In­te­grated or in­de­pen­dent?

Be­tween 2010 and 2017, FCB won six out of a pos­si­ble eight Best in Show tro­phies at New Zealand’s premier media agency awards show. But as Damien Venuto dis­cov­ers, just be­cause an agency’s in good shape doesn’t mean you should stop chis­elling away at the

New Zealand Marketing - - News - Pho­to­graphs by Bryce Car­leton

FCB Media and MBM give the low­down on their two dif­fer­ent media agency mod­els.

A STREAMER of haz­ard tape cor­doned off the door that con­nected re­cep­tion to the ground floor of the agency. High-vis vests cir­cled the space in lieu of state­ment frames and on-trend kicks, while the dull thud of tools re­placed the tic-a-tack of fin­ger­tips on the key­board.

As he led the way to one of the few rooms on the ground floor not im­pacted by the com­mo­tion, FCB Media gen­eral man­ager Ru­fus Chuter apol­o­gised in ad­vance for the sound of ham­mer­ing that was likely to serve as the back­ground per­cus­sion to the chat about the agency.

The whole idea of the agency being un­der con­struc­tion seemed some­what at odds with the fact the team had just cel­e­brated win­ning yet an­other Best in Show for NZ Fire Service’s ‘Made from re­mains’ cam­paign and Agency of the Year at the an­nual Bea­con Awards. As the Amer­i­can­ism goes, if it ain’t broke, don’t fix it.

But in this in­stance, the mo­ti­va­tion behind the con­struc­tion isn’t so much to re­pair holes in gib boards, but rather to en­sure FCB re­mains in tune with an evolv­ing in­dus­try.

A sig­nif­i­cant part of the re­fit will in­volve in­creas­ing the num­ber of work­able meet­ing rooms from six to 12, giv­ing staff more space to hash out ideas to­gether. This move looks to ac­cen­tu­ate the ad­van­tages that come with hav­ing an in­te­grated model that brings to­gether cre­ative, media, PR and dig­i­tal. The greater the op­por­tu­nity for col­lab­o­ra­tion, the more likely they be­lieve it is for dif­fer­ent skillsets within the busi­ness to come to­gether to solve client prob­lems.

“We’re al­ways think­ing about the im­pact a phys­i­cal space can have on how we col­lab­o­rate and the work we pro­duce,” says Chuter.

That said, he be­lieves there’s a false per­cep­tion in the in­dus­try that in­te­grated agencies just hap­pen to col­lab­o­rate across de­part­ments by de­fault, that in­te­gra­tion au­to­mat­i­cally equates to col­lab­o­ra­tion.

“Hav­ing peo­ple in the same build­ing doesn’t mean you’re in­te­grated; there’s a dif­fer­ence be­tween in­te­gra­tion and co­hab­i­ta­tion,” he says.

“Peo­ple some­times think that be­cause we’ve got all these things in our build­ing, it’s some sort of gimme, but we ac­tu­ally work hard to cre­ate the ad­van­tage the model should of­fer.” In­te­grated edge FCB chief strate­gist David Thoma­son some­times tells an anec­dote about at­tend­ing the Bea­cons a few years back on a night when FCB didn’t win the

Hav­ing peo­ple in the same build­ing doesn’t mean you’re in­te­grated; there’s a dif­fer­ence be­tween in­te­gra­tion and co-habi­ta­tion ... We ac­tu­ally work hard to cre­ate the ad­van­tage the model should of­fer. Ru­fus Chuter

Agency of the Year award. As is cus­tom­ary at these events, the pre­sen­ter read out the judges’ com­ments, which cred­ited the win­ning agency for do­ing well be­cause it didn’t have the unique ad­van­tage of FCB, which had cre­ative and media in-house.

“They were al­most re­fer­ring to it as some sort of award cheat that we had,” re­calls Thoma­son.

Look­ing at the re­sults be­tween 2010 and 2017, it cer­tainly does seem as though FCB has down­loaded some se­cret cheat code, with the agency land­ing six of eight Best in Shows at the nation’s big­gest media awards.

How­ever, what’s in­ter­est­ing about Thoma­son’s anec­dote is not that FCB has a de­cent con­ver­sion rate at awards events, but rather that a model dis­missed as an­ti­quated not too long ago has now emerged as an ap­par­ent com­pet­i­tive ad­van­tage.

His­tor­i­cally, most agencies were fully in­te­grated with media and cre­ative op­er­at­ing along­side each other un­der the same roof. But fol­low­ing the 1980s ex­am­ple of larger-than-life Aus­tralian media mag­nate Harold Mitchell, many of those cre­ative and media de­part­ments con­sciously un­cou­pled to form in­de­pen­dent shops fo­cused on their pri­mary strengths.

This all made sense in an era when there was a clearly de­fined set of media chan­nels, which the media agency, as ob­jec­tive pur­veyor, could use in ac­cor­dance with the needs and bud­gets of its clients. But dig­i­tal has ripped through the in­dus­try, tear­ing some chan­nels into frag­ments and meld­ing oth­ers to­gether.

This has in­tro­duced a level of com­plex­ity that not only makes it dif­fi­cult for media agencies to de­cide which chan­nels to use but also for cre­ative agencies to de­ter­mine what to make for the client. And it’s also led to plenty of in­fight­ing over who’s re­ally in con­trol.

Chuter ar­gues this com­plex­ity is only fur­ther ex­ag­ger­ated when cre­ative and media agencies are op­er­at­ing in their dis­parate siloes, not to men­tion when you throw data management and be­low-the-line mar­ket­ing into the mix as well. With so many players, each with their own in­ter­ests, cir­cling the brief and of­fer­ing their ser­vices as the panacea for all busi­ness prob­lems, the mar­keter will, at best, be­come frus­trated or, at worst, in­vest in an idea that doesn’t service their needs. Some­thing’s got to give—and to the Chuter, it’s the siloes that stand in the way of col­lab­o­ra­tion.

“I be­lieve that in­te­gra­tion [of pre­vi­ously siloed dis­ci­plines] is an in­evitabil­ity,” he says.

“It sim­pli­fies com­plex­ity, it allows con­nec­tion

of more seam­less cus­tomer jour­neys, which his­tor­i­cally have been sep­a­rated in dif­fer­ent siloes, and it sets it­self up to have data at the heart of the or­gan­i­sa­tion.”

This is not to say that ev­ery agency of the fu­ture will look like FCB, but rather that op­er­a­tions across ad­ver­tis­ing will evolve to better service the needs of mod­ern mar­keters.

“The types of in­te­grated solution will vary, but the principle of bring­ing siloed dis­ci­plines to­gether to cre­ate more seam­less, con­nected ex­pe­ri­ences in a sim­pli­fied way for clients is in­evitable,” Chuter says.

Across all the ma­jor hold­ing com­pa­nies, we’re start­ing to see var­i­ous forms of in­te­gra­tion ap­pear. It’s the mo­ti­va­tion behind WPP chief ex­ec­u­tive Martin Sor­rell’s em­pha­sis on what he calls hor­i­zon­tal­ity, which ba­si­cally re­quires agency units with dif­fer­ent com­pe­ten­cies within the broader group to work to­gether; it’s the foun­da­tion upon which Havas Group’s 47 ‘vil­lages’ around the world are built; and it’s in­fused in the think­ing swirling through the Dentsu Aegis of­fices in New Zealand.

A con­stant tin­ker­ing

There’s no colour-by-numbers guide on be­com­ing in­te­grated, leav­ing agencies with lit­tle choice but to tinker with the ex­ist­ing sys­tem while still en­sur­ing their busi­nesses remain prof­itable. Even FCB op­er­ates as some­thing of a hy­brid model, with some clients us­ing the com­pletely in­te­grated full-service op­tion and oth­ers us­ing the agency only on the media side.

So, with this in mind, does the client, rather than the agency, de­ter­mine the level of in­te­gra­tion? And de­spite all this talk about the com­pet­i­tive edge of in­te­grated agencies, does the model re­ally serve as an ad­van­tage if clients haven’t signed on for the full pack­age?

Un­sur­pris­ingly, Chuter still be­lieves there’s an ad­van­tage in the model, even to clients that only work with the agency on the media side.

“The way we work as a team and the cul­ture we cre­ate and the pro­cesses we adopt re­flect an in­te­grated mind­set that be­lieves in the im­por­tance of con­tent and con­text com­ing to­gether. Our fo­cus on that is taken to the in­de­pen­dent pieces of busi­ness as well as our in­te­grated clients.”

This claim is cer­tainly backed by Flight Cen­tre gen­eral man­ager of mar­ket­ing Jodie Burnard, who says FCB’S in­te­grated ap­proach lends strate­gic and cre­ative weight to cam­paigns.

As an ex­am­ple, she points to the work the agency did last De­cem­ber on the ‘Gifts that go places’ cam­paign, which used Google data to get hol­i­day pack­ages in front of cus­tomers that were look­ing to

Media agencies used to be or­der tak­ers. They were like mon­keys with cal­cu­la­tors. They were at the bot­tom of the food chain, and made money from book­ing media. Ru­fus Chuter

pur­chase other Christ­mas gifts for loved ones.

“Be­cause they had dig­i­tal, strate­gic and media buy­ing teams they were able to pull to­gether a cre­ative and in­no­va­tive cam­paign idea … with an ex­tremely short lead time for a low budget,” she says.

FCB also en­sured the ex­e­cu­tion was up to scratch, as­sist­ing Flight Cen­tre’s in-house stu­dio with cre­ative ideas.

For Chuter, cam­paigns such as these bring to life that im­per­a­tive re­la­tion­ship be­tween ‘con­tent and con­text,’ a phrase he pep­pers all the way through the in­ter­view.

For him, ev­ery cre­ative de­ci­sion must be made with an eye on where it will play out. Get­ting ei­ther side wrong is akin to book­ing Adele to play in a heavy metal club or an ama­teur rock band to play in Spark Arena. In some ways, ad­ver­tis­ing is even more com­plex than this anal­ogy sug­gests, be­cause you have to start by build­ing Adele from scratch be­fore you can book her to per­form any­where.

No mat­ter what channel you’re deal­ing with, adept media think­ing starts with a clear strat­egy that iden­ti­fies the cre­ative and the media ob­jec­tive, and ends with both being de­liv­ered with de­sired im­pact and au­di­ence. Sep­a­rat­ing the cre­ative and con­tex­tual dis­cus­sions at any stage of the process risks tear­ing the strat­egy into two sep­a­rate direc­tions and po­ten­tially de­liv­er­ing some­thing very dif­fer­ent from what was orig­i­nally in­tended. And to Chuter, this is­sue is most pro­nounced in dig­i­tal, which de­mands greater im­me­di­acy than any other channel.

“So­cial and mo­bile are in­creas­ingly de­mand­ing a mar­riage of both con­tent and con­text, which I think is a struggle for many agencies be­cause of the rel­a­tive sep­a­ra­tion of the plan­ning of the con­text and the cre­ation of the con­tent,” Chuter says. “If one of the in­evitable ar­eas of pro­gres­sion for the in­dus­try is in more per­son­alised and more mo­ment-based com­mu­ni­ca­tions that de­mands a bring­ing to­gether of mes­sage and mo­ment, that can be hard to achieve if you have dif­fer­ent agencies work­ing on the busi­ness.”

This could get com­pli­cated

But col­lab­o­ra­tion be­tween the var­i­ous forces at play is al­ways eas­ier said than done. And even in the in­te­grated model, it doesn’t come with­out chal­lenges.

A com­mon crit­i­cism lev­elled at FCB, for in­stance, is that the agency works with com­pet­ing clients across the dis­ci­plines on of­fer in the agency.

An ex­am­ple of­ten raised is FCB’S as­sort­ment of part­ner­ships in the bank­ing and fi­nance in­dus­try, which sees the agency work­ing with West­pac on media, ANZ be­low the line and Lat­i­tude Fi­nan­cial Ser­vices (which in­cludes Gem) above the line.

More re­cently, FCB has also been step­ping out­side of the tra­di­tional re­mit of these cat­e­gories, cre­at­ing a TVC for ANZ and a range of web con­tent for West­pac.

Placed un­der the UV lights of wi­ley, highly

com­petitve in­dus­try in­ves­ti­ga­tors, these part­ner­ships light up as con­flicts of interest, which is why it’s not un­com­mon to hear these same in­ves­ti­ga­tors ques­tion how clients could pos­si­bly be happy with FCB’S Chi­nese Walls—par­tic­u­larly given the agency’s ten­dency to tout its sin­gle profit and loss state­ment as an ad­van­tage.

“It starts with hon­est con­ver­sa­tions about the na­ture of the ser­vices that in­di­vid­ual clients are buy­ing from us,” says Chuter, ex­plain­ing that the agency takes steps to in­form all new clients of the checks and bal­ances in place to en­sure that con­fi­den­tial client in­for­ma­tion doesn’t reach com­peti­tors.

“It goes with­out say­ing that there are a whole range of in­for­ma­tion and data se­cu­rity mea­sures that we put in place to en­sure that client in­for­ma­tion is pro­tected,” he says.

There is also per­haps an ar­gu­ment to be made for the evo­lu­tion of our un­der­stand­ing of con­flicts of interest. As far back as 2013, Lau­rie Coots, then the global CMO at Tbwa/world­wide, wrote in

Ad Age that “hav­ing a client sug­gest that you not serve an­other client in a non-con­flict­ing cat­e­gory be­cause it does not want you to ‘con­trib­ute to its com­peti­tors' suc­cess’ is no longer ac­cept­able”. She called for con­flicts of in­ter­ests to be re­solved on a ra­tio­nal level in tune with how the in­dus­try was evolv­ing (par­tic­u­larly in the con­text of in­creased project work) rather than on an emo­tional level, largely in­formed by boundaries in­her­ited from a pre­vi­ous gen­er­a­tion.

Of course, it’s also no se­cret that ad­ver­tis­ing hap­pens to be a fickle in­dus­try, and Chuter makes the point that un­happy clients tend to jump ship when a part­ner­ship isn’t de­liv­er­ing what they ex­pect.

“There’s no ben­e­fit to us in this not work­ing,” he says. “We are the ones who have most to lose from those sit­u­a­tions not go­ing well. It’s some­thing we take in­cred­i­bly seriously.”

He adds that while FCB does have a sin­gle P&L at chief ex­ec­u­tive level, the dis­parate arms are all ac­count­able for sep­a­rate fi­nan­cial state­ments.

“Within FCB Media, I have over­sight of a media P&L and I have ac­count­abil­ity for how media is run­ning as a busi­ness, but that feeds into a mas­ter FCB P&L that we use to make wider de­ci­sions about how and where we choose to in­vest across the to­tal busi­ness,” Chuter ex­plains.

“It means we can make in­vest­ment de­ci­sions to sup­port the evo­lu­tion of cer­tain ca­pa­bil­i­ties from revenue that may be gen­er­ated in other parts of the busi­ness. In that re­spect, while I run an op­er­a­tion that’s prof­itable, I still have the ben­e­fit of CEO level de­ci­sions where we can make wider in­vest­ment de­ci­sions that will ben­e­fit the to­tal agency.”

Mon­keys with cal­cu­la­tors?

The big­gest in­vest­ment at any agency is in the peo­ple. And if the grow­ing staff numbers are any­thing to go by, media is an area that the ex­ec­u­tives at FCB are happy to spend a few dimes on. Be­tween 2010 and this year, FCB Media has grown from 35 to over 70 staff.

Chuter says the agency has also diversified sig­nif­i­cantly, with the ad­di­tion of a fast-con­tent unit called Hive, in­creased data ca­pa­bil­i­ties and the in­tro­duc­tion of con­sul­tancy ser­vices within the agency. Each of these add-ons serve to shift the agency’s fo­cus from sim­ply buy­ing media to play­ing a role in solv­ing clients’ busi­ness prob­lems, says Chuter.

“Media agencies used to be or­der tak­ers. They were like mon­keys with cal­cu­la­tors. They were at the bot­tom of the food chain, and made money from book­ing media. But what you’re now see­ing in the more suc­cess­ful agencies is a cul­tural revo­lu­tion to­ward being much more en­tre­pre­neur­ial and service- and solution-ori­en­tated for clients. How we make money to­day is very dif­fer­ent to how we made it ten years ago.”

While many of the changes have been in­tro­duced to im­prove the agency’s han­dle on dig­i­tal and data, Chuter warns against tak­ing a sledge­ham­mer to the foun­da­tions good media agencies have al­ways been built on.

“It’s tempt­ing to get car­ried away with the sci­ence and lose sight of the art,” warns Chuter, point­ing out that a new piece of tech­nol­ogy won’t au­to­mat­i­cally re­solve all client prob­lems.

Chuter says the art of media plan­ning re­mains as rel­e­vant as ever, par­tic­u­larly given that ad­vances in neu­ro­science have shown that hu­mans aren’t quite as ra­tio­nal as we imag­ine our­selves to be.

And de­spite the con­sis­tent stream of de­mo­li­tion ex­perts blog­ging about how tech­nol­ogy will lead to the demise of media agencies, plan­ners and strate­gists, the team at FCB still seems con­tent to keep chis­elling away, tin­ker­ing at the struc­ture and shap­ing it into some­thing that stands out and helps its clients nav­i­gate a com­pli­cated, ev­er­chang­ing en­vi­ron­ment.

“We don’t want to be like other media agencies or fol­low le­gacy in­dus­try mod­els,” says Chuter. “I think a big part of the suc­cess of agencies such as ours and MBM is that we’re of­fer­ing some­thing dif­fer­ent.”

So even when the tools are laid down with the com­ple­tion of FCB’S ren­o­va­tions, you’ll prob­a­bly still be able to hear the faint sound of ham­mer­ing, if you lis­ten care­fully enough.

An­drew 'Ribs' Coulthard shows off his con­tem­pla­tion face

Jay Drew tries out the stand­ing desk ap­proach

Sil­via Ku­sic in the con­struc­tion zone

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