LEADER: A threat agencies must not ignore

Creative agencies, suffering from diminishing profit margins, face a further squeeze this year as television channels muscle into the business of creating commercials in a big way. This is not something new. Terrestrial stations have been doing this for a years, targeting small to medium-sized advertisers. But the threat this time around is bigger as heavyweights like Discovery, CNBC and AXN - all with immense production resources - target big brand names.

Still, in the current climate, this could provide the spark to force through a strategic change within the typical creative agency - a change that should have occurred sooner. Since media agencies have largely taken the strategic high ground from their creative counterparts, the situation has been exacerbated by other events: senior creatives taking up jobs in production houses, and, now, television channels taking on the role of commercial creative provider.

This leaves the creative agency very definitely out of the centre of action. To reverse the downward spiral, creative agencies must build on their strengths in providing the big 'idea' that is central to the effectiveness of any ad, and which remains unchanged. What has changed is the explosion of media choice which has impacted the way an idea is shaped; for instance, technology is now available to tune out advertising on TV. Creative agencies, therefore, should be reinventing themselves to try to retake the strategic high ground. One route is to put more resources into account planning.

Then beef up below-the-line capabilities. Finally, produce campaigns that are effective.

Another route is a bit more radical. Position the agency as a business partner, which has a range of strategic solutions and knowledge, not just marketing communications tools, at its disposal. Meaning it would participate more in other business processes such as product development, new business opportunities and quality management, to name a few.