Commentary by Rance Crain


Ad Agencies Struggle to Provide All the Services Clients Require

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Why are advertising agencies turning out to be the weakest link in the marketing chain? Because their multi-unit structure prevents them from delivering what advertisers want.
Rance Crain, editor in chief, 'Advertising Age'

Maybe it's easier coming up with the big idea and hoping it trickles down to where the consumer does business -- if it ever does. It's more difficult to start with little moves in the trenches, where consumers and the brand actually interact, and then work up to where the message supports all those little things.

Drudgery and boredom
Besides, all these little things don't add up to reels of award-winning commercials, which is what agencies consider the true end game. Here's how they think about the equation: Award-winning commercials, fame and glory; all the little things, drudgery and boredom.

Another problem is that all that little stuff is usually done by an offshoot of the main agency because the creative people don't want to bother themselves with such mundane details. So they farm it out to their subsidiaries that do collateral material, sales promotion, direct mail and the like. It's called integrated marketing, but in reality it's more of an add-on that never seems to fit very well (although it's a good way to hit up the client for more money).

Havas' move, announced last week, to unite peripheral stuff like internet advertising, events and database marketing into one entity is a step in the right direction in that it simplifies things a bit. But it still pits traditional advertising against all the other activities. So the other stuff will be an afterthought.

The whole egg
Ironically the agency that thought up the integrated approach, Young & Rubicam, seems to be fighting it the hardest. Back in 1972 Ed Ney, chairman emeritus of Y&R, announced one of the first calls to marketing integration, "The Whole Egg."

"Our idea was to go horizontal," Ed told our publication in 2001. Y&R got the idea from creative inconsistencies between Goodyear Tire's TV advertising, which Y&R handled, and its print ads in newspapers hawking tire sales, which were done by an outside shop.

"We realized that clients like Goodyear were all doing some sort of PR, sales promotion or a direct thing. So what if we bring these companies together and give them the quality of Y&R Advertising? That was our spiel."

What agencies have since discovered, however, is that it's just as hard to control the quality when the components are inside the organization as when they are outside.

Resisting integration
But everybody keeps trying to make it happen -- including the new management at Y&R. An article in BusinessWeek details the struggles Y&R's new CEO, Ann Fudge, is having implementing her vision of an integrated Y&R (she's even renamed the agency Young & Rubicam Brands to emphasize "the whole egg" idea). But as the magazine says, "few of the company's divisions want to be grouped under a single brand and they certainly don't want to work more closely with what they regard as the high-handed and dysfunctional Y&R ad agency."

Ms. Fudge, who was a top exec at Kraft before she joined Y&R, says that the agency's senior-level managers have a difficult time understanding that collaboration doesn't necessarily mean loss of independence.

Maybe the senior guys have watched "the whole egg" evolution and have concluded that the whole thing just won't work.

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