Agencies are focusing increasingly on “strategic planning” as marketers want their creative shops to be more agile and capable of managing the gamut of marketing channels.
As marketers acclimatise to rapidly evolving digital channels and agencies assert more influence over communications strategies there’s a shift in the way creative shops are staffed.
McCann Erickson is the latest advertiser to do away with the traditional model of account managers, creative units and planners in favour of an integrated workforce. It claims the changes will help to better serve its client roster, which includes L’Oréal,Nikon and Coca-Cola.
The IPG-owned agency’s new chief-executive, Ben Lilley, has reduced senior management roles across the business in recent weeks, citing a desire to respond to creative briefs quicker as a key driver.
Speaking to The Sydney Morning Herald, Lilley blamed the death of the traditional agency model for his decision.
”A clear delineation between suits, creative and production, is a very old-hat way of thinking about agencies,” he said. ”Technology has forced our industry to evolve and obviously that means that agencies need to evolve as well. We are very excited to demonstrate the changes we’ve made.”
The death of the traditional agency model has been much heralded across adland for some time, but its only now, with tighter budgets and increased competition, that alternative business models are being executed successfully.
McCann’s structural change adds to a growing chorus of agencies voicing their concerns over the feasibility of the traditional agency. Mother and Anomaly are among those advertisers who have opted to ditch the flailing system in favour of a more innovative approach.
Agency bosses must look for new ways to make money such as sponsorship and managing social media websites on behalf of clients.
These are just some recent examples: Iris, the creative agency which makes ads for brands such as Adidas and Philips, launched a global creative network with US media company, Meredith last month, to offer brands a more flexible offering across digital. Publicis Groupe and telecoms giant France Télécom-Orange are investing €150m (£129m) in a new venture to fund digital start-up projects across the EU. And Firms such as 101 and Goodstuff are promising “new agency models”.
The most obvious reason for these new models is that its what clients want. Marketers want to deal with fewer agencies, capable of executing integrated campaigns across all channels.
However its also true that the margins are under relentless pressure and agencies have had to look for new ways to make money such as handling direct brand strategy and managing social media accounts on behalf of their clients.
Indeed, Beattie McGuiness Bungay (BMB) the creative agency who makes ads for brands such as Microsoft, Samsung and The Independent, recently launched media division BNB Media, a joint venture with the Omnicom backed agency Goodstuff Communications.
The new offering, which will be based in BMB’s London office, will target medium-sized clients who “demand joined-up creative and media thinking.”
Agencies are moving away from being “advertising agencies” to “marketing agencies” as they focus on strategic planning, and in doing so revert to business relationships of the 60s and become true partners to their clients. A shift away from the old commission model to revenue sharing is part of this transition.
While revenue sharing may not be what marketers ultimately want the issue is cleverly being sidestepped by agencies forging strategic creative relationships with brands off the back of the new entrepreneurial approach to business. It’s up to advertisers to demonstrate the value of these new models and show that shared revenue vs commission structures are the way forward.
The role of the agency has changed massively over the last five years. It used to be about finding new ways to say old things. Now it’s about finding completely new things to say, and clients are deeply involved in the collaboration process.