Jon Williams, The Liberty Guild, and the irresistible pull of “Next”
In this provocative conversation about the future of creative agencies, Waypoint’s Matt Lacey talks to advertising legend Jon Williams, CEO of The Liberty Guild, about building value in today’s highly disrupted environment, both from a creative and an enterprise perspective.
Jon is one of the industry’s most fearless leaders, someone who has raced towards change at every stage of his career. He explains how he thrives on disruption, doing his best work in that uncomfortable zone, navigating “next”.
Make change your default
Jon moved into digital at the start of the noughties – his colleagues thought he was mad to swap the glamour of TV ads for banners! Then from 2008 he did the hard yards as chief creative officer at Grey London, and later across EMEA, rebooting the agency and transforming it into a top global creative agency, one that people would “die to get into,” and not “go to die at!”
Yet less than a decade on, spotting change on the horizon, Jon took the learnings and experiments from his time at Grey, to build an agency model fit for the future, and in 2017 he launched The Liberty Guild.
The official descriptor says that the agency “runs a fully productised, fully distributed service for clients charging for ideas not by the hour”. It has “540 Cannes-winning creatives and strategists and 37 cultures around the world”, working for leading global brands including Nestle, Procter and Gamble and Tui. For more on the model Jon has built and continues to iterate, and the AI tech stack that powers it, tune in to the podcast here!
Where next for the creative sector?
While Jon can be scathing about certain parts of the creative sector, he’s fundamentally hugely optimistic about its future. This episode is filled with practical advice and learnings, delivered in Jon’s inimitable, no nonsense style. Key points include:
Don’t be the kind of agency that hides behind the collective delusion that it’s OK to carry on doing things the way you’ve always done them
An agency’s ideas are its most valuable commodity today – knowing what’s good, i.e. exercising “taste” is your key differentiator, don’t waste it. Prepare to be uncomfortable because next is uncomfortable but there’s no alternative unless you want to become quickly irrelevant. Clients want and deserve something better than the status quo. Matt Lacey also explains how investors love disruption and that the new creative agency models Jon sees emerging – he freely admits The Liberty Guild is not the only one in town – have the power to drive both creative and enterprise value.
Ultimately the conclusion is that everything is up for grabs. Worlds are colliding and overlapping giving birth to exciting next gen businesses; tech is transforming ways of working and all of this keeps investors engaged with those parts of the creative industry that show they can stay ahead of change.
Short on time? Read the conversation
We’ve edited Matt’s conversation with Jon’s into a shorter read, capturing their key discussion around the changing creative agency model, AI and what all this means for building enterprise value.
Why is change so difficult for established creative agencies?
Matt Lacey: You’ve been through the journey from traditional creative businesses to becoming a disruptor yourself. Where did that appetite for change come from?
Jon Williams: I’ve always felt most comfortable in “next” mode. I got into digital when everyone else thought it was a flash in the pan, and later joined Grey as its first digital-native creative leader. We transformed it from somewhere people’s careers went to die to somewhere people would die to get into. But re-engineering an existing business is incredibly difficult. You’re effectively trying to repaint the car in the fast lane.
We were fortunate to find enough margin relief to restructure. That’s the dilemma running an agency today: you’ve got to change, but you can’t afford to change. And next is uncomfortable. There’s no manual telling you how to do it. You have to work it out, trust your gut and have great people around you.
What’s changing about the traditional creative agency model?
Matt: What is The Liberty Guild doing differently?
Jon: We run a fully productised, fully distributed service, with 540 Cannes-winning creatives and strategists across 37 cultures. We operate like a global advertising agency, but we don’t charge for hours; we charge for ideas. Clients want something better than the status quo. Traditional agencies are often still carrying on in the way they always have, despite enormous changes in the market. We’ve stripped away a lot of the traditional structure. We don’t need armies of account people or layers of strategists. We have a technology stack, a tightly defined process and great talent assembled around the problem. Process isn’t sexy, but it’s incredibly important. If AI makes execution abundant, where does creative value sit?
Matt: What is the traditional agency model getting wrong?
Jon: One fundamental issue is hourly rates. How long does it take to have a brilliant idea? You can’t tell me. And how long does it take to have a bad idea? You can’t tell me that either. So why sell creativity in hours? We place value on the idea and the thinking. That’s becoming even more important in an agentic age because the idea is the last thing left.
Production and media are being transformed by AI. We’re going to be surrounded by an enormous amount of mediocre output, so “taste”, i.e. knowing what’s good, becomes more valuable. We make sure there is human intelligence before we use the machine. Technology can produce things, but the ideas and judgement come from people.
Can a distributed creative business scale and build enterprise value?
Matt: From an M&A perspective, scale has traditionally been an important part of building agency value. How does that work with a distributed model?
Jon: We’re built to scale. Each project has a very senior team that can operate relatively autonomously within our technology stack and processes. We’re already working across 37 countries. The virtual model gives us flexibility, scalability and speed, although relationships and physical presence still matter in markets such as the US.
Matt: And when we think about enterprise value, what matters beyond the traditional measures?
Jon: EBITDA is perennial. That’s where the discussion in the boardroom ultimately ends up. But value is also increasingly about talent and connections: knowing who the best people are and being able to bring them together. They don’t need to sit permanently on our books. We know where to find them and, for clients, that’s incredibly valuable.
But what makes a distributed agency defensible?
Matt: That’s an interesting question for investors. If your creatives aren’t permanently employed and another business could theoretically access the same people, what is the IP? What makes the business different and defensible?
Jon: It’s how you operate the model: the process, control mechanisms, contracts and the level of control and repeatability you create. We’re not a loose collective of freelancers. The processes are incredibly refined. The fact that the talent isn’t permanently employed can actually be a strength. As the world changes, we can bring creators in, AI artists in, whatever comes next. A client could theoretically try to access all those people directly, but finding, contracting and managing them would be enormously difficult. We’re effectively middleware: we enable clients who want great ideas to access the community capable of producing them through a model that makes it work.
Who’s buying creative businesses and why?
Matt: The market has already been through enormous change, digital, the creator economy and now AI. But investors love disruption.
Creative industries are full of innovators and human-capital businesses have repeatedly used change to become better. I don’t believe the industry gets wiped out; I think we’re going to see more happening. Creative agencies, entertainment, talent, creators and technology are increasingly overlapping. We’ll see disruptors from those different areas coming towards the centre and creating new kinds of businesses, backed by different kinds of investment.
Jon: That’s the exciting part. How are we going to be creative with the creative business itself? In disruption comes opportunity.
So what does the creative agency of the future look like?
Jon: We’re living in an ambiguous, unclear world, and I love that.
Some clients are already further ahead than their agencies. They’re going through root-and-branch transformation while the agencies that are supposed to be their trusted creative advisers aren’t necessarily doing the same.We had one client ask us to make ourselves irrelevant within two years by creating a transformation and creative automation process that would ultimately make us redundant.
At first you think, “What?” But then you understand it. Because in two years we’ll have morphed into something else too. That’s what “next” is about. Some of us will win and some won’t. The only thing we know for certain is that it’s going to be different.