Media Forum: Is online unbundling inevitable?

Is separating media and creative unavoidable in the digital world?

Strange to think that, not so long ago, Omnicom was regarded as one of the more ponderous and hesitant groups when it came to media. In the conventional media space, the holding company seemed to take an age to get its head round the need to create coherent media specialist brands and then construct group-wide structures to derive the greatest combined negotiating leverage for these brands.

Its approach in the digital world couldn't be more different, however. Perhaps that's the nature of the beast - what used to take years can now be done at the speed of light.

In June, Omnicom announced that it was extending OPera, the media negotiation joint venture between its OMD and PHD specialists, to cover digital media. With immediate effect, Agency Republic's billings were joined with PHD's and OMD's digital billings to create a buying pool of more than £100 million - and other Omnicom-owned digital agencies are scheduled to join when they are ready.

Omnicom clearly believes what it has learned in the past can be applied wholesale to the media world of the future - a conclusion underlined by its latest announcement. Last week, it revealed that Agency Republic - until now a full-service agency - has decided to replicate the structure of its offline agency peers by hiving off its media department as a standalone operation called Media Republic.

Martin Kelly, the media director of Agency Republic, will head the new company. He argues, unsurprisingly enough, that the generalist agency might have been appropriate in the early days of the digital advertising market - but no longer.

He explains: "Media and creative are both specialisms and need people and management dedicated to those functions and products. Both Agency Republic and Media Republic will be centred on strong planning functions that are tasked with developing an understanding of the digital consumer and what is coming next. But layered on top of that insight is a fundamental need for strong commercial skills and relationships with media owners, as well as the infrastructure to make sure a campaign can be delivered."

That's hardly a view that you'd expect Wayne Arnold, the managing director of Profero, to subscribe to. His agency is thoroughly full-service in its ethos. Arnold argues that you can't draw analogies from what happened in old-fashioned media during the 80s, when even the most hardened advocates of the full-service advertising agency model had to concede defeat.

He states: "You have to think first and foremost of the consumer, rather than business models. Consumers don't think in terms of something being a good media idea or a good creative idea, they just see something and think it's a good idea. And that's especially true in the digital world, where it's increasingly impossible to distinguish between creative and media ideas. Creating a separation between media and creative just doesn't make sense - and clients understand that."

Do they? Charlie Dobres, the founder of i-level, doesn't think so. He says that the Agency Republic announcement is yet more vindication of his own agency's approach of the past eight years and the truth is that the market has been moving steadily in this direction. Full-service agencies tend to struggle when they're up against specialists on media owner pitches - which are the rule rather than the exception.

He explains: "There is a huge cultural difference between a media department and a specialist. What we have managed to demonstrate is that you don't have to have media and creative in the same building to make it work."

So who's right? Just what are clients asking for? It's horses for courses, Juliet Blackburn, the head of digital at AAR, reveals. She says she doesn't think it's possible to predict how the market will evolve. She concludes: "It's no surprise to see agencies doing what Agency Republic is doing, as it reflects the way in which the offline world evolved. But I'm sure there will be agencies that argue strongly for the need to keep creative and media together. There are those, for instance, who argue that clients who start off looking for media alone end up asking the agency to do the creative too. All agencies will be aiming to claim that they can offer the best in class, while being able to guarantee that there is integration and synergy between the creative and media sides."

YES - Martin Kelly, media director, Media Republic

"When an industry is immature then specialisms are unnecessary. It's like those sports players who played for England at cricket, football and probably real tennis and were jolly good at all of them. But unbundling is inevitable."

NO - Wayne Arnold, managing director, Profero

"In a world of converging digital media, it's about getting the right message in front of the right people at the right time. It's about understanding the media environment in which the messaging takes place."

YES - Charlie Dobres, founder, i-level

"Clients tend to hold media-only pitches as they always have done. Full-service agencies manage to get on to (media-only) pitchlists but, when they do, they tend to struggle against the specialists. It's hard for them to be taken seriously."

MAYBE - Juliet Blackburn, head of digital, AAR

"Creating a separate operation is one way of positioning yourself as having a focus on media. But many (full-service digital) agencies will argue that they have invested consistently in bringing in digital media expertise."

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