by: Idris Mootee
The hottest new agency is WANAA (We Are Not An Agency). Ok, there is no agency called WANAA. You get the point. Headhunters are calling everywhere tyring to recruit new heads for interactive agencies as many have plans to replace theirs. The problem is the interactive heads just move around from one agency to another...with little result...sadly. This is not going to change anything. Coming back to the topic of agency consolidation, these are the questions:
- Would agency consolidation now starting move beyond ad agencies?
- Will technology firm start buying agencies and blurr the line between marketing technology vendors and agencies?
- Will the centralization of marketing services will move outside of agency holding companies?
We are seeing a polarization between deep-specialization and skilled integration, it is hard to survive in the middle. Most ad agencies are in the middle. Everyone's wondering what's the next game for agencies? What's the future of these big names Ogilvy, Y&R, FCB, BBDO, JWT?
Read this statement from Dell's blog regarding how they work with of WPP for their $4.5 billion global business: "Together with the WPP agency, Dell is creating a new marketing model designed to further propel Dell's growth. We've been calling this 'Project Da Vinci' because we've been looking for the combination of artist and scientist-an agency that has both the creative horsepower and ability to measure the business impact of their work."
Large agencies are not having an easier time than smaller agencies just because of their reputation or scale. My dialogue with CMOs are often centered around how disappointed they are with their (big) agencies and how these agencies became marketing procurement partners rather than idea partners.
WPP has the smartest strategy at a holding company level. WPP's strategy is remarkably smarter than Omnicom and Interpublic. As agencies struggle to meet the demands of client, WPP is actively securing new media and services and for its client base in addition to its pursuit of interactive service expertise. They invested in Wild Tanget, LiveWorld, JumpTap, Video Egg and 24/7 Real Media. This is in line with their strategy as WPP sees challenges/opportunities as follow:
- Globalization /Americanisation / BRICs
- Overcapacity, shortage of human capital
- The Web (internet penetration, e-commerce, mobile)
- The pace of technological change
- Retail concentration
Unfortunately, many of WPP's agencies are slow or failed to adapt these challenges. The need for agencies to have deeper strategic capabilities and technological competencies is causing pain. I have not met a so-called "digital" strategist or planner or director from Ogilvy's that I personally think meet the minimum standard in terms of understanding the digital space. Not to mention how disappointed I was every time when I interact with another "digital" or "interactive" experts from other agencies like DRAFT FCB or JWT which I held a lower than standard than Ogilvy's. I think this is not an easy problem to fix. There are so many structural issues that need to be fixed. It takes a lot of effort and energy to insure an agency to bring digital thinking to the core of everything they do. It is about pull-marketing, software as a service, social networks, emotional connectivity; widgetnomics and collaborated search. The opportunity for brands to regain consumer trust and engagement is not only about tools, it is about whole new mind set about what the new role of marketing. If one of these guys show up on my office and ask me to help them to fix this, I would say this is a 3 - 5 year engagement. I'd other better opportunities.