Recently there seems to have been a great deal of debate in the industry press about different agency models, their roles and their respective importance. Who will inherit the future? Which type of agency will take a leadership role with clients? Direct marketing agencies are afraid that advertising agencies are encroaching on their traditional areas of expertise.
Digital agencies claim they are better placed to decipher the complexity of the new consumer-controlled interactive environment.
I'm afraid to say that during these debates, the arguments are usually prejudiced by contributors' backgrounds and their need to push their own positions. Here are three examples of these recent contributions: "Can the DM industry defend its turf against adland?"
"Direct marketers are so much closer to clients' businesses than their advertising cousins."
"Some clients feel their digital agency now understands the selling of virtual products better than their above-the-line counterparts. How long before a digital agency is the lead agency for a big consumer-facing brand that sells virtual products?"
Some of the friction that exists between disciplines emanates from emerging agencies, which may have previously felt insufficiently respected at the high table. Digital agencies, in particular, have become more confident and forceful about their role as they have become more financially stable and as the impact of new technologies makes others feel less comfortable and more threatened.
Agencies are finding new ways to develop their individual skills. It is quite natural for direct agencies to think digital (and vice versa) and a significant amount of digital spend goes through "DM" agencies.
Many below-the-line outfits have strong promotional marketing expertise.
And a new batch of ad agencies is setting up specialist DM arms. The term "DM" has become an increasingly hard one for most direct agencies to define.
If you read much of the industry press, it seems that many of us are still boxed into our single-channel mentalities. Isn't this all a bit old hat? Had we known then what we know now, would we have invented the channel-specialist model? Why has it persisted so long - and should it continue?
It has persisted partly because of the unwritten rule that "you can't find several strong specialist skills in one place". Those who are media neutral tend to be dismissed as "jacks" rather than "masters" - only specialist agencies are thought to have the credibility to be experts in their channels.
Client behaviour has also played its part in fostering the single-channel mentality among agencies - DM managers hold DM pitches, digital clients hold digital pitches, promotions managers build sales promotion rosters.
With some notable exceptions, we haven't convinced clients that agencies should be able to work across all the major disciplines, that they should understand them in equal depth and that they should be able to respond to marketing challenges with the appropriate communications mix.
Agencies should be able to take a holistic view and understand that branding, prospecting, response generation, cross-selling and the customer experience must work together seamlessly. Agencies should become communications rather than channel experts. And when clients formulate agency briefs, they should focus on the marketing task in hand rather than on any specific discipline.
Most clients think this way - so why are tasks deconstructed by channel?
Consumers do not differentiate between channels. Does it make sense that we spend so much of our time doing so?
There are two reasons why the old models will not last. First, while formal integrated briefs are the exception rather than the rule, I cannot think of a single pitch in the past three years that did not require us to assume a multichannel response, even if the brief started from a channel perspective. There is a growing demand for agencies to think and contribute upstream, even when their role is still, paradoxically, specialist. Those best equipped to leave behind the safety of their channel or specialism do this best.
Second, the rise of technology in communications will force us to re-evaluate our thinking on interactive and move beyond merely asking "who leads?" We must all get interactive, whatever our agency background.
Technology is going to change things more profoundly than just fuelling the formation of more single-channel specialists. And while many DM agencies have taken on a significant digital capability, it is too limiting to claim new technology belongs in a direct response-based environment. Technology will affect how brands behave and how advertisers approach the role of communications, which means above-the-line ad agencies must also embrace the change. Arguably, all advertising will become more responsive - look at the growth of infomercials in the past few years.
Agencies will need to be more consultative, more client-business oriented and better able to contribute as communications experts, rather than channel specialists. And while there has been a convergence of DM, sales promotion, online and, to a lesser extent, ad agencies in recent years, there is still much more to be done in blending media, investment planning, analytics and PR.
In the future, there probably won't be a single optimal agency model but a range of multi-specialist agencies, as well as alignments and partnerships between like-minded outfits. The days of the single-discipline specialist are numbered.
- Simon Marshall is the chief executive of Publicis Dialog UK.
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