You can always rely on a feisty Northern lass to tell it like it is. Before the roundtable lunch debate on integration even gets going, Sarah Golding, CHI & Partners' managing partner, interrupts comments about how well integration is going and comes clean about how back- achingly difficult the whole lengthy process actually is.
After hearing Alison Wright, the group strategy director at Engine, tell how smooth the move to one building has been and how much the different agency employees get on and how good this is for business, Golding probes: "But how does it really work, because you've all got separate profit and loss accounts? At her previous employer, Lowe, advertising and the direct business were in the same building. "We all talked to each other on the stairs and drank together but, at the end of the day, we were all mini fiefdoms because we had separate P&Ls," she says. "Advertising protected its bottom line, just as direct protected its bottom line."
Golding is just as frank about her current agency: "When CHI started, we had multiple P&Ls. Four separate ones. At the same time, we were talking about being about big ideas and being media neutral, like everyone else was, but we just weren't. It was all bollocks. It was really hard to move over to one P&L and there were lots of teething problems and lots of mess to sort out. But since we've moved to that position, we can stand there and say we are a proper full-service, new-model agency."
Max Wright, the director of strategy at Kindred, agrees: "You have to have one bottom line. Then you just don't get into those debates about who's making the most money or who's going to get promoted. I've worked in environments where we didn't have a single bottom line and I know that having one changes the way you think. It frees you up."
The implication that those agencies without a shared P&L can't truly be integrated is not lost on the rest of the group. Some are quick to defend the multi-P&L proposition. Alison Wright points out that Engine is "on a journey" and doesn't rule out aggregating accounts. She adds that one in five people in her building are shareholders in Engine. Dominic Stinton, a managing partner at VCCP, and Chris Lovell, the group chief executive of the Golley Slater Group, however, flatly disagree with Golding.
Stinton argues that separate P&Ls for separate divisions are crucial because they mean "a weak unit can't hide". He says that, instead, his group is moving toward a "single group incentivisation scheme". Similarly, Lovell says that with 17 different companies in his group, a single P&L doesn't make sense, but he advocates a better measure in client profitability.
"Quite rightly, we want to hold people accountable in each of our 17 companies, which is why we have separate P&Ls. But every client has a 'client profitability' measure and that's how you get collaboration, making sure people work and behave nicely together," he says.
While the detail of these models may be different, the basic premise is the same: human nature is such that for real integration to happen, people have to feel failure where it hurts and success where it makes a difference to their lives - in their wallets.
Nevertheless, that's not to say the touchy-feely aspects of integration, such as sharing the same building, are not important. They contribute to the cultivation of a culture, which, as Stinton says, cannot be underestimated in creating the right conditions for successful integration. "More than anything, you need people who are really hungry and passionate," he says.
The lunchers agree with Stephen Maher, the chief executive of MBA, that people working for agencies today need to "have a specialism, but be a generalist as well". These "T-shaped" people have deep knowledge in one subject combined with a breadth of knowledge of all disciplines. Maher believes that the younger generation are naturally T-shaped because they "automatically think in a broader multi-discipline way; anyone with teenage kids knows that".
The group also agrees that client-side experience at the top of an agency is a huge asset in becoming more integrated. One reason is that clients typically move around the business much more than their agency counterparts, so have a broader outlook. They also have much more direct contact with "real people", something Stinton believes agencies should have much more of.
John Rowley, Tangible's chief executive, picks up on the irony of this: "I can remember about 20 years ago how snobbish we were about hiring clients. We just wouldn't. But now we're actively looking to recruit brand managers. The industry has employed many more clients than it used to at quite senior, as well as junior, levels. It's because they've been integrated since the beginning."
At this point in the conversation, Stinton drops a bombshell. He "didn't know what integration was" until he became a client, despite having already had a successful ten-year career in an agency. It's a contentious point to make. Yet, instead of a barrage of counter-comments, there's a concession that pure agency experience is not enough to lead the transformative change that is integration.
"We've got three companies and the most successful of the managing directors is exactly the same (as Stinton); he's agency trained, then had a few years in brand management and has taken that experience incredibly positively into our culture," Rowley says.
Alison Wright has also learnt valuable lessons client-side that she believes make her much more effective in her strategy to make Engine a seamless machine: "What I learnt as a marketing director is that you're so focused on the end result in that Monday morning sales meeting that, actually, you don't care what channel it is, as long as it works! You're driven by the end result, rather than by seeing all these things that we produce as being an end in itself."
This triggers several comments in support of the argument that a results-driven culture forces integration. But, hang on, Campaign's executive editor, Caroline Marshall, points out, doesn't this short-term way of thinking go against the grain of integrated thinking, which is, by definition, a long-term approach?
According to Lovell, not so. "If you're a marketing or managing director today, then 'the new normal' is all about 'getting the sales today because you'll be fired, or your company won't exist tomorrow'," he says.
"There is a real reality now in having to build sales overnight and, if you are not doing that as an agency for your clients, then the clients get quite nervous."
This talk of nerves inevitably leads to conversation of procurement and the commodisation of the buying, planning and creative process. It's a threat media agencies in particular are currently grappling with as they try to reinvent themselves more as strategic hothouses, than mere implementers. "We've had to change and we're still changing," David Walsh, a partner at Mindshare, says.
"We've hired senior clients ...
guys from McKinsey ...
we've brought in people from other agencies ...
planners from above the line ...
That's what we're doing to change because the old-fashioned view of media planning and buying is increasingly a commodity business that's driven by price."
There's a palpable tension in the air when agency heads discuss the need to re-educate clients about briefing and remuneration in an integrated age. Golding rallies the troops: "The agencies around this table have got the top-table relationships with clients, much more so than the digital or direct pure-plays. Most of us started off as ad agencies and we're all saying we're more than that now. So it's our job to do it and lead the charge."
To command a premium for their strategic thinking, agencies agree they have to clearly position themselves as experts in bringing about behaviour change in an audience, a key differentiator from management consultancies. They have to encourage clients to come to them with a "business problem", rather than a fait accompli brief for a TV ad or viral or direct campaign. They also have to persuade them to set an integrated budget, rather than one that is discipline-specific. They have to convince them to share more data too. It's a tall order, but necessary.
"If you are able to get your strategy people to advise clients on a business problem at the very start (rather than once the channel has been decided), there is potential for charging out those people at a better rate than just a communications rate. We could start charging consultancy-type fees. That's the Holy Grail," Stinton says.
The problem, as St Luke's managing partner, Neil Henderson, points out, is that this strategic thinking is bundled into an agency's general offering. "That process needs to be a separate process and clearly defined," he says.
Another thorny issue is that in an integrated world, clients have to be more tolerant of failure. "Getting clients to understand this idea of failure is really crucial," Max Wright says. "You can't put all your money behind one horse like you used to because it doesn't work like that anymore. You've got to have a spread-betting approach now. Some clients know that if they just do one execution it's not going to work as well and there's a realisation that the world is changing. You don't know what's going to take off and you may have to try loads of stuff before an idea does."
No debate on integration would be complete without a conversation about the woefully inadequate terminology that surrounds it. There's the usual gripe that integration means a myriad of things, particularly in different specialisms, and that it's an often-misused term. However, GyroHSR's chief creative officer, Christoph Becker, manages to reinvigorate the debate by coining a new term to better describe what the people behind integration in an agency actually do.
Rather than "integrators", they are "curators", he says. The term goes down well with the rest of the group who like the way curation implies it is a skill and an art form, rather than a bland and purely technical process.
This thread sparks a discussion on what agencies will look like in future. Will creative and media reintegrate? Will results orientation mean agencies will be scared to take creative leaps of faith? Will integration eventually lead to the end of the "advertising", "direct" and "digital" labels?
"The future of agencies is actually not around whether an agency is digital, direct, PR or advertising but around understanding specialist interest groups," Lovell says. He believes agencies will market themselves along the lines of "we really, really understand 18- to 24-year-olds" or "we know everything there is to know about people who hike".
Mike Spicer, the group managing director of EHS Brann, isn't so sure. He argues it will be "less about categorising an audience down into convenient segments and more about changing the conventions and assumptions about how agencies work". In the future, he believes it will be "more about what the audiences need and less about what we want to give them".
Paul Simonet, the creative strategist at Imagination, is similarly unconvinced by Lovell's view of the future.
So what's his answer? "Creativity, of course," he says. "Creativity is the only way to avoid the commodisation of what we do. Digital technology may allow for better targeting and targeting is a 'ticket to entry' on a client's list, but it's not inspiring.
"To attract attention and get consumers to react - which is ultimately what we're all trying to do - you have to be creative, inspiring and have exciting content. Agencies that do that in future will survive and those that don't, won't."
- Suzanne Bidlake, associate editor (reports), Campaign
- Dominic Stinton, managing partner, VCCP Partnership
- Chris Lovell, group chief executive, Golley Slater Group
- Sarah Golding, managing partner, CHI & Partners
- Hadassah Nymark, editorial assistant/junior reporter, Campaign
- David Walsh, partner, Mindshare
- Alison Wright, strategy director, Engine
- Neil Henderson, managing partner, St Luke's
- Caroline Marshall, executive editor, Campaign
- Max Wright, director of strategy, Kindred
- Sarah Paez, account manager, Campaign
- Christoph Becker, chief creative officer, GyroHSR
- Stephen Maher, chief executive, MBA
- Suzy Bashford, journalist, Campaign
- Devin Parmar, senior sales executive, Campaign
- John Rowley, chief executive, Tangible
- Paul Simonet, creative strategist, Imagination
- Mike Spicer, group managing director, EHS Brann