Media Forum: Is full service coming back?

Are we witnessing the rebirth of the full-service agency?

It wouldn't exactly be shocking if the management of Leo Burnett just came out and said those three little words - words that still have the power to transfix the advertising industry. "Full", "service" and "agency". In that order.

Many of the classic US agency networks have never really reconciled themselves to the structural changes that engulfed the industry more than a decade ago, but nowhere was the full-service ethos more engrained than at Burnett.

So, it was easy to find excuses to read between the lines of last week's announcement by the agency's parent company, Publicis, of a new "open architecture model", the aim of which will be to bring Burnett closer to its sister agencies Starcom MediaVest and Digitas in a drive to improve integration and client services. There will be a management board to implement the new structure, first in the US at the start of next year and then across other regions.

Board members will include Tom Bernardin, the chairman and chief executive of Leo Burnett Worldwide, Renatta McCann, the global chief executive of Starcom MediaVest Group, and David Kenny, the chairman and chief executive of Digitas; and it will be chaired by Jack Klues, the chairman of Publicis Groupe Media.

The group stresses that each agency will remain independent and there will be no default lead agency on any client business. But still, it's hard to resist speculating where this might lead. Especially as a rival holding company, Interpublic, has implemented similar structures allying its media brands to group creative agencies. Meanwhile, at the other end of the scale, we're witnessing the creation of the first "bundled" agencies in years. Note, for example, Greg Grimmer's agreement to join Hurrell and Dawson as a full partner. And CHI & Partners' decision to set up a media department - with the stated ambition of becoming a top-20 media buying operation in 2008.

So, is the rebirth of the full-service agency now inevitable? Absolutely not, Iain Jacob, the chief executive of Starcom MediaVest Group EMEA, says. He argues we're misinterpreting the announcement: "This isn't anything to do with bundling. It's about creating a structure that ensures you are able to go about creating the best possible working arrangements with the best possible partners. Increasingly, the business is about co-operating in new ways to drive the right solutions for a client's needs."

Paul Phillips, the managing director of the AAR, says: "It's true that, in the digital marketplace, there's a body of opinion that argues there's a benefit to having all the services you need under one roof. And there might be a generational aspect to this, too. The industry was restructured to meet evolving demands 30 years ago. Maybe the people coming through will see the world differently - but if that does happen, it certainly won't happen overnight."

Perhaps, Martin Sambrook, the global account director at Accenture Marketing Services, responds. Let's just see how it evolves, he says. On the other hand, even in quasi full-service mode, the structure might prove tricky to manage. He explains: "I think this is a positive move for clients. However, I think a difficult area to address will be that of remuneration and fee allocation across a broad spread of agency services that will all be operating off different models - fees, commissions and payment by results."

But Graham Duff, the president of Universal McCann EMEA, is considerably more sceptical - even though his agency has nominally been operating within just such a structure. He concludes: "If a client can see value from a genuinely integrated offering and the talent at its disposal is consistent across all disciplines, then it can be a wonderful thing. But the majority of Universal McCann's business is not serviced on a group-wide basis and the decision to make Universal financially independent has dramatically improved our network, our product and our talent. That's what clients want."

- Got a view? E-mail us at campaign@haymarket.com

NO - Iain Jacob, chief executive, Starcom MediaVest Group EMEA

"This is about creating the best possible working arrangements. And, actually, bundling continues to be an increasingly old-fashioned idea, because it's the opposite of being open-minded."

NO - Paul Phillips, managing director, AAR

"We have a situation where not just agencies, but clients, too, are structured in a certain way. That won't change overnight. If you're asking whether Leo Burnett will become a full-service agency again - I can't see it."

MAYBE - Martin Sambrook, global account director, Accenture Marketing Services

"This promises to address the issue of lead agency co-ordination and also it's open-minded about where the leadership and co-ordination may come from within the group."

NO - Graham Duff, president, Universal McCann EMEA

"If one group can truly deliver that across all disciplines, some clients will look at it. But I smile when I hear about the glory days of full service - because it was anything but full service in the majority of agencies. The model became extinct because it didn't deliver to clients."

Topics