The future of agencies

Reading a soon-to-be published history of advertising recently, I was forcibly reminded how much the momentum behind agencies is a product of its time. Benton & Bowles was rescued from bankruptcy by its skilful manipulation of radio – the dot-com phenomenon of the twenties. The ‘creative revolution’ led by the likes of DDB, Wells Rich Greene and (in the UK, CDP) was hugely influenced by the rise of television. New media are the making – and breaking – of reputations.

Which raises the question: who will be made, or broken, by the digital revolution? Or, cast more prosaically, what is the agency model of the future?

The most cursory SWOT analysis of the current agency scene cannot fail to stumble upon a curious paradox. The last significant development of the linear TV age – the devolution of media buying and planning – has left agencies at a significant disadvantage in dealing with the challenges of the present. At a time when spot-on media planning skills should be working hand-in-hand with clear-sighted creativity, the institutional representatives of both  disciplines find themselves hamstrung by a cultural divide.

That’s clearly an opportunity for someone, but for whom precisely? To be sure, traditional service agencies – still keepers of the creative faculty – have attempted to remedy the situation with a kind of management sticking tape. The very act of consolidation, à la WPP or Omnicom, has at least had the merit of bringing all the necessary skills back under one roof. And, let’s not be churlish about this, the continuing financial success of such companies suggests, in the words of Chris Ingram, that the current “agency model is cracked, not broken.”

Rooted in the past
Nevertheless, the extent to which these acquired skill sets can, or will, co-operate within such organisations remains a moot point. Moreover, in attempting to be all things to all clients, there is a danger of excelling at none of these skills, however clever the acquired individuals.

Creativity, the primary criterion by which most conglomerates continue to judge themselves, is a case in point. Looking down the list of the top four’s traditional creative brands in the UK, ask yourself which is not perceived to be struggling (in terms of its creative reputation). Answer: AMV.BBDO. This may, of course, be a temporary blight, though I rather doubt it.

What of the other side of the divide, the media agencies? With the exception of Aegis, all the majors are now owned by agency groups. Some would say that they, rather than their creative cousins, are emerging as the real money- making machines – and effectively the rationale – of the global networks. For them, unlike the creatives, size really does matter, at least on the buying side. While their media planning capability offers an obvious advantage in charting unpredictable digital terrain, their culture of targeted accountability – many would argue – also make them a better direct fit with acquired or self-built interactive operations. This argument may conceivably apply to the creative as well as, for example, the search end of the business.

Indeed, we have a good example of just such a model at work in the only pure-play media specialist operation of scale: Aegis. But is the high-profile acquisition of Glue an exception, or the beginning of a rule? It has yet to prove itself the clinching formula when, in any complex pitch, put up against mainstream creative agencies.

And there are other concerns. Although conglomerate-owned media specialists (the vast majority, remembering Aegis is unique), frequently do provide some kind of creative service, this is unlikely to have free rein, given the vested interests of the company owning them. Finally, though the issue of hidden commissions as a means of remuneration is probably on the way out (see, for example Tesco and Interpublic), it persists. And while it persists, it means media specialists will remain very much planted in the television age, hindering their objectivity in offering clients advice on overall planning.

The rest of the field
So what are we left with? A number of interesting experiments. Draft/FCB marks an infrequently imitated template for merging direct and above-the-line services on a grand scale – with interactive thrown in. The fact that is very much driven by the dynamic personality of Howard Draft does not necessarily detract from its viability as a model. But it is largely untested. Likewise, the mini-conglomerate idea fostered by Creston and Cossette (which has recently acquired Dare).

But the coming idea seems to be the micro- or mini- network: sufficiently small still to be entrepreneurial and adaptable, yet sufficiently diverse to offer clients rapid service over a number of areas. And branded with sufficient creative standing to smooth their path to even the largest clients.

BBH is too big to be considered a ‘micro’ network, but in hooking the lion’s share of international business from such companies as Unilever, Vodafone and BA (inconceivable for an agency of that size a few years ago), it has proved an important inspiration.

The Robin Wight/Peter Scott partnership has worked strenuously to commute its traditional brand of advertising savvy into a more versatile, all points offering. If there is a criticism of Engine, given its successful new business record, it is that the component parts remain too siloed.

The truth is, though, that agency evolution probably has some way to go. The decisive change in media consumption patterns brought about by the internet revolution has to a greater or lesser extent exposed the shortcomings of all existing models. Like the coming of television and radio before it, this has created an exceptional opportunity for those smart and entrepreneurial enough to take it. Expect many more breakaways, as the talent in the business attempts to regroup and demonstrate to clients that it, uniquely, has found a way of combining precision search capability with brilliant brand-building capability and 24/7 turnaround, all at an astonishingly low price.

That talent, variously combined, will come not from a single model, but all sorts of backgrounds: media specialists, digital start-ups, micro-networks, brand consultants. And even, as we may be about to discover in the James Murphy breakaway at Y&R, from relatively conventional mainstream agencies.

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