Feature

The New media model?

As the full-service agency makes a comeback, are the rich pickings in media to blame or is it becoming a viable new agency model? Are the sceptics right when they say media can't revisit the past?

With the days of Dynasty and Dallas long gone, who could have imagined shoulder pads would ever again be fashionable? And yet, power suits and parachute pants are the norm down Hoxton these days.

The current fascination for all things 80s even seems to extend beyond the wardrobe. The resurgence of a phenomenon last seen in the decade that gave us big hair and the Falklands war - the full-service agency - looks more likely than ever with last week's launch of Eden, the new media agency formed by Adam & Eve and the7stars.

Eden arrives on the scene exactly a year after the launch of MCHI, the full-service agency created by CHI & Partners and WPP's Group M. But whether the trend is just a transient throwback, or represents a viable new agency model, is still up for debate.

Since Mother launched Naked Communications in 2000, all the top shops such as Bartle Bogle Hegarty, Fallon and, more recently, Euro RSCG have got themselves a token media bloke round the table. But, on the whole, the media element of creative agencies has been marginal and limited to comms planning. Now planning's more lucrative sibling, media buying, is on board, the proposition could seem inspiring, or threatening, to creative and media agencies alike.

But it's vital that creative and media are on an equal footing. Greg Grimmer, a managing partner at Hurrell Moseley Dawson & Grimmer, says: "Tacking on a media buying shop to a creative agency will always end up with the media buyers feeling unloved. Now it has to be more involving for both parties."

A share in cost and profit for both sides makes commercial sense, and the attraction from a creative shop's point of view is obvious when you weigh up the differences in margins between media and ad agencies.

But there are downsides. The media side of the operation is for the most part dependent on the ad agency for business. Both Eden and MCHI launched with a signature client - in Eden's case, Phones4u and, for MCHI, The Carphone Warehouse. Until they grow large enough to pitch for their own media business, they are limited.

"If Carphone Warehouse creative walks out of CHI, will media stay with MCHI? Would Phones4u media stay at Eden? The answer is we don't know," Grimmer notes. It's not all rosy for the creative shops either, who may compromise their relationships with their clients' other media agencies by becoming the competition.

Some are still sceptical that the new model could represent an industry blueprint. ZenithOptimedia's chairman, Derek Morris, believes media is past the point of return. He says: "There were billions of pounds-worth of global media assignments last year. What clients expect for the money they pay can't be provided by the smaller model of a full-service agency.

"I think new full-service agencies are more for one client looking for a one-stop solution."

A full-service shop faces many obstacles, not least for agencies in large holding groups, which already have competing media and creative agencies.

Nonetheless, it's a model with history on its side. Grimmer says: "It's not new, but in this new environment that tried-and-tested model makes sense."

EDEN

- Why have you launched the agency?

Jon Forsyth, founding partner, Adam & Eve: "Clients are increasingly looking for an integrated offering, so as a young communications agency we believe this is a natural area for us to expand into. Having spent five years as head of strategy at Naked and experienced the potency of a media-neutral offering, I believe our independent and integrated approach to producing creative work will be just as effective when applied to media planning and buying."

Jenny Biggam, founding partner, the7stars: "We know this is something clients are looking for - the concept of developing media strategies at the same time as creative simply makes sense."

- Was the venture planned or did it come about because of the Phones4u pitch?

Biggam: "We have been talking to Adam & Eve for nearly a year now - it's not something you can put together in a few weeks for a specific pitch."

Forsyth: "It just happened to coincide with the client's plans to tender out the business."

- Why have you chosen to do it with the7stars? What do they offer?

Forsyth: "For several good reasons. First, like Adam & Eve, it is also an independent agency so we will not be aligning Adam & Eve with any of the large networks.

"Second, due to its independence, we can provide tailor-made media buying services, which is what we believe is required in a world where the consumer controls what they see and when. The days of lassoing large groups of people with bulk-bought media are long gone. To satisfy a brand's communication needs, agencies have to be light-footed, innovative and highly targeted without compromising their ability to achieve the very lowest rates. The7stars set up from the start in this way, so it makes an ideal partner for us.

"Third, as its approach is truly entrepreneurial and creative, it felt like a natural fit for us as our clients are always looking to make their money go further through creativity - the7stars achieves amazing deals that marry quality and innovation with value."

- Why have you chosen to do it with Adam & Eve? What do they offer?

Biggam: "One of the benefits of our independence is that we attract some high-quality partners. Adam & Eve is a great fit for us, though.

We like working with similar types of client, we are both young, successful owner-managed companies and our agency cultures are well matched. It's not bad at creating advertising too."

- What, exactly, are you offering? What is the strategy?

Forsyth: "The two elements we believe will make Eden distinct are independence and integration.

"This means we can offer clients bespoke media buying without making them pay a premium for it. While it was the accepted norm that media owners could impose a high premium for advertisers to select exactly what they wanted, in today's market those rules are no longer as applicable. Increased but more selective viewing habits, combined with a declining demand on advertising, means the control is shifting back towards advertisers. And, as Eden is born from within a creative agency, we are uniquely able to deliver integration."

- What are your long-term ambitions for Eden?

Biggam: "We have had a great start with Phones4u and will have a powerful case study to take to the market, which will hopefully attract further business. However, our initial focus is about maintaining the momentum."

- Will you be taking on the big agencies?

Forsyth: "We're not looking to take large agencies on for the sake of it. However, as with the Phones4u pitch, we'll inevitably come up against them."

Biggam: "I'm a believer that right now there is a two-tier structure in the media and advertising industry. While the big agencies thrive, there is also a lot of interesting work coming from the smaller, more entrepreneurial agencies."

- Are you going to leverage deals from your existing clients? Why?

Forsyth: "Eden is another gateway into Adam & Eve, but it is definitely not our intention to unsettle existing relationships our clients have with their current media agencies."

Biggam: "Same here. Our clients don't like being told what to do or, even worse, being 'leveraged'."

- Why is it called Eden?

Forsyth: "We wanted a name that builds from Adam & Eve but was its own."

MCHI

- Why create a full-service agency?

Tim Allnutt, managing partner, MCHI: "We launched MCHI as response to the challenges our clients face today. A few years ago, we would be asked: 'What is the best advertising and media solution for my brief?' Today, we get asked: 'What is the right communication solution to my business problem?' This may involve advertising, but it is equally likely to involve direct marketing, customer communication, online or in-store activity. That shift in emphasis requires a different focus. It requires a broader range of communication experts, all working together to define and bring to life the big idea in a way that maximises the return for the client's business. This is why having media people in the full-service model is important. They help to shape an idea based on market opportunities and realities. And by being part of the creative process, they can ensure that the right media (in the broadest sense of the word) is bought for the idea, rather than just the most media available."

- What are the benefits for you and for clients?

"The benefits for our clients are fourfold: first, greater levels of integration; because of the way we are structured and the people we have, we're able to give a more joined-up and integrated response that considers the entire customer journey. Second, greater levels of creativity; the creative idea tends to be stronger when it is developed and shaped by creative, planning and media people working together. Third, greater levels of efficiency; the client writes one brief and deals with one joined-up team. This is more efficient both from a financial and process point of view. And fourth, collaborating to solve problems; we are able to get clever people together quickly to create a solution."

- What tensions can arise between the creative and media buying cultures?

"The lazy answer would be to default to the stereotypical view of the creative and media type; the creative concerned about writing an award-winning film (even if it means nobody really sees it), the media guy concerned with hitting the numbers and then the pub. The truth is that when you put good media people and creative people together, they benefit from and enjoy each other's company. Creatives get a broader perspective on what can be achieved out there in the market, and media people get to shape creative ideas."

- What have you learnt since founding MCHI?

"Keep your proposition simple and single-minded; it's very tempting to try to be all things to all people. Although it might not always be people's natural way of working, collaboration is where the full-service model really comes to life.

"Make sure each discipline gets an equal voice; it's not just about the one that shouts loudest. Everyone has something positive to contribute, so make sure you consider all the angles before you decide on the right solution.

"Work as a one bottom line rather than individual profit centres; only in this way will teams focus on the right solution and idea for the client rather than promoting the solution that best serves their silo."

- Would you do anything differently now?

"With the considerable benefit of hindsight, we would have progressed more quickly. We would have brought the two businesses together more quickly and been less cautious about keeping everyone happy all of the time. Full service isn't for everyone, but for the vast majority of the team who chose to work this way, you need to make the structure work brilliantly for them."

- What involvement is there from the parent companies, CHI and Group M?

"Both parent companies are actively involved in ensuring that MCHI delivers the best of what each has to offer. We've got strong foundations to build on CHI's strategic and creative heritage, and Group M's resources and buying capability."

- How is a full-service agency different to a traditional media agency?

"There are a far broader range of skills in a full-service agency than within the traditional media agency, which allows people to develop a more rounded view of communications. It still tends to be true that the big creative ideas originate in creative agencies rather than media agencies, and media people that work in the creative agency environment contribute to and benefit from this fact. And working in such an energetic and creative environment is a lot of fun!"

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