Hakuhodo consulting unit dreams of changing the big agency model

It’s a small step to raising the value of brainpower in a market where sheer media buying power still takes precedence. In September, Hakuhodo launched Teko, a five-person team that aims to bring siloed agency functions closer together and offer strategic solutions that take into account a client’s business as a whole, rather than just its advertising needs.

The proposition is certainly not unique, but it is a new direction for Hakuhodo, whose model, like its bigger competitor Dentsu, is based firmly on TV buying. It can be seen as both a reaction to changing client needs and a hedge against the advance of consulting firms into marketing services. Teko, which means ‘lever’, aims to deal with company management rather than advertising or marketing operatives. It comprises four creative directors and one marketing director. Each specialises in a particular area, from business strategy to social media and storytelling, product development, services and internal strategy and digital and data.

In an interview about the thinking behind Teko, Tomonori Osawa, who is in charge of internal strategy and leads the unit, said he and Tomoki Harada, who is also chief creative officer of TBWA Hakuhodo’s startup division Quantum, formed as a way to “break out of a divided way of operating” that is commonplace between agencies and their clients. They want to be able to apply creative thinking to business and product challenges, which advertising creatives typically do not have the chance to address. But he says thinking about advertising in isolation is not necessarily in a client’s best interests.

Clients think marketing is a cost, and they look to cut costs. What we’re aiming to do is grow together—launch new projects and share the revenue together.  
—Itaru Yoshizawa

Company management “doesn’t want answers from different divisions,” he said. “They want a holistic answer.” Though Teko is small, the idea is that it is able to tap into varied expertise throughout Hakuhodo and apply it as needed. A permanent team of 50 or 60 people would defeat the purpose, Osawa said.

Marketers who work with Hakuhodo are not accustomed to paying for pure creative thinking, because it’s typically a service offered free alongside media. But Osawa thinks it should prove easier to convince top-level management to pay. The bigger challenge will be convincing them to enter into join-venture agreements, which is Teko’s ideal scenario.

“Clients think marketing is a cost, and they look to cut costs,” said Itaru Yoshizawa, creative director and business strategy leader. “What we’re aiming to do is grow together—launch new projects and share the revenue together.” He expects this type of remuneration model to become more common for agencies in Japan and if successful, that it will raise their standing on the food chain.

"The aim is that in 10 years, Hakuhodo won’t be called an agency."  
—Kentaro Ichiki

Changing the operating model of an agency with 120 years of history won’t be easy, and at this stage Teko is best viewed as an experiment with big dreams. In some ways, it operates like Dentsu’s B-Team—although the B-Team does not appear to want to change the way the rest of Dentsu operates. In wanting to solve business problems, Teko might also appear to be following Ideo, which is part of Hakuhodo DY Group’s kyu. Both are similar in proactively looking for problems to solve, rather than working to set briefs. Teko differs from management consultancies in that it can execute as well as offer strategy.

“The aim is that in 10 years, Hakuhodo won’t be called an agency,” said Kentaro Ichiki, another Teko creative director, who hopes to provide an alternative to people looking for a change from standard agency life who would otherwise look to go independent. “Our objective is that everything will relate to creativity. This is the first step on that path.”

This article has been updated to note that Ideo does not work to strictly prescribed briefs.