Newspaper article The Evening Standard (London, England)

Future for Ad Industry Is. Simples; ON ADVERTISING & MARKETING

Newspaper article The Evening Standard (London, England)

Future for Ad Industry Is. Simples; ON ADVERTISING & MARKETING

Article excerpt

Byline: Gideon Spanier

WHAT are the biggest challenges for advertising chiefs in the post-recession, multi-media world? As the annual results season for media firms draws to a close, two themes keep popping up: integration and diversification.

Advertising clients increasingly want "integrated" campaigns that blend online and traditional media, direct mail, marketing, public relations, social networking and even customer loyalty programmes. Instead of using a roster of agencies with expertise in different disciplines, clients are keener to use just one or two firms which can offer many of those skills under one roof.

"About half the new business pitches we are working on are integrated pitches," says David Kershaw, chief executive of ad agency M&C Saatchi. "Clients are no longer saying they want just advertising, they say they want a range of [marketing] tools."

At the same time, as brands have slashed budgets in recession, many agencies have found it useful to diversify and reduce their dependence on advertising income by offering other marketing services.

Of course, cost-cutting is a factor behind all this as brands think one agency can do more for less. But there is also an understanding that, in a fragmented media world, it is more important than ever to have a single, clear message across all platforms.

And, as many firms have begun to recognise, this needs to start with simplifying the creative process -- for example, by not having separate teams for TV, press, digital and so on.

"The plethora of specialisms no longer makes much sense," argues Stephen Woodford, chief executive of agency DDB London, part of the Omnicom empire. "As media become more fragmented, agency structures must become simpler. We have to remove the barriers that stop people working together and many of those are structural."

However, trying to restructure an agency business can pose quite a challenge.

Many have separate divisions or silos, with different profit-and-loss (P&L) accounts. Sometimes these subsidiaries have only found themselves under the same roof because of acquisitions.

"There has been a tendency for everyone to want to protect their own P&L," says one boss. "They say, 'If I can bring in a piece of business worth [pounds sterling]200,000, do I really want to give half of it to my sister agency? …

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