I’ve had a few conversations recently about the changing remit of the advertising agency and the growing inter-relationships between different agencies, be they pure event/activation groups, web development or even media agencies. The question that always comes up (on both sides of the table) is whether the agencies will be able to get along.
The fact of the matter is that an agency is always looking to increase its bottom line – after all this is the business that they are in, and we know that the big holding companies are driving each of their business units hard with absolute revenue targets and PC ratios, and a little competition even within holding groups isn’t frowned upon. So this invariable means that somewhere along the line there will be some breaks in the value that one party is getting out of another.
There are a few solutions that exist to these challenges:
Integrated Agencies
Back to the golden days of Madison Avenue when full service really meant full service. Only the bigger agencies can afford to, and have the critical mass to be able to achieve this, as they can have the requisite number of specialists and generalists. But as I wrote in my post ‘Has ‘integration’ become a dirty word?‘ unless we can bring the media agencies back into the fold this is still going to be a challenge.
Holding Companies
The last few years have seen a few holding company pitches, the most notable of these from my experience are WPP’s TeamDetroit and TeamHSBC where the best skillsets from the different agencies are brought together to create the requisite team. The financials between these teams and their respective companies are always a little complicated and function best where they are all responsible for a single bottom line, either driven by the holding company or the client.
Internal teams and agencies
These seem like a way around some of these challenges although they are sometimes seen as not always delivering the best creativity. Depending on the people involved and the structure these can be a very efficient way of removing the financial layer and allowing the teams to really focus on the work. The unfortunate side of it is the quality of talent who are prepared to focus on a single client and potentially lose the cache of a Madison Avenue brand in their portfolio.
Client Managed
The fact of the matter is that to make the system work the clients need to understand the different pieces of the equation and actively manage the balance. When the client has a grasp of what they need from either one or several agencies – and also a firm hand on the strategy then the different players in their marcomm orchestra are in harmony.
At the end of the day, the answer lies really in the control and deployment of a clear single-minded strategy whether that is in your marketing message or how you organize your partners. Are you playing nicely?
