kind of things that you could be doing at a certain price for, you know, for, you know, a large, large company, obviously, but you can actually get to a fairly, fairly high monthly revenue there. And I think, I think the, the useful thing about this and this momentum that it drives and it generates is you kind of get this positive feedback loop. You know, the more video that they do, the more ingrained it becomes in the business, the more benefit they see, the more they want to do it. And it's, you know, really, again, it comes back to that concept of the video engine, this flywheel, just getting video moving through the business, moving through the business, moving through the business. And lastly, obviously, growth and engagement is, is, is, is, is key. And these are, I would say to a degree are hygiene factors. But I think, you know, the, the, the first thing is being easy to buy. And, and, and that I think comes down to understanding a client's level of video maturity. And I think that's a kind of useful way to think about it. Where, where are they on their journey? And so being sensitive to that so that when you engage with them, you're not trying to sell them something they're unlikely to buy. And then the second piece is trying to get as close to the top as possible. And I know this sounds blindingly obvious, but one of, one of the fascinating things that we see at TwentyThree is the nature of the producer and the customer. And the producer and their character and how close they can actually get to certain people and organisations. Because they're filming CEOs, but as an example. So that's an unbelievable level of access. And we had, I mean, David Brain, IKEA was sitting here yesterday. I know, I know that IKEA, CEOs change a lot, but he worked very closely with that CEO. Got on with him very well. Followed him around for a day. George Mole will, will, tidy the, the way the CEO looks when he's in the lift, but even if he's not shooting because he can't stop himself. But the point is that there's this proximity that the producer gets to certain important people. And that's unbelievable leverage as well. And there are obviously, you know, that isn't your only way. And there are different ways that you can try and engage with that, that level. But really trying to get at that level to then demonstrate the value of video is certainly going to be an important piece. So with that, I guess that's a bit of a, this is my end slide. And a kind of wrap for me. These are the kind of things that we've kind of established. There's, there's this model, I think, which, which, which I hope you now understand why it's coming to existence and how it works. There's a talent piece, I think, which I think is really, really interesting. The operating system be easy to buy, understand their maturity, try and get to retained if you can. And the tailwinds are there. The tailwinds are there for an opportunity. And just before I go, anything to add, Jon? Well, loads, but I'm going to be super quick. I can be around after, but I know I've not, I've, you know, not, I've not cracked it, right? We're all being driven by the same global winds and we're all struggling a bit, but it's like, that's life out there. But I think the key things for me, if you want to go down this route, main thing is marketing skills. You as filmmakers have to get marketing skills because if you don't understand, excess share of voice and you don't understand mental availability, it's like these basics. These people are talking about, you won't get in there. Social skills, social media skills, get some young people on the team. That's basically what I've done. That's good. And I think getting as close as possible to the money has been the most successful thing we've done. I think sometimes, especially brand films, they're very hard to demonstrate return of investment. If you've got media buying in house or anything like that, where you're like really close to the money, as in you spent 80 grand on media, we've given you quarter a million pounds worth of revenue. That's, that just helps you get in the door. So those are the things I found is exactly this model. It's just like what the skills that I found most important. There's social marketing and paid media, but yeah, we need to do it because it's changing for sure. Brilliant. Thank you. Thank you everyone. Thank you. Thank you. Thank you so much.