ANALYSIS: Advertising - Can full-service agencies retake lost turf? - Ad agencies look at ways to fight back and retain revenues

<p>That the business sphere is in the midst of an unrelenting, </p><p>technology-driven change is accepted fact. But that is of little comfort </p><p>to advertising agencies as they grapple with their position in the new </p><p>world order. </p><p><BR><BR> </p><p>For decades, their place at the centre of the strategic communications </p><p>planning process was undisputed. Then came the internet and media </p><p>explosion which eroded their role, while media and other specialist </p><p>agencies, once relegated to the last minutes of a pitch presentation, </p><p>have found their star rising. A case in point is the recent appointment </p><p>of direct agency 141 instead of parent Bates to handle the core brand </p><p>strategy work of Allied Domecq. </p><p><BR><BR> </p><p>Agencies apparently aren't taking the changes lying down. At the AdAsia </p><p>conference in Taipei late last month, ad agency chiefs spelled out plans </p><p>for a fight-back. </p><p><BR><BR> </p><p>They started by defining what they thought the future would look </p><p>like. </p><p><BR><BR> </p><p>In Keith Reinhard's vision of the future, personal digital assistants </p><p>talked to their owners - advising them on what to buy and where to go </p><p>based on their personal lifestyle interests and brand profile - and in </p><p>which FMCG companies produced dramas and sitcoms that run on their </p><p>websites. </p><p><BR><BR> </p><p>DDB's worldwide chairman and chief executive says interactivity of this </p><p>level is important because consumers are being empowered by technology </p><p>to block advertising."In order to be chosen, advertisers must have three </p><p>things in their message: timely information, interactive entertainment </p><p>and brand-embedded content." Reinhard adds that advertisers must, </p><p>therefore, create a total brand experience to get consumers to "buy-in". </p><p>Underlining the sea change to come, he predicts "creative director of </p><p>the future may be called experience directors". </p><p><BR><BR> </p><p>But too much change leads to disorientation, even among the </p><p>tech-literate people, says Leo Burnett regional managing director </p><p>Richard Pinder. "Now more than ever before, the brands you feel </p><p>comfortable with are becoming increasingly important," he says. </p><p><BR><BR> </p><p>Advertisers, he adds, shouldn't lose sight of the fact that brands are </p><p>made up of three components: core drivers, which are the essence of a </p><p>brand's existence in people's lives, lifestyle trends and transient </p><p>cultural cues. "Brands must satisfy all three if they are to survive in </p><p>the long-term. Most dotcoms turned into dotbombs because they missed out </p><p>the core driver components of the equation," says Pinder. </p><p><BR><BR> </p><p>However, because of the increasingly complex marketplace and a more </p><p>'me-centric' consumer, traditional advertising agencies are finding </p><p>themselves pushed off centre stage and into the role of supplier, while </p><p>media agencies and a bewildering array of consultancies - branding, </p><p>marketing, even management - take on plum assignments such as </p><p>strategy. </p><p><BR><BR> </p><p>Gautam Rakshit, the managing director of Mumbai-based Advertising </p><p>Avenues and the vice-chairman of the Asian Federation of Advertising </p><p>Associations, says that full service agencies are facing a bleak future. </p><p>Blaming specialists for the decline, he says: "One by one, </p><p>revenue-earning parts of the full service agency are being plucked away </p><p>and, very soon, it will be left with crumbs while the specialists take </p><p>the cream." </p><p><BR><BR> </p><p>The only way out, he says, is for the traditional agency to reposition </p><p>itself as a provider of strategic solutions and knowledge, in terms of </p><p>consumers, markets, and new business and product opportunities. The idea </p><p>is to put the agency back onto centre stage, with specialists becoming </p><p>the suppliers. "Right now, when we go and see the client, we are only </p><p>welcome at the brand manager's table. What we should aim to achieve is </p><p>to be welcome at the chairman's table." </p><p><BR><BR> </p><p>However, Bates Asia president and Hong Kong 4As chairman Jeffrey Yu </p><p>describes such a repositioning as radical. "We cannot up our roots and </p><p>become business consultants. Our core competency is communications and </p><p>this is where we should be focusing on." </p><p><BR><BR> </p><p>Rakshit also questioned the rationale behind clients chopping budgets in </p><p>a recession. "The reason is that we are not addressing the key issues - </p><p>the future health of the business category the company is in, and new </p><p>markets and products. What is worse, we don't want to accept </p><p>responsibility for the success or failure of a brand campaign." </p><p><BR><BR> </p>