Live Issue... Media agencies confront the winds of change

There are nods of agreement all round when anyone says the old media agency business model is broken. Media fragmentation and digital advances have driven the world built on commissions to the edge of obsolescence, but how the agency of the future should be built is less clear-cut.

For media agency chiefs speaking at the Venice Festival of Media the time for change is now. And yet, they admitted, they still don’t have the right business model - or the right people - to become their clients’ lead partners.

MindShare thinks it may have the answer through its new global restructuring, which will integrate almost a dozen agency units and disciplines into four new groups that will span all MindShare services and focus on collaboration.

For MindShare Worldwide CEO Dominic Proctor (pictured) the new model means that silo structures must be crushed, a more diverse range of talent hired, and creative people set to work across multiple accounts.

Unsurprisingly, he sees talent as the biggest challenge his agency will face. “It’s a problem,” he says, “Getting good people, keeping them, broadening their skill base, particularly in Asia where economies are growing quicker than the talent base.”

Proctor sees the media agency as the orchestrator for clients, a vision that is supported by Procter & Gamble global head of media Bernhard Glock. “Media has the right and the obligation to grab the steering wheel and drive the car,” he said. While many agencies still, Glock says, paid lip service to the idea of truly integrating their specialist teams, they are well placed to navigate the new communications triangle formed by content, context and contact.

If media agencies do not take on this role, the implication goes, there may be costly consequences.

The fact that Johnson & Johnson in the US last year signed up boutique agency Naked, should serve as a warning to the holding group media agency giants that unless they too are creative and nimble, they’ll lose out. “In recent years, there’s been too much focus on buying,” says PHD Worldwide CEO Mike Cooper. “Clients want more and better work in strategy, and if we don’t do it, we will lose out to smaller shops.”

To do this, to return to Proctor’s argument, requires the right kind of talent. MindShare claims that it is increasingly going outside of the industry to hire the kind of content creators, producers, programmers and, yes, creative types it needs to meet client needs.

“First up they can’t understand why you’re phoning them,” he admits. “But when you explain it, they understand. Our industry has done a bad job of telling people what we do.”

Here, of course, what media agencies do can often diverge dramatically from what they would like to do, particularly in emerging markets where TV buying still rules the roost. Proctor bristles at any suggestion that MindShare’s new approach is at odds with these realities. “The vast majority of clients want this but to differing degrees in different countries,” he says. “We find that much more of our income comes from fees for services and much less from commission. We don’t especially mind how we get paid as long as we get paid a fair amount.”

Publicis Groupe Media chairman Jack Klues says a collaborative culture is now critical.

“At the end of the day, what a media agency should be bringing to clients is neutrality of strategy and solutions.” But this kind of agnosticism, to use the new buzzword, requires a mindset that does not always sit easily with agencies.

“We want to reward collaboration,” says Proctor. “But the risk is  losing intensity in the vertical.”

And for some of the holding company stablemates, the implications are similarly clear. “There’s no point in pussyfooting,” states Proctor. “There are definitely areas of the business where we can tread on each other’s toes. All of us are looking for 360 solutions. ”

How the agencies, and their holding company parents, manage these “collisions” may yet determine the eventual success of the new media agency model. Proctor denies MindShare’s move - which may look like it will bring everything in-house - is “aggressive”.

“I think its absolutely natural,” he says. “The more chaos there is out there, the more important the media agency becomes.”

It is not the first time that media agencies have made their designs on creativity so clear. Proctor likes to think that “all of our people are creative”. Others might disagree. Regardless, he says that the agency is not looking to hire people who, for example, write TVCs.

“You’re not suddenly going to become a creative, inspired company by hiring a creative director and sitting him in the corner,” adds Steve King, worldwide chief of ZenithOptimedia.