Should agencies return to a full service model?
Our current method of separating creative and media is more expensive and less effective, leaving us with the worst of both worlds, argues 303Lowe CEO Nick Cleaver. Is it time to bring media and creative back together?
Who ever actually proved that separating media and creative services was a good idea; that it represented a better more effective model; one that could deliver better value outcomes?
The simple truth is no one.
The separation of the disciplines was a response by the holding companies to protect margins as the market deregulated and the media commission system was abandoned.
I’ve never really believed in the unbundled model.
It creates competing forces, with different KPIs advising on the same outcome. Those KPIs are rarely actually customer-centric or measurable at the meaningful customer behaviour level.
Net effect – paid media agencies propose paid media solutions. Whether the client needs it, or not.
Nick,
We opened our agency 3 years ago on the belief that you express in your very well written and cogent piece.
The toothpaste is going back into the tube.
Sean Cummins
NICK,
Agree…. we were accredited under the old MCAA and kept our media accreditation after Fels changed the system. We believe, to offer effective overall communication solutions, you need to be in the total space ;research, strategy, creative, direct mail , sales promotion,digital, media planning and buying. The clients we work for do not like the idea of multiple agencies, multiple meetings,multiple fees and no agency 100% responsible. Ian Ross.
The main issue I see is risk. At some point, whether it be 1 or 20 years, a relationship may sour.
It will be interesting to see if any of the major holding companies are willing to formerly reunite their creative and media agencies, when a soured situation could potentially inflict the loss of two revenue streams instead of one.
Of course, a bundled agency may win more business due to proven efficient and effective communication. Personally I’m for all in, and the risk that comes with it.
Well said, Nick.
It should be remembered that unbundling occurred before the web when mass media channels dominated most budgets. It is not appropriate for the digital world. Clients need holistic ideas that span multiple channels and ideally the ideas should emanate from a single source. While implementation should be under central management it can be effected through multiple specialists.
The current structure is not in the best interests of most clients, and the digital age demands a new model. I applaud the few agencies that are offering creative and media under one roof, but their skills will have to be best-of-class if the market is to be successfully re-structured.
Great article and perfectly articulated. Media and Creative have to come back together, its just a case of how. If it was the old way of a media department in the corner articulating how the ECD dream should come to life, then it won’t work. We need a more contemporary solution…
Nick – of course, you’re right. It shouldn’t even be a debate, at least not down to the strategic level.
But you can’t expect anybody to agree with something when their livelihood is dependent on the contrary.
The two biggest evils in today’s advertising landscape are unbundling and third party procurement.
The separation of media and creative has been nothing more than a giant money making scam for ‘media’ agencies, or in most cases branded spinoffs still owned by the same parent company.
The ‘media’ agencies have created a false media economy. Since ‘unbundling’ became a thing, the cost of media has gone through the roof, whilst the effectiveness has dropped by about the same margin.
At the same time, creative agencies are thrown smaller budgets and often have to recoup revenue through a mix of retainers and production margins. The creative agency has lost all accountability for it’s ideas and work when a campaign is handed over to a media agency as performance of the campaign is now measured with the media agency and spend as opposed to the creative agency’s thinking.
There are so many problems with this model:
1) Creative agencies aren’t even thinking about how they will connect potential consumers with their clients, instead they’re driven towards a creative environment where it’s in their best interest not to think too hard and just keep making expensive TV / Radio / Press ads / websites.
2) Media agencies don’t think about how to connect with customers outside of paid media, their job is simply just to work out how to take the agency’s creative and maximise the amount of paid media they can buy with their client’s cheque book. There are even media planners who have the nerve to call themselves ‘strategists’.
3) Media agencies being armed with giant cheque books without any creative responsibility have not only propped up media with bad value propositions, but have also caused it to thrive. With free-to-air audiences dropping to all time lows, a dramatically outdated audience measuring system that is not being called into question and press, radio and online display advertising now proven to be almost entirely ineffective, media agencies keep throwing millions of dollars at these mediums without any regard to whether the media budgets could provide better outcomes for the client if given to actual creative thinkers or strategists inside a creative agency.
I’m sure the agencies who are offering all services under one roof are delivering better outcomes for clients… but then again, I haven’t witnessed any agencies doing anything overly groundbreaking for their clients yet… everything still seems quite safe and traditional.
Why cant we all play together? from a distance it makes no sense for the message and the media to be chosen in isolation of each other. it would be easier to brief the collective ‘team’.
But if the ‘responsible owner’ of the communication outcome has any informed views he/she should be able to evaluate and make decision for both components- message and media. He does not need the advisers to be in the same family. (obviously it would be more efficient if they were..but it is not a necessity)
Surely the problem stems from the client not having ownership of the entire communication strategy.
Forget employed managers (the majority of our clients) for the moment and define a client only as someone with assets invested to gain a ROI.
On this basis he surely would use ‘experts’ as required to optimize his brands perceived value and communication strategy.
As Bill the butcher perfected Bills best Burger. He wanted to promote them to best effect. he went to a communication genius who gathered all the pertinent dynamics in the burger world. he knew all about methods to identify and understand important burger consumers. He told Bill the positioning strategy to get him where he hoped to go.
Bill then had a media buying shop provide some options for reaching the important customers. He got prices and all the audience data.
He made some decisions and bought a campaign the end.
Nice one Nick – we live in a world of intersection not sectionalism
Just as well the clients don’t know how much time and money is spent on all the buck-passing, eh? Or all those spots they paid for that never ran when the media people didn’t pass on the message to the creative house, because “fuck it, not my problem”?
Everything used to be solved with a phone call. From a publishing operations perspective, unbundling is a very bad joke that has gone on for far too long.
Agree Nick, as long as the media department isn’t treated as a sausage factory.
Hear, hear Nick – well said!
Once you get people on board with this, perhaps we can start to tackle the equally daft issue of why anyone thinks it makes sense to have separate PR / Comms agencies?
Might help the debate if people knew their history. The birth of media agencies was not the response by the “holding companies” to fear of diminished profit margins in a de-regulated world. In the case of the multi-nationals, it was a response to the growing strangle-hold the specialist media independents had on the market and, potentially, their own clients that spooked them. That companies like Merchant and Partners and Mitchell and Partners could survive and prosper on 2.5% made them greedier than was good for themselves and their clients.
Some people believe media agencies only started when the Zenith’s of this world began. Not so. They were around late 60’s, working hand-in-glove with creative agencies. Wonder what went wrong? Ego, greed and a lack of respect and understanding of the roles played in the communication process. Alan Robertson.
Agencies should absolutely return to a full-service model! My company has adopted an integrated strategy, content and technical production approach where innovation, quality and service is at the business’ core. The results are consistent, and lead to a better client/agency relationship. If clients don’t like our model, then they’re not the right client for us, so everybody wins.
If we were really going to put the toothpaste back in the tube, we’d have media companies offering creative services. Or, are people only wanting to return enough
to ensure agencies are back in charge?
Having had the good fortune during my career to have worked in full service agencies, media agencies, media owners, and now for the first time, on the client side, I have perhaps a unique perspective to offer.
The client should decide which business model / agency structure best suits their business needs and budgets, and then manage the process accordingly. Ultimately the client is responsible for deciding how the marketing budget is invested.
Good briefing at the outset, with the appropriate time frames, clearly articulating what is required from whom, combined with the ability to a) evaluate what comes back, and b) make decisions in a timely fashion should, in theory, make the process work fairly well, irrespective of the number of channels, and the number of specialist disciplines involved.
Or is it really more complicated than that?
Curse you Robbo for clouding the issue with some facts … and curse you too Paddy for throwing in a well-needed lashing of common sense into the discussion.
Now, everyone back to work and may the best performer win.
Very well said Paddy.
With full service, the umpire is within the agency.
With separate media and creative agencies, the client becomes the defacto umpire.
The problem is clients don’t seem to realise they are the umpire, or don’t want to be: “Can’t you just work it out amongst yourselves..”
Media/creative tensions exist in both models, it’s just that they’re less obvious to clients with the latter.
When a client used to pay 17.65% for a bundled service…and then they could buy media services for approx. 3% from Robbo and his partners …clients realised that they were paying a LOT of money for CWB’s agency back then to produce the new 30 sec Decore ad.
Unbundling and more competition has reduced agency fees charged to clients. Pitch consultants have educated clients on the best way to purchase agency services. Auditors have gotten their share of the pie to make sure that the media that a client buys is good value and actually appears. Production specialists have carved out the back end of material distribution – again at lower costs.
Clients are getting the type of solutions and advice they are prepared to pay for. If they want a ‘full service’ offering from Nick – then they know where to go…and know what the cost of the alternatives really is.
Back in…leave it out…agree with Paddy the client will determine what’s best for their business…. although with such rich consumer information now at our fingertips, the case for being able to act quickly with joined up thinking is strengthening. A lot of marketers are interested in one point of contact for strategic advice and comms planning. At the moment most are left piecing it together (PD unfortunately ‘in theory’ can be a long way from reality), or spend too much time making everyone in the sandpit play nicely. If you take out self-interest my bet is most would back communications and creative under one roof….
Aha Garth A….the rich consumer information topic….
Yes, there’s a lot more of it these days, but the richness lies in the insights gleaned, and how those insights can be turned into messages that persuade those consumers to reinforce, or change their past behaviour identified by the data in the first place….who owns that tricky little conundrum?
If the now, and the future lies here, then the case for full service, or at least full collaboration between agencies driven by a smart client becomes even more compelling.
from a client’s perspective, the argument for bundling makes sense, until you actually experience it
then you realise that despite all the sales pitch promises, creative and media sit on separate floors and never talk to each other anyway, other than at friday night drinks, so you might as well have two agencies
at least with two agencies to manage, you can pick best of breed specialists
you are never going to find this in a bundled offering
First time I have posted on this site but this issue is something I am very passionate about having worked in media on all levels both pre un- bundling, post. But a recent experience came to mind – whilst contracting to a boutique creative agency and working with senior execs, the group creative director said to me “Wow, I haven’t had this kind of relationship with media since the 80’s and I miss it”. Whilst I won’t disagree that un-bundling gave media agencies an voice (albeit to the detriment of their remuneration) sometimes after 26 odd years in the industry, I believe that we delivered a better result for the client as one.
why do people always automatically blame any industry fault on the big holding companies? Those big nasty devilish people, right?
For what it is worth, WPP did this years and years ago when they created unique integrated businesses (with staff from different agencies within the group) to serve specific clients (who wanted it) – team detroit (ford), team red fuse (colgate) etc….
I agree, it comes down to client preference.