Having been in this business for 20-something (cough cough) years, the cycle of brands consolidating and then de-coupling their media, creative and specialty-marketing services has swung back and forth more times than a center-court spectator at a Wimbledon match. The impact this has on cross-channel marketing — even as the media landscape gets more complicated and automated — is significant.
The holding companies will argue that having one “team” handling end-to-end marketing services drives not only efficiencies but also better work. Independent agencies that have media and creative under one roof will posit that having one overhead to pay for in the fee, plus better agility in go-to-market, provides brands with the advantage they need.
On the flipside, others believe that having a series of best-of-breed shops united by an agency council is the only way to go. These folks suspect that agencies are inherently lazy and entitled and fear that if they put all their eggs in one basket, they will not get the best thinking over time. Let’s make them jump ball for every brief, they reason.
I’ve had the good fortune to work within independents with bundled services, stand-alone specialty digital shops and, at Havas, a holding company that can bring everything together with one “village” team. I’ve also worked with many CMOs along the way that believe bundling is the best way. But which way is right? Does it depend on the spend-levels? The brand? The paranoia level of the CMO?
The advertising trades are full of stories about how big brands have made moves to consolidate their work with one agency or one holding company. In 2014, MediaPost reported that SAP consolidated with Omnicom with its CEO citing “…a compelling end-to-end vision for the next generation of the SAP brand.” Closer to home, DISH Network consolidated a majority of its spend — including digital, digital media and brand creative — with our Havas village.
Publically, brands say they seek consolidation for a variety of reasons, including:
- Procurement-led efficiencies. Why pay the overhead of multiple agencies all working to represent the same brand to the same consumer? Why have many account, media and creative leads, all with different agendas and different internal pressures?
- Scale and market power. This is relevant for brands that spend a considerable amount of dollars in working media, especially in media that is non-bid or programmatic. Scale and buying power are real for network and media deals where holding companies can bundle across multiple clients.
- It is all about the idea, not savings. This one can go either way. Some believe that the best ideas will come from specialists in their craft — big brand builders, CRM, digital or direct mail. And some believe that having all of this together under one leadership team drives a better idea cross channel.
I believe that the truth is more mission-critical, however, than those sound-byte reasons. There are two primary drivers in today’s marketing economy driving CMOs to consolidate:
- Compression of time from idea to consumer engagement. Because media and content are moving faster than ever and across more touchpoints, brands cannot wait months for content to be produced, trafficked and put into market. The pressure is on CMOs to show their CEOs and boards that their brands are in the game on a daily basis. Yes, broad-based media still matters but content creation in market, in near real-time, is critical. Having teams that aren’t truly linked makes this harder — even if the brand has the best agency council, communication and technology supporting the mission.
- Data drives everything, or at least it should. The trail that media analytics, social data, transactional behavior and other analytics are leaving for a brand to make creative and content decisions are overwhelming. The best agencies are putting data in the center of all decision-making. And, having a bundled team that can translate that data into effective campaigns will win. Consumers tell us everyday what type of content, messaging and offers they want from a brand. All we have to do is listen and respond.
The trend du jour for brands with scale, it seems, is finding an agency or holding company to bundle under a common structure. This makes sense for some brands. For others, a specialty model will. My intent is to spawn dialogue around the topic and learn from each other about what’s working and what isn’t.
What do you think?