It is imperative for any advertising agency to understand the methods that offer the highest return on marketing investments. The market share devoted to online and email advertising has greatly increased over the past decade and marketing departments are frequently subdivided into print, media, and Internet divisions. Constant innovation is a requirement to remain relevant in the market. We will discuss two interesting principles that ensure constant innovation within an advertising agency: the Pareto principle and the 20% time idea.
The Pareto principle is a theory found repeatedly in the business world, and it is the phenomenon of a recurring 80/20 ratio of benefits. Some examples of typically associated Pareto principal postulations are:
- 80% of sales come from 20% of customers
- 80% of sales come from 20% of sales workers
- 80% of profits come from 20% of products
- 80% of complaints come from 20% of customers.
Naturally these are general rules, not all encompassing statements, but it is surprising and interesting that these percentage ranges are frequently accurate. If a business complies with these inputs and identifies the origin of a majority of its profits, the source of a majority of its complaints, and who their best workers are, a business can better understand what is necessary within the organization, and where to focus expenditures, throughout the organization, but especially within marketing efforts.
Google is credited for introducing the 20% time idea to the world. The 20% time idea denotes that 80% of time working for the company is spent with company projects and items covered in the job description. The other 20% is spent working on pet projects not covered in the job description, whether individually or with a team. Google was famous for allowing its executives one day per week to pursue these projects, and from this method many wildly successful applications were born; Gmail, Google Adsense and Google News were all born from the 20% time idea. This method can very easily be utilized by other companies, and encourages innovative thinking, as well as promoting employee satisfaction and fulfillment. It also increases productivity overall by motivating employees to work effectively 80% of the time, resulting in less time spent procrastinating or poorly prioritizing projects. The 20% time idea actually has a synergistic effect on productivity within an organization, with the added bonus of the products of the pet projects.
An advertising firm may choose to implement these methods within their organization and find that by using a combination of the 20% time idea & the Pareto principal, they can create great innovation and synergy. They can focus on areas that already bring the majority of profits and find new ways to access and increase revenue in areas that do not bring in large segments of profit. The methods can also target specific segments, like email marketing, to identify which type of emails provide the best results, in responses or sales, and therefore create a more effective system of email marketing. Advertising firms working on large conceptual projects, and specific day-to-day tasks can use both concepts and create a more efficient, higher earning organization.
Inspired by Google’s 20% time, Convergent1 is incorporating similar aspects into our work day to boost the creativity and teamwork within our company. You’re sure to see more of the neat things we got going on here on our Facebook page. Interested in what our creativity can do for your company? Contact us today!