Agencies pulled in both directions by bid to be different

Feeling a bit worthy last weekend, it was time for a change of reading matter. Out went Saturday's usual Soccer AM accompaniment of Viz and the Daily Mirror's sports section and in came a 31-page report on the media and ad agency sector from the City boffins at Morgan Stanley, writes Ian Darby.

My interest had been piqued by its suggestion that agencies "share the same remuneration arrangements as third-party logistics, contract cleaning and warehouse management".

The implications of this are clearly dangerous for those wishing to work in a creative business. If pricing issues lie at the heart of all negotiations with clients, as the Morgan Stanley report suggests, surely that will serve to create a market that is featureless and solely driven by market forces. And, as everybody knows, there is definitely a limited value in knowing the price of everything.

The report points out that procurers, rather than marketers, now handle negotiations and the inevitable global consolidation of media networks has created the perfect conditions for commoditisation. What is interesting is watching how agencies respond in both participating and pulling away from this process.

First, there are those agencies, Starcom Motive would be one I think, that are confident enough with evolving their existing model, relying on their original proposition of combining really good buying with talent that claims to understand brands better than most.

Next, there are agencies such as BBJ, now Vizeum, who launch a whole new positioning (in this case "connections") to convince more imaginative clients that they are better than the rest. Manning Gottlieb OMD also fits into this camp with its launch of The Source planning offering, formed because, in the words of the chief executive, Nick Manning, "knowing the old mix of media won't wash any more". The irony of most agencies in this category, especially Vizeum, is that their very attempt to offer something more than a commoditised service has been borne out of parent networks squeezing and consolidating them. Aegis wants it to make better margins so it creates a network with thinking at its centre.

A final set of agencies ruthlessly attempts to exploit the forces of blandness by bolting on every service they can think of and flogging it mercilessly to clients while spitting the word "Naked" at you as though they were devils.

But I can't blame agencies. Clients are driving the quest for efficiency at any cost and nobody can be surprised that their obsession with obtaining buying expertise for next to nothing leaves agencies with little time or inclination to focus on anything else.

All this left me feeling a bit down. A peek at the latest Paul Burrell revelations in the Daily Mirror was required. Her Majesty's Press: now there's an industry where rivals would never compete solely on price.

If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum here.

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