Australian advertising leader Mat Baxter runs IPG’s Huge out of New York along product lines, rather than offering headcount and services, shunning the lengthy, and sometimes cuthroat, client negotiations advertising agencies are known for.
His group’s services are there for all to see on a product shelf. This is what it does. The price is set.
Huge, the 20 plus year design and innovation outfit born in Brooklyn, has officially opened for business in Australia.
It's headed by managing director Ben Skelsey, returning to Melbourne after spending 13 years working internationally, most recently running Huge’s Singapore office.
Skelsey is bringing a different proposition with him.
“Like most agencies, we were selling people and services,” Baxter, the global CEO of Huge and the former global CEO and chair of Initiative, told AdNews.
”How many people on my team, what percentages at what hourly rate delivering what sort of service?
“We've done away with that model. We now have a product-driven company that has 45 predesigned frameworks and business problem-focused products that allow us to deliver repeatable, highly efficient, highly proven outcomes and deliverables for clients.
“You don't buy a team, you buy a product at a set price. We don't negotiate that price, that price is fixed. If you don't want to pay that price, then we don't buy the product.
“We're happy to walk away from business where clients are not willing to pay for the product price that we're asking. We believe in the power of the products that we've got, we believe in their power for delivering results. They're proven products.
“And so that's a very different model to the agency model. And something that we think is sustaining and interesting and different, and something that can really power the huge brand forward in Australia.”
Since Baxter arrived 18 months ago, Huge has transformed away to describing itself as a Creative Growth acceleration company.
Baxter: “What does that mean? It's straddling what we believe to be a pretty uncontested battleground, which is, taking the best of the agency world and the best of the consulting world, and creating a bit of alchemy to make something different.
“We think the agency model is outdated, not results focused enough, not strategic, and creatively progressive enough.
“On the counter side of that, we feel that the consultants are a little bit too conservative and maybe not as creatively minded as they need to be.
“If you bring those two components together and take a middle ground position, there's something quite interesting in that.”
Products are a value based discussion. “We're less interested in how many cooks does it take in the kitchen to make the meal that I want and we're more interested in how valuable is the meal.
“It's a value based compensation discussion. The industry has gotten into a bit of a tailspin on pricing and on how fees generally are negotiated and ultimately priced.”
The advertising market
Clients are what Baxter calls “trepidatious” in the current economic climate with inflation running high and media groups shedding staff across the globe.
“I think they want to be optimistic and they want to spend and they want to build market share and their brands in this current environment.
“But I think they're a little trepidation. I think the broader economic climate is such that there's a degree of caution built into the macroeconomic environment right now.
“And clients are being careful with how they invest. Every company is on a very, very focused cost management if not cost reduction footing.
“And you see that, for example, in the tech sector where you've got layoffs happening left, right and centre, that definitely has a domino effect into client confidence and into spending.”
However, Baxter has seen a rebound in the last three to four weeks.
“There was a very quiet January. But we're seeing February looking much stronger, more inbound interest coming into our business … and we only see that continuing.
“That's a positive signal, potentially optimistic outlook beyond the very beginning of the year which was pretty cautious.”
Why open in Australia?
Baxter: “We're looking for creatively advanced markets that relish and embrace the power of creativity in a way that is world class, world leading, and Australia's definitely one of those markets.
“We're a creative growth acceleration company, we're there to provide injections of what we call kind of creative capital into brands, and Australia is the market that has historically not just embraced that, but really demonstrated and delivered that. That was a big factor in deciding to get into Australia.”
And Ben, who was working for Huge in Singapore, wanted a move.
Baxter: “It seemed like an opportune time to have a person on the ground that could provide a market presence for us.”
Ben Skelsey
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