In New York, Graphic Systems Group is aggressively pursuing the “de-coupling” trend.
“From workflow systems, for whether it’s packaging, advertising, today, 75 percent of the work we do is direct with our global clients, as opposed to with agencies,” says Madsen, who admits this has marked a substantial change to the company’s early business model. “Not only that, but we diversified the portfolio so now we’re doing not just print for advertising, but we’re doing packaging as well.”
This marks a decisive change from the early days of GSG, when agency work – specifically re-touching and print proofing – was the company’s bread and butter. When those firms were fat and happy, so was Madsen’s company. But the economy has a way of sneaking up on you, he says, and the successful businesses are the ones that manage to change and grow in the face of financial hardship. That’s what happened for his firm, at least.
Adaptability and ingenuity have both helped GSG survive, thrive, and redefine itself while many of its fellow production houses have struggled under the burden of clients’ shrinking marketing budgets and a long and brutal economic downturn.
“The recession has forced this idea of doing things more efficiently in a faster timeline, and clients want to understand what they’re spending in the marketing channel,” he says. “Because we have reporting and transparency, we’re providing a lot of those things that are too compelling to ignore. So the result is, they don’t want to use the agency anymore. Now, we call ourselves “de-couplers” because we de-couple the production away from the advertising agencies.”
Taking advantage of the decoupling trend
De-coupling – or unbundling – in advertising is the process through which advertisers buy services directly from suppliers who previously were sub-contractors to the clients’ advertising agencies. In GSG’s case, these services could include the printing, prepress, installation, and other production-related services the company brings to the table. While he certainly didn’t invent the term, Madsen admits he is clearly aware of the negative connotation it might have, particularly among his former clients at the advertising agencies on Madison Avenue.
“The advertising agencies do not like who we are,” he admits. But that hasn’t stopped him from selling the un-bundled services approach directly to clients.