Saatchi & Saatchi’s recent announcement that the word advertising
would be dropped from its title is evidence that the narrow discipline
of advertising is too tight a pigeonhole for a modern agency. It is also
symptomatic of the fact that agencies face increasing competition for
their clients’ time and budgets from some interesting new directions;
one of the most dynamic of which is the management consultant.
The subject has become an uncomfortable bone of contention among
agencies.
Attitudes range from an insistence that ’consultants will never do what
we can’, to a dismissal of the threat as ’an over-hyped
irrelevance’.
It is still rare to hear a positive response and a constructive argument
for agency change. Meanwhile, the consultants continue to make inroads
into agency territory.
Agencies would do well to take the threat seriously. First, because it
is specifically for strategic planning, the intellectual heart of the ad
agency, that clients are now forsaking them in favour of the management
consultant. This was the very discipline that raised the status of
agencies, from creative execution shops a generation ago into today’s
intelligent communications partners. Without strategic planning,
agencies would not only lose creative focus but professional
credibility. Given that, for all their foibles, few clients would be
naive enough to invest the sums charged by consultants without
reasonable justification, there must be a significant degree of
disenchantment with what ad agencies are offering.
The door is then left open for the management consultants to move in and
seize the opportunity with the analytical precision for which they are
renowned. Of course, some agencies write off the popularity of the
management consultant as a passing phenomenon - merely the latest in a
series of client fads. There may be an element of truth in this, but it
conveniently ignores the fact that the door is only left open when the
client does not shut it.
So what are the consultants offering that agencies are failing to
deliver?
Evidence suggests that clients now feel that they are outgrowing their
traditional ad agency partners, that they have moved on while their
agencies have stood still (or, at best, moved too slowly). With ever
more complex briefs and an explosion in communications opportunities,
their demands are growing beyond the ability of most agencies to
respond. They are, more fundamentally, disillusioned by the fact that,
for all their pretensions of being ’full service’ and ’media neutral’,
scratch below the surface and most agencies remain in that traditional
advertising pigeonhole. So, when the management consultant arrives
promising a comprehensive and holistic solution to their total
communications needs, the client, dazzled by the scope of the new
arrival’s intellectual insight, needs little persuasion to hand over the
brief.
If this analysis is true, how have agencies arrived at this dilemma, and
why are they struggling to compete against the capabilities of the
management consultant? First of all, agencies always seem to be too busy
(with their client’s business, naturally) to have a strategy for their
own business. For example:
- How many agencies have really focused on the changes that
globalisation will have on their business - as opposed to simply
pursuing a policy of relentless expansion and business acquisition?
- Apart from the more progressive media specialists (many of which are
now independents), how many agencies are actively engaged in realigning
their product to meet the needs of the radically different media
landscape that is now emerging with the advent of digital TV and the
explosion in computer-based media? It is a sad indictment, given the
changes taking place, that so many agencies are still without a
Website.
- To what extent have agencies put into place the practical operating
systems needed to manage pan-European campaigns for international
clients?
Too few, for example, offer an integrated network of local offices -
making do with an assembly of local agencies trying to hide internal
dissent about whose work should run where. One of the major problems
that faces clients when setting up international advertising is the
difficulty of maintaining centralised control (which is often based on
informal rather than organisational authority) to reconcile local
differences. Imagine then, the added complication of working with an
agency network whose local offices are also pulling in different
directions with vested local interests. Improved internal communications
are needed within and between both agency and client as campaigns go
global; few networks make adequate use of e-mail and video conferencing
- fewer still can offer multilingual account management teams.
- With the exception of the international planners, how conversant are
most agency staff with, for example, the fragmentation of international
consumers into horizontally-segmented tribal clusters? Or, for
argument’s sake, Michael Porter’s five forces?
If you winced at that last point you will appreciate the next: it is
that agencies generally place too little emphasis on education and
developing their own strategic vision. How many agency practitioners
(excluding, once again, those from the more erudite planning
departments) have seriously studied the theory of their subject? If
advertising is to raise its professional status this must surely be a
prerequisite (imagine your surprise if your lawyer had never opened a
textbook dealing with the issue on which you were consulting him). It
may sound cruelly sceptical but whoever got promoted in advertising for
knowing about the theory? The way to the top seems to be a narrow,
well-trodden route for shrewd movers hopping from one agency to the next
to secure each successive foothold - education is rarely going to get
you there any quicker. So, after years of being immersed in an exclusive
world of their own, it is hardly surprising that some agency chiefs have
become rather myopic about their agency’s direction and corporate
mission. For the same reason, agencies tend to be equally myopic about
recruitment. How many for example, have had the foresight to bring in
senior talent with a fresh business perspective from outside the
industry? (Saatchi & Saatchi springs to mind but how many others can you
name?)
In contrast, one of the key success factors of the management
consultants can be attributed to their broader intellectual platform
which enables them to be totally ’solution neutral’ (and not simply
’media neutral’ - which is the broadest claim most agencies are prepared
to make). This perspective is further enhanced by their survival not
depending on the selling of campaign executions, which means they have
an uninhibited view of the big picture and can recommend solutions well
beyond the confines of traditional advertising.
This less inhibited outlook also leads to a greater awareness of the
strategic opportunities for their own future which is precisely why
advertising agencies are now having to compete against them. What is
more, management consultants often have a more aspirational image than
their agency competitors.
Why? Because they have been working hard to develop their own
identities. Unlike most agencies, consultants have been using their own
skills to build their brand images (witness the image-building
initiatives from Andersen Consulting). How many ad agencies have enough
confidence in their skills to use them to solve their own communications
challenges?
Does this mean agencies are destined to regress into little more than
execution shops, handing over the strategic planning to the consultants
having lost the plot irretrievably? Not necessarily. Agencies have a
wealth of experience and possess unique qualities above and beyond the
scope of most management consultants. Most agency reels can celebrate
several miraculous transformations of timid brands turned household
legends (Tango, Boddingtons, Peperami, Martini, the Economist,
Brylcreem, Lucozade ...)
The imaginative inspiration that sees the potential in a dormant brand
cannot be replicated by strategic analysis. The impact of a truly
memorable ad campaign that expands the potential of the brand or
proposition far beyond the client’s declared commercial strategy is no
more than an anomaly to the consultant. It is the spark of creative
genius at the core of any successful agency that sets it apart from the
studiously worthy but rather anodyne analysis of the management
consultant.
So, if agencies really do have the potential to succeed, what must they
do to regain lost momentum and rejuvenate their client offering?
PAgencies should take a more progressive attitude to their staff. They
should be better trained and educated, they should recruit more from
non-classical agency backgrounds and there should be systematic
client/agency role-reversal. Career progression should recognise wider
experience and more clients should be encouraged into agency jobs and
vice versa.
PThey must widen their scope to offer solution-neutral answers to wider
marketing problems. Building on a broader experience base and a higher
level of theoretical expertise, the agency should exercise its skills in
more diverse areas of marketing communications. To support this
strategy, agencies should also aim to work on a consultancy fee basis
wherever possible and so avoid being compromised by a perceived vested
interest in any particular solution.
PThe benefits of being responsible for the final execution should be
positively exploited. Provided that their strategic thinking has been
set free from the formulaic execution process described earlier,
agencies have a powerful and unique advantage over the management
consultant in also managing the campaign execution.
This factor alone can give a progressive agency the potential to crack
the client’s brief successfully in, perhaps, a quarter of the time (and
at a fraction of the cost) taken by most management consultants.
Furthermore, the strategic solution then naturally flows into the
creative presentation that exemplifies it. In contrast, the management
consultant’s task ends at the very point where the client is getting
interested.
PAgencies should use their own skills to help themselves. It might be
argued that an agency’s credentials may be judged in the work it
produces for its existing clients (which is a bit like expecting someone
to buy an Armani suit just because it looked good on the person last
seen wearing one). We should expect to see confident agencies that are
proud of their capabilities, advertising their competency and meeting
their competitors (from wherever they may come) with a genuine USP in
their armoury.
There is some serious self-appraisal called for if agencies are to
revitalise themselves to meet the challenges of the next millennium.
That spark of ingenuity that sets agencies apart from management
consultants provides not only their critical point of difference but
should also now be used to help define their own solutions and re-ignite
client confidence for the future.
Finally, I would like to reassure any indignant agency chiefs that my
observations refer to the agency world at large and are not aimed at
you! They are, however, the personal and unprejudiced views of an
advertising client and will, I hope, help to stimulate the kind of
debate needed to get to grips with the challenges that lie ahead.
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