Wednesday, 4 February 2009

IP May Become the Currency of the New Ad Agency Business Model

Comment on a FastCompany blog: Mad Ave's Latest Fetish: Intellectual Property

Have to agree with both the skeptical tone of Danielle's blog and Alexander D's point (on the blog). There's a bit more to creating products and building them into brands than the name, logo and patent of a weird flavor/scent combo. That is NOT the intent of "IP" (and the US patent board is beginning to rise to the challenge of drawing the lines on what can be patented -- or pirated).

Anomaly's Virgin Atlantic luggage line concept is a good example of what this new IP movement is about at its core. In the recent (and even distant) past, global manufacturers often sprinted off with a new product concept that grew out of the analysis of a clever, strategic, creative thinker at an agency -- someone who had become intimately familiar with a product or a category over the years and was jn a unique position to identify a key insight and opportunity. The agency person never saw a dime out of the breakthrough IP they'd just handed the client, while today young turks are selling simple new product 'patents' to the highest bidder. Yes, the agency person (or team) was under contract to their client, but these days they'd be wise to keep a lid on the breakthrough they've envisioned, quit their job, patent the idea, then sell it independently to whoever sees the biggest potential behind it.

This gradual shift in IP patents has been, driven, in part, by user-generated content that firms like P&G are enthusiastically reaching-out to in order to tap into, as well as being driven by the growth of patent auctioning sites on the internet. Ideation firms like IDEO are also seeing the downside of being paid $100k to develop a concept that goes on to make millions or billions. The originators of the IP are now beginning to settle for less upfront, but a share of the sales, not unlike what happened with Hollywood stars.

The core point is that everyone remains in their field of expertise, but share fairly both the risk and reward of launching exciting new products and building them into brands.

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