Manifest is making a bid to break away from the fee based business model and apply performance marketing techniques to public relations. Here Alex Myers, its Founder and Managing Director, shares how they’ve done it.
Profile: integrated social media, content marketing, inbound marketing and video production
Insight: creating a new business is a way of incubating a new proposition and business model
In my chapter in the original #FuturePRoof book, I asked the question how do you charge for awesome?
Although deliberately flippant, this question is something I had been struggling with for a while. In an industry where ideas matter most (and will continue to do so as the ‘arms and legs’ of the industry become less valuable), it seems odd we all get paid by the hour.
We win a pitch because our strategy and ideas are the best, and our clients judge success by the business impact of our work, yet our fees are dictated simply by how long it takes us to deliver the campaign. We are a creative industry that charges like a cleaner.
As with so many things, we face a simple binary choice in this business: change the status quo, or become it. So how are we introducing new billing practices at Manifest?
The making of Naked & Famous
Naked & Famous is Manifest’s sandbox. It’s a testing ground for new billing models, new ways of working with clients and challenging the norms of the industry. When young brands or startups want us to work with them, Naked & Famous offers an affordable and versatile option.
They just need to be willing to try something new. We’ve stripped back the traditional agency structure, offering full transparency across everything (that’s the naked bit), and we focus purely on the specific business results the client wants to see (the famous bit). It means we don’t bill by the hour, we bill by how effective the campaign is.
Reward by revenue-share
Closed on Monday is an amazing male grooming brand and one of the first clients to take us up on our Naked & Famous service. Without any other external marketing behind them, we knew the business growth of Closed on Monday would be largely driven by PR, especially in the US where the brand has no resident management team.
Rather than suggesting a retained fee, we asked the guys how much of the cost of a product they’d be willing to pay for someone to buy it. To use an analogy with online businesses, we were co-creating a cost per acquisition (CPA) rate.
We were then able to map out the projection of fees alongside sales, and overlay our expected minimum cost to agency for delivering a campaign. There’s no cap on how much we can get paid, but importantly this billing model focuses our attention on delivering a creative campaign with optimal return on investment (ROI).
We also feel we can move outside of our traditional remit if needed, or if there’s an opportunity. We can appoint third parties or commission research with our portion of the revenue share if we can see the numbers adding up.
It makes us feel differently about the money we’re earning. It also means the end of the client/agency relationship; this is a business partnership. We’re both working together to sell more products and build advocacy from the brand’s customer base.
Innovation: making it up as you go
I freely admit that we’re making this shit up as we go along, which might sound scary or lacking strategic calculation, but something I’ve come to realise is that this is how it feels to do something for the first time. Like it or not, experimentation is the only way anything new comes about. Someone has to be the one to ask, “why not?”
When I asked James Adkin, Director, Closed on Monday about how he sees things working, he said, “The way our Naked & Famous billing is structured is a perfect demonstration of Manifest’s alternative way of approaching any challenge – we have a revenue share agreement in place, replacing traditional billing practices and remarkably replacing the traditional client/agency relationship with something far more akin to a business partnership.
“There is a genuine sense of collaboration flowing through everything we do. It shows an agency confident in its work, trusting in its approach and willing to invest in a long term relationship.”
Will revenue-sharing replace our traditional billing structure? Probably not alone – but offering it as an option for relevant briefs means that when we smash expectations, our fees surge accordingly, instead of hitting the glass ceiling of the hours we agreed we would spend on things.
We have certainly been involved in campaigns for the likes of BrewDog and Samsung where a revenue share would have better rewarded our creativity, and because of the way revenue shares restructure the working relationship, I don’t think it would have had a negative impact on our relationship or perceived value-for-money.