Close-Up: Are ad accounts more integrated?
By Caroline Lovell, campaignlive.co.uk, Friday, 26 June 2009 12:00AM
The recession has seen clients and agencies take a more integrated ad approach.
The recession has had many victims. It has caused the death of Woolworths on the high street and the highest level of unemployment since 1996. But it has also given integrated advertising more power. And its impact is seen across marketing departments, agency structures and pitch processes.
This month, Comet began talking to agencies to help it change its marketing approach to focus on cheaper, non-traditional channels. Then, McCann Erickson and its sister agency Momentum picked up the integrated £10 million ad account for Subway.
There are also the big accounts, such as Royal Bank of Scotland Group, which consolidated its below-the-line agency roster to cut costs by moving the retail direct marketing account into its ad agency CHI & Partners from M&C Saatchi's direct marketing arm, Lida, in March.
Or Virgin Trains, which consolidated its £6 million ad account from three agencies (Rainey Kelly Campbell Roalfe/Y&R, Craik Jones Watson Mitchell Voelkel, glue London) into Cossette Group. Virgin Media Television, the TV content arm of Virgin Media, has just moved its integrated account into The Brooklyn Brothers.
And the daddy of them all, UPS, is now looking for a team of agencies to work together from media, digital, advertising and marketing disciplines. Surely it can't be a coincidence all of these accounts are becoming more integrated?
Integration is definitely a trend. One driver is money and the need to cut costs. But it is also driven by the desire to manage new, complex, fragmented media channels.
Tim Lindsay, the chief executive of TBWA\Media Arts London, says: "The principles are the same as they've always been, but the way in which the brand has to behave consistently in so many channels is different. Brands are co-owned by their consumers; we've had to relinquish control."
The AAR has responded to this change by restructuring so that its business directors work in teams across accounts, instead of focusing on specific disciplines. Its siloed approach has been chucked out to embrace the integrated market requirements of today.
In the same way the AAR has restructured, so have some agencies. Leo Burnett did it in 2007, and this month M&C Saatchi and TBWA\Media Arts London jumped on the integration bandwagon.
Paul Phillips, the AAR's managing director, explains why: "When there isn't a lot of 'new' new business around, agencies will look to protect incumbent business through offering a wider portfolio of services from the agency. This is where agencies with multiple capabilities are better placed to address client requirements when they are looking to write fewer cheques for less overall money."
And the cash cow incentive is one that an anonymous managing director said is drawing in holding companies: "They've got a double whammy: top-line growth and shared costs. It's not a hard sale."
The one danger of following the integrated path is the risk that you become a Jack-of-all-trades and master of none. Ad accounts have become more integrated, no doubt. But whether they will stay that way once the recession has passed and marketing budgets are not as tight is debatable.
As Phillips says: "Life is cyclical. There will come a time when the market recovers and some clients, who have moved to a single agency delivery, will want a specialist to look after elements of their marketing activity."
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CLIENT - Jeff Dodds, director of brand and marketing, Virgin Media TV
"The reality of life is that trying to handle three agency relationships to keep it fully integrated is really difficult. If you can have one amazing agency that understands your culture and business, it is easier to manage.
"I don't think any agency can survive now by saying 'we're brilliant at press or DM'. They can have a leaning to one discipline, but they need to do everything.
"I think marketing and brand departments are under increasing pressure to justify value in their spend. What they are looking for is clever low-cost or no-cost ideas. I don't think they're restructuring, I think they are refocusing and taking fewer risks."
MATCHMAKER - Paul Phillips, managing director, AAR
"I think more clients are looking at integration, but this is driven by the commercial pressures they face, rather than a burning desire to have all their eggs in fewer baskets.
"Reviews this year are being driven far more by a fiscal, rather than a marketing, requirement, not that they're mutually exclusive.
"In the media world, there are massive international reviews taking place. You can't believe it's suddenly because clients are dissatisfied with their incumbent agencies. It's driven by the desire to rationalise, achieve better commercial arrangements and save money."
AGENCY CHIEF - Tim Duffy, UK group chairman and chief executive, M&C Saatchi
"I think, yes, they are, on balance, and the way it's happening is interesting. What integration means is not necessarily universally agreed. What we're seeing is increased interest in upstream integration.
"It's important to think of integration as an over and above channel in order to get your thinking straight. Channels are not that neat and predictable anymore.
"I think clients are not necessarily looking to put their disciplines all together into one agency and expect it to work. If it starts downstream, you end up with a bag of ferrets where everyone is fighting."
AGENCY CHIEF - Tim Lindsay, chief executive, TBWA\Media Arts London
"Integration is a big issue because the media landscape has become so fractured. As one person said: 'It's now an embarrassment of niches.' So it's harder and harder to reach big audiences. Non-traditional solutions increasingly sit alongside traditional ones, so to orchestrate marketing communication programmes properly, it's important to have a single point of contact.
"A key driver is cost. As always, the thing becomes more powerful when it is cost-driven. That is what accelerated the dislocation of media from creative. At the start, it was media wanting to come into the sunlight, but it was cost that accelerated it and the same thing is happening now."
This article was first published on campaignlive.co.uk
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