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
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.