The Campaign essay: rediscovering the faith

Times of recession are just when advertising agencies should be talking up their creative attributes and their ability to affect the bottom line. William Eccleshare, the chairman and chief executive of the Young & Rubicam/Wunderman Group in EMEA calls for greater self-belief.

"The only thing we have to fear is fear itself," Franklin D Roosevelt proclaimed in his Inaugural Address in 1933, back in the Great Depression.

He had seen his people brought low by events beyond their control. He then saw their lack of self-belief become self-fulfiling, and their businesses fall like dominoes. He could have been speaking about the European advertising industry in 2003.

Coming back into the industry after nearly three years away, it's hard not to be struck by the lack of confidence which pervades all but a very small number of highly atypical agencies. In every European market, the industry and its trade press are in a state of deep depression, bordering on fear.

Gloom and despondency

In advertising, gloom and despondency can be viciously self-fulfiling. If we don't believe in what we do then it seems pretty unlikely that anyone else - least of all our clients - is likely to. One of the greatest strengths of the greatest agencies has always been their conviction, their passion, their utter self-belief and certainty that advertising, and advertising alone, could turn brands around and make businesses grow.

Economic-inspired self-doubt is being compounded by a general feeling that what we do as an industry, what we excel at, isn't enough any more.

Many seem to believe that in order to survive we need to become far broader in our scope. While there may have been times in the past when we have over-claimed for advertising, we now seem to have over-corrected and become apologetic about what it is that we do best.

The oddity in all this is that there has rarely been a time when advertising - in the broadest sense of that inadequate noun - has been more desperately needed by clients. Advertisers' product or service differentiation is increasingly hard to achieve for any real length of time. Time to market for new products in the car industry has virtually halved in the past ten years and in consumer electronics, clones of competitors' products are now in the shops literally within days of their launch. In an environment like this, truly distinctive brand ideas should be at a very great premium indeed.

Creative flair

Sure, they may be executed as anything from a three-minute cinema commercial to a CRM programme, from a 96-sheet poster to an SMS campaign. But creative flair remains what makes them distinctive. Without that, they will fail to capture the consumer imagination and thus pass like ships in the night.

All major companies now recognise that their reputation - be it with customers, staff or shareholders - is their greatest asset and they will continue, recession or no, to invest behind ideas to build and protect it.

This should be no great news to a Campaign reader. Yet industry leaders continue to undervalue, or even deride, the very thing that our business is built on. I was recently bemused by the head of a rival European network explaining to me his strategy of diversification into brand consultancy. This was based, he assured me, on the premise that "creative work is now a commodity" and that only by "added value" services such as brand positioning and valuation could he hope to return to the days of "top table" respect and the cash that went with it.

Orchestral symphonies

This is nonsense. How can creative ideas be a commodity? On that basis, fine art or orchestral symphonies or tragic drama are commodities. Yet I can't quite see Rembrandt, Mozart or Shakespeare being dismissed so brazenly. The truth is that great, original advertising ideas can and do have the power to transform the fortunes of brand owners in a way and with a power which at least bears comparison to the effect of great art on its audience. Just ask Scottish Courage, Unilever and Diageo where John Smith's, Lynx and Smirnoff would be today without the great advertising ideas which built those brands into massive, profitable businesses.

What's behind this loss of self-belief seems to be an envious, and ill-informed, longing for the greener grass and higher fees of some other professional services. Making false comparisons like this and casting nostalgic glances back to a past which is long gone - and may never have existed anyway - has caused many industries, not just ours, to lose their way.

Diversification in a downturn is not the wisest of strategies. Instead it would surely be smarter to focus intently on the one thing that no-one else can do. Developing and selling great creative ideas is, or should be, at the heart of what any great agency does. Concentrating on the power of those ideas, their relevance and their potential is what makes us distinctive.

Utterly professional

Yes, there are things we can learn from consultants. We need to ensure that our ideas are rooted in a real understanding of consumers and we need a full grasp of the economics of our clients' business to ensure that they can actually deliver real returns. We need to be utterly professional and rigorous in our approach and to avoid any suspicion that we're only interested in creativity for its own sake.

From my time at McKinsey, I certainly learnt a lot from the almost obsessive focus on people and talent; the recruitment, development, evaluation and "up or out" processes are a formidable guarantee of consistency and quality for clients. Agencies can certainly improve in this area. Equally the investment in knowledge development, the sharing of experience and the codification of expertise really do ensure that "world class" has real meaning. Our relative failure to capture and leverage our collective experience is a weakness we should fix.

So, there are lessons to be learnt but not, I believe, about our core deliverable. If we retain, or regain, our focus on that, and do it with conviction and passion, I believe no-one can touch us. In a world where product and service differentiation is increasingly hard to come by, it will be the brilliant execution of great brand ideas that will continue to differentiate the successful agencies and their clients.

Clients are using consultants to help them to understand the changing economics of their business, they pay handsomely for advice on strategy, organisation, distribution, building marketing capability, managing acquisitions and, yes, sometimes for developing an over-arching brand strategy. Clients value the objectivity of consultants, their investment in knowledge and deep understanding of an industry or discipline and, above all, perhaps they feel secure in the knowledge that there is no product to be bought at the end of the process.

Achilles Heel

Up to now, that is. For all is not rosy in the world of consultancy as recent reports of cutbacks and discounting bear witness. One of the reasons just may be that in a major business downturn, the lack of a tangible, necessary product is something of an Achilles Heel. Can a chief executive really justify spending £1 million on a consultant's report at a time like this? On the other hand, the need for stimulating demand and creating brand distinction has never been greater. The mantra of growth leads to the necessity of demand creation. It is only by turning theory into practice - by giving consumers something tangible, such as an ad, to react to - that this can be achieved. Others may be as good or better than us at producing intellectually rigorous analysis and theoretically brilliant positioning statements but without creative flair to bring them to life, they will never change the behaviour of a single customer.

Creative ideas are more, not less valuable in today's climate and the worry that they might emerge from the intellectual, analytical world of consultancy is risible. The great agencies have creative people at their heart and in their bloodstream for a good reason - it's what makes them great. Managing the tension between creativity and business is a rare skill which outsiders find hard to understand, impossible to emulate.

We need to get some pride back into the fact that we have a real product to sell, not find ourselves apologising for it. We should be investing more, not less, in creative talent. If the IPA is right that only 25 per cent of agency payroll goes on creative people, this is absurdly low. It's certainly far lower than in a design agency. This is our industry's competitive advantage and yet we seem in serious danger of losing sight of the huge value and the unique power of what we make. Clients certainly recognise it. France Telecom paid $45 billion for Orange - a brand which had taken a number four entrant into the number one slot of a ferociously competitive market. WCRS's contribution to that wasn't insignificant.

Over a longer period, 70 years in fact, J. Walter Thompson's "Have a break, Have a Kit Kat" has been a significant contributor to what has become a $485 million brand in the UK, and is now Nestle's global confectionery flagship. A combination of chocolate, wafer and praline, however well packaged and well distributed, could not have done that on its own. We all have our favourite example; at least I hope we do, because if we don't, and if we don't believe in the value of such ideas, then it's not surprising that we're failing, as an industry, to get properly paid for what we do.

The simple rules of supply and demand are beginning to apply with an overdue but none the less forceful impact on the advertising industry.

We're underpaid not just because some of us seem to have lost the faith but also, and critically, because we're oversupplied. There are simply too many of us doing it and too many not doing it well enough. But that doesn't mean it has no intrinsic value, on the contrary. As the number of global networks and people working in them shrinks we have to ensure that we regain our ability to be properly rewarded for our contribution to our customers' bottom lines.

None of this can take away from the indisputable fact that agencies used to do far more for their clients under the guise of "full service" and that with 15 per cent commission we did a lot more than just "do the ads". I recently asked a major FMCG client to look at the fees for marketing services (not including media spend) it paid to its agencies now against 20 years ago. It's a dramatic shift from ad agency fees (then commission derived) taking more than 80 per cent of the budget in 1980, with the rest split between market research and some pack design work. Compare that with last year when this same client spent only 18 per cent of its fee budget on its agency (now only doing the ads) and the rest split between specialist consultants covering everything from pricing strategy to awareness tracking.

But the "fee pie" was so much larger, even in real terms, than it was two decades ago, that that agency, in this example, was actually getting paid more, in real terms, than it was in the early 80s. So yes, a lot has changed and the scope of work for agencies is different, but not necessarily narrower, than it was.

While we may not have home economists or cardboard engineers in the way that big agencies famously did in the 70s, a much wider range of consumer touch points now exists and we have to develop ideas that transcend the artificial barriers between them. This isn't a veiled plea for "integration"; rather a desire to redefine our business as being simply, but proudly, about creative brand communication and the need to focus on our unique ability to deliver it. That's what knitting in the 21st century is about and we should be excited to stick to it because there's no-one else out there who has anything like our ability to knit.