Media Forum: Is integration back in fashion?

Has IPG's creative-media restructure come at the right time, Alasdair Reid asks.

Let's face it, it's hard to imagine Interpublic becoming much of a role model in any facet of the advertising business these days. The group has seemingly lurched from one crisis to the next.

Recent blots on the landscape include huge account losses, including General Motors and Bank of America, at its network agencies; an accounting scandal at McCann Erickson that resulted in an investigation (still ongoing) by the Securities and Exchange Commission; and the accumulation of a slightly tiresome debt mountain.

Interpublic's most recent financial results were deeply uninspiring, its share price continues to sag, and there are those who predict a takeover bid can't be all that long in materialising.

So your first instinct when you hear of an IPG restructure involving its media agency brands is that this might just be some form of desperate expediency masquerading as a strategy.

IPG has announced that, henceforth, its media agencies will be far more closely allied to its creative agencies - Initiative with Draft FCB and Universal McCann with McCann Erickson.

This stops short of a back to the future bid to reinvent the full-service advertising agency - media agencies will retain profit and loss responsibilities and a degree of management autonomy - but only just.

And the timing is odd given that IPG only recently allowed Universal McCann to develop more independence (not least in terms of profit and loss) from its erstwhile parent brand, McCann Erickson. It was widely regarded that IPG needed to do this in order to catch up with rival holding companies such as WPP, Publicis and Omnicom.

But is IPG on to something here? Grant Duncan, the chief executive of Publicis, suspects IPG may be more motivated by short-term considerations in this instance - but he does think it's worth revisiting the whole question about how best to encourage the media and creative sides to work more effectively together.

He adds: "Our ability to push this (notion of closer collaboration) comes down to whether we can take more pressure off the issue of which agency is in charge of the account, because clients certainly understand the importance of integration and they are prepared to bring media and creative agencies together to create specific teams. I think that's the key to this - it needs the active involvement of clients."

But Jed Glanvill, the chief executive of MindShare, argues that the issue of closer collaboration should be kept entirely separate from questions of ownership and management. He explains: "I think we have proved how successful you can be when media people are able to take control of a media business and make the right decisions in the interests of that business and its clients.

"If you try to impose closer ties than that, it can be limiting for both the creative agency and the media agency involved. In fact, you could argue that in Universal McCann's case, the fact that it has had to report to McCann Erickson has meant it has not been able to invest in its media product quickly enough."

Much of that is echoed by Colin Gottlieb, the chief executive of Omnicom Media Group, EMEA. He says the advertising world may be moving towards a more integrated model - but absolutely not on the terms proposed by IPG. It seems to be attempting to turn back the clock, reabsorbing the media function and recreating the full service agency of 30 years ago.

He says: "If they had come right out and said they were going to create a totally new type of agency, one not totally led by creative agency people, then we'd all be sitting up and taking notice. But they're not doing that at all. They say the media agencies will retain much of their independence, but we know that won't be the case. It's like saying you're a little bit pregnant. I have to say, I think this is a terrible own goal."

Paul Phillips, the managing director of the AAR, agrees that it is, to say the least, an interesting move - and he's curious to see how it will play to clients. He says: "I see no harm, for instance, if, when McCann Erickson is pitching for a piece of business, it were to say that its preferred media partner is Universal McCann. It will effectively be a full- service option.

"You then have to ask yourself if clients are buying full service these days - and perhaps it is true that this offer might have more efficacy where domestic (as opposed to multinational or regional) accounts are concerned."

MAYBE - Grant Duncan, chief executive, Publicis

"I do think there's an interesting conversation to be had about media and creative agencies working more closely together. Complete (management) separation has not always helped the effectiveness of ad campaigns."

NO - Jed Glanvill, chief executive, MindShare

"A successful media business is about allocating the right resources and creating the right structures. That does stop you collaborating with creative agencies in the right way. I can't understand the Interpublic logic."

MAYBE - Colin Gottlieb, chief executive, Omnicom Media Group, EMEA

"There is a compelling case for integration. In the digital world especially, it is increasingly different to tell creative and media agencies apart. What won't work, however, is trying to put media agencies back where they started from."

MAYBE - Paul Phillips, managing director, AAR

"Some argue that (integrated thinking) was best achieved when media and creative sat together in the same agency - and that it might be an idea if they got back together again. But the world was a simpler place then."

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