Ad Agencies and the Integration of Traditional and Digital.

The interactive portion of SXSW 2009 wrapped up yesterday. If you followed my Twitter feed, you probably know I went to a lot of interesting panels.

During one session, Models for Agency Integration, my tweets resulted in a lot of requests from friends for my notes so I decided to post what notes I took and some additional thoughts here on SuperGeekery.

The session was unique in that it was the only session I attended handled by a single person, Pete Lerma, a principal at Click Here. Click Here is a sister company of The Richards Group and is sort of their digital arm, although they are actually a separate company. There were no seats in the small room and the audience sat in a semi-circle around Pete as he spoke.

Various Models for Integrated Agencies

He started the session by outlining several different ways advertising agencies approach the problem of integrating the creation of digital brand development into the traditional agency model.

The first method he talked about was the one practiced by his company. Two sister companies that split the duties, traditional on one side and digital on the other. Their term for this is “Spherical Branding.” (When I was at Ogilvy, their term was “360.”)

The second method he called “The generalist model”; a traditional agency assures brand that they can handle all the digital aspects the brand needs even though the traditional agency isn’t as digital savvy as a digital agency.

The third method, another “one agency model,” is when a single agency handles a brand but with 2 groups inside the agency, a traditional group and a digital group.

The fourth model, another “one agency” model, is practiced by Goodby. It’s where an agency is the owner of a brand but farms out the production of digital work.

Lastly there is the “multiple agency model:” In this method a brand uses best in class agencies across the different types of agencies. Agency holding companies claim to help facilities this type of model for a brand. It often leads to a battle for control between the different agencies, even within the same holding company.

Opinions Are Like, Well, Opinions.

After going through these definitions, the session really started to get interesting.

Various attendees started asking Pete questions and then started asking each other questions.

Unfortunately, I don’t have detailed notes from this part because I started to get wrapped up in conversation. It seemed that the crowd was leaning in the direction that a shop with a large in house production for digital was swaying the crowd and I wanted to add my opinion.

I spoke up and said that I thought the outsourcing model will ultimately be proven to be the model that will be the best solution. I think it’s the agency’s role to be the owner of the idea and see that it’s executed properly across the appropriate media types.

My argument is based on the idea that no single agency can have the best in class production resources on staff all the time. For example, if you found the best data visualization programmer in the world, you might not be able to keep him or her on staff because you won’t always have enough work to keep that person paid properly and working on the type of work he or she thrives on all the time.

I think that type of thinking has proved the best way to create TV spots for example. Big TV directors aren’t on staff at New York ad agencies. They are hired for a week or 2 when the TV spot they are perfect for is sold by an agency to a client. It’s “normal” to sell an idea to a client and then look for a director and production company to help realize that spot.

I was surprised how controversial this idea was to the group. There were many people who thought that having a full digital production staff seemed like the way to build an ad agency. I think that if you do that though, you’re more like to sell and produce the type of work your company is set up to produce rather than sell and produce the type of work that is the most right for your client. It reminds me of the old saying that if you’re a hammer, every problem looks like a nail.

That doesn’t mean an ad agency shouldn’t have some development people on staff. If an agency can safely predict certain types of work will be common in their day to day workings with their clients, it can justify having some core development team on staff. Many agencies have print production on staff because they’ve got clients who ask for a regular cycle of newspaper advertising, for example.

There seemed to be some agreement in the room that regardless of which model an agency is set up as, there needs to be someone who is the owner of the big idea. I see this working best in the outsourcing model though because there will be a clear sense of who is working for who in the relationship and who has the ultimate authority.

My big caveat: A generalist agency needs to be more digitally savvy.

A potential hole in my argument is easy to see. There are many examples of traditional agencies who claim to have this outsourcing model working, but it’s clear many haven’t got it working based on their output. Why? The answer is simple. It’s hard work to be well versed in so many types of media. But as I see it, that’s the job of a generalist in the ad world. 

Pete and others brought up what sounds like harsh process. It’s basically a get with the program or get out approach. For example, Pete talked about going through an agency and every person gets evaluated as “a star”, “having star potential”, or “never going to be a star player” then the culling begins.

  • Stars get to stay.
  • People with star potential get intensive nurturing to become a star from stars.
  • Those who don’t get deemed to have star potential are replaced over time.

That process applies to every person in the agency, especially senior management. Ultimately it makes for an agency that gets it.

Pete talked about how The Richards Group and Click Here had a 12 week course to get everyone on board. For 12 weeks, for 2 hours per week, the broad groups within the agency had intense training in their discipline, across the different media types.

After that 12 weeks, each department has a weekly meeting to keep everyone current. For example, Monday mornings for an hour, the creative department gets together and reviews the best creative work that’s happening in TV, Print, Digital and Social in the past week or so. Media might do their group review on Tuesday, Account, another day, and so on, each focusing on their discipline. Those are mandatory meetings.

The Client’s Role.

Another point that came up along the way was how important a role the client plays.

If a client is set up to have a common point of approval when dealing with their agency, or group of agencies, there is a much better chance of a brand’s advertising being seamless in the eyes of their customers.

For example, if a client is set up to have one marketing group approve the TV and print work and a different group approve the digital work, the work will have a much harder chance of delivering a consistent message to customers.

We look at some companies and see consistently high quality brand messages from them. Apple is probably the easiest example to point out. Apple’s internal marketing process seems to be very focused. The brand message, the look, the feel and everything about how Apple communicates with the world is very focused.

If Apple were a scattered organization internally, it would hinder it’s agency partners from doing the work they’re doing..

Wrap up. Feedback.

The one thing I think the group in the session ultimately agreed upon though was that what we see today is a snapshot and when we all get back down here next year, it will have changed again. If you were in the session, please drop me a line at john at johnfmorton.com. I’d like you to come to the next meet up of NY advertising folks, NY AD SCRUM. Join the group and you’ll get an invite next time we gather.

Also, please leave your thoughts below in the comments area. Thanks!

 

Comments on this post.

John- I don’t think you can contract hired hands and stay in business for long. If a client is truly outsourcing your agency to do advertising and marketing- you’re already one step removed from being invaluable and “integrated.”

Digital isn’t something you do once every fortnight, it’s something you do 24/7/365 unlike a tv spot.

Most agencies have shunned “long form” ads long ago- but, in reality, digital is the ultimate “long form” connection with the customer. You don’t “manage” the relationship- you live in it.

Most “digital agencies” are still built to be an outsourced supplier of marketing solutions- yet, now, online- it’s about coaching the clients to live in a digital world- and that’s a full-time project.

By David Esrati on Mar 18 2009
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