Global professional service businesses seem to do pretty well. One thinks of category leaders: McKinsley, Clifford Chance, Accenture, PriceWaterhouseCoopers, and investment banks like Goldman Sachs and Lehman Brothers. So what’s different about ad agencies? A Martian ad industry watcher with access to websites, the trade press and the watering holes of Soho might well conclude that it is all up with the giant international creative agencies – at least here in the UK.
Advertising revenue is under pressure. Start-ups abound, and several are doing well. The drift from "old-fashioned" advertising to integrated, digital, direct and other, newer media has accelerated. The owners of these businesses in their annual reports universally sledge the system agencies. It is often hard to find enthusiastic defence of what they stand for – much less passionate support – even within the big shops.
So is it a crisis? Or is it more a crisis of confidence? Let me mount the case for the defence – not because I have anything less than whole-hearted regard for independent agencies, but because I profoundly believe that global marketing needs agencies with global capability. Global players need brilliant international agencies as well as brilliant local ones.
We live in a world of brands, and the agency networks are brands in their own right – which Omnicom, WPP, IPG, Havas and Publicis (Le Groupe) were never intended to be. These brands, the famous names of international advertising – BBDO, DDB, Grey, JWT, Leo Burnett, Lowe, McCann, Ogilvy, Publicis, Saatchi & Saatchi, TBWA, Y&R and so on – need to market themselves just as aggressively as their leaner, meaner rivals like 180, BBH, CHI, DLKW, Fallon, M&C Saatchi, Mother, Strawberry Frog, VCCP, WCRS, Wieden & Kennedy and the others. It is interesting that of the 11 "third way" agencies mentioned above, five have sold to groups and a sixth is contemplating following the same path.
Where do networks’ strengths lie? And how can they make a more compelling case?First, their long-term stewardship for legendary brands across the world. At a pitch, strategic thinking or speculative creative ideas can be very impressive, but track record and client testimonials should count for more. Second, big agencies offer first-class people on every continent. Global marketers truly value the support of top professionals on the spot who understand not just company culture and its brands, but also the market they live and work in. Third, network agencies win just as many creative and effectiveness awards around the world as independents, but they often don’t get the credit. Fourth, and crucially, network agencies can offer better deals, greater economies of scale and a wider spread of integrated resource, thanks to their parent groups.
Then there are four aspects I would work on next to build confidence internally and reputation externally. Start by promoting the value of building a career at a global agency – and do it by paying key people much better. This can only be achieved by taking a leaf out of the independents’ book: slimmer, more able teams of client-facing stars. Second, push for the greatest synergy and economy of scale of all: offer a banded pack of creative agency and media agency. The finest creative agency in the world cannot function properly with a client unless it is working with world-class communication planners and media specialists. But why should those players come separately, when the big groups have them on board anyway?Third, network agencies must demonstrate more obvious commitment to innovation and change, embracing new disciplines. Leading clients are on a quest to use digital media as effectively as the conventional variety. If they can’t access these skills and resources from their main agencies, they will hire them elsewhere. Finally – particularly in pitches – less pursuit of one sight, sound, one message, less fixation with big ideas at all cost, and more focus on segmentation and touchpoints.
Commercial savvy and success come from concentrating on strengths. The global investment banks, management consultants, law firms and accountants never sell themselves short. When they pitch for business, there is no chance of their apologetically comparing their energy to much smaller local firms. The leaders of independent agencies learn their trade in the networks and usually end up selling to them. There must be a lesson there.