Chris Savage: Agency competition has become ‘a knife fight in a telephone box’
L:R Tom Burton, Kat Thomas, Alex Hayes, Stuart Gregor, Chris Savage, speaking last week at Commscon.
Chris Savage chief operating officer of Australia’s largest communications group, STW has told a conference of PR professionals that increasing tense competition is one of the biggest issues facing the advertising industry.
Speaking last week at the final Question Time of CommsCon conference Savage said: “From our perspective at STW it’s absolutely a knife fight in a telephone box.
“Most of our businesses, and I would suggest most of the businesses in our industry, are only disrupting themselves to the extent that their most disruptive client is disrupting them.”
Savage told the room that one of the challenges was that businesses were not changing or disrupting their traditional ways of doing business as fast as was necessary in the new business environment.
“What we have to do in this industry is disrupt ourselves faster than clients are asking us to do and that’s a hell of challenge, to change and to set and still deliver the kind of return we need,” he said.
“If you look at the world of the CMO — it is being dramatically recalibrated. If you look at the old days it was about price, product, place, promotion, there is more money going to marketing than ever before but it is not being spent on those areas.
“Certainly in the promotion area, where a lot of our money used to come from, the world has changed.
“Then it comes to procurement and we are finding that with most of our clients and in every discipline that the old days where you had a big retainer and a strong personal relationship to see you through now you have to pitch every single project that comes along and if someone else comes along we’ll take that and use their idea.”
His comments were echoed by the head of PR agency Liquid Ideas Stuart Gregor who told the audience the competition among agencies had seen relationships become less important.
“We’ve been an agency that based itself on relationships, we’ve have been agency all about empathy, understanding and about closeness of our relationships,” said Gregor, whose agency has the likes of Carlton United Breweries, Kellogg’s and Gloria Jean’s Coffee on its PR roster.
“This is about as big a change as anything that has happened in the last year. It doesn’t have the adhesiveness it once did.
“What Chris says is right — I’m now much more on edge with clients who I thought I had a long term empathic relationship with. Today it is about reliability and for Christ’s sake do the basics really well.”
Gregor said the increasing level of competition in the industry among all agencies meant agencies needed to make sure they had covered all their bases.
“Allow them (the client) to at least trust your reliability,” he said. “That reliability may be as simple as getting things in on time and in ensuring that you are tending to the right things because there are a lot of relationships that you see when you are sitting around a table with the client and all the other agencies, which we do more and more often, it is the unreliable agency that gets the daggers. It’s the agency that didn’t deliver on time.
“A year ago I would have said empathy, understanding, and relationships were key but I’m increasingly understanding that it is harder to pull in the favour than it used to be.”
Fellow panel member Tom Burton, Australian Communications & Media Authority’s (ACMA) communications boss said that in his view digital was a major opportunity for PR professionals to differentiate themselves from their rivals in media or creative agencies.
“There is a massive opportunity in the digital space,” said Burton, ACMA executive manager for Gov 2.0, stakeholder engagement and communication. “The proposition is a very simple one: digital allows people to communicate directly with people, you don’t need to work with (traditional) media will follow.
“There is a massive opportunity around these toolsets but one of the biggest challenges is around teaching organisations how to build that.
“You can’t underestimate how in some organisations that capacity is not there. PR companies I think get that innately.”
One Green Bean’s executive creative director Kat Thomas said PR agencies also needs to focus on creativity and emphasise their strengths in connecting with consumers and building a brand, and become more creative in their output.
“There are two pillars that I think are important, in terms of ideation, and they are entertainment and utility,” said Thomas.
“You need to ideate in a space where you can ask: are we going to create something that is genuinely entertaining for brand X to engage and are consumers going to respond.
“On the flip side the other sense of purpose is around utility bringing an idea to life that people are going to want to engage with, download, because it is going to add value to their lives. In terms of ideation it is the why: what should I care or why should I share?”
Nic Christensen
What the hell is a “telephone box”?
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Last year it was ‘content marketing’ this and ‘social selling’ that. This year it is ‘big data’ that and ‘disruption’ this.
Clients will pick or retain the agency that is going to do the best job. As ever the agencies that can change and adapt, produce the goods and all the while service the client incredibly well, will win / retain business.
Nothing has changed. Lots of people use buzzwords, especially on Linkedin, (that is really annoying me at the moment):
– CEO’s of a company with one employee (themselves) sharing info-graphics about common sense.
Okay, back to the article: The best agencies, will retain their clients.
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Pity those PR professionals (sounds better than amateurs) who endured this twaddle. Speakers may as well have spoken Swahili for all the sense they made.
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@leslie
I think it must be the box a mobile phone comes in. The people involved must be very tiny if they can have a knife fight in there.
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Ideate, Kat? Very cromulant of you to embiggen my vernaculese.
Chris Savage is right about the knife fight. And clients are taking advantage of this by pitting agencies against each other to reduce fees or trawl for ideas.
Or they are moving to a model such as CumminsplusAdamminusJason which avoids the deleterious effects of, say, a media agency from one multinational group sandbagging a creative agency from another multinational group whilst both are on the same client account. Funny thing is, I think this model has been used before.
When everyone disruptzigs, assuagezag.
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As someone on the outside looking for gaps to get into media/advertising, I’m attracted to the knife fight. I think it will and is possibly poking holes in the box for outsiders to gain their entry. In saying that, I realize that new trends are simply good old fashioned courtesy, thoughtfulness and generosity. The buzzwords are delicious though. Keep em coming.
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@Eda. I don’t quite understand your comment. Would you create an infographic, so that I can digest this a little better? Perhaps you could share it on Linkedin too?
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@disruptive telephone box buzzword in simple terms, there’s nothing wrong with competition. Feel free to connect on linkedin, I’m an open book.
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”digital allows people to communicate directly with people”
Isn’t that what the phonebox does?
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