S6 Ep 11 | The Founder Whisperer: Ivan Fernandes on Why Marketing Agencies Thrive, And Others Don’t.

0:04Welcome to Beyond Marketing, the podcast. I'm Mara Genovese. I'm the founder and CEO of Emgen Power, a global integrated market agency. Today's conversation is one I have personally been really looking forward to as we dive into the realities behind building, scaling and reinventing independent agency. Joining me today is Ivan Fernandes, marketing management consultant and M &A advisor who for over two decades has worked across global agents, groups and independent business, helping founders navigate growth, reinvention and exit on their own terms. And by the way, I found out now that he's also Portuguese from Lisbon that we're going to speak Portuguese this episode.

0:48No, I'm not. So Ivan from Leadership Pressure and founder identity to what truly makes agencies thrive today. This is a very honest conversation about the business and human side of building something that lasts. Ivan, welcome to Beyond Marketing, the podcast. Thank you very much for having me. I'm so excited. I'm a big fan of, you know, your LinkedIn, your socials. It's a great inspiration tool for me. So now and then I'm always like reading or you talk and I get anxious to be honest about what is going to be next that he's going to talk about it and I learn a lot so thank you so much for being here.

1:29Thank you very much for having me. And before we start introduce yourself who is Ivan Fernandes which I just as I said I just found out that you're from Portugal and I got even more excited. I am an advisor like I said I've been working in the industry for about over 30 years. I came with a big dream and in terms of working in marketing. So in the last 20, 30 years, and I've been working in helping brands, helping companies, even like you, I basically make better decisions. So I basically transitioned basically from working for agencies, now working for myself. And thank you very much for having me.

2:09Fantastic. I'm not going to speak in Portuguese because I think my Portuguese is completely broken. Even myself, I feel very embarrassed in speaking Portuguese. So, but looking forward to exchange ideas and share as much as I can with you today. Wonderful. So, for me, it's just like I'm very, like, curious about your career and how have you been, you know, working from big agencies, big corporations, and then become a consultancy. How was that transition? And why that decision of... Because sometimes you can be very controversial on... Sometimes. Sometimes I'm being a little... Sometimes you can be very controversial for some people for what you write about the old model of agencies, where we are evolving from where we are to where we're going.

3:03And I can see that you have a ton of experience and views of past, present, and future. Future, yes. Which I love about it. But tell me a little bit more about your career, like how it started and then where you are today. Actually, it's quite funny enough, I think probably as you from Brazil, actually my passion started from Brazil. Really? Yes. I was 13 years old, actually started reading, I think there was about two or three magazines that from Brazil about business. By I was end up going to chemistry. But then later on, I realized I want to go back to business. So I graduated as a consumer psychologist.

3:45Very few people know this. And I wanted to work in marketing. I struggled basically from the beginning to get into marketing. It's very secluded in terms of number of people that get into the industry. And I started working in loads of different agencies, including Below the Line, Through the Line, Publicis, WPP. And I had that kind of experience, went through the ranks. And then actually, funnily enough, I'm not ashamed to say I went through some redundancies. I went the first redundancy, I think, I believe it was in 2007 with WPP. I didn't learn the lesson, ended up going again to be to WPP and being redundant again.

4:23Twice? Twice for the same group. Wow. The first one was because of the crash. Actually, we were working with a small agency that was very, very good. I think probably the most talented group of within WPP grew from 30 employees to I think 150 in three months. Wow. Because Microsoft realized this is a fantastic shop. We want to move everything there. And then with 2008 crash, the whole team basically was broken. It was like basically first, it was the first wave. And even then I was controversial. And I remember receiving the email from the leadership saying, actually, we need to make some cuts.

5:04and my name was not on the list. And I started looking to the names. Okay, all these great people. Why are you making them redone? Why are you making them redone? So my first person of controversial, I wrote an email back to everybody. I was all staff emails. Always staff emails. And like I said, this is a wrong decision. You should be sacking these individuals. Actually, luckily the second round, my name was included. Was included after the email. After the email. And afterwards when we had, I went through the first part of redundancy and I went to took the three months off recharged they were trying to help me to find a job but nobody was helping to find me a job this is they always say they will say that and I like I said okay I'm gonna focus on myself I'm gonna start looking afterwards and then when I went back in to the market at five interviews and five offers in the first week and one of them was double pp like okay but again I was like okay okay I'm gonna to take it so i went through that um i was head of digital for planning um went through the ranks i was always a self-starter i wanted to basically do things differently and actually caught the eyes from the media team and the global team and it's actually can you come in and do this for the global team but then i started realizing the dynamics of working for a holding company and again I was there was a conflict of minds to put it mindly with at the whole code because like again I was saying to them we should be going moving to consulting and funny enough I think probably your business around the influencer that was my area so I was basically global head for social media for midicom so I was in charge of whole strategy for for social media so I was doing deals with YouTube I was doing deals with Twitter I was doing deals with Facebook and I could see some gaps in the markets or see influencers popping up.

6:57I remember back in the day I had my PA. Like I said, can you start tracking some of these guys from Love Island? Because they are getting loads of traction. I was like, why this guy basically is looking for Love Island? So I could see there was an emerging terms of influencers. So I always looked into ways to grow and I could see the business was not growing. And there was like, again, a conflict of mind. So I was asked to leave and I had the choice, the choice in terms of what should I do next? Should I go back to what? To work in another big agency? Big agency or should I basically go consultancy?

7:34I've done a bit of a consultancy. I had a friend of mine that reached out and said, can you come in and help us? Independent agency. So I went in as a strategy, head of planning strategy. Then afterwards, I wrote a nice email because I saw you basically had Martin Sorrell as a guest. I wrote another lesson that I learned within working with Martin Sorrow and he reached out and I said Ivan, fantastic, fantastic post and so on. Like I said to him actually probably was not a great idea. Why? Why is that? Because actually I'm talking to join Omnicom as part of the leadership like this doesn't work very well.

8:11And he said don't go there, don't go there I'll connect you with global head of recruitment of talent in New York where do you want to go and there was one company that i always wanted to go and basically so i didn't have a permanent position but i had a contract was blue state digital i'm not sure if you know them not much i know them but not in too much blue state digital basically the guys behind obama campaign 2008 2012 so basically they done the whole movement in terms of using a b testing doing so i really want to understand the how they done it so i had it was a three-month gig so i went there and that was very successful so yeah in the back of that's okay right i'm done with the agencies i want to go back to consultancy so i've done a bit of consultancy um so i was at nestle in geneva then i done some work with be with quicksilver and i was doing loads of consultancy And I realized one thing is that the agency model was broken.

9:14Most clients have, their systems are broken. They basically want to be data-driven, but everything is broken. So then afterwards, I went to work as an intermediary, and we're helping brands to find agencies. So I was helping brands find influence agency, SEO agency. So I was working with F1. I was working with AXA. I was working with L 'Occitane. So helping them find agencies. And I could see there was a massive gap of what they wanted to what the agencies can be serving. So, and then later saw I progressing to become more advisor in a sense where I sort of work with loads of different companies from mainly U.S.

9:55There's a lot of U.S. companies that I advise in the technology side. I help private equity backed investors. I help a lot of family offices that are trying to get into marketing. all of them trying to buy influencer shops all of it's like the hottest is the hottest ticket in town um but at the same time i work with loads of collectives and loads of bodies within the industry that basically i feel that have been left behind the likes of pr the likes of out of home the likes of creative where experiential where basically they feel that they are not transitioning So this is where I am now today.

10:35I'm basically helping loads of different companies from around the world. I do loads of speaking events. So I'm going to Cannes next month, this month. I'm going to go to US. I'm going to Barcelona. Last year, I was in Tokyo presenting. So Lithuania. So I always try to not just, probably you know for me from the post, I try to have the same conversations at face-to-face. so every single thing that probably people see i'm controversial i don't see that as a controversial i think everybody's got that kind of thinking behind their minds but they don't say they don't say they're afraid and the thing the reason that sort of i started talking more about this is that i realized that our silence helped them to continue doing this the same behaviors and because if you continue to be silent we need to have more voices now we start seeing and be more voices people complaining um because there's certain things that don't make any sense and that's where basically i start to become more vocal and in terms of the topics it's basically like i said to you earlier before this starts it's like i go for a run every morning and like basically things that comes to my mind it's like okay i'm gonna come back i was like okay i'm gonna be writing about this um because most of the times what i tend to do is i do tend to have various conversations with people from across the industry.

11:57One thing that I realized really very early on is that we are very isolated. We lack our islands in marketing. We don't only see our part and we don't want to understand the finance. We want to understand the M &A. We don't want to understand how people make decisions. So my role is, okay, I want to educate myself in terms of their world. So I want to be talking to people that make decisions around finance. I want to talk to people that basically make decisions, procurement. So I'll try to get outside the box in order to understand their mindset, in order to help me be better at what I do. And do you think because of that, because you like to navigate in different rooms and different, you know, corporations and talk to everyone, as you said, to talk about finance, procurement and marketing, that's why it came to your conclusion that the agent's model is broken?

12:53It's been broken for a while. And I think basically that if you, let's recap a little bit. Basically, if you think about it, it's something I actually speak in loads of my talks is I think there's loads of different small steps that show this being broken. Consulting, one of the key elements is most of agencies of the agency model is broken is right now there's a lack of consultancy. Clients are trying to find partners that understand their problems. And most agencies are not equipped to ask questions. They're equipped to sell things. It's a different dynamic. So that's why we've seen the growth of Accenture because Accenture came from that space in terms of what's your problem and we try to find a solution for your business.

13:41Agencies are going in with, here's what we service. This is our services. This is what we do. Buy it. versus really figure out what clients want. I think the other side I feel that is broken is that it's more technology-driven. Every single thing we do now is technology-driven. And most agencies fail to understand how to integrate services, time, and expertise into a level in terms of bringing technology as part of their operating system. And that sort of opened the door to private equity, that they realize, actually, these guys and they don't know what to do, we're going to come in with digital-first platforms.

14:22So basically, they are leaner. They have a platform. They have a different operating model. They have a different revenue model. So they came in with a different approach that basically, in my way, destabilizes into the legacy models. Then you had the other big problem is trust. There's a lot of clients that realized that for many years they were dependent on agencies. But they realized, actually, we can do this by ourselves. We can bring in-house. We can find partners. We can orchestrate relationships. So I realized that most agencies were not taking, they're not taking enough risk. And we're just thinking it's just the money.

15:05And they wanted someone to come in and say, actually, if I'm going to pay you, make sure you have the resource to support it. So there's a lot of different signals that basically led into where we are today. So right now where we are today is loads of different holding groups, specifically struggling to find the rhythm. And the rhythm that's aligned with clients, aligned with the market, and goes back to my point earlier on, I think they're still islands. They still feel that we have the solutions. We can go to a room and define what we're going to do. And define what we're going to do and sell.

15:42And then go outside and follow the same model in terms of we're going to be able to sell what we do versus pro-chip. Because it's 11. Let's understand what our clients want. What was the challenge, right? So what's the challenge? What's the solution we can bring? Because I think big corporations, big agencies, they apply the same model and the same strategy to every client. but you cannot put every client into one pot and define that the same strategy is going to work for all of them. And the other thing about it, I think probably you had Martin Sorrell in this situation. Actually, Martin Sorrell identified in 2006-17 that basically the model they were offering, a WP model they were offering to FMCGs was wrong.

16:28Basically, they needed to change. And they identified they need to adapt. And I think probably for the last few years, they've been trying to find a model that doesn't, for some reason, they struggle. They struggle. They struggle. But at the same time, there's others that basically within the holding campus, they realize that it's more data-driven, it's technology, it's a platform play. But there's problems with that model itself. I already spoke to loads of them, groups. There's issues with that model. And we're still going to start seeing the problems emerge in the next 12 months. So, because not every business is ready for it.

17:05But do you think that every business needs to be ready for it? Do you think every single agency, being small, medium, big, needs to have technology as the number one add-on into their service or into their process? and because I'm like sometimes I feel that pressure where technology should be the thing that every founder is used to be looking at do you think that's that's why basically my conversation in terms of understanding outside the bubble is important so if you think about it most of those groups they're owned by shareholders right basically they're public trading companies if you look across all those various groups there's two names that keep appearing in across all of them in every single brand around the world blackrock and vanguard yes so they are present and if you look into their mandate their mandate is that technology so they're sitting every single board and they basically potentially are doing all the narrative that basically everybody should be driving efficiencies everybody should be using ai everybody should be using technology the valuation goes high so if you have the shareholders pushing that and at the same time selecting the ceos that are focused on technology and rewarding them based on doing the things they want so you have all these elements of technology focus but same time blackrock is sitting some of the brands so you have this ecosystem of density on both sides and on both sides and if you like i said it's publicly available you can see that in some of the big brands blackrock is one of the biggest they they're quite clever basically if you see some of them is between five sometimes 10 percent normally things be 10 percent um and they keep saying basically in um is this my opinion about it is like they're saying oh we're just investing uh in behalf of our investors like family offices and so on.

19:11But what I see is they have voting rights. And the voting rights enable them to do other things. So for me, I think we're moving into this technology world that I think most agencies are not ready for. Because they never saw technology. And then they never saw technology. And then I think from my perspective, from what we do, it's not every brand that we work with that they're interested in technology yes so i think there's there's another side as well because we like again like the industry is going for like technology ai driven but are we actually asking the question from the brands and our clients if that's what they're looking for when they're looking for an agency i think it's interesting i there's a there's a there's two mandates i think there's a i think we need to figure out what's going on at the client side the client side like i said we're talking about why there's an issue right now i think the client side there being loads of different changes including the cmo position yes cmos basically if you in this significant amount of studies are there that the tenure of a cmo has been decreasing for the past 10 years and what's driving what's driving is technology.

20:28Technology basically being creating that kind of friction within big brands. Yeah. So because technology sits with the CTO. The CTO is not a marketeer. No, he's not. So you have someone basically a CMO that's got the brand kind of conversation and more budgets now are moving to technology. So those two need to be, like I said, One. Need to be one. And they are not one. Because it's difficult for you to find the skill of someone that is a good marketeer, but is also good in technology and become one role because there's completely different skills. And then on the back of that, you have this kind of, the CEOs of most of these big corporations standing around us, actually, CMO, you're not doing the job.

21:09You're not bringing the money. You're the only guy from our business that looks outside. And you should bring the money. Because you're not delivering it, so the 10 is decreasing. And because now the CMO is not trusted with the money, the CFO gets involved. so he needs to babysit the cio the budget the budget and making sure that the roi is there so you have all this kind of ecosystem that basically is driving but at the same time to your point they have the ceo like okay this ai um there's different industries they're growing at different paces and most most of my experience working with lots of different brands is their data capability is not there the ambition they have outside is it's big it's big But when you look inside the business, they actually don't have the processes, don't have the data, don't have the technology.

22:00I've seen it and it basically is scary. But at the same time, they're asking for the agency to bring us innovation. We want to win awards. Perfect. But there's no synergy. And the problem that you have in terms of AI that I'm seeing is sometimes you have agencies going too fast compared to the business that exists. and you have this creating this massive gap between how you align that and i think if you go to different industries different verticals like uh pharma you can you can you can't go too far because you can't go too far because the farm yes so you have pharma you have automotive probably they are more open uh entertainment basically they like the kind of because uh reaching out But then you have banking that regulation.

22:49So you have different verticals. So I think guess the problem in terms of how you break down this future strategy based on different verticals. And then you have another layer underneath that, different regions. Because different regions don't have the net. Completely different. Completely different. For example, what you do in the UK is very different than what you do in Brazil. Oh, my God. I know what you do in the US is completely different than what you do in the UK. and then off we go. So different regions, they have different mandates, different pressures, different networks supporting. Different culture.

23:24Yes. Yeah. So, and makes it very, very difficult as well in terms of sometimes even the capabilities. Sometimes you have different markets with different expertise from the client point of view and from the agency point of view. So there is a lot, it's not an easy answer, but at the same time there's a lot of complexity that I think most of the situations that I look back and that's why I try to bring some clarity to that, is that agencies are not thinking that. They're just thinking, okay, we're going to have a platform. We're just going to sell it and people are going to buy it. It's like, okay, how many people in the world, how many brands in the world can buy your platform?

24:05It's not a lot of them. They're basically, yes, you can have 100, 200, 300. What about all the other brands that make between 50 to 100 million? What are you going to offer to them? It's not being intentional about why technology and why AI, I feel like everyone wants to do added on, but without being intentional on the why and how and what's that value that they're going to bring into their business and their clients. It's efficiency. It's a money play. Because basically they're all under pressure. And I think this goes back to the agency, or any, every single agency. They are being, it's about the margins.

24:41It's about the margins. So you want to basically, you can have as much revenue as you want. You want to build an operating system that enables you to capture more margin. Because the problem that you have is marketing now, and I think that's why there's so many eyes to hold cars, is most investors, because I have conversations with some institutional investors, they are looking, right, why you just have between 12 % to 15%, 16 % margin if I put my money on Facebook or Meta or Google, it's like, okay, why are you not growing like them? Why are you so heavy? It's basically they are making that comparison between the two.

25:24And I think it's an interesting space where, and I think the bigger conversation is what should be the ages of the future looks like. That's why one of the key things I'm doing, I'm working with loads of people from different industries, from different hold calls where we actually get together every two weeks and we are discussing, okay, bring your expertise, how we'll build something for the future. What do you think is the agency of the future is going to look like? I think it's going to be smaller. It's going to be leaner. I think private equity provided really, I think the Stagwell model is quite interesting.

26:00Actually, I wrote about that in some of my posts because they combined four different key elements. So they have an agency, they have products and services, they have a platform and they have one thing that basically very few actually doing this they have the vc model incubator model so they actually buy smaller shops bring to the to the mix grow them and sell them i think that's interesting but i think agency of the future is data will be important technology will be important but i think the other thing will be important would be expertise um and i think agency of the future is about clarity of saying where do we want to play and where we don't want to play.

26:41And this we're actually seeing in terms of private equity guys when they're building this kind of roll-ups. They're actually being very specific. We want to be a performance-led private equity group, Brain Labs. We want to be an influencer-based, Sami from Spain. So basically they're focused on the influencer space. And you have some people who want to be in the production side. So they're picking the places where they want to win. and to be the leaders. And I think the other thing that I see, I think, is orchestration is a bigger play. So I'm seeing ages of the future is about orchestration. What I mean about orchestration is it's not about you growing by acquiring things, new assets.

27:23It's about you parting with the right people and get together with minds and build expertise to a level where you are working seamless across different plays. A good example is what we're actually seeing, like I said, I always sit outside our industry. It's like with NVIDIA. NVIDIA basically is one of the big, is the most profitable company in the world, in my cap and so on. But they don't have, they don't manufacture their own chips. They assemble from different parts. So this is why Agents of the Future is about assembling the right components into a platform that can basically grow or diminish depending on the client.

28:05So that address, that kind of challenge that I was telling you about in terms of how do we make sure that it's relevant for a vertical? Because you can assemble. You can assemble. Or for a different region, you can assemble the right factors. So that requires a different operating system, requires different ways of working, different talent, and a different approach. But you can't only change the agency model, but you need to change how agencies work with brands and how brands work with agencies. So I'm not saying there's going to be just one way change, but it needs to be an ecosystem play change.

28:39And where are the big groups to stay into that occasion? I think they're struggling. Like I said, if you look in terms of the big groups, like there's a change of CEO, WBP, there was a change of Dentsu, Vivende basically, Harvest decided to go solo. But then you have publicists. They have publicists. Publicists right now probably is ahead because they actually went through the pain and went early on and they have enough cash flow to make investments. But I think... Do you think they are doing the right acquisitions? Yes, because I think they're creating, they're fixing things that they knew they need to fix and they're preparing to the next phase.

29:17Because I think probably at this moment in time, I think if you look in terms of comparison, publicists are so far ahead that I think they are looking, if we want to improve, who should compete with? Yeah. And the bigger player out there is Accenture. And Accenture is basically the place that, in my view, they are trying to go into. It was quite interesting. I had a conversation with senior leadership of Accenture two weeks ago. And it was like, I said, oh, yeah, our focus is not there. It's not there, which is good for them. We said, we are doing our own thing. And it was just really, really open as well.

29:52And I think from that conversation we had with the leadership from Accenture was quite interesting because they were talking about something that all these holding companies are struggling to do is this okay right the role of creativity so creativity is actually there's there's an issue of our creativity in terms of data insights i think always that missing like i have been having loads of conversation with loads of cmos and that's missing because the focus now because of the pressure everything's about performance so do we don't care we don't want to build brand, we want to build performance.

30:29You want just results, results, results. And I think probably ages of the future are going to be started looking more about the brand experiences. Talking about creativity, AI is not going to replace creativity. What is your thought around that? Because I talk a lot with people in the industry as well, and then creativity is just like the key word of like how brands need to position you when it comes to technology and AI. What's your view on creative? Yeah, creativity I think is going to be more important than ever. Than ever. But needs to change. In which way? In each way because I think the problem that we have with the creative model is because I work with lots of creative directors and for them is like what they know is law.

31:21We then need to change. Everybody else needs to change around that. They can continue to do the way they do it. The way they do it. So the thing, I think probably from the creative industry, I think they need to adapt to the new world. They need to figure out, okay, right, this is the new rules of the game. And this is how we need to play and how we adjust. I think creativity is going to be more important because when everybody is doing platform play, because they are doing the same thing. The same thing. data production and creativity, basically with a bunch of agencies put it together, and technology and data.