John Curnow’s advertising agency doesn’t operate like a traditional advertising agency. The 46-year old South Australian is the founder and managing director of The Virtual Ad Agency—an agency based around a small core staff of marketing executives and a large network of freelance creatives. The agency turns over $4.5 million each year and has recently been named a finalist in Telstra’s South Australian Business Awards.
We started The Virtual Ad Agency six years ago. At the time, I was the chief executive of three sizeable advertising agencies operating in South Australia and Victoria: Charter House Advertising, Ice Berg Media and Ad Rover Online Productions.
About six years ago I turned 40 and my wife said to me: ‘Are you going to work for the man all your life or go out by yourself?’ It was a milestone moment.
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I’ve spent 25 years in the advertising business. I started with the Adelaide News and I worked for six to seven years in media sales before I got a diploma in marketing and moved into brand management. I found this quite limited as I was working on one brand, one product. So I moved into working as an account director at an advertising agency.
The companies I worked for had big operations and between 35-40 staff. I remember one day, we had three meetings scheduled: in the morning we were presenting scripts and TV ads to a hardcore retailer; at 12pm we had a winery and we were presenting a logo and design; then we had a government agency in the afternoon.
What struck me was I was wheeling in the same creative teams for all three meetings, and I thought: Are we doing the right thing for the client? My staff had to be experts in retail, then design, and then communicating a change in government legislation. It just struck me there’s got to be a better way to do things.
Freelancing has been around for decades but it’s become more and more apparent in the advertising industry in the past 15 years. There was an implosion in the industry and a lot of large agencies were letting go of creatives. While we were using freelancers at the agencies I worked for, I thought maybe there was a better model. If you have a creative team on the books, you have to feed them each week. And clients are ultimately paying for that.
So came the idea of a virtual company. It’s not a new model, more emerging. But it was new to the industry. The proposition is that we are a core group of marketers, and when it comes to creativity, we go out and handpick the people who will do the client justice.
Our approach is we build the agency to match the brief.
The model won’t suit everyone but I think it does bring a more value-driven approach to the advertising process. Australia is full of SMEs and being virtual is an interesting differential for us. We’re now a finalist in the Telstra Business Awards so we must be doing something right!
Like any business, it doesn’t work without cash flow. So at the start I had a silent partner, who held a small share of around 20%. They were also a client at the time.
It was an interesting chapter. One thing I learnt was the importance of lead generation. It’s an accountable way of doing advertising and in the first few years it helped me really appreciate that at the end of the day, advertising is an investment that needs a return.
One of the things I found was a lack of accountability by others in the industry. But a good portion of our clients want to generate leads. So we place tracking numbers on all work and we record all the calls and report back to clients on how they were handled and if they led to appointments.
We tend to make better decisions with raw hard facts. There can be a big gap between what we put in the market and what happens with the sales. We want to shorten that gap.
Going through the process of developing a business plan solidifies what’s in your mind’s eye and helps you communicate that with others. We started out with a 35-page long business plan, in part to convince shareholders to invest. Every couple of years I’ll revisit the plan and each year we go through the financial planning process.
One of the flaws from the start was that we didn’t think of the administrative needs of the business. Admin people do actually need a space and so now we have a HQ where people can come and go as they please. But the flexibility is there and that’s why we do a lot of business outside of South Australia.
I try to generate what I call a ‘Plan A’, a ‘Plan B’ and a ‘Plan C’. Plan A is the ‘blue sky’ plan. It’s about the ‘what if’ and “where are the opportunities”. Plan B is more realistic—you could describe it as an optimistic business plan. And Plan C is the contingency plan. It’s what we have to do if something doesn’t work out.
Being a virtual company means we can virtually do anything we want in the future.
This year we’re planning to consolidate a lot of our business as the advertising business is going back a bit. Part of the reason is that a reasonable share of our clientele is in the solar market, which is under pressure. So what we’re doing is trying to offset that by diversifying into publishing.
When we started six years ago, the business was born at the end of the GFC. I had been through that time as a CEO so right from the get go we’ve had a plan to try to support the balance sheet with current assets to get us through the tough times. It’s never a matter of if, but a matter of when there will be a downturn.
It’s never just one thing or three things that keep a small business owner awake at night. It’s 100 things that make you successful or make you fail.
But cash flow can keep you awake at night. What happens is that it puts pressure on your ability to keep suppliers happy, keep staff happy and do the right thing by your clientele.
Managing a virtual team comes down to trust. No manager in a small business can micro-manage everyone, even if they are in the same building. The sort of people we like to attract are senior, experienced people and no juniors.
People come and go as we need or they work from home. So long as the work is done on time, is high quality and on budget, then who is to complain?
When managing contractors or freelancers, these people are also running their own businesses. So they go that little bit further to make it work. If it wasn’t for us, they know there would be a hole in their weekly pay cheque.
The freelance model doesn’t suit everyone. It takes a certain type of person, a self-starter, and they have to be motivated. It is very flexible but it’s also rewarding.