GALE, the Business Agency, Reveals its Successful Growth Strategy
GALE's 80% average annual growth rate catches the advertising industry's attention: an interview with Brad Simms, President and CEO.
Brad Simms is both busy and happy — he’s President and CEO of GALE, which he co-founded in 2014; Global CEO of Crispin Porter Bogusky, and Global Chief Product Officer of Stagwell’s Brand Performance Network. He sat down with Michael Farmer, author of Madison Avenue Manslaughter and Madison Avenue Makeover to discuss GALE’s successful business strategy, which has delivered 5-fold revenue growth since 2020.
Michael Farmer. Brad, GALE seems to have created some magic in the past several years. The rest of the industry is floundering, but you’ve had eye-popping success, growing your existing clients and winning new business. 80% average revenue growth per year? What’s your secret?
Brad Simms. Other agencies claim to be about “Big Ideas,” but there’s not much evidence that big ideas, as currently conceived by the industry, are delivering value. Too many major advertisers are not growing. I’ve seen some data that show that 21 out of the top-spending 50 advertisers have grown slower than GDP for more than a decade.
When we started GALE in 2014, we came in with a fresh perspective. We saw the issues with the then-current agency models and purposely built something that was different. As the industry evolves, we will continue to strive to see things differently.
GALE is about solving “Big Problems” — the Big Problems that get in the way of improved client performance, like declining sales, a drop in loyalty participation or the failure to engage new customers, like the elusive Gen Zers. These problems need a “Business Agency” to solve them, an agency that understands not only what levers need to be pulled but how to pull them. At a practical level, we are structured around what we call our five superpowers — advisory, story, CRM, media and data / technology. These are the tools that we deploy once we begin a performance-improvement journey with our clients. Importantly, media, creative and technology are fully integrated in our operations.
These capabilities enable us to answer a critical client question: if I have one more dollar to invest, where should I put it? At GALE, we want to be an independent advisor and answer this question for our clients. While only some clients buy all services from GALE, more and more are buying 4-5 connected offerings and benefiting from the efficiency of this model.
We blend the advisory and analytical services that are typical of a management consulting firm with the storytelling and communications expertise of an agency. This combination of capabilities allows us to support and help drive client growth.
When we begin an engagement, we ask the CMO: “What are the CEO’s current business goals, and how does what you’re doing as CMO align with those goals?” Often, we find that CMOs are not aligned with the CEO’s need for growth. We help to redefine and focus on the performance problems and then deploy our story-telling, CRM, media, data and technology to put performance-improvement plans into action.
Michael Farmer. What do you see going on in the marketing communications industry? Why do so many of the holding companies and their agencies seem to be struggling?
Brad Simms. The industry is at a serious inflection point. Agencies lose clients every three years. Agency CEOs overinvest in client replacement rather than focus on retaining clients by making them winners. The current remuneration models are no longer sustainable. The gap between CMOs and CEOs is wider than ever. Agencies claim to push their clients to embrace innovative approaches, but agencies never do the same thing for themselves. Agencies focus on advertising and not on marketing. Marketing is the wheel that drives client growth, and advertising is one — but only one — factor, and it has become a commodity. The old ways of working are not working. The industry worries too much about the effectiveness of a single ad rather than thinking about the potential effect that the right combination of ads and data and technology might have on client performance. Most agencies are looking through the wrong end of the telescope.
Michael Farmer. How do you feel about the future of the industry?
Brad Simms. Artificial intelligence will crush the majority of agencies out there. The agency space has resisted change, and resistance to change does not permit survival in a changing world. One of the main issues with holding companies is that they have supported agencies and models that should have been shut down. They will pay the price for this.
We’ll see more agency turnovers, more startups and different operating models. This turnover will be good for the industry and good for clients.
The future is exciting. In the next 30 months, we are going to see a dramatic shift in the definition of an agency — and that is going to be fun, particularly for GALE, because we are going to prevail as one of the surviving winners.