Magazine article Marketing

The Future Is Marketing: And If Ad Agencies Don't Respond to Demands for More Than Pretty Ideas, They'll Be Left High and Dry

Magazine article Marketing

The Future Is Marketing: And If Ad Agencies Don't Respond to Demands for More Than Pretty Ideas, They'll Be Left High and Dry

Article excerpt


In May of last year my company ran an advertisement in Marketing with the headline "Why brief an advertising agency when you could brief a marketing agency?" Most in the industry probably dismissed us as yet another boutique's attention seeking strategy, but in the weeks that followed word reached us that for a few very senior advertising folk the ad had struck a raw nerve. The European head of one of the largest agency groups had actually cut it out and pinned it up in his office.

I believe it was the idea behind the ad that caused the modest ripple. The copy acknowledged that agencies were excellent at producing advertising solutions but suggested that they were not the best place to go for marketing. This thought, if it catches on, could represent a serious catalyst for change. In combination with the many other pressures already evident - recession, the move from commission to fee-based remuneration, media independents, clients dealing directly with production companies - it could result in a very different looking industry in a few years' time.

The buzz-word is "unbundling". The idea is that ad agencies comprise a group of different services all paid for by one fee (based, directly or otherwise, on an anachronistic media commission) yet the only area where they perform a service that is better than a client could obtain elsewhere is in the creative development of ads. The logical step, therefore, is for all the other services to spin off into more specialist businesses or back into the client company itself.

Why might ad agencies be vulnerable in the area of marketing? Let's start with the demand side. In marketing life is becoming more difficult and complex - markets are fragmenting, consumers are becoming more sophisticated, competition and the rate of innovation is increasing, and the cost of establishing and developing new brands is rising. Add the external pressures of Europeanisation, environmentalism, changes in the retail trade, legislative changes and a world economy in recession and one can appreciate that the task of brand management is challenging to say the least.

Moreover, it is a task that companies are taking even more seriously. These days brands are called "equities", recognising their fundamental value to shareholders. The demand on marketing as a function is therefore increasing. There is a lot more work to be done in identifying the right consumers, what they want, and how to add value before clients decide how and where to communicate.

One effect of all this is that clients have more sophisticated marketing departments, but they will still need to draw on good quality external resources. Not even the best staffed marketing department can cope with the level of change that is occurring. But second, and more importantly, external agencies can provide objectivity and eclecticism - the ability to cross-reference from other markets. The question is, can ad agencies provide the help clients need or are there better alternatives?

My argument is not so much that ad agencies cannot offer marketing advice in the sense that they do not have the quality of people. True, clients are increasingly cynical about 24-year-old planners who "understand" their business better than they do, and increasingly wary of research carried out by the agency when there are plenty of first rate research agencies they can deal with direct. …

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