A new paradigm for agencies? Michael Farmer on ‘myths’ created by Cannes Lions and his new book

The Media Leader Interview

The strategy consultant and author speaks to The Media Leader about Cannes Lions, the crisis that agencies face, and his vision for a different industry paradigm in his new book Madison Avenue Makeover.

Cannes Lions isn’t what is used to be. At least that’s the view of author and strategy consultant Michael Farmer who made waves when he published his first book Madison Avenue Manslaughter.

Last week Farmer flew to Cannes to promote and pass out copies of his newly-published sequel, Madison Avenue Makeover. If you were walking up and down the Croisette last week, you will likely have been handed a flyer for the brightly-coloured book.

Speaking to The Media Leader, Farmer said: “It is no longer a creativity festival. The awards are the sideshow. The main events are on the beach in the pavilions. However, it is still positioned as an award festival, breathing life into the myth of the industry.”

He continued: “I was [last] here in 2015. My impression is that the amount of money spent by media and tech companies on beach infrastructure is 100 times what was spent eight years ago. Cannes is now like a blockbusting movie production. The sets are incredible.”

Described in the Financial Times as a “damning critique of the modern advertising industry” and a “sobering read” for any young creative looking to join it, Farmer’s award-winning first book painted a bleak picture. From declining agency fees, to increasing workload, a talent shortage and frequent turnover in agency relationships, Farmer argued that the signs were all there — advertising is an industry in crisis.

Last year, Farmer sat down with The Media Leader to discuss whether anything had really changed since the book’s initial publication seven years prior. Now, in a new interview with The Media Leader, the strategy consultant returns to explore the themes and key takeaways of his Madison Avenue Makeover.

On its face, the book is a fly-on-the-wall account of how Mat Baxter, a newly-appointed CEO of IPG creative agency Huge, sought to transform the agency and restore its former dynamism. But the raison d’etre of Madison Avenue Makeover is to serve as the industry’s guide for what another paradigm of agency relationships could look like.

Here is a partial transcript of the conversation.

The Media Leader: How did you meet Mat? How did the proposal to write a book about Huge and its process of transformation come about?

Michael Farmer: I had had some email contact with him in the past. He wrote and gave a speech in Australia (and later I think he turned it into an article called “Ditch the Pitch”) and what he stated was that this whole system of pitching all the time to get new clients, to replace the clients we’ve just lost (and still not grow) — is just crazy. We should be in a long-term client business. We should be in a long-term business of helping clients perform better.

Well, Mat’s speech in Australia was well publicised and made quite an impact. I’ve never heard an agency person talk that way. So I sent him a note saying, “This is terrific, would love to get together with you.” He was in New York, and I live in Connecticut and work in New York.

We never did get together but he did introduce me to Amy Armstrong who was the North American CEO of Initiative and, long story short, Amy hired me a couple years ago to do some work with the agency. So even though Mat was never a client personally, his agency was, and when he left Initiative in June 2021 to go to Huge I sent him a note saying, “Congratulations you’re going to do a great job there.”

And it was, you know, just a month later that he called me and said: “I’ve got a writing project in mind for you.”

TML: So what did Mat have in mind – both for the book and for Huge?

Farmer: Well, you have to bear in mind that Mat knew that he was going to transform Huge but he didn’t know what he was going to do. He didn’t really have a plan in July of 2021. He still called me to say “I’d like you to write a book about the journey we’re going to take,” and I think he was also thinking maybe I could consult to him at the same time; that agencies needed a ‘big idea’ and I could be the ‘big idea provider’ and write a book about the whole journey. He told me he’s not afraid if I write about the good, the bad and the ugly and the things that they do wrong.

I had to say to him “Mat, I don’t know how that’s going to work. I can’t be a consultant to you and then write about what you’re doing wrong.

What actually worked was that Mat got another consulting firm to be his guide and I just focused on the book. Now I did attend all the management meetings. I attended every week by Zoom. I attended three retreats (but only wrote about two of them). My comments were always welcome as a consultant, but that wasn’t my role.  I was, you know, I was just a fly on the wall. And if they were talking about something that I felt I had an opinion about they were very open to let me mention that.

He hired The Business Model Company (TBMC) — a London-based firm — to give him guidance on the transformation, and once he had that he was off to the races and he knew what he was going to do. He organised his 20-person team very appropriately over the next 15 months or so and I just reported on it.

I told him, “Mat I think you were a little crazy to hire me and give me total independence to write a book that you could not influence.”

TML: Well, you said he might be a little crazy for giving you full authorial independence, and that might be especially true given the job itself. You mentioned in the book that Huge had had four different CEOs since 2018, all of whom had resigned or left. And not only that, but Mat Baxter was new to being at a creative agency; he’d really made his bones in media. He’s described in the book by past colleagues as “crazy” and “rebellious” — what sort of qualities do you think were important to carrying out this transformation?

Farmer: Mat [has] got an extremely strong moral core. He believes in right and wrong. He thinks there’s a right way to do things and there’s a wrong way to do things. And he was sort of offended in his first job at Zenith when he was 20-years-old — I think he worked there until he was 26 — while he was learning the media business. He was sort of offended that the client-service people were promoting television advertising to clients just because media agencies made the most money on television advertising. It wasn’t necessarily the right vehicle.

And you know certainly thereafter digital and social were coming in, but they continued to espouse the media that made the most money for Zenith. That was an industry characteristic and Mat told me that he found this highly offensive. He said: “We shouldn’t be doing that. We should be giving media neutral advice. We should give them the advice that matters for them.”

If the industry is doing many wrong things — in the way it positions itself with its clients, in the way it prices for its services, in the nature of the work that it does and the way it’s organised — you can be sure he was going to do something about it. As it turned out, he led a change in mission, he led a change in the way they’re paid, he led a transition in the way their products were put together and led a major transformation of their organisation, but all of this comes out of this deep sense that there’s a right way and a wrong way. The right way is what we should be doing for clients, even if that isn’t what the industry is currently doing.

TML: In the concluding chapter of the book, you spoke about the industry needing to move past the “creative paradigm” and what Baxter was trying to do is to usher in a new paradigm: the results paradigm. Could you elaborate on that?

Farmer: I learned from Bill Bain at Bain in the very early days when I was there. He said: “I don’t want to do consulting. I don’t want to be a consultant. I don’t want to answer briefs for clients, or proposals. I want to make a difference in clients’ results and work for our clients forever. And so our mission has to be ‘improved results for clients’. So I’ve had that idea for a long time.

In Madison Avenue Manslaughter, I said advertising agencies need to be in the business of improving clients’ results not being creative, doing creative things or making creative ads. And I was thinking — just like Bill Bain said “I don’t want to do consulting” — but agencies do say: “I want to be creative. I want to do work that’s creative.” They never say anything about whether it generates anything for clients or not. There are numerous examples of tremendous award-winning work that has done absolutely nothing for clients, like at Burger King which is a terribly poor performer. But you know, its CMO and its agencies have won all kinds of creative awards for things that have not encouraged customers to eat Whoppers.

So in Madison Avenue Manslaughter, I talked about agencies needing a different mission. I also said in the book that the major failure of agencies is that they don’t keep track of the work they do and they don’t even negotiate how much work they’re going to do when they agree to a fee. That’s nuts.

They’re like ad factories that have no idea what their outputs are and yet they’re agreeing to fees. And so that’s the whole theme of the book: you’ve got to do a different job on pricing. So when I think about Mat’s transformation, he did change the mission with his management team, and the way they would be paid. He now sells products at a fixed price.

The full interview will feature soon on The Media Leader Podcast.