Agencies will endure despite (because of?) 'self-flagellation'

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Kurt manning, the advertising hall of famer who ran J. Walter Thompson for many years, is still bullish on the future of ad agencies. Burt doesn't subscribe to my hand-wringing column last month about how the double whammy of consultants and media buying agencies will turn out to be the final nails in the coffin for agencies.

To refresh your memory, I wrote that "Advertising agencies these days must feel like a baseball player caught in a rundown between bases. Either way they turn they're likely to be tagged out." (AA, July 16.)

It's Burt's thesis that agencies will survive and prosper because they are adept at "somehow reinventing themselves. They have got a self-preservation instinct along with a self-flagellation instinct."

By the latter, Burt means that agencies are "violently self-critical. Agency people are always saying how bad most advertising is, how they blew it on this and that. They are always looking for some reason to admit how lousy the agency business is."

He said if magazine publishers took the same attitude about themselves-that their magazines were poorly written and an ineffective ad medium-they'd be out of business. But with ad agencies, there's a "latent virus" out there ready at all times to attack the ad agency corpus.

Burt reminded me that in the early '90s, agencies were said to be "sick and moribund," to have "lost their way and not relevant anymore." What's more, the national brands they created ads for were "dead and dying. Consumers didn't need brands anymore."

But when the economy came back, agencies and brands came back. "Brands were suddenly valuable," he said.

In the same way, agencies have survived the threats of integrated marketing and of consultants. I remember one 4A's meeting a few years ago where speaker after speaker warned that consultants were out to steal all their business. The very next year at the same meeting, agency chieftains talked of how they had slain the beast and were once again an indispensable part of the marketing mix.

In 1998, Burt interviewed CEOs at such companies as Procter & Gamble, Hasbro, Southwest Airlines, Kraft and General Mills for a series of 4A's videotapes. He came away impressed with how much they relied on their agencies for "invaluable help, resources, relationships. They're generalists at the top, and they're not interested in one part but the whole spread in front of them. Clients learn they get value from their agencies' counsel."

The recent emphasis on media isn't so surprising, since it provides "an incredible opportunity for agencies to be creative. Power goes where the money is, and inevitably media is going to come to the fore," Burt said.

The agency business started as media reps, Burt pointed out. Mr. Thompson-J. Walter himself-ran a company representing a stable of over 30 magazines, and the agency only took on the task of creating the ads when clients didn't know what to put in the magazines.

In the 1930s, agencies wrote and produced the radio programs their clients advertised on, such as JWT's "Duffy's Tavern," where an agency executive played the starring role. They handled their clients' in-house publications, publicity, letters to retailers.

But television, Burt said, made this early stage of integrated marketing "disintegrated." Once agencies started doing TV commercials, they made so much money they didn't need to do all the other stuff.

Burt isn't exactly sure how agencies will reinvent themselves again-"maybe they won't be called agencies"-but he's confident that clients will always need their "strategic and creative resources."

After the consultant scare, agency revenues "went through the roof," Burt said. "They couldn't be prosperous if they didn't provide value."

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