All it took was 3 clients

Six weeks ago, one of the most respected creative agencies in the world filed for bankruptcy.

“It’s with pain in our hearts that we have to announce KesselsKramer has filed for bankruptcy. We have dealt with challenges before. This one we didn’t see coming”

KesselsKramer, a Dutch studio that helped define an entire era of European advertising, the agency behind “I Amsterdam”, the agency that turned a hotel’s own filthy rooms into one of the most celebrated ad campaigns ever made - went from insolvent to reopened in the time it takes most of us to finish a single project, as within 6 weeks they were back.

“New door, new church, new KesselsKramer… it’s a goddamn blessing to share that we’ve reopened our doors… Hallelujah!”

In all honesty, logging into LinkedIn and seeing the news hit me right in the face and unsettled me to the point that I’m writing this post. If this can happen to one of the world's greats, then what chance do the rest of us have? Agencies and studios close for a multitude of reasons; it's the lifecycle of companies in any industry… maybe this one hit a little harder as I’ve always looked up to KesselsKramer’s work, or that I recently had the pleasure of meeting Erik Kessels himself after Rendr Festival in Belfast, and the connection of the story hit that little closer.

By KesselsKramer's own account, the collapse came down to three major commercial projects falling through at the same time. Not a slow decline, not the market turning against them creatively. Three deals that didn't land the way they were supposed to. I don't know the specifics of those deals, and it's not my place to guess whether pitching or payment terms played any part in it. That's the part of this that our industry loves to avoid talking about. We work in an industry where we're routinely asked to deliver the work before we see the money, pitch for free, produce on spec, invoice on 30, 60, sometimes 90-day terms, and carry all of that exposure ourselves while the client carries almost none. It’s “smile & wave boys” as the industry waves this off as the norm.

It's worth looking inward and evaluating our own positions.

What scares me most about this is how normal their exposure was. Three clients could be as simple as a bad pitch, a contact leaving, a project stalling, all fairly normal occurrences, yet it was enough to end thirty years of trading. This isn’t a problem exclusive to KesselsKramer; it's an industry-wide problem and one that most studios carry without really accounting for it. None of that is dramatic, none of it gets talked about, and most of the time nobody outside the business ever knows it happened at all. But it's usually the difference between a studio that can take a bad month in its stride and one that can't.

Free pitching is one of those same habits, another way risk gets quietly shifted onto studios instead of shared, and as a small studio we've built a policy around not doing it on the client's terms. Every studio owner knows the shape of the ask. A brief lands, and buried in it is an expectation that you'll produce a full concept, a creative platform, sometimes a finished campaign idea, entirely on spec, up against two or three other studios doing the same, with no guarantee anyone gets paid for any of it. It's treated as completely normal, but no client would ever accept the same arrangement in their own industry. No client would ask an architect to design and draw up a house first and pay only if they liked the outcome. Creative gets asked to work this way because it's been allowed for decades.

A client has every right to want a taste of how we'd think about their problem, to feel like we actually want the work rather than it just being another job. So we'll share an insight, something specific to their business, sharp enough to be genuinely useful, that goes beyond whatever's already sitting in our portfolio. Not a concept. Not a creative idea. Not a campaign direction. An insight, offered on our terms, that doesn't over-stretch or over-invest our time, but is enough to show we've actually understood the problem and give them a real sense of what working with us would feel like. It's a good reminder that the unglamorous decisions, the ones nobody sees, are usually the ones doing the real work of keeping a studio standing.

I’m inspired most by what brought KesselsKramer back; it wasn't the fancy converted church studio or the client list; it was the ideas. Studios that sell ideas, concepts, a way of seeing a problem in a way nobody else has, is something a client will fight to keep even after the money's gone, because it’s the thing that made it valuable. Sell time, and you're exposed the moment the work dries up. Sell ideas, and there's still something worth relaunching even after everything else has fallen over.

Build a studio around the work you can produce, and you're only ever as safe as your next job. Build it around how you think, the ideas nobody else in the room would have had, and you're building something harder to lose.

KesselsKramer are back, and I've no doubt they'll raise a few more eyebrows before long.