Sunday, October 07, 2012

Who Is This Man And Why Does He Have $540 million?

Answer: his name is Luke Taylor, and he just sold a digital agency network called LBi to Publicis.

All right, admittedly he didn't get the whole $540 million himself, but I imagine he got a fair chunk (the agency was owned partly by its management team of which Luke Taylor is the CEO, and partly by private equity investors). 

Now, I'm not against people getting rich. In fact I'm all in favour of rewards for success.

For example, the BBH crew, who also recently sold to Publicis, deserve every penny of their payout in my opinion - they have created great work, actually some of our industry's best-ever work, and done that consistently, for thirty years. And they've done it profitably, too.

Stef Calcraft, one of the co-founders of Mother, also sold his stake, last week, and received a tidy sum - again, deserving every penny, in my opinion, having co-created the shop that won Campaign's Agency of the Decade in 2009. And Mother is not just a creative hot shop. It's also growing strongly (a presence on three continents) and is also highly profitable.

But LBi?

Let me ask the simple, age-old question - what have they ever done?

Well, Campaign asked Luke Taylor "What recent work for clients are you most proud of?" and his answer began like this:

"We are currently in the process of leading Johnson & Johnson on a global journey of digital transformation. We service a total of 15 J&J brands across four continents, making it one of our broadest client engagements."

Ah, the Johnson & Johnson work. Of course.

Nope, I haven't seen it either.

But maybe that's an aberration. Let's take a look at the rest of their showreel.

I didn't recognise one thing on there.

They say a sample of one person is unfair... but that does surely depend on the person.

I'm more or less an advertising obsessive. I write an ad blog so I read all the ad blogs, and click on a link for anything that looks interesting. And I spend a horrendously unhealthy amount of time online anyway, where presumably I could (nay, should) have been exposed to LBi's work.

Please note - I'm not saying I think their work is crap. I'm saying I don't even know what it is.

Then again, if the first job of advertising is to get noticed, maybe I am saying it's crap.

Am I wrong? Do you work at LBi, and it's actually the shizzle? If so, set me straight. Otherwise, join me in wondering how Luke Taylor just made $540 million.


Jurobu said...

Advertising isn't about getting noticed, it's about convincing people to take action.

In this case LBi is genius.

It convinced Publicis that it was worth buying for $540 million. Luke Taylor is obviously the greatest advertiser of all time.

EugenS said...

I think it had to do more with the fact that WPP bought AKQA, and they didn't want to be left out, so they jumped on the biggest digital agency micronetwork left. Strawberry frog being acquired in February as well, they kinda got scared, I guess. I once tried to get a job at Lbi Amsterdam, but I didn't hear about them before actively researching the small agency market in Amsterdam. Which obviously mean I was more interested in Amsterdam :)

Mark said...

While of course some of LBi's work takes the form of campaigns, most of their revenue comes from huge-scale enterprise web design & build (and maintenance), e.g. Lloyds, BT etc.

As ever, this kind of work is usually eschewed in the showreel since it isn't exactly sexy, but it brings in serious money.

Anonymous said...

Yeah I haven't seen any of their work either. But then again I wouldn't have, because I've never visited the brands they do work for.

It's the advertising agencies job to get me to the website. Then it's up to places like LBi to make that experience engaging and give me a reason to come back.

I wonder how LBi's cashflow might be once their clients have their pretty websites. How does LBi plan to make money then?

ALS said...

They've got fucking UNICORNS, Scamp. They deserve all the money.

Anonymous said...

Lets be clear about this, LBi is not an advertising Agency. A lot of their work is designed to improve a users experience online. Whether that's to help with your online banking or make shopping easier. So although you might not have seen a piece of 'advertising' they've produced I bet you've used a piece of technology they've created that has improved your online experience.

That said $540 million is a lot of money.

Lubomir said...

If I can rephrase a German chap: Talent hits a target everyone can see; Genius hits a target no one else can see :)

nuradical said...

LBi is in the business of experience design, not campaign advertising. Advertising is not the be all and end all, in fact it is becoming increasingly irrelevant. The present and future already lie in harnessing technology and culture to create experiences for users that transcend the 30sec spot, think systems design, platforms, programmes and products and you're probably getting there.

Scamp said...

Seems I'm getting slammed here, by people telling me "It's no surprise you've never noticed any of LBi's work, they make websites, not ads."

Well, first of all, I should have noticed their websites, because I should have wanted to click into them from the write-ups on ad blogs.

And second of all, LBi's own website claims that they do more than just websites. It says: "We develop big and small creative ideas for our clients. We make content, tools and functionality for brands in all forms: from films, to ads, infographics, to new products and services. Our work is technically innovative and intrinsically ‘social by design.’"

That's right. "Intrinsically social by design". Bunch of oxymorons.

Anonymous said...

What Mark said...

Another massive part of their revenues, post the merger with bigmouthmedia can be accounted to SEO/PPC work.

Again does not look good on a show reel but that doesn't mean it is not good work. BMM have been a the top of the search world since 1997 and have multiple awards to show for it.

Not a well researched post...

Scamp said...

All right, all right already, I now know they make most of their money from building websites, and doing boring SEO stuff.

And I don't have a problem with people doing boring SEO stuff, brilliantly, and earning tons of money for it.

So... how did I get this so wrong?

Probably because of all the bits in Luke Taylor's interview and on their website where they say they do other stuff too like ads, and films, and social media stuff...

Lubomir said...

Talking about money spending... Scamp, what have you been reading lately? I mean on advertising - I’ve flicked through John Hegarty’s book but it was at the end of last year... Your book was interesting too but I think it was published in 2010... is there something new - a must have for 2012?

Anonymous said...

Until I read this, I had never heard of you or your blog.

Does this mean your work is crap or that I might just not don't know everything ever.

Scamp said...

Well, it's not a big deal if you've never heard of my blog, since I'm aiming at a pretty narrow circulation - advertising creatives. (Though I suppose I'd be mildly disappointed if you were an advertising creative and had never heard of my blog).

It would be a bigger problem, though, if you'd never noticed any of my work, because the companies that paid to run my ideas wanted them to be widely noticed.

Why not take a look at my work, just as I took a look at LBi's showreel, and report back on whether you've noticed any of it before? The link is on the top right of this page.

Scamp said...

Lubomir, the last ad book I read was 'The Real Mad Men', by Andrew Cracknell. I thought it was okay. I guess I've read a lot of the stories in there before - not Andrew's fault.

Perhaps the publishing world is holding off on releasing any significant ad books, in preparation for the release of my next one... :)

Jim Powell said...

Also worth looking at the whole article

Some favourite bits for me.

Q - What is the secret of LBi's success? How has it become such a valuable asset?

A - We have been relentlessly focused on creating a single brand platform and eradicating local market politics. As a management team, we constantly beat ourselves up and restlessly look to drive improvement and reinvention.

Oh I see, I reckon I will do the same if there is that sort of money in focusing on single brand platforms. Does he mean Facebook. He eradicating local market politics too, is he allowed to do that. Tell us how for goodness sake. I wont make a joke about beating yourselves up, I am sure you can stop now.


Anonymous said...

I've worked with them. They're very average. You're not wrong.

Anonymous said...

My question would be about business value.
If you think about the bottom line, agencies LIKE lbi (but not lbi in my experience) offer far more than a BBH...
Just looked at your work, Scamp....and it's nice but really, really dull. Just ads, 'spots', the sort of pointless shit creative directors high five over....stuff that outside the industry bubble, NOONE gives a shit about...
LBI build commerce engines, tech back ends and web platforms. They BUILD Virgin Atlantic, you write disposable ads about brands.
So, to my mind, they're worth more than you in principle. Except that LBi are SHIT at what they do and just bought MR.YOUTH who are the emperors clothes writ large.
So you're right in this instance but for the wrong reasons...

Anonymous said...

LBI claims they do digital marketing, at least in their NA operations so Scamp isn't totally off. They may have different focuses in other offices, globally, but they are not as UX, front or back end development focused for their work in the US.