No Ads, No Pitches, No Price Negotiations: Mat Baxter On Huge’s New Model

No Ads, No Pitches, No Price Negotiations: Mat Baxter On Huge’s New Model

As reported in B&T yesterday, one of Australia’s most successful advertising exports, Mat Baxter, has made a return (of sorts) to Australia with the opening of operations in Australia of his current employer Huge. While Baxter himself remains in New York, Australia has boots on the ground in the form of Ben Skelsey, who is the managing director and Aussie employee number one. Here, B&T’s editor-in-chief, David Hovenden, caught up with the pair to delve a little deeper into the one-time design agency’s new plans.

While Skelsey is indeed Huge’s only employee based in Australia, that doesn’t matter, say Baxter and Skelsey, because the 1200-strong business is following the trend set by the likes of Special Group, in having people from all over the world work with clients, equally, all over the world.

“The whole model of Huge is to give Australia and all our clients around the world, the aperture to access the whole Huge network, not just be constrained to the market that the office or the business resides in,” explains Baxter.

“So yes, you come through Ben, Ben facilitates the client relationship, takes the job, manages the briefing, deals with all the kind of frontline requirements. But then guess who you get? You don’t just get the team locked into Australia; you get a team from all around the world.

“With our first Australian client, they really found this appealing, which is like, okay, so I get to work with the best of the best, no matter where they are in the world, not just the people that happen to be in Australia. And the answer is yes. And in a business like ours, which is creative, and digital and technology focused, sometimes working with talent and resource that lives in the West Coast of America, or the East Coast, or the UK is a much better compilation of talent than just the people that happen to be in Australia. So, it’s a really different model in that respect. And as I said, it’s getting already a lot of traction and interest from clients who feel that’s very differentiating.”

While no doubt the new global structure remains a key selling point for the 20-year-old business born in Brooklyn, its fee structures are probably more important.

While agencies traditionally charge by head hours, Huge has turned its offerings into some 45 products. Designed from the ground up, they have strategic frameworks, deliverables, outcomes, team design, and a range of fixed pricing options.

“The products are set at a price that we believe is a value-based assessment of that product’s value. And if you don’t want to buy that product at that price, then you don’t buy and we’re comfortable with that,” says Baxter.

“We’re not getting into the whole procurement, slippery slope of: How many people delivered the product? What’s your hourly rate? What’s your margin? What’s your percentage . . . none of that! This is the product. These are the outcomes you get. This is the value we believe those outcomes are worth. And this is the price. And that’s it.”

Baxter goes on to say that since launching the product range in December 2022, Huge has sold seven or eight products and all of them have been at the price they have put forward.

“When you have products versus people and percentages and hours, people tend to mess with the price less. It’s like if you go into a boutique store and there’s a jacket that you really want and it’s $1000. You’re not going to get in there and start negotiating and say I’ll give you $800. When you’ve got products, people are much less likely to try and negotiate the price.”

Of course, if you have a model like that then you don’t pitch either. So how does Huge attract its customers?

Baxter says Huge has “three gateways to growth”– experience transformation, tech realisation, and growth creation. Experience transformation is typically CMOs and chief experience officers. Tech realisation is chief digital officers, chief information officers, and chief technology officers. Growth creation is chief strategy officers, CFOs, and CEOs.

With such broad client archetypes, the competitive set Huge comes up against is equally diverse. From consultants like McKinzie to agencies, and tech companies like Salesforce and Adobe.

So given Baxter’s heritage, is one of Huge’s product offerings advertising?

“We’ve made a conscious decision to stay out of advertising. When I arrived, there was an advertising business in Huge, but it wasn’t making any money. And that’s the problem with advertising. Right? It’s a very low margin,” says Baxter.

Skelsey also points to the strength of Australia’s creative agencies and says that he is not naïve enough to think he could compete with them. “You want to go to the Monkeys, to Thinkerbell.”

He also added that an ad, in many instances, is a preordained outcome.”We don’t want the preordained output, we want the problem. Yes, the problem we’re trying to solve: maybe an ad is the right answer, in which case, we might talk about that, but more often than not, I suspect it’s not the answer.”

So what problems have Huge been called on to solve? Baxter says unlocking the trapped value in the technology assets companies have purchased? “Brands have spent a lot of money on adtech and martech. They feel like they don’t necessarily get the return on that investment. So, one of the most recurring themes is, how do I unlock that trapped value in those assets? How do I get everything that was promised to me when I bought it in the first place? How do I now get those things? Realising the power of technology is a very big and overarching theme.

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