The Dream of the Agency DAO

As creative studios and agencies struggle for more creative freedom, DAOs and tokenization will surely take a more central role in the marketing and branding industries. Decentralization offers such entities benefits that could fundamentally reshape creatives’ relationships with clients—reducing layers of inefficiency and anti-creative incentives.

November 4, 2022

Isaac Simpson



Chris Callahan runs an independent brand strategy agency called Visitor. Visitor wrote the line that emblazoned the sky over the parking lot that housed Urbit Assembly. Its work focuses on Web3 blue chips and up-and-comers: dev marketing, notoriously one of the toughest niches in the branding world.

“Devs are very sensitive to puffery and cringe,” says Callahan. “Traditional tactics like headlines and manifestos fall flat. Clarity and vision are much more important because they showcase the benefit as well as a long term potential for use.”

Why? Because developers eschew sales. If something is good, it will rise to the top without the help of annoying salespeople. The thing is, marketing-world creatives usually agree—we’re just bogged down by salespeople of our own. So we, like devs, yearn for the day when decentralization will save us from the social climbers and “connectors” that suck up all the oxygen.

Enter the Agency DAO. The idea—a creative agency that solicits work, receives clients, hires creatives, and makes decisions all on the blockchain—is oft-discussed because it appeals to the crunchy, anti-establishment vibe at the core of every major ad agency. A trustless, leaderless creative community where everyone has equal voice and the best creative rises naturally to the top? The dream of the ‘90s come true!

Unfortunately, decentralization in the ad world currently occupies much more podcast time than reality.

Creative by Committee

But there are some actual attempts at making the Agency DAO a reality. Koto, a top creative agency known for creating the AirBNB brand, tried it with Web3 brand Polkadot. It pit two pitches against each other to determine the future direction of the Polkadot brand by vote. It used a quadratic voting via Snapshot to deliver the will of the Polkadot network to four “multisig curators” who executed the vote on chain.

While the experiment worked, it also revealed the shortcomings of the blockchain’s ability to guide creative decisionmaking.

“To organize Polkadot token holders who wanted to participate and create the voting parameters took very long,” says Callahan. “To have the wisdom of crowds decide on two design elements was an exemplary concept for Polkadot to own. The question is, did it push the work? Or was its value in consensus alone?”

Quadratic voting is cool, but the creative process is long and complicated. Stakeholders chose between option A and option B. At the end of the day, that doesn’t feel like a significant innovation, especially if the vote isn’t even actually happening on chain. Rebranding sprints typically take around 3 months. This process took 11. Sure, it was a good way for Koto to play ball, but it wasn’t much more than that.

Agency DAOs face the same central problem as ordinary DAOs, which can be summed up thusly: every decentralizing force is too costly, and every cost compromise moves the system back towards traditional hierarchies. The nature of creative work even further stymies the theoretical Agency DAO. Creative products almost always suffer when anti-hierarchical principles are put in place. As David Ogivly famously said,

“Some agencies pander to the craze for doing everything in committee. They boast about ‘team-work’ and decry the role of the individual. But no team can write an advertisement, and I doubt whether there is a single agency of any consequence which is not the lengthened shadow of one man.”

So this leaves us with the question of how exactly the DAO model can help creative agencies, and what such an organization might look like, and how Urbit can help. There are roughly three paths: 1) Project Bountification 2) Talent Retention 3) Idea Valuation.

Project Bountification

In the Mad Men era, a few Agencies of Record (AORs) dominated the advertising world. These massive whales took every cent of a given big brand’s yearly advertising budget and charged a simple 15% premium on all media (e.g. radio time, TV time) purchased. A very simple and very profitable system, now long gone.

Today, big brands typically have many agencies—sometimes hundreds—each with a different specialty, and each fighting for their own share of the budget. I’ve been in rooms with representatives from no less than 10 agencies—digital, DEI, experiential, CSR, influencer, etc—all pitching ideas for the same holiday campaign, and all surely billing upwards of $100/hour per person to do so.

This sounds nice for agencies, but actually it isn’t—instead of focusing on the creative work, they must dedicate their energy towards constantly re-pitching themselves to the client and fighting with procurement people on rates. The managerial class types who control the budgets care a lot less about the quality of the creative than whether you remembered their dog’s birthday.

Crypto could provide a solution to modern agencies’ woes by creating a flatter system for project acquisition; adopting the sort of decentralized bounty system some devs already use for Web3 projects.

“Bounties are great,” says Callahan. “Big agency players should popularize them. I feel like if there's a way to do an on-chain bounty with select members who either hold a special token that allows participation on key briefs, that would help a lot.”

How would such a system work? First, a brand issues a bounty for a project for work it needs done. Luckily, this basically already happens in advertising, it’s called a request for proposal, or RFP. The only difference here is instead of RFP acquisition and response being 90% schmooze-fest and 10% creativity/pitching prowess, it’s a lot more like what you’ve seen on Mad Men: the client’s RFP passes trustlessly to the bold creatives who spend many drunk, sleepless nights coming up with genius ways to knock their socks off.

“A brand issues a bounty for a stunt activation that, for example, educates the world on the psychological benefits of calm computing,” Callahan explains. “The members of Agency DAO approve it, and create their own bounty for creatives inside the DAO. Bounties burn after 10 days. Ideas submitted and sent to client in the manner set by DAO.”

Once the job is awarded, the chosen agency will continue this pattern, effectively removing the “account guy” layer—the sales-y middle people abhorred by both creatives and devs alike—and returning more focus to creativity.

Talent Retention

“Professional creative” industries, e.g. marketing, branding, etc, suffer from turnover rates orders of magnitude higher than the industries they serve. Being a creative is both kind of awesome, because a new gig is never too far away, and also scary, your current gig reliant on the slightest whims of the client.

This means that the market for creative talent in the form of copywriters, designers, art directors, animators, producers, editors, etc, is always choppy and competitive. Staffing sucks—it’s difficult to evaluate the quality of someone’s work until you’re actually working with them, because creatives stuff their portfolios with successful projects they’ve barely touched. Beyond that, now bloated Web2 lowballers like Fiverr and Upwork bottom out the market with garbage time labor that even the biggest brands still somehow fall for. Another great opportunity for Web3 disruption.

The Agency DAO model provides permanence. Currently, some independent agencies offer equity packages that take a long time to vest, and are only ever worth anything if the agency sells. Owning fungible tokens from day one is a much better way to incentivize both work quality and retention.

DAOs also offer flatter and more collaborative atmospheres, which creatives at least ostensibly want.

“There’s total transparency of who works on what. Better collaboration between members, meaning happier, more fulfilled workers. Awards will be more meaningful and accurate,” says Callahan. “Plus, the value of your tokens naturally increases or decreases based on your performance. Just by getting hired at a successful DAO you can already be doing well.”

Finally, a system that allows democratized voting on creative products, as opposed to traditional Hype Dad aristocracies, could actually foster more Darwinistic environments where the best creative has a higher chance of rising to the top.

“Eventually group preference will select one creative over others; causing repeat elections of the same member,” says Callahan. This could occur on both the agency level—removing the Hype Dad problem, e.g. lazy incumbents making lame decisions. “There's a sort of Darwinism that is created that can determine benefits or even redundancies for those not pulling their weight or who simply aren't as talented as others.”

Idea Valuation

The creative industries are perhaps the only example of a field in which the artists retain no intellectual property right for their ideas. This is why advertising creatives make so much money—an advertiser can milk a good idea for decades and we’ll never see a dime.

The tokenization inherent to the DAO model opens up several possibilities for valuing ideas in new ways that behave more like copyright.

“The basic thought now is starting something I’m calling General Idea; pre-created, white label ideas based on research of real creative problems that need fixing,” says Callahan. “We NFT the ideas, sell them to clients. They make them or they resell that idea to other clients or agencies. That monetary markup value on the idea trickles down the original creator. More democratic way to share ideas and defend their ownership when they’ve been recorded on the blockchain.”

This sort of blockchain-based soft copyright is one way to value an agency’s DAOs. Another, simpler way, is to sell NFTs or NFT-related independent creations of the agency itself. Art collective/creative agency MSCHF, for example, makes its money both via brand deals and also a la carte meme-to-merch drops. Agencies with a certain amount of clout could easily tokenize the clever side projects of its creatives—making it far less reliant on client deals and more able to capitalize on its creative prowess.

“Pool Suite [another creative studio] does a great job of being a creative company that happens to make NFTs of music and general drops and stuff,” says Callahan. “They're a studio first and then a blockchain player after. I'd still consider them a ‘diet-DAO.’”

Édouard Urcades has designed interfaces for Tumblr and IBM, and currently serves as a design lead at Tlon. His project Structure is a “cork board” for creative projects on Urbit—sort of a “mercenary guild,” for UX/UI designers looking for work. Structure is run by a gnosis safe wallet operated by its 12 members. Beyond serving as a “soft on-ramp for Urbit-related design labor,” Ed plans to monetize Structure by selling Urbit merch designed in-house, both NFT and IRL.

How Urbit Can Help

The three categories discussed above—project bountification, talent retention, idea valuation—present theoretical frameworks for the Agency DAO. However, the shortcomings of current DAO infrastructure and governance make them largely impossible. Enter Urbit.

The creative industries rely almost entirely on reputation—so any Agency DAO without permanent pseudonymous ID is dead in the water.

“Goodby Silverstein and Partners, for example, is widely regarded as one of the best ad agencies out there,” says Callahan. “When a big name in the creative industry goes to work there, the reputation of Goodby Silverstein increases.”

Urbit IDs let you maintain your creative and working reputations while operating within a self-owned ecosystem that can’t be deleted. Beyond that, Urbit’s design-forward OS selects for self-expression in a way that no corporate-owned platform could.

“The sigil itself is its own design feature,” says Callahan.

Simply put, running an Agency DAO on Discord and Google Docs would be fundamentally unserious. It’s one thing for a traditional agency to use Web2 products as tools for its creatives. It’s quite another for Web2 products to be the only connection the agency has with its creatives outside of the blockchain.

Recruitment, ideation, project sharing, and even simple chat aren’t possible on Web3 without something like Urbit to tie it all together. Sure, you could get a bunch of anonymous creatives together on a shared Figma, but there will be zero accountability and likely low participation. Whereas Urbit—particularly Holium’s forthcoming Realm—brings Urbit ID into a decentralized, permanent environment that connects members P2P, and allows on-chain transactions without leaving Urbit. All while maintaining permanent IDs.

As creative studios and agencies struggle for more creative freedom, DAOs and tokenization will surely take a more central role in the marketing and branding industries. Decentralization offers such entities benefits that could fundamentally reshape creatives’ relationships with clients—reducing layers of inefficiency and anti-creative incentives. However, a decentralized ID layer like Urbit is needed before the Agency DAO can be practically attempted.

Isaac Simpson is a Los Angeles based writer and the founder of the marketing agency WILL. You can read his work on his substack The Carousel.