By Published on .

Leo Burnett USA's pending reorganization is reigniting the debate over whether, and under what conditions, the once-hot "agency-within-an-agency" concept is effective.

Supporters praise the configuration-which divides groups by clients or category and staffs each with dedicated account managers, planners, creatives and media staffers-for improving flexibility and responsiveness to clients. That's a plus for large, bureaucratic agencies like Burnett, where decisionmaking is often overly complex.

But others who've adopted-and, in some cases, abandoned-the structure say it sacrifices efficiency and stifles creativity while giving birth to fractious fiefdoms. Among those shops that in the past few years have tried and later modified or dropped the mini-agency structure are Saatchi & Saatchi Advertising, D'Arcy Masius Benton & Bowles and Y&R Advertising.


DDB Needham Worldwide tried the setup in both its New York and Chicago offices, with markedly different results.

In the case of Chicago, "We decided it was . . . a more realistic way to operate for a modern agency," said Alan Pilkington, chairman of that office, restructured four years ago. "It's designed more around client needs than agency needs."

DDB Needham's New York experiment was less effective. The office split into three account groups with managing partners instead of a president, and dedicated creative teams. But shortly after Ken Kaess, at the time a managing partner and now U.S. president, was elected New York president, the agency severely modified the structure to return to a single creative department.


"We were rebuilding our creative department and needed the flexibility to shift creatives around on accounts," said one executive.

And even in the case of Chicago, the agency is encouraged to seek additional manpower when needed, as it did in its recent winning bid to regain lead status on the McDonald's account. DDB Needham pulled in top creatives from all over the world to assist. The Chicago office won the account, but the creative director on McDonald's is Jim Ferguson, vice chairman-chief creative officer of the Dallas office.

Saatchi also found creative a determining factor behind some recent changes it made in the "core group" structure it imported from England to the U.S. in 1993. Saatchi at first embraced the concept, establishing groups that included account planning, management and creative. But the agency has now backed partially away from the structure.


While Saatchi still has core groups, they are now minus creatives, who have been returned to their own department. Said one insider: "It is beneficial to have creative working for the entire agency."

Around the same time Saatchi first imported its core groups system to the U.S., DMB&B began moving away from its then 3-year-old "partnership" structure.

While the structure resulted in the teams working closely together, the agency lost the flexibility to bring together people and resources from different teams, said Arthur Selkowitz, chairman-CEO, DMB&B Communications. The agency's creative identity also suffered, he said.

Mini-agencies sprouted on the West Coast in the 1980s after the emergence of Goodby, Silverstein & Partners, San Francisco. The agency, then called Goodby, Berlin & Silverstein, won new accounts partly by promising one of its principals would work hands-on with each client.


Other San Francisco agencies experimented with systems that mirrored the Goodby formula. McCann-Erickson, San Francisco, restructured in 1986 into "collaboratives," each handling one major account. Finding the system unwieldy, the agency dumped it two years later.

In 1988, Young & Rubicam broke up its New York office into three groups, each with account services, creative, strategic services and media planning staff. After trying that concept for two years, Y&R scrapped it in 1990, citing the greater operational advantages of a large-scale agency.

Still, proponents argue that for a large, centralized agency such as Burnett, mini-agencies can streamline decisionmaking and give clients the level of responsiveness they find in smaller boutiques.

Burnett Chairman-CEO Richard Fizdale noted at an agency-wide meeting last month that "grouping clients by business type within the mini-agencies is similar to the 'industry practices' approach used by large consulting firms.

The obvious appeal to clients is that each agency would become knowledgeable about basic category dynamics."


Opponents counter that some disciplines, particularly creative and media, thrive on their own. For creatives, brainstorming with other creatives and even a certain amount of peer pressure are more valuable than proximity to account planners and managers, these people say.

"You aim a little higher when the creative department is together," said John Nieman, DMB&B's worldwide creative director.

For media planners and buyers, the economies of scale are also more attractive. Media staffers share systems and intelligence across accounts, which makes it more efficient to have them together, said Mary Lou Quinlan, president-CEO of N.W. Ayer & Partners, New York. Ayer has created integrated teams on an ad-hoc basis for some clients.

Whether the lessons learned by those who preceded Burnett down the mini-agency trail are applicable to the Chicago-based agency giant is a question only time can answer.

"I don't think there's a right way," said Arthur Anderson, principal of Morgan Anderson & Co., New York. "The real issue is what's right for the client and for the client's brand."

Most Popular
In this article: