BUT FIRST THE PAST
Six years ago I published an article in Advertising Age entitled “The Agency Model Is Bent, Not Broken.” It was in response to claims than it was broken. Now, a half-dozen years later I believe the model is finally evolving to the shape of the future.
Last August, when the planned merger of Publicis/Omnicom was announced, the trades explained WPP’s “agency team approach,” in response. In it, Sir Martin Sorrell did not emphasize competing on size, but rather on shape.
Quoting Ad Age: “WPP promises a client an integrated marketing unit tailored with talent from across its agencies… The teams range in size and structure; some are merely partnerships between a couple of WPP shops, but others are amalgamations of staff from numerous agencies, with their own offices, websites and monikers. WPP says that there are now more than 30 of these teams ”
AND NOW THE FUTURE
For years we have been advocating a system where the agency model mirrors the CMO’s multiple responsibilities – creative, media, digital, promotion, PR, branding, direct, data analysis etc. The new model would have an agency leader to mirror the CMO to become their alter ego and primary resource. Agency holding companies are uniquely positioned to affect this change. Certainly WPP’s most publicized team concept addresses that, as have attempts by Procter & Gamble (BAL system) and American Express’ Integrated Marketing Approach, both of the latter were introduced only a few years ago.
The new integrated marketing agency that reports to the client and serves many different marketing services needs in one place we believe is the future. Clients have told us that one of their biggest problems is working with several agencies to coordinate and collaborate on customized marketing solutions. Furthermore, over the past five years marketing services integration has ranked among the top three client concerns every year.
Of course change is not easy. Here are some pros and cons to the system.
Pros:
- The team is easier for the client to manage since the leader of the team mirrors nearly all of the business interests of the client CMO.
- Over time the team is likely to assume the personality of the client as much as the personalities of the various agencies from which they came.
- Potentially client agency relationship longevity could be improved since the vested interests of both parties are more closely aligned. While individual members of the team may leave from time to time, holding company leadership is very involved with client business and relatively stable.
- In comparison with a group of agencies from the same holding company it avoids inter-agency squabbles over egos and siloed profit margin goals. Besides, the team could be more cost effective since there can be one blended overhead rate and profit margin as opposed to many.
Cons:
- Clients want best-in-breed specialists for their business and the ability to select agencies they believe qualify. The team is selected from within the holding company mainly by the holding company. The hope is that best-in-breed individuals will be assigned to the team.
- The personalities of the various agencies within the holding company are likely to fade over time. Agency personalities are largely responsible for styles of creative thinking that could be lost. To continue to be valuable over time the team must not totally assume the identity of the client, but maintain some of the independent the personality of the holding company or at least that of their own strong team leadership.
- In depth resources for each discipline are expensive, especially in today’s data-driven world. The team most likely will have to dip into the resources of existing specialty agencies within the holding company sometimes standing in line from the outside. However, some of this already exists within the current holding company structure.
- Creative talent, regardless of discipline can get bored working on the same problems over and over again. Some allowance might have to be made to inject variety. This could mean that some agency people might work with more than one team, while the most senior marketing leadership remains completely dedicated to the single client.
Summing up: The Integrated Multi-Discipline Marketing Agency seems reflect the natural evolution of where our business is going in an increasingly more complicated environment. We believe this concept most closely fits the future needs of client CMOs who long for integrated solutions and CPOs who want more cost effective solutions. This model also helps agencies who want to find ways to build and maintain loyal client business over a long period of time.