Marketing Strategies: How to play the game

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Integrated marketing continues to be top of mind for marketers and agency executives, but the industry is still grappling to define it. That's even though the ad world's commitment to the concept-arguably first articulated by Young & Rubicam's "whole egg" philosophy 30 years ago-is stronger now than ever, as Wall Street-wary clients and agencies maintain a maniacal focus on cost-cutting and bottom-line boosting.

"For most clients, [integrated marketing] is a big unmet need," said Steve Silver, partner at Helios Consulting. "Clients are very concerned with the return they're getting on their marketing spend. Clients are desperate to drive top-line growth."

Although integration is often considered the Holy Grail of marketing today, few have uncovered its secrets. "Our sense is that everybody seems to want integration, but not everybody seems to agree on what it is, and we run into that on both the client side and the agency side," said David Beals, president-CEO of Chicago-based search consultancy Jones Lundin Beals.

Like all things rare and coveted, integrated marketing comes with its share of myths.

Myth No. 1: Multichannel marketing is integrated marketing.

As marketing services disciplines continue to gain legitimacy, many believe that adding direct, promotion and public relations components to traditional advertising creates integrated marketing. But a holistic, customer-focused marketing strategy-not merely execution-is most critical."I think what has been wrong with a lot of people's ideas about integrated marketing is that somehow or other it has to include everything," said Michael Mesic, president of Strategic Solutions Group Consulting. "But that implies that you may have to use what may not be right."

Most industry experts agree that integration must be customer-driven, and that the goal of acquiring and retaining consumers should dictate execution, whether it means using few or many channels.

Although integrated marketing is likely to include more points of communication than traditional marketing, "you can have integrated marketing with one channel," said Clarke Caywood, professor of integrated marketing at Northwestern University's Integrated Marketing Communications division. "The purpose of an integrated marketing strategy is to build that relationship" with the customer.

Myth No 2: Integrated marketing saves money.

Although cost-efficiency is often used by agencies as a selling point, integrated marketing doesn't always save clients money, and some argue it might even cost more to consolidate with one shop.

"It's sort of like in the marketplace. When banks compete for your business, you save. When agencies compete for your business, you save," Mr. Mesic said.

Mr. Beals argued that clients desire integration to conserve another valuable asset-time. "I don't think it's a cost-savings consideration at all," he said, "I think it's a time-management consideration."

Myth No. 3: Consolidating all marketing assignments with one agency or holding company automatically creates integration.

Holding companies have scurried to expand their marketing-services capabilities in an effort to ensure holistic marketing by housing all disciplines under one roof. But the promise of integration rarely gets executed successfully by agency groups, according to many industry watchers.

"Advertising companies have tried to put together a portfolio of service offerings that would allegedly enable them to be the one-stop provider," said Tom Kuczmarski, senior partner and president of consultancy Kuczmarski & Associates. "The big huge fallacious flaw with that type of thinking is that what we're talking about here is expertise. To convey to a client that you can cover all of their marketing-services needs because you've got the resident expert, I just don't think it's credible," he added.

Even if agencies are legitimately trying to facilitate integration through expanded services, most marketing experts agree that clients drive integration. And few clients are yet behind the wheel.

"The problem is there's not that many clients who are set up to have or accept that kind of programming," said David Sable, president of Wunderman, New York, a unit of WPP Group's Young & Rubicam. Because clients' marketing departments are separated into different centers of responsibility with different budgets, he said, they don't approach their customers holistically, so neither can their agencies.

Client commitment

"The only true place where marketing occurs is on the client side," argued Brett Gow, an independent CRM consultant. "Agencies are simply partners that assist in that development," he said.

He added that clients wriggling in Wall Street's grip often focus on meeting analysts' short-term expectations instead of investing in longer-term goals like the internal reorganization necessary for integrated marketing.

"The corporation isn't structured to drive it," said Casey Jones, exec VP-managing director, technology at Grey Global Group and president of Grey Worldwide, San Francisco. Grey is advocating that clients' CEOs appoint a chief marketing or communications officer who has absolute control over the brand and sends the message to agencies and client-side employees that they must "integrate or die," Mr. Jones said.

"It's determining the investment strategy where the client has to take the lead," said Malcolm Speed, chairman-CEO of Omnicom Group's Rapp Collins Worldwide, New York, "because each of the [agency] parties very much has its own set of priorities."

Show me the money

Profit goals often determine those priorities. Most industry-watchers believe dollars drive devotion, arguing that agencies with one profit center or financial incentives to share clients across disciplines are better equipped to deliver integration.

"You follow the money," said Michael Duda, senior VP-director of business development at Interpublic Group of Cos.' Deutsch, New York. "If it's truly integrated, the client's cutting you one check a month."

Although having one P&L helps, "it's not happening on a regular basis," Mr. Speed said.

But simply sharing one profit goal is not enough, said Tom Harrison, chairman-CEO Omnicom's Diversified Agency Services, whose member agencies keep separate balance sheets. Successful integration comes from convincing Omnicom DAS agencies they'll get more business if they work with sibling shops, he said.

"One way we do that is by [encouraging] integration, and we do that beyond the P&L," Mr. Harrison said. "We do that with stock options or certain programs that [reward people financially for working with] sister agencies."

Publicis Groupe Chairman-CEO Maurice Levy restructured the holding company to facilitate what it calls "holistic communications" by putting a core team of specialists-representing advertising, direct, interactive, promotion, events and PR-on an account as soon as the agency group receives a brief. That way, Mr. Levy said, "people are not fighting for their own revenue; they are not fighting for their own egos. They are fighting for the client."

But many agencies are simply fighting to toe the line set by Wall Street. "The analysts are looking for organic growth from the holding companies," said Deutsch's Mr. Duda. "Wall Street is really pushing [integration], and therefore we have to go and prove to our clients that it's the best thing for their business, when, in reality, it's the best thing for our business."

contributing: alice z. cuneo, jean halliday, kate macarthur, jack neff and stephanie thompson