Sunday, November 26, 2006

Rerun season

Originally posted Wednesday, June 25, 2003

Agency Integration

Ad Age (6-16-03) reports on a recent survey of big advertisers. One key finding is that on 43% of the clients think it is "very important" that "a single agency offer fully integrated services." This presents a problem for big agencies which have spent the last couple of decades acquiring a variety of firms in order to become a "one-stop shop" for big clients. Those agencies paid a premium to develop capabilities that most of their clients do not see as valuable.

"One stop shopping" is a convenience, and convenient channels are valuable only when the underlying good or service is unimportant or similar across outlets. Coke is Coke, so it makes sense to buy it where you shop for groceries or gas instead of making another stop. Has anyone every chosen a college solely because the campus was closer to the airport? "Gee, Oberlin is a great school, but Ohio State is much easier to get to. Guess I'll go there instead."

As one survey respondent said, "I go to a specialist; I don't go to the same doctor for everything."

For key business services, convenience is not a big concern. Marketers after all have people on staff whose job is to manage the programs and vendors. One mega-agency or three small one, it is not really big deal in the scheme of things. It is also not a differentiator that can be used in decision-making either. "Hey, Mr. Senior Vice President of Marketing, I think we should select WPP because I'm kind of sick of juggling three different agencies for this project." Saying that out loud would be a CLM-- "career limiting move."

Clients worry that the one-stop shops end up having second-rate services. While media buying might be first-class, the creative could be ho-hum, or the direct marketing unsophisticated. It is worth a little aggravation to get all the parts right for a marketing campaign.

I suspect that one of the key reasons agencies prefer integration is that they do not want to play with their competitors. While understandable, this concern is the agency's problem, not the clients. As such, clients will be unsympathetic.

These findings offer hope to smaller agencies who focus on a single niche (interactive services, say, or cutting-edge creative). If they are willing to play well with others, they still have a shot at working for large clients.

If they really wanted to set themselves apart, they could embrace the disaggregated approach and show that they are eager to work with competitors. If they developed tools and a methodology to provide integrated campaigns even when they did not control all aspects of the marketing, they could get clients attention.

Blogs, it seems to me, should be an integral part of that effort. They are superior to email or meetings for keeping a whole team up to speed and for thrashing out differences.

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