The advertising agency of the future is in sight
The debate of the “agency of the future” has been raging and fuelled by the disruption caused by the advent of digital technology, changing consumer habits and budget cuts. It’s an ongoing evolution of mammoth proportions that is shaking the tectonic plates upon which the foundations of the ad industry once straddled.
And under which its very existence may be buried soon, if it fails to find the right balance and adapt.
In fact, according to a recent PwC study, it may already be too late for the behemoth global marketing agencies to re-emerge as the status quo is fast losing ground, credibility and ad dollars to more agile and digitally native competitors.
Two traditional giants, WPP’s branding business and Omnicom’s media agency network, have already begun to integrate their operations in response to the pressures from clients and the external market. But not doing so fast enough according to PwC: “They need to fundamentally rethink their organisational structures; become far more integrated and play a more active role in day-to-day strategic operations.” According to the same study, as a PR man, I shouldn’t be at all concerned about the travails my fellow advertising peers will have to face because disruption would leave my domain, as well as that of market research specialists, unscathed and unharmed. As the authors of the study analyse it, the four next generation integrated marketing agency models that will prevail will not include PR under the one-stop-shop offering to their clients.
I couldn’t agree more with the authors’ conclusions with regards to the place of PR in the mix; based on my personal experience, integrating PR into the model is easier said than done.
However, I am slightly bemused of the four proposed future agency models, each with client-facing front offices and globally shared services. Because this would only mean that holding companies and their agencies should remain selfcentred, organisational behemoths that lose sight of clients’ key needs and still prioritise the wealth of their shareholders at the expense of client satisfaction.
Could there be a viable alternative? What about the Spark44 model? Set up six years ago as a joint venture between a few advertising executives and Jaguar Land Rover (JLR), the partnership has delivered tremendous success with significant uplifts in brand health for both brands, supporting an overall increase of retail sales volume from 308,000 units in 2010-11 to over 604,000 in 2016-17.
Focus
The joint-venture clientagency model focused on a single client who shared the risk and the reward. But how would the model scale up to make it a significant market player? Spark44 started in 2011 with four locations and 100 employees and today operates in 16 markets from 18 offices — and with over 1,000 employees.
Predictably, not a single one of them works in PR, which is strategically absent from the Spark44 structure. And of course new JVs will be named in the same pattern, according to the name of the next client partner and so on. Furthermore, having one P&L equates to no distraction from inter-office competition and holding company interference.
The Spark44-JLR model works because it offers an even closer relationship with the agency and allowing for fuller integration into the business. And “inside the firewall”, if you like. It increases the confidence in global implementation through a shared belief approach and it allows for less productive work spent on diverse agency coordination, management and pitching.
As we are moving from the ice age of advertising into an age favourable to niche models, it’s important to look back to protect and promote past or current models that have a proven track-record. Or still successfully deliver return on investments for both sides — agency and client.
Evolution would then occur as a natural consequence and take over the process for the required changes.