A strong voice is emerging in the advertising industry for ad agencies to house their services under one roof rather than in silos in a bid to boost creativity and brand stewardship.
Procter & Gamble (P&G), the world’s biggest advertiser, recently took a firm stand on ad agencies to reinvent their agency models to emphasise creativity and operate under one roof.
In a keynote address at the annual ANA media conference early this month, P&G chief growth and brand officer Marc Pritchard was reported in Forbes as having some harsh words for agencies. Among others, he urged agencies to rebundle media and creative works under one roof and that unbundling them was a mistake.
Publicis One Malaysia and Leo Burnett Malaysia CEO Tan Kien Eng tells StarBizWeek that he agrees with Pritchard’s view. “That is why Publicis One removes all the silos from creative, media, data, tech, e-commerce, PR, etc. This is to get everyone to focus on a seamless honest solutions to drive growth and to solve our clients business/marketing problems through creativity.
“In our office, we have a catch phrase – No silos, No solos, No bozos. We need to understand people and their behaviour. The Internet has changed how people interact with brands and commerce. It is not business as usual. It is chaos, organised chaos. The way brands carry themselves – the personality and tonality of the brand should be consistent regardless of time and situation.”
Therefore, Tan says it is risky for brand custodians to engage multiple agencies working in silos to execute the work across multiple-platforms and stakeholders. By driving a unified approach, it will also improve effectiveness, reduce the cost of engagement, acquisition and transaction,” he stresses.
Echoing similar view, Dentsu Aegis Network (DAN) Malaysia CEO Nicky Lim says Dentsu Inc of Japan is the only advertising agency in the world that has not unbundled since its founding 117 years ago.
When agencies in the West started unbundling and developing freestanding services some 20 years back, Dentsu followed a completely different path.
“Integrated marketing and communications designs have always been at the heart of Dentsu’s offering to its clients, and this gave it great foresight as to why it shouldn’t unbundle in the first place.
“In other words, offering solutions in silos simply doesn’t work anymore in today’s digital economy. At the rate the world is moving, we need to ensure that our services can respond in speed and scale to stay relevant. Efficiency is important to achieve effectiveness, and the ‘Eigyo’ culture we practise at DAN gives us the agility to respond to client needs and industry changes. That is our main focus and point of differentiation,” Lim says.
Eigyo is a Japanese term referring to having brand custodians who are gatekeepers of the client’s brands and business as well as being the chief marketing officer-counterpart of clients.
IPG Mediabrands Malaysia CEO Bala Pomaleh says he agrees with Pritchard’s sentiment in saying that agencies need to reinvent to stay relevant. “I think we can see our future in the past, and take strides towards greater integration between media and creative. It has been demonstrated, that our very best work is produced when we integrate, and this integration is data-led, for both media and creative.
“The question here is less about bundling or unbundling, but finding the right mix of talents to work on the business. Ultimately, the wrong people within a bundled agency will not produce results. We see further reinvention of the agency business model through greater focus on talent culture and diversity.
“Agencies need to move away from the idea of departments, and embrace skills to cultivate a thriving ecosystem that will unlock creativity to transform and revolutionise the agency model, with return on investment at the very heart of client relationships,” Bala explains.
Putting things in perspective, Entropia senior partner Prashant Kumar says bringing all the relevant ad services and departments together is not about stacking one atop the other, but blurring the lines to make it seamless. It’s not a salad bowl, but a melting pot, he notes.
“As marketing is getting more and more complex due to the advent of new digital opportunities, it is important that we remove artificial lines and silos. Or the rather fragile soul of marketing – insights and ideas – will get bogged down by ‘operational plumbing’. We must make the complex, simple. Sophisticated, but simple. In fact at Entropia, it is our mission to deliver that,” he says.
There is just too much duplication and operational inefficiency due to the silos that exists in an agency, he says, adding that there is one customer, and one brand and it needs one stewardship.
World Federation of Advertisers (WFA) Asia-Pacific director (marketing services) Ranji David says marketing services across media and creative should always work in unison, although the business silos that exists in both scenarios don’t always enable this.
It is not WFA’s desire to dictate how agencies structure their business, she says, noting that the federation is interested in enabling advertisers to take a pro-active and progressive approach to agency rosters, remuneration and building profitable partnerships that will result in great work.
“There is no one-size-fits-all model that works for everyone – each business organisation has its own needs and the fluidity that content marketing requires from production to execution in an ‘always-on’ environment which necessitates advertisers and agencies to work seamlessly in a truly integrated way. But with the right tools and levers, there is the opportunity for brands to incentivise and inspire good work regardless of agency structures and models,” she says.
Meanwhile, Malaysian Advertisers Association (MAA) president Margaret Au-Yong says it is vital to treat agencies as partners rather than vendors.
“There must be mutual respect, transparency and trust between the two. This will create a strong team which understands clients needs irrespective of whether the ad services are bundled or unbundled.
“A strong partnership and the ability to work closely and meet customers’ needs is more pertinent,” she adds.
Unified approach will drive effectiveness and reduce cost of engagement