• by Justin Barocas , March 15, 2006

The hot topic at the future marketing awards last month revolved around intellectual property. The prospect of creating, contracting, selling, and monetizing intellectual property has agencies buzzing. They recognize that the communications landscape is changing, and they see intellectual property as their path to the future. Declining compensation, tight margins, increased competition, greater demands, and shorter contracts are compelling agencies to seek new revenue streams.

For years, agencies have watched clients reinvigorate their businesses with ideas that go beyond advertising. Crispin Porter & Bogusky's Alex Bogusky told attendees at the Future Marketing Awards that Burger King's sales have increased since the fast feeder began working with Crispin.

Bogusky is too polite to accept sole responsibility for the success, and he was complimentary of his clients, but do you really think a new burger with more cheese is driving store visits? Or could it be the stunt that got BK's target audience to don tights, capes, and masks last Halloween to play the Burger King himself that has the brand buzzing?

Some of the smartest people in advertising still haven't figured out the intellectual property equation. Sure, they've invested in design shops and product developers, but that's not monetizing the ideas, it's leveraging someone else's. And that starts to feel eerily familiar to agency holding companies.

So what's holding agencies back from developing intellectual property? Unfortunately, it's the agencies themselves. Their preoccupation with ad-centric solutions and the fee-for-service model that supports them is what prohibits them from cracking the code. One answer to the intellectual property question is branded entertainment. But how do you generate revenue from something no one cares about? How many advertisers, other than the ones that are paying for the actual programming, are clamoring to get into TV shows? The producers do well. The networks do well. The client even gets some value. Does the agency?

If it's lucky, the agency gets to hang on to the client for the next year, and then it has to do better. Agency/client contracts guarantee that if you whisper something smart in a meeting, your client owns it.

So, you ask yourself, if I'm an agency person, how do I do it?

It's about faith. Have you ever seen how passionate agency people get about their ideas? Have you ever seen a creative director slam his fist on a table and walk out of a production meeting? How about an account director bark at a client so loudly that he nearly starts crying? Or a media guy lunge at a client over a conference room table?

If you want intellectual property, you have to believe in it, support it, and fund it. How can you negotiate a fat fee for service agreements and still think of yourself as the client's partner? How can you complain about being treated like a vendor when you are preoccupied with full-time-employee analysis and profit-and-loss statements?

If you're so confident you have the right idea, lower the fee and take a piece of the backend. Why not pay for the development of a brand extension yourself, then distribute and sell it? That's what your clients do all the time. Shouldn't you?

Go into business with your clients. Provide them intellectual and financial value. Once you align your interests with theirs, then you have a partnership where you're sharing in the risk and are entitled to share the reward. Otherwise you are a vendor, and you should be happy with that.

In short, it's up to us as agencies to get as creative with our businesses as we are with creating ads and media plans. If you start treating your work as a product, and not a product of the work, you just might have a chance of getting a cut of the revenue.

That said, don't underestimate what it takes to deliver this proposition. Developing and monetizing intellectual property is no easy feat. It demands that you identify the right people both internally and externally, and support those people and their ideas. It requires a fundamental change in how you interact with your clients.

Justin Barocas is a partner at Anomaly and leads communications planning for the agency. (justin@anomalynyc.com)