Focus shifts away from the big agency brand

Last year, Johnson & Johnson consolidated its global media account into UM’s J3, a dedicated group that IPG created within UM in 2007 for the health and skincare company.

It’s one example of a shift towards ‘horizontality’—with bespoke agency teams pulled across a group for major clients. Brands including Cathay Pacific and Colgate have similar arrangements, with Cathay Pacific Central Team an agency within McCann Worldgroup composed of multiple disciplines, while agency Red Fuse Communications is WPP’s global agency serving all of Colgate-Palmolive’s brands worldwide.

J&J’s move suggests that group-wide client teams are achieving the desired result, but it also hints at a move away from the individual agency brand. And with the creation of GroupM and more recently Publicis One, where agency brands are centralised under a single group, within a larger agency holding company, has the time come to phase out or de-emphasise the big agency names?

Greg Paull, principal at R3 Worldwide, doesn’t believe this is the case. The best talent, he says, lures marketers, and the best creative minds and these people still tend to work under the agency brands. “It takes a special kind of creative talent to spend 100 percent of your life creating toothpaste ads for Colgate—and those people may not have the flexibility that automotive or telecom clients demand,” he says.

Jason Oke is former regional managing director Asia at Red Fuse Communications, now based with the agency in Paris. The horizontal team model, he says, appeals to clients who like a single point of responsibility and contact across all disciplines and who also want a bespoke agency set-up customised to their specific requirements.

But it’s not for everyone. For such teams to work, clients need to be willing to partner at scale, both across countries and regions and also across disciplines, such as creative, media, digital and shopper. Not every client wants that and they may also be unwilling to undertake the long-term commitment to make this model work. Others might prefer having a stable of agencies to create competition among them.

“What it means, though, is that the big agencies may need to get by with fewer, big-global-network anchor clients—as they are the ones most likely to try a holding-company structure. This will make it more important to win and grow local and regional clients,” adds Oke.

While Jarek Ziebinski, chief executive officer of Publicis One, isn’t rushing to call group-wide client teams a model of success just yet, he understandably believes it is one for the future and says the formation of Publicis One is not about de-emphasising individual agency brands. Rather, it is addressing the challenge of achieving effective integration.

“The increasing fragmentation of our industry has got to a point when integrating marketing communications becomes too difficult and costly,” Ziebinski points out. “At the same time, marketers’ communication demands today are increasingly moving towards specialised capabilities. Our model has been created to address these two needs,” he says.

Clients ultimately want their agencies to collaborate when it comes to delivering the best solution for their particular needs: there’s no denying the value that comes from offering multiple disciplines under one strategic view, but it appears that the big agency (name) still has a vital part to play. Many agency networks may have the multi-disciplined experience, but the real challenge can come from sharing the thought leadership, tools and approaches needed to build integrated client teams.

For Brandon Cheung, managing partner at McCann Cathay Pacific Central Team, being a big agency brand is more relevant than ever.

“Unless you have the chops as the big agency in the first place, it’s hard to convince prospective clients that you have the ability to put together dedicated global teams—one is a direct result of the other,” he says.

For others, there’s a need to partner with the big agencies all the time. Oke, for example, see Red Fuse as not just an agency in its own right but as a portal to access the best of WPP. With today’s marketer requiring expertise from many different disciplines, it seems one client team can’t be good at everything.

Whether a big agency brand today is as useful in winning clients as it used to be a decade ago may ultimately comes down to the client and their needs. While a bespoke horizontal team has obvious appeal to some bigger global clients, others are likely to be attracted by being with a well-known ‘big name’ agency, one that has achieved notable campaigns and worked with big brands.

Shubha George, MD, Asia and CEO, India at Red Fuse, sees the two as mutually beneficial. She expects to see more group-wide client teams emerging but does not believe they will ‘eat into’ agency brands. Rather, she sees a scenario where the bulk of the business will remain with agency brands, while client teams will help agencies focus on building their practices and new business.

“Evolving the agency product is incredibly important for agencies and they will lead this—whether they are creative, media or digital,” she says. “Group-wide client teams would be the best practice in the application of these products and likewise, the requirements of client teams will compel agencies to invest in product improvements.”

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BIG IDEAS

No more silos: Group-wide client team is a trend

Gillian Anderson is managing partner at Oystercatchers Asia

We have seen a growth in recent years in group-wide client teams from the major agency groups. WPP was really the pioneer in this field with Team Detroit, the agency established to manage all of Ford’s agency business across multiple WPP accounts.

This trend had expanded with almost 50 dedicated WPP teams for top clients. In the Asia-Pacific region, one high-profile example is the Cathay Pacific Central Team, a unique agency within McCann Worldgroup composed of multiple disciplines from McCann, Univeral McCann, MRM McCann, partnering with Cathay Pacific, Dragonair and Asia Miles.

This trend is driven by the major groups’ desire to serve their key clients better and capture (or retain) a greater share of that client’s total marketing spend. In recent years, the marketing ecosystem has become so specialised that clients need to secure best practice wherever they can find it. We believe that this is increasingly more likely to be found in a group-wide, rather than purely agency-wide, solution.

That said, leading agencies like Ogilvy for WPP or Saatchi for Publicis Groupe will still be the key contact for client partners—like Huawei in China or Asda in the UK—so the teams are, in fact, the latest way to ensure agencies remain top of mind for key clients.

Group-wide client teams are, however, certainly changing the job roles and skill sets for agency staffers, especially in account or client development roles. Roles in demand now are good networkers who can work seamlessly across disciplines, rather than those who prefer operating inside narrow traditional agency silos. Gone are the days when Ogilvy or McCann was the perfect calling card: nowadays it’s also the holding company you have worked for and the cross-agency experience that you have gathered.

Interestingly enough, the long-term consequence of this is that the great traditional agencies will still remain in high demand—not, as in the past, because they are a one-stop, full-service shop but because, in the future, they will be the anchors in group-wide relationships.

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Our view: While proclaiming the end of big agencies may be premature, the function of the agency brand within the holding-group structure is changing.