The Future of Media Agencies

Shops Want to Prove Communications Planning Is Vital to Marketers in an Increasingly Digital World

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Fourteen months ago, Naked Communications, the communications-planning agency that helped upend the advertising business in the U.K., opened in New York City after years of threatening an invasion. The news, heralded on the cover of this magazine, triggered some anxiety among Naked's soon-to-be competitors: How will Naked play with creative and media agencies? Is there demand for the kinds of ideas Naked develops?
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Photo Illustration: Marc Simon
A recent survey by the American Advertising Federation's Center for Media Research found that about three-quarters of the marketers it questioned said that as much as 20% of budgets are reserved for experimentation.

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Most important, the launch of a shop whose programs often delineate the limits of mass marketing, leading marketers down new paths that have little to do with TV advertising, broached a much larger question: Is the U.S. -- a market full of conservative advertisers moving only grudgingly into a post-interruption era ushered in by the digital age -- ready for communications planning, a way of thinking that's flourished in other markets, especially European ones, but that's been slow to take root here?

The hustle by just about every media agency to embrace the discipline was one of the biggest trends in the agency world over the past year, as the major players reacted to rapid shifts in the ways consumers interact with media.

New outlets, new headaches
The explosion of YouTube and all manner of consumer-generated and -distributed content made the internet a platform for brand storytelling. Finally, there was a place other than TV for advertisers to tell their stories, a reality that's made figuring out a communications strategy that actually reaches the right consumers all the more daunting.

Enter communications planning. Or connections planning. Or engagement planning. Or channel planning.

Whatever you call it, it's become clear that the future of media agencies will be determined by how well they can guide marketers through an ever-complicated media world. Responding to that environment represents a huge shift for agencies that have been experts in buying time on TV or space in newspapers but, with a few exceptions, don't have nearly as much experience in giving strategic, consumer-centric counsel.

"Media agencies have been built to give great media recommendations," says Antony Young, president-CEO of the U.S. division of Optimedia, a part of the Publicis Groupe. "They're very good at responding to briefs and delivering audiences. The big shift we need to undergo is move from being media-facing to consumer-facing" and start with studying how a consumer interacts with and uses media.

Positioned around planning
Mr. Young, who moved from London to New York last summer, is charged with carving out a place for Optimedia in the U.S. market. He took one look at what clients wanted and decided to stake his agency's new positioning on planning. Other agencies are going a similar route. Universal McCann, the Interpublic Group of Cos. agency that's struggled for years with client losses, named Wayne Fletcher, an anthropologist by training, to lead the agency's communications-planning offering on a worldwide basis from its London office. His boss, CEO Nick Brien, has said the development of that offering is a priority that's second only to embracing the media world's switch to digital.

All these companies owe some debt to trailblazers Naked and other boutique-planning offerings but also to giants such as Publicis' Starcom MediaVest Group and Aegis Group's Carat, whose work for marketers such as Procter & Gamble Co. has led them into customer-facing areas such as design and retail strategy.

Lisa Donohue, exec VP-managing director at MediaVest, says just about all marketers these days are in search of media-neutral solutions. The challenge for some is to break down internal silos so communications planners have the requisite information to create strategies that reach beyond media and into in-store settings and packaging and even product design.

Some of this thinking has had dramatic effects on advertising institutions propped up by traditional ways of thinking. Both P&G and rival Unilever took a pass on advertising in the Super Bowl this year and Unilever's Dove brand didn't spend any money on media for its "Evolution" video, which was distributed on YouTube and watched by millions.

"We are seeing clients shift dollars from TV into other channels," says Peter Mears, head of knowledge at PHD, an Omnicom Group-owned unit that serves companies such as Discovery Networks, Chrysler Group and Safeway. "This is not a deliberate goal, but if you're following consumers, that's where you'll end up."

New era of experimentation
It's also likely that the ad business has only seen the beginning of the kind of experimentation that will fiddle significantly with how major marketing budgets are spent. A recent survey by the American Advertising Federation's Center for Media Research found that about three-quarters of the marketers it questioned said that as much as 20% of budgets are reserved for experimentation. Nearly 80% of respondents said they're open to new ways of using traditional media.

All of that will drive the growth of communications planning and with it the fortune of agencies, both media and creative, that do it well.

Fallon Worldwide, one of the early U.S. players in the practice, recently recommitted to it by bringing back John King, who as a young media planner at the Publicis-owned agency helped develop a media-agnostic way of thinking the agency called connections planning. For instance, when Mr. King and Fallon helped launch Ted, United Airlines' low-cost carrier, the agency steered the marketing approach into one that leaned heavily on guerrilla marketing and PR to drum up excitement for the brand. After more than a year away from the agency, he returned in mid-February as director-connection planning.

"Eight years ago, this was a luxury," he said. "There was a lot of chatter about it, but it felt a little ahead of its time. Now you've got multifaceted audiences with split attention spans who are multitasking; you've got influentials who are opting out of media altogether; and you've got consumers involved in the creative process."

A good time to be Naked
It's exactly those conditions that have set the scene for Naked, the agency says, and, after its first year, it's easy to believe them. M.T. Carney, one of the founding partners of Naked's U.S. operation, says the company has tripled its revenue expectations for its first year here, picking up projects from major marketers Coca-Cola Co., Johnson & Johnson and Nokia. With 26 staffers, the agency has twice what it expected to have and is expanding onto a second floor in the New York loft building that houses its office. Soon, it will open a Los Angeles office that will explore the overlapping worlds of marketing and entertainment.

Ms. Carney isn't particularly worried about bigger players trying to get into the game whose rules Naked helped write. Those agencies, she says, are too tied to the ad model to offer objective advice on how budgets should be spent.

"Clients know the model is broken, and they can't keep going back to the same agencies who are using the same tools," she says. "It's like how Einstein defined madness, doing the same thing over and over and expecting different results."
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