The Business of Advertising: NZ’s own Mad Man

Sandy Moore is this year’s Fairfax Media/AdMedia Agency of The Year Awards best chief executive. The awards measure the business performance of the country’s agencies, not their creative output as most industry awards do. Agencies’ creative prowess is, of course, measured as one core performance criteria. Great product is, after all, an important indicator of smart people management strategies.
This year, DDB also took out the Agency of the Year Award. It is one of New Zealand’s largest agencies and, as such, has won the usual collection of industry creative accolades. But, says Moore, an advertising agency is subjected to the same pressures to deliver profits, manage staff, return shareholders dividend, win new business and deal with market conditions.
“We are first and foremost business,” he says, and DDB is structured and organised like any other business – with some anomalies. “The major difference I can see is that there’s no product, there’s no stock, there’s no inventory, there’s no manufacturing. It’s all about managing people. An agency, even one this size doing hundreds of millions of dollars in turnover, is actually quite simple business. There are people costs, the largest proportion of the outgoings. Rent and the rest of [the overheads] are not much. It’s all about the management of people.”
DDB is well structured with rigorously prepared business plans, marketing plan and performance forecasts.
The Group comprises six companies. “We break the budgeting and business plans down by department as well as an overall business plan,” says Moore. The Group plan is “taken to our American partners – we have 30 percent local equity and they have 70 percent.
“We present it to them and agree on what we think is achievable, taking into account local market conditions.” Then Moore and his team work to deliver on it.
To achieve the agency’s goals Moore must lead staff whose characteristics are, he thinks, unique in the commercial world. They are, for instance, required to deal with failure on daily basis. Their work may be rejected for any number of reasons – too risqué, too derivative, too political, too confrontational. “Creatives are an unusual bunch and I think (their idiosyncrasies) must be inherent to people who are creative or artistic. They seem to be extremely conservative in their own life, very nervous, most of them are introverted, which is opposite to what you might expect. They’re extraordinarily resistant to change.
“Advertising is an ego-driven business. Perhaps that’s because without an ego you don’t survive. Guys live on the ability to think up something and try and sell it. Others are trying to do the same thing, so the workplace is very competitive – both between agencies and within our own company. People want to get their work made and shown. You want to perform and you want to get your work out there. You want to be as good as you can be in the category and you want people to see it and like it.”
Managing fractious, competitive egos requires balanced and carefully maintained policies to maximise the potential of DDB’s human capital. So Moore stresses the importance of selecting staff that perform well in highly competitive team environment. “Our long-standing policy is to hire people who are two things in equal quantities. They must be nice and they must be talented. Too much of one way or the other doesn’t work. It’s important because despite the stress and the deadlines, you have to maintain team spirit [to produce results].
“People can’t feel threatened,” says Moore. “So we have freedoms that are important in our business – freedom to be, freedom to fail and freedom from chaos. If you embody these in the way you handle the staff and they feel and believe them, they are happier. Happy people try more things. I don’t think there are many businesses where, if you do something and it doesn’t work or doesn’t get sold, the boss doesn’t mind.”
Moore began his career in advertising in the 1960s. Training and development happened on the job and there wasn’t the plethora of educational programmes and tertiary opportunities available to today’s aspiring creatives and other agency functionaries. “I started off as management trainee, read office boy for that. The only way to get into this industry was to start as trainee. There was no degree in marketing; no diploma in advertising. You had to join an agency of some kind or newspaper or radio station. I learned the craft from the people who were there,” Moore says.
Print, radio and fledgling television industry were the mediums for projecting advertising messages. These traditional media are now struggling to survive and the internet and social media are at the frontier of commercial opportunity. The technology for delivering advertising messages may be new and the exposure numbers mind boggling – Facebook has over 500 million members and YouTube is one of the top five websites accessed daily – but social media is just one new medium among many that have been heralded as life changing in the past 60 years.
Moore can’t predict where the social media ‘revolution’ will lead, but he accepts that clients expect the option to be included in their media plans. “Some people would say it is different from radio or television or something else. It’s just another medium, another channel to take the message to the audience. Others say it’s way bigger than anything else we’ve seen before and that it’s going to dominate and change the advertising business. In this agency, and I’m sure in every major agency, it’s an absolute necessity that whatever solution we come up with to (solve) client’s communications problem, we must think about the impact of the social media option,” he says.
Whatever the media’s future, Moore looks set to continue doing what he’s done at DDB for the past 21 years – strengthening relationships with senior clients and executives and running well managed and effectively led organisation. M