Advertising Week 2007

Industry Bigwigs Still Struggling to Define Agency Model of the Future

Not Much Consensus in Discussion Featuring Greenberg, Others

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NEW YORK (AdAge.com) -- What will the agency model of the future look like? Heads of some of the biggest advertising agencies are still trying to figure that out, based on a panel discussion that took place during Advertising Week 2007. The session was moderated by New York Times columnist Stuart Elliott.
Bob Greenberg
Bob Greenberg Credit: Scott Gries

Reluctant to change
There has been a widespread reluctance to make dramatic changes to agency models, said Bob Greenberg, chairman-CEO and global chief creative officer at Interpublic Group of Cos.' R/GA. For many agencies, "the model is one that goes back to the '60s and hasn't really changed," Mr. Greenberg said.

According to Steve Hardwick, president of Grey, New York, the agency of the future will likely be a "tradigital agency," one that mingles the expertise of both traditional and digital shops.

Matt Freeman, CEO-North America, Tribal DDB Worldwide, said it was a "fallacy" to think that digital agencies are at the forefront, rather than traditional agencies, as the latter are well-versed in important marketing techniques such as storytelling. In fact, Mr. Freeman predicted we might see a "reverse merger" trend on the horizon, in which media agencies begin acquiring traditional agencies.

"It's really a jump ball in the marketplace" when it comes to figuring out how to best structure agencies, noted Mark Kingdon, CEO of Omnicom Group's Organic, who pointed out that evolving to new and innovative agency models is tough when many shops are still grappling with so-called "legacy" business issues.

All about dialogue
That said, Mr. Kingdon believes a new agency model is set to emerge in the next 12 to 18 months that will place the concept of having a "dialogue with the consumer" at the center of its mission.

Hamish McLennan, CEO of Y&R Advertising, however, insisted there is no one-size fits all model that can applied; any model will vary from client to client based on the marketers' needs.

While the agency executives couldn't reach a conclusion on the new breed of agency models, they did agree on one thing: The talent crunch isn't helping.

These days "agencies have to offer more than just great compensation" to attract and retain talented employees, noted Linda Sawyer, CEO of Interpublic's Deutsch.

"Talent is a big issue for everyone," said Mr. Kingdon. In his view, it's important that agencies cast a wide net to hire experts from varied disciplines, not just those with advertising backgrounds. At the same time, though, it's important to not lose sight of current employees, and agencies must continue to focus on developing people already there, Mr. Kingdon said.

Additionally, warned Steve Hayden, vice chairman of Ogilvy & Mather Worldwide, agencies need to be smart about hiring -- particularly in the digital space. Often, "people hiring haven't worked long enough in the space to know what the hell they are hiring."
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