Episodes

Andrew McCormick: The Fifty Percent

Andrew McCormick, former Chief Growth Officer at dentsu X, on what separates agencies that compound from agencies that churn. Mission, ambition and culture as the three pillars. Outcomes as the new remuneration model. And why fifty percent of AI is overhyped, and the industry doesn’t yet know which fifty percent.

Apple Podcasts Spotify
 ·  The Business of Marketing  · S5 E79  · 30 min
Read the interview

"Fifty percent of AI is overhyped. We just don’t yet know which 50 percent."

The Conversation with Justin Cooke

Twenty years from New Media Age to dentsu X, via Essence’s start-up years and the founding era of social media. Andrew McCormick on the three pillars of a successful agency, why outcomes are the new remuneration model, and the fifty percent of AI we don’t yet know to trust.

Andrew McCormick spent ten years in journalism covering the media and marketing industries, including a reporter’s chair at New Media Age when Facebook opened its first office outside the United States in London. Editorial roles at Haymarket and The Knowledge Engineers followed. He moved agency-side to Essence as VP of Marketing and Business Development EMEA during its start-up years, before joining dentsu X in 2019 where he spent seven years driving global growth, most recently as Chief Growth Officer.

In this conversation with co-host Justin Cooke, McCormick argues the agency job is still, always has been, to drive growth for the client, even as the toolkit has been rewritten for a third time, first by digital, then by retail media, now by AI. He sets out the three pillars of an agency that lasts: mission, ambition and culture. He explains why the best client you can have is one you already have. And he borrows the William Wanamaker formulation to make the claim about AI that half of it is overhyped, and the industry doesn’t yet know which half.

Key Takeaways

  • The agency job is still to drive growth for the client. The skillset required to deliver it has been rewritten by digital, then retail media, and now AI.
  • Three pillars decide whether an agency lasts: mission, ambition and culture. Essence’s mission was to make advertising more valuable to the world, and it informed every operating decision.
  • The best client you can have is one you already have. Retention, expansion and referral compound into a cheaper growth engine than pitching. McCormick has shut down new business more than once to protect onboarding.
  • Outcomes are the new remuneration model. Output-priced fees turn agency work into a cost centre in the CFO’s eye, whereas outcome-based models put agency and client on the same side of the table.
  • AI is the biggest change in our lifetime for marketing. Fifty percent of it is overhyped. The industry doesn’t yet know which fifty percent. Search engine marketing is the first discipline being rewritten.

Topics Covered

  1. 01 From journalism to agency growth: the New Media Age lineage
  2. 02 What a successful agency looks like: mission, ambition, culture
  3. 03 Paying for outcomes: the remuneration model rewritten
  4. 04 Creative in the right places: why the fundamentals haven’t changed
  5. 05 AI, search, and the fifty percent the industry doesn’t yet trust

Key Exchanges

05
01 Has the definition of an agency fundamentally changed?

Fundamentally, the agency should be driving growth. The skillset required to do it has changed.

For McCormick the essence of the agency job is unchanged: drive growth for the client. What has changed is the toolkit. Digital meant search optimisation. Retail media meant owning the point-of-sale moment. AI means putting intelligence to work across every client process. The question every agency has to answer quarterly is whether its talent mix matches the toolkit the market now requires.

02 What makes a successful agency today?

Mission. Ambition. Culture. Three pillars of a successful agency.

McCormick’s frame comes from Essence’s start-up years. Mission was the operating sentence ("make advertising more valuable to the world"); ambition was the stretch goal that was still reachable; culture was the people equation everything else compounds on top of. Agencies chasing only growth numbers without those three are fragile. Those three stabilise every hiring call, every client conversation, every no to a new-business pitch.

03 Where does real growth come from?

The best client you can have is one you already have.

McCormick has shut down his new business engine more than once to onboard new clients properly. The logic is compounding: doing great work for existing clients earns retention, expansion and referrals, which is a far cheaper growth engine than pitching. He treats "we’ve shut new business for six weeks" as a signal of discipline, and finds prospective clients often respect it.

04 How is AI reshaping agencies?

AI is the biggest change in our lifetime. And 50 percent of it is overhyped. We just don’t yet know which 50 percent.

McCormick classifies himself as the opposite of a hype guy, and still frames AI as categorically different from every wave that came before. Digital hit performance marketing first. Retail media reshaped point of sale. AI touches every process. Search engine marketing is, he believes, the first discipline to be meaningfully rewritten. The commercial question is which tools will last five years of client use and which will be quietly abandoned.

05 What has the industry still not realised about itself?

Brand and direct is a solved problem. We just haven’t admitted it yet.

The brand-versus-direct argument has dominated CMO conversations for a decade. McCormick’s view is that both levers, in the right balance, measured by outcome, compound. The failure isn’t the mathematics. It’s the institutional reluctance to settle the question at board level. Once the balance is agreed, both levers compound.

S5 E79Season & Episode
30 minDuration
50% Proportion of AI Capability He Calls Overhyped
$40bn YouTube Annual Ad Revenue, Two Decades After Google’s $1.65bn Acquisition

"The best client you can have is one you already have."

Hear Andrew on
The Business of Marketing
Season 5 Episode 79 30 min
Apple Podcasts→ Spotify→ Andrew's full profile→ Andrew on LinkedIn→
Read the full transcript
Lightly edited for readability.

Justin Cooke Agency definition has changed. Or has it?

Andrew McCormick Fundamentally, the agency job is to drive growth for the client. That hasn’t changed. What has changed is the skillset and expertise you need to do it. Digital brought search optimisation. Retail media brought point of sale. Now AI is here and it affects everything.

Justin Cooke What makes a successful agency today?

Andrew McCormick Three things. Mission. Ambition. Culture. At Essence, our mission was to make advertising more valuable to the world. That informed every decision. Then you need an achievable ambition that is still hard work to reach, so when you get there you can celebrate. And you need a good culture, because people, beyond platforms and beyond media, are the most important ingredient in our industry.

Justin Cooke Best place to find growth?

Andrew McCormick The best client you can have is one you already have. They paid you. They trust you. Do great work and they bring you into bigger conversations, they expand into new geographies with you, they become your reference. I’ve shut down the agency for new business more than once when we’ve won a couple of new clients, because we want to onboard them properly.

Justin Cooke Remuneration model for agencies today.

Andrew McCormick Outcomes. A good agency today leads every proposal with an outcome-based model. If growth doesn’t land, we don’t get paid. I think it’s fundamental to doing business now. CMOs are managing budgets across multiple providers, multiple channels, multiple agencies. If you can’t show them clarity on how you’re helping them grow, you’re adding complexity instead of taking it away.

Justin Cooke AI and the agency.

Andrew McCormick AI is the biggest change in our lifetime for marketing. I’m not a hype guy but I’d put my name to that. It’s structurally different from digital or retail media because it affects everything a brand and an agency do. And I’d say 50 percent of it is overhyped. We just don’t yet know which 50 percent. That’s the job for all of us over the next five years: work out which half lasts.

Justin Cooke One capability every agency needs to develop?

Andrew McCormick Search. Where AI has affected things first is search engine marketing. How people search, how results are served, how to appear in them. That’s where everyone needs to adapt first.

Justin Cooke Brand versus direct.

Andrew McCormick It’s a solved problem. We haven’t admitted it yet. The answer is both, in balance, measured by outcome. That’s where the industry still hasn’t realised what it already knows.

Justin Cooke A brand you think is doing amazing stuff today?

Andrew McCormick Apple. I’m an Apple fanboy. Home is full of Apple products. Nothing they do is wrong in my book. They’ve earned a customer for life. If you can do that as a brand, you’re succeeding.

Keep Reading