Integration, integration, integration. Agency networks are falling over themselves in their rush to announce plans to bring their marketing disciplines closer together. But will the advertising community ever allow non-traditional media to take the lead in generating brand ideas, or is integration just the latest advertising buzzword? Campaign asked five UK network chiefs - Stephen Woodford, the chief executive of Engine, Paul Bainsfair, the chairman of TBWA UK Group, Cilla Snowball, the chairman of Abbott Mead Vickers BBDO and Proximity London, Gary Leih, the chairman of Ogilvy Group UK, and Tim Lindsay, the chairman of Publicis UK Group - to explain how they make integration work in practice.
- Why are so many networks choosing to move towards an integrated model?
SW: Over the past 20 years, the advertising silos have grown like mad in their own way. Now the growth of traditional media has plateaued, those disciplines are less bullish as other media become more important.
PB: Also, the proliferation of digital TV and the personal video recorder, combined with not being able to buy the ratings that we used to, means we are seeing examples of activity in non-traditional media having a dramatic effect. There is also a generational shift occurring - you can almost draw a line when you meet marketing directors; most are under 40. And the days of a brand having a single-minded proposition and one thought and sticking to it have gone.
- Who is driving integration?
GL: It's a shared agenda. Clients have become more skilled at it but you still see some unbelievable mistakes made when a company's PR and advertising are doing different things. Young people are agitating for it and clients are agitating for it, but it's mostly up to us. If you offer it to a client, they're not going to refuse it. It's about a brand idea that transforms behaviour, not a buzzword. The word integration should be banned.
CS: Clients such as Unilever, Sainsbury's and TV Licensing are trying new things and making huge progress. Integration isn't just about communications, it's about commercial integration too. You need a client champion and they need to be integrated for it to work. Then their internal communications can join up with their external activity. If you've got integrated communications and a disintegrated organisation, it's not going to work.
- What practical measures need to be implemented?
SW: The key to integration is being under one roof. There are barriers to break down and you trust people more if you see them every day in the lift and in the bar - the corridor conversations are important.
CS: I don't necessarily agree. I think you can get good integration with good teams. We can do it without being in the same building and if that becomes the crutch for success, the actual bricks and mortar will not help.
GL: We're currently in five different locations but we have the bulk of our business - 800 people from OgilvyOne, O&M and Ogilvy PR - in one place. The integration between those businesses is far greater than those outside. You've got to be able to do it even if you're in ten locations. But I've grown up in a place where everyone is together and it's better that way.
TL: We're in the process of merging our creative departments. We're lucky that we've got our marketing services company, Publicis Dialog, in the same building.
But you can take it further. Even though you need separate front doors because you need to be able to do pure advertising and DM pitches and manage conflict, the issue of physical and geographical proximity is huge.
Our Renault, Procter & Gamble and Army account groups sit together. It is unbelievably liberating and the feedback is fantastic. The teams get more joined up, the conversations you wouldn't normally be bothered to have are had. The best things that happen in advertising happen where disciplines overlap metaphorically and also physically.
- How easily are staff adapting to the changes?
TL: The generational shift is important. Out of the four teams on our graduate summer school this year, none of them started with TV in their pitch.
PB: I would extend that beyond graduates. If you look inside your creative departments, the young creatives get really excited about viral films or events or in-store marketing. The older creatives regard that as some kind of below-stairs activity that they don't want to get involved in.
Five to ten years ago, young creatives only wanted to write TV ads, but that has gone now.
- How can you overcome the prejudice that exists between disciplines?
PB: One building would solve the issue that advertising is the daddy in the relationship, because if all the teams were together then the leader on a particular project or account would emerge naturally. The informality and intimacy that comes from being in one place would make it easier.
What I've also noticed is that as well as designers or sales promotion or digital people, we've got people from music publishing or event management or rights negotiation in the room. They're the people the clients want to talk to now. When I started in the business, advertising people knew things clients didn't. But that has changed and now they want to talk to the people who can negotiate with Hollywood.
SW: You know when you've reached the endpoint when the creative idea comes from anywhere and each discipline can embrace it. Account handlers and strategists can be more enthusiastic about the idea than some creatives are.
- What management issues do you have to overcome?
TL: I think there's a wave about to break that will see people outside of advertising start to take positions of responsibility in communications groups. Three of our management group, excluding the finance guy, are not from advertising backgrounds.
GL: There is an ego issue to consider. We need to remove the titles so we can take away the managing director and chief executive roles from the different silos. When you take away these titles, the trade-off to staff is the gaining of experience. A lot of our staff have grown up in silos, so you have to tell them they're going to be more marketable. They might not be specialists in everything but they're going to be strong generalists. You can't have the client - who is skilled in integration because they have to be - marked off by specialists in agency silos.
- Should all this affect the way agencies are paid?
PB: These ideas that we're now having - we don't get paid for them. Integration hasn't affected us with remuneration and it should have, positively. We've got to get better at measuring the effect of the things we do.
SW: It's a virtuous circle: the more successful clients are, the more they invest. It's at that macro level that if you're doing more and more for the client across more channels and it's delivering, you'll get rewarded for it.
- How important is sharing a P&L?
PB: In addition to being in one building you have to remunerate to one bottom line. Even within a holding company, if the different organisations are structured to have different P&Ls, each company wants to improve their share of the cake. It gets harder when a client wants to bring in an outside PR or DM agency.
We have a bonus pool that works across the group, so if the group doesn't make its target then no-one gets their group bonus. Even though we measure each unit as a separate P&L, everybody knows the additional bonus comes from the group success.
GL: You have to keep measuring individual units, but you also have to keep saying you will all be rewarded for this.
SW: Ultimately there has to be one bottom line and one management team responsible for it.
- Do clients want integration at pitch stage as well?
TL: Martin Jones (the AAR chief executive) says that everything that comes through his door is about advertising. That's still how most people move their business.
CS: It's rare that you are asked to compete in an all-discipline pitch when every bit of business is up for grabs.
TL: Most of our integrated accounts have started with advertising or DM and we've sold in other services.
GL: And it will continue to go that way in the foreseeable future. But if you want to open the door, talk to them about the brand solution rather than the agency and then they will talk to you. That's the currency of discussion currently. Whether that means you automatically get the brief or that it goes to three or four competitors as well - the point is you've engaged the discussion at the right level and you're getting to talk to the chief executive about it.
- Why is advertising still the dominant force?
PB: I think this Jones effect is caused by something that we must acknowledge and that is that even in 2006, marketing budgets will contain a large amount of money for advertising, but hardly any for branded entertainment or PR. Their mindset - the way they do their forward thinking - is old-fashioned.
SW: Between 40 per cent and 50 per cent of a client's budget is advertising.
When they're running an ad pitch, they're generally expecting the outcome to decide which direction the rest of the communications is going to go.
Nine out of ten pitches might be for advertising, but they're agenda-setting pitches and you can't have a pitch where the brand idea comes out of the advertising and the DM and sales promotion go on in their own sweet way.
- How can you ensure that advertising isn't always automatically presented as the answer to a client's problem?
GL: Have one business director to head each piece of business.
CS: That's a good point. You've got to have a good leader and they can come from any discipline and it can vary by account. Without seniority and strong leadership, integration just falls apart.
- Can integration work between unaffiliated companies?
TL: Some of the agency teams COI puts together are shotgun weddings. Integration doesn't have to happen within an owned group. Some of our best relationships are with agencies from other networks.
GL: I'm not entirely sure about taking bits and pieces from all over the place. I think advertising people are generally tribal. People take a long time to get comfortable with each other and to trust each other.
CS: But it's a good test of whether the idea's strong enough.
GL: You have to be able to do both. If you can't, you're dead in the water. Whole big chunks of business will move that way.
- How does media fit into an integrated agency?
PB: The media agency issue is a big question - by allowing them to exist separately, we've created a monster. I would love to go back to the days when media departments were inside advertising agencies. Clients would get better ideas, better thinking and better joined-up initiatives.
GL: I don't think we need buying - that's a specialised service - but there's a whole generation of creative people who have grown up without media input and a whole generation of media people who have grown up without creative input. It's impossible to provide integration without a high-level media strategy.
SW: The paradox here is that the rest of the communications process is getting incredibly close to the customer. We're getting much closer to the sharp end, apart from in media. When you take channel planning out, you're still not getting very close to the space and airtime that clients are spending their money on, whereas ten to 15 years ago, we were very close to that.
TL: The biggest barrier to truly holistic communications is the separation between media and creative agencies. Media companies are the enemy of creative companies because they are competing for the same upstream relationship with the seat around the boardroom table. And it is a competition.
Even with media companies in your own group (and I'll probably get the chop for this), there's this sense that you're in competition for influence, for relationships. Most of the time, people co-operate but they don't give much to each other in the sense that ideas need to be shared.
CS: Sometimes the buildings are used as an excuse for lack of collaboration but, provided you've got a clear set of objectives and goals to work toward on a piece of business, it can work. But if you try to pull the whole (media) business back in, you've got a hell of a lot of conflict issues.
You've got to look at that seriously.
GL: If you can have representation of each of the disciplines around the table, around the water-cooler, at the bar, you will get better cross-pollination. But what we're going to do is bring representation of all the disciplines under one roof. I do believe in having everyone around one table.