Tiffany Rolfe: R/GA Has Reimagined Pricing Model, Wants to “Rethink Whole Damn System”

R/GA is using its newfound independence to reinvent its pricing model and, in the process, “rethink the whole damn system”.

Global chair and chief creative officer Tiffany Rolfe told LBB on a visit to Australia the business is retaining ownership of intellectual property (IP), charging a base fee for tech tools, and considering licensing agreements.

AI is drastically reshaping the industry -- “this is not just an evolutionary moment [but] a revolutionary moment,” she confirmed -- and putting pressure on the traditional agency model, which sees clients charged by the head hour. To successfully reimagine how an agency charges for creativity, R/GA now needs to educate staff, clients, and the market.

“We need to rethink the whole damn system,” Tiffany told LBB.

“The biggest challenge with our industry [is] rewiring our own beliefs, mindsets, how we have operated. We really are incentivised to do one offs, incentivised to try to create something new every time.

“That goes against productisation and the way things typically work. And so for us, it is a shift. It's a shift in mindset for clients.”

It started with having some “skin in the game” with its work for beer giant AB InBev. For the brand’s e-commerce platform, TaDa, R/GA used AI to address customers abandoning their carts. The hyper-personalised ‘Abandoned Nights’ videos predicted the evening a shopper could have if they followed through with purchasing. R/GA kept the intellectual property, which it will build upon for other clients.

“We said, 'We're going to invest some of our own time, and we're going to build out something that can work differently and solve your problem in a different way. But with that, we are going to retain ownership of the things that we're investing in. But you get ownership of what it produces.'

“It was a way for them to see a new model that could work, and they get the benefit of that, they get work that we can spin up faster. It optimises and personalises content like they couldn't have done before, and lets them scale.

“In that case, it wasn't about charging any sort of licensing fee, but those are different models that we're experimenting with. And it will be a little bit different for every client. It depends on the length of engagement [but] most likely it could be some sort of base fee for the tools. We can also build bespoke tools … And there's still service wrapped around that.”

The global business -- which regained independence from IPG earlier this year in a deal between the management team and private equity company Truelink Capital -- will continue charging a service fee in addition to any productisation. “It's not becoming a product-only company where you get the R/GA in a box.”

A client like AB InBev can use the tech underpinning ‘Abandoned Nights’ to iterate on and invest in the idea, rather than experiencing a “Groundhog Day”-esque process of “reinvent[ing] the wheel every single quarter, every single marketing launch, which has been the way it has been in the past.

“You still have to bring newness to it. Things change with culture, context. People change. It doesn't mean that once you build it, you never go back again, but it does mean that you can build on things.”

When global CEO Robin Forbes and Tiffany closed the deal with Truelink, “we'd already started to change some of the structure, and knew where things needed to go. But it really was going to take a big change for us to be able to have the ability and have some oxygen to be able to do what we needed to do.

“Independence was the only way forward. We knew we needed some major change. It wasn't going to come from merging us with some other brands within a network.”

Independence, and Truelink’s backing, allowed R/GA to chase the vision it had, but couldn’t implement, under IPG ownership, and respond to the AI onslaught. It immediately established a USD$50 million AI innovation fund, and an AI products team based in Australia.

“We knew we needed to build out some things that we weren't necessarily supposed to build out, because you have to stay in your lane inside of a holding company,” she said.

“When you are operating within a holding company, you've got to ensure margins are to a certain percentage, utilisation is at a certain percentage, and we knew there was going to need to be some investment in technology.”

The commercial model will continue to shapeshift over time, as technology does and client demand grows; “ever since we went independent, we've seen the rise of demand”. Globally, its portfolio includes the likes of Google, Nike, Moncler, Verizon, and Nike. With some, it’s currently in a “hybrid mode” between the new and old model, and “there’ll be some projects where we’re going all in on a new approach … we can disrupt ourselves.”

Good clients want help disrupting their categories, or navigating disruption, Tiffany added. In a couple of weeks, R/GA will launch a project it won off the back of a brief that read, “Digital agencies are all the same. Websites are dead. Prove us wrong.’ That was the first page of the RFP. And I'm like, 'Hell yeah.’” The resulting work plays with personalising a website experience.

Tiffany was in Australia for a SXSW Sydney session alongside APAC CEO Michael Titshall, and an R/GA event focused on humour and AI. The week before, the company flew its leadership to New York for a two-day creative summit, during which every exec used AI to build a brand from scratch. One worked on a sunscreen for bald men; Tiffany was tasked with building an alcohol-free tequila brand. “There were some beautiful brands. There were some silly brands.”

The summit taught R/GA’s leaders how to “start to communicate with each other through this technology” and reminded Tiffany of the power of asking the right questions, forcing her to articulate and “understand my ideas better.” Craft still reigns, she added.

“People want great storytelling. They're going to want meaningful experiences, and that takes the people that give a shit about going in there and understanding how to make something great with it,” the creative chief said.

“I actually became more hopeful because there's sometimes tension around this new technology and creativity, like it's taken it away, or there's going to be no need for it, when I actually think it's this enabler for you to go deeper, do things that you wouldn't have done before.

“I think it tests us to go, 'Sure you can make that thing, but what are the things you can't do?' That's the part that we get really excited about, the stuff that hasn't been done.”