Gift of the Gabberer: Ben Lilley
By Jess Lilley
Ben Lilley began his career as a fresh-faced grad at George Patts in his early 20s. He quickly moved through a raft of Melbourne agencies before starting his own. Over a decade, he built SMART into a hugely successful independent with offices in Melbourne, Sydney, Queensland and Auckland. In 2011, he sold the business to McCann, becoming their national Chairman and CEO in the process—roles he resigned from last year.
Full disclosure, Ben is also my brother, and I blame him for my own initially accidental career in advertising. He joins Gabberish to talk about the landscape of the industry and the challenges of making money in creative agencies today, while reflecting on his two decades in the business.
J: It feels like everything is tightening in the industry now. Where has all the money gone?
B: In reality there’s more money than ever before but it’s spread thinner than ever before, across different offerings from a decade ago—and certainly from two decades ago when I started. A lot of people in the industry talk about the consultants, and they’ve taken a bit of the money. But the truth is, it’s mainly digital platforms.
There are a lot of clients now who’ll go direct to Facebook or Google for everything from creative services to consulting services to strategy for specific campaigns.
Even if clients don’t go direct, media agencies will. And that’s all money that would once upon a time have flowed through creative agencies first.
J: Do you think clients are completely bypassing creative agencies or just using them for a smaller remit?
B: A lot of clients are understandably bamboozled by the sheer amount of options for their marketing spend, and they’re under a lot of pressure to be accountable. The attractive thing about campaigns on digital platforms is that they are very measurable, very accountable, and very reportable in terms of data for ROI.
Even though the work may be less effective—and I think it’s much less effective than a genuinely creative campaign from a creative agency—you can’t measure creativity per se. So a lot of marketers now will just default to a digital campaign that gives them numbers they can wrap around their spend and use to report back to their C-Suite masters.
Still, it’s been proven over many studies over many years that creativity can deliver up to 20 times more impact, effectiveness and ROI for clients than uncreative campaigns.
And that’s creativity that’s measured by awards. But even armed with this knowledge, there will always be clients who just feel much more comfortable with conservative work.
J: In this context, do agencies need to relook at how they charge for what they do?
B: It would be nice if they could. But I’ve been running agencies for 20 years, and every single year there’s another article or forum about how agencies should be able to charge for the quality and the value of their IP (intellectual property) rather than just charging by head hours, and I’ve never seen an effective solution.
I’ve also never seen anyone able to justify why ad agencies should be able to do that rather than, say, architects or anyone else who could in theory put a price on creativity rather than head hours. Great creative and strategic accounting ideas can be transformative for businesses, but creative accountants are still only charged by the head hour!
The classic line you hear is, imagine if Wieden & Kennedy were properly remunerated for Just Do It?
But frankly, I think that is a reflection on how poorly most people in our industry understand money and how our clients make their money. Because it’s not Just Do It that built Nike. It’s Nike and their founder, Phil Knight, and the incredible creative and strategic brilliance of that business. Of course W&K were an important partner, but W&K didn’t make Nike. 99.9% of campaigns are not 'Just do it'. So if even if agencies were able to be paid for the commercial value of their IP, most of them would be paid nothing—or would owe their clients money.
J: Dumb Ways To Die, same logic?
B: Well of course that’s the exception! We had a hugely successful campaign that transformed the fortunes of Metro Trains, and if we'd been paid purely on the IP value of that campaign we probably would have done very well. But there are plenty more we would have lost money on. Especially on the clients who came to us after that asking for their own Dumb Ways to Die.
J: How important, then, is it for creative agencies to truly understand the business problems of clients rather than simply provide creative services?
B: The more the leadership of creative agencies understand clients’ business problems, the better they can partner with their clients rather than just being service providers or suppliers. Otherwise all you’re doing is responding to what they’re asking you to do, rather than having a proper strategic conversation about what they really need.
However, we’re in the business of creating transformative ideas for our clients. We’re not in the business of management consulting, and any agency that thinks they can replace management consultants are idiots.
Just as, we haven’t seen any management consultants successfully move into the creative business. What some have been able to do in terms of stepping into digital services has been impressive. But I haven’t seen any consultancies successfully execute a great creative campaign. They can’t compete in that field. I mean, how man great creatives want to work for a management consultancy?
If creative agencies stick to their lanes, just as other businesses do, that’s where they’ll thrive and make the most money.
J: It does seem like a lot of agencies feel the need to innovate to survive though.
B: I think they feel the pressure to do that but if they instead double down and refocus on building their own competency as a creative agency, as opposed to trying to be creative in other spheres, then they’d be so much more successful.
Most agencies that try and branch out into other fields, like TV shows or creating their own consumer brands, fail. It distracts too much from their core business and they have to invest so much in upskilling in those areas outside the agency business that they veer into another model that they’re not qualified for.
J: Regarding your own aspirations, I remember you being determined to get into advertising pretty early. How did you know that’s what you wanted to do?
B: Advertising for me was the perfect marriage of creativity and commerce. I knew from a young age that I wanted to have a creative career. But I also knew from a young age that I was materialistic enough to want some decent things in life and that I wanted to be paid properly for that! I also knew that I wasn’t so creative that I could be a great artist or author or that kind of thing. So I boiled it down to architecture or advertising. I chose advertising because I was more excited by the breadth of possibilities.
J: How long were you working as a copywriter before you started SMART?
B: I said I’d been doing it for eight or ten years and I reckon I’d probably been doing it for four or five.
J: Did you get bored of agencies or was it fortuitous that you met Paul (Findlay—Ben’s early business partner and founder of South Melbourne Art which became SMART)? Why go out on your own so soon?
B: It was definitely partly luck. But I think you make your own luck—as cliched as it is. I mean, I was only really in the agency system a few years. My first agency was George Patts, where I started as a trainee then got into the creative department. I was there for 18 months until they lost a couple of big clients.
I got fired along with about 50 other people. That was pretty devastating. It was my first job and I was so inspired by that agency. I ended up a bit depressed for a while after that—I realised then that the industry can be brutal.
So then I was 24 or 25, freelancing, and I think I had too much money. I became a real dickhead. And so I was fired from DDB as well. I worked at JWT then McCann, funnily enough, and ended up being asked back to George Patts after winning at New York Festivals. I thought, ‘fuck you, I’m going to do the worst interview and ask for the most money I’ve ever asked for.’ So when they asked me how much I wanted, I doubled my salary. They baulked a bit but offered me the job.
By then I felt like I’d done the rounds of Melbourne. And I also had a bit of a chip on my shoulder.
Both from being fired but also from working at a few places where I thought I could do much better creatively if I didn’t have all the layers of management above me and if I could be more client facing.
That was the inspiration to want my own agency. I found SMART which was then a design agency and Paul had aspirations to turn it into a creative agency. Then while I was still working at Patts, I introduced them to SEEK, who were then a start-up looking for an agency. But Patts did such a bad job at pitching for the account that I just thought, if I had my own agency I could have pitched for that and won it. So I just thought, fuck it I’ll do this myself.
J: There are a lot of small agencies that probably compromise on creativity to keep the work coming in. But it was always your aspiration with SMART to be creative first. How did you maintain that?
B: We tried to be a pure creative boutique to begin with. Our philosophy was: no suits, no layers of management, no wankers.
Just creative people with a very creative studio and production partners who would partner directly with our clients and only do the creative work we really wanted to do.
And that was a complete failure as a business model.
Because clients do need strategy, they need stability, they need to pay for campaigns that over time are going to build their brand and brand value. They don’t just want a new creative idea for every single brief—which I didn’t really understand at the time.
Also, clients say they want creatives to be client facing. But only if the creatives are really nice to them all the time and are professional and reliable and don’t argue too much. So we lost almost as many clients as we won in those early years, especially before we had suits.
Instead I found the better strategy was to really define what we wanted our reputation to be—which was to be a more creative agency. There are different agencies for different clients and it’s up to clients to decide if they want to invest in creativity—which I think they should—or retail expertise or digital expertise or whatever it might be.
J: How did you grow SMART?
B: The turning point was getting more professional management in. It didn’t take long for me to realise I wasn’t going to be the world’s best ECD. So I hired John Mescall, who is now one of the world’s best ECD’s so that was a good call. I then made myself Managing Director, and I realised pretty quickly I wasn’t going to be a great Managing Director either. So I hired Ash Farr, who was much better.
So I ended up CEO. And I didn’t really love that either to be honest but I was kind of stuck there because if I replaced myself as CEO I’d literally have had nothing to do.
I started to realise how little I know about certain areas of the business so I found people who could advise me on how it all worked. People who showed me better ways to get things done.
That’s still what holds most independent agencies back, they are still run by their founders who don’t move out of their original passion roles, and they are the limiting factor in their own growth.
With MD, Ash Farr, and ECD, John Mescall, at SMART’s Melbourne office.
J: How important have professional advisors or mentors been for your career success?
B: Fundamental. My first mentor was Michel Lawrence when we started growing SMART—he’s an author and photographer who was JWT’s creative chairman at the time. JWT wasn’t going great so I started targeting some of their clients, and we started to win them. They kept losing more work and in the end Michel was unceremoniously dumped.
We had an opportunity to win another huge bit of business but I needed help. So I called Michel. I told him I was sorry to hear about his departure from JWT and he said, ‘fuck you, you’re part of the reason I got fired.’ And I said, ‘well I need some help and thought maybe you’d want some revenge and to come and consult to me and take JWT down from the outside?’ And he kindly agreed: ‘fuck you, Lilley. I’ll do it.’ So he came on board as chairman of SMART, but really he was my paid mentor and he taught me everything I needed to know. His help transformed the business.
“I’ve had great mentors every step of the way. I even tracked down Richard Branson and plumbed him for advice.” Ben with his long-time business idol.
J: SMART never entered award shows. Can you tell us why?
B: Because they were too expensive and I didn’t believe in them. I still don’t—the system is flawed. But they are the only way that agencies and clients can measure the pure creativity of work. It’s imperfect but it’s a system that works for agencies who want to have their creativity recognised. Less so clients—there are not a lot of clients who want to enter awards.
J: But it’s a love hate relationship. The need to win Awards can put enormous pressure on creative departments—on top of pitching, shrunken budgets, workloads—and I don’t even know if the value to creatives is still as high as it used to be. Maybe for a few and maybe if you’re younger.
B: There are agencies and creatives who choose to chase awards and there are those that don’t. And most don’t. But for those who do I think it can be hugely lucrative. I mean, we were at McCann Melbourne when we did Dumb Ways to Die. That’s the most awarded campaign in history—and will be forever because Cannes changed their awards structure after that!
I certainly saw how that was able to transform our agency and make it a magnet for talent and for people who wanted to win awards. But I also saw how it transformed the careers of some of the people in our agency—some of whom were very involved and others who weren’t at all.
There’s a lot of bloody people who dined out on Dumb Ways To Die—probably myself included, frankly.
It was certainly a campaign that helped careers and helped the client.
J: It did help the client? Because its effectiveness as a safety campaign has been questioned—as is always the case with highly awarded campaigns I guess.
B: Well haters gonna hate. Dumb Ways To Die won heaps of effectiveness awards for statistics you can’t lie about. It’s a campaign that is proven to have improved rail safety. And I saw first-hand how hugely successful it was for Metro Trains. It became a brand in its own right. There are games or apps now that have had billions of downloads.
J: The other thing that creates a lot of pressure and can be very taxing on an agency—both financially and on its people—is pitches. Pitching can be relentless. What’s your view on the system as it stands for creative pitches?
B: It’s deeply flawed and wrong. There aren’t many businesses that ask potential partners to solve all the client’s problems before they’ve even been appointed to the business.
You’re having to do unpaid work in order to win an account. Then, typically, even if you’re appointed the business, you don’t get paid for that work you’ve put in during the pitch. So you try and recoup that over time. But more to the point, what kind of client really wants to see what an agency can do for them for free, just so they can appoint them and then start paying for the work? They can’t possibly get the best ideas out of a pitch. It doesn’t make sense.
J: After some time at SMART you made a change for your business to not physically be at work that much. How did that come about?
B: When the global financial crisis came along it deeply affected most of our clients, which then affected their budgets, which then affected us. And we very rapidly had to make deep cuts in the business. I never wanted to do retrenchments—we never did any at SMART. So instead people in the executive team all agreed to take a cut. Most went from five days to four days a week and took a 20% pay cut. But I decided to take a 40% pay cut so I went from five to three days a week. We were still available on other days but we all tried to cut back, and that saved at least three or four jobs.
But what I really found was that I was just as effective, if not more so—and much happier. I was more involved with my two young kids, meeting people for coffee, reading and doing creative things outside of work. I suddenly felt a lot more fulfilled. So I kept on doing that right up until we sold to McCann—and then some people would argue I kept doing it once I was at McCann as well. But again, I was no less effective.
I just didn’t have the same work ethic as a lot of other people to be in the office for 60 hours a week. That was my idea of hell.
Instead, I’d be in the office for 30 hours a week. I’d still do a 50 or 60 hour work week, I was just more productive by having time outside the office.
The Australian’s report on SMART’s acquisition by McCann.
J:When you sold to McCann, was that a purely financial decision, or did you feel like it was time for SMART to wrap up?
B: Actually it was a career decision. We’d had a lot of offers before McCann came along and none of them were very appealing. It was, ‘let us buy your business and you keep running it and then we’ll slowly take over until we manage you out.’ Business as usual but working for someone else.
But then McCann came along and their approach was, ‘hey why don’t we buy your business but we’re not happy with how our business is going, so you take over management of McCann and run it exactly the way you’ve been running SMART but on a much bigger scale.’ I did flag that my methods and hours were often unconventional and they said, ‘as long as you get results, you run this thing however you best see fit.’
There’s no other way in the world that I would ever have been a multinational agency CEO.
It was literally an offer that was too good to refuse. And John Mescall and Ash Farr are now in global roles in the McCann network. It catapulted them into careers they would never have got otherwise.
J: Meanwhile you’re now on a perpetual holiday.
B: I like to call it funemployed.
J: Was there any kind of culture shock going from SMART into a big agency?
B: Yes it was total culture shock. The deal only went ahead because the McCann business was underperforming. But there were still a lot of good people there. So it was a total shock for everyone at McCann—particularly for the existing McCann leadership team because they all got fired and we took their jobs. We had people who were worried they were going to lose their jobs and others who just hated us. So the culture was toxic to begin with.
We pretty quickly earned the nickname The Smart Arses because they thought we’d somehow scammed our way into this reverse takeover.
And then we had this huge job to turn around the McCann business. For me personally, I went from reporting to nobody at SMART to reporting to a matrix of around 100 people. I was terrible at navigating all that. I was never a good employee anyway but I was also used to being entrepreneurial and being able to forge ahead and do my own thing. So I made a huge number of mistakes and got a few early arse-kickings.
J: What did you enjoy about the transition?
B: Actually, in the end I loved it. McCann is the world’s biggest global agency network and when I joined it was probably the world’s shittest—from New York down to Melbourne. And then over that time McCann became the most awarded global agency network.
Not that awards are everything but they’re a great reflection at least of the creative turn-around of the business. It started with Dumb Ways To Die but then the year before I left they did Fearless Girl (in New York) and a whole heap in between. McCann today is an unbelievable creative network globally. So I enjoyed being part of the turnaround and creative renaissance of the business.
But I particularly enjoyed my regional APAC (Asia Pacific) creative leadership role. Being able to be part of the creative development of so many different and amazing countries, that’s the single most creatively fulfilling thing I’ve ever done.
J: From a money management point of view, what would be your criticisms of working within a multinational network versus an independent?
B: The short termism. The agency is often measured on how it’s going on a quarter by quarter basis. And that means that sometimes you suddenly have to make cuts to staff or cost cuts out of nowhere to meet your quarterly business goals. And it freaks everyone out in the business, understandably. You don’t have that in independents.
A well-managed independent can ride out those ebbs and flows, and the culture is generally people first. At all multinationals, the culture is money first.
Because they are all listed and they all answer to the stock market and they have to manage their money according to quarterly returns. But everyone working for a multinational surely understands that—you’re there to make the multinational money. It’s very different if you’re working for an independent.
J: What would your advice be to salaried creatives or ad employees to help them be as financially rewarded as they can for their time?
B: There’s a saying in real estate that you make your profit when you buy. You’ve got to get the price right when you come in so that when you sell you get the best result. I’d say in this industry it’s exactly the same—you make your money when you sign up, and that’s the one time you can push as hard a bargain as you can, when you sign your initial contract.
Once you’re in the business you don’t want to be an arsehole over money and it’s much harder to get decent increments along the way.
J: Clearly agencies have staff budgets and have to work within those. What other things can people ask for to still be financially rewarded for their work?
B: Sometimes if we couldn’t afford someone but we really wanted them we’d start people on a four-day week, or even a three-day week. We’d also sometimes offer, or have people ask for, a trip to Cannes each year—which is still a budget of about $30K for each person. Or we’d send people to Spikes Asia or Adfest—not nearly as high a cost but a great experience. Definitely ask for those sorts of things.
If you’re a parent there are concessions you can ask for. Certainly greater flexibility but it could be travel—if you aren’t from Australia and have family overseas you might ask for flights back once a year as part of your package. Training is a big one. I’m always impressed with someone who asks for executive coaching or training as part of as their package.
J: Did you always have big financial ambitions, or do you think that’s just fallen into place because you’ve followed your instinct in other ways?
B: Believe it or not, I had no financial ambitions. And I think that’s why I’ve been able to achieve some financial success. Even though it sounds counterintuitive, I didn’t have financial concerns as I went, so we took risks and every time we had some success it was a surprise or a nice to have. We came close so many times to running SMART into the ground or blowing it up.
Up until we sold to McCann, we just focussed on doing things that were more fun and challenging and that were right for the business and right for the clients. As a result, the business kept growing. Then all of a sudden it just seemed like one day the business was big enough to sell.
It’s the golden rule: if you are focussed on doing the best you can for the agency and for the clients, you’ll have great results for yourself.
People who are focussed on the dollars or financial reward don’t have nearly the success of people who are focussed on what they love and what they think is right.
Ben is currently enjoying an extended sabbatical from the industry, with an eye on possibly investing in an independent agency financially and in an advisory role. Until then, the funemployment continues.
