risk and reward – marketing and accountants

Jim Surguy knows practically everything there is to know about managing an agency business. His expertise covers valuations, exit strategy planning, mergers and acquisitions, business strategy and lots more. His experience working client and agency side means he knows the industry inside out. He’s hugely respected and we’re very proud that’s he’s agreed to share his thoughts with us.

I was at a dinner not long ago where the Lord Mayor was the speaker (the real one, not the blonde one). Rising to address a marketing audience he explained that he had been speaking all afternoon to accountants and, now, how refreshing it was to be able to talk to a live audience. It got a good laugh. Well a quick quip at the expense of the bean counters usually goes down well – what’s not to like?

It got me thinking. Accountants just love numbers. Numbers provide certainty. But in the marketing world, numbers are increasingly putting the squeeze on creativity and risk-taking. Marketing today is seen as a science. Analysing markets; using finely calibrated metrics; scientific segmentation; RFM; econometrics; ROI; cost per this, cost per that. Marketing is ever more becoming a numbers game—analyse and measure is the modern mantra.

Research to death. You would think we are all accountants now in the quest for certainty.

There is, of course, nothing wrong with the contemporary focus on effectiveness and efficiency. Rigour is important and so are data and analytics. Generally speaking however they don’t grow your business. And in tough times like today there is only so far an organisation can go in to protect its profits by cutting costs and measuring everything.

In the end you have to grow the top line. For that you need innovation and creativity. Both are risky and at the outset difficult to measure meaningfully.

Yet innovation and creativity are the lifeblood of competitive advantage. It’s how companies take that leap ahead of their competitors. But as art critic Robert Hughes said way back in 1980 in his BBC television programme and subsequent book, the new is shocking (The Shock of The New: Art and The Century of Change by Robert Hughes).

Customers often don’t take immediately to the new. As for agency clients, they invariably react badly to truly innovative campaigns because of the shock of the new. Brave clients embrace it.

Often creativity simply can’t be measured up front. It’s risky. And as is so often the case, the higher the risk the higher the reward. The lower the risk the lower the reward. Now that at least is language accountants would understand.

So marketing and advertising are art as well as science. In art instinct is important. And innovation by its very nature requires that we break new ground, that we go to a place where research may be of limited value.

Instinct and intuition in such circumstances may well be the best option. As management guru Tom Peters said “Leaders trust their guts”. Or as Einstein said, having grappled for years with his theory of Relativity, constantly revising and reworking his formulae, “There comes a leap in consciousness, call it intuition or what you will, and the solution comes to you and you don’t know how or why”.

Agency creatives will have no problem in understanding this. Clients may.

Accepting the importance of human intuition and instincts and marrying it with the science of data and analytics is never going to be easy. But if the effort is not made marketing in all its aspects will be the poorer. And then the accountants will inherit what’s left of the earth. No risk no reward.

Jim Surguy, senior partner, Harvest Consulting