Agencies come full circle

Latest moves to eliminate the boundaries beween media and creative have seen the re-emergence of the all-in-one agency. Patrick Dye investigates.

As divorces go, the split between media and creative agencies in the '70s and '80s was an amicable one. Clients still enjoyed easy access to both sides, while the former partners got on with cultivating business models of their own. Now a reunion looks in the offing as shifts in the media landscape have produced a new type of full-service agency.

Those springing up aim to do away with the old boundaries of media and creative to offer something new - the best of both worlds - although most shy away from the "full-service" tag. CHI & Partners, Hurrell Moseley Dawson & Grimmer, AnalogFolk and Adam & Eve are among a spate of start-up and revamped agencies with a foot in both camps.

The decision by media specialists to launch their own businesses was an obvious one, given the lowly status they enjoyed. According to Will Collin, partner at comms planning agency Naked: "They were second-class citizens. There was no investment in their talent and skills, but it was clear that there was a huge business opportunity and the chance to add value for clients."

Agencies of the day could be forgiven for underestimating the importance of communicators, given the relatively few channels available. Hurrell Moseley Dawson & Grimmer media partner Greg Grimmer says: "Media was very simple. The account director and client both knew what the media schedule should be. Now clients don't know what their media schedule even looks like."

The proliferation of media has played into the hands of media agencies, vindicating the decision to hive off media planning and buying into specialist firms. Media planning is now a complex art. Rob Scott, creative managing partner at Smarter Communications, says: "As creative directors, we don't get to call the shots anymore, nor do creative agencies: media is where the money is."

Higher margins

Powerful though the big media shops have become, there are limits to their potential growth, which may go some way to explaining why some of their key staff are jumping ship to join their fledgling full-service rivals.

One motivation for this new trend is basic. "Aside from the strategic logic of integration, a big argument in favour of this model is cash," says Collin. "The revenues associated with media agencies are substantial. They make much better margins than advertising agencies, who want a piece of the pie."

Pressure from weary clients exasperated by the growing number of agencies on their rosters also helps to explain the joint approach.

Ed Ling, former strategy director at digital media agency I-Level and partner in start-up AnalogFolk, says: "Clients find our approach refreshing. They can have a single conversation with two groups, who speak with one voice."

The division of creative and media brought commercial benefits for clients, but also introduced conflict between agencies.

Too often the client was forced into the unwelcome role of mediator. Jon Forsyth, partner at Adam & Eve and Naked's former head of strategy, says: "Media and creative agencies work in isolation and begin to believe that their ideas are the best and others should fall into line. This causes problems for the client when the two sides are brought back together again."

Uncoordinated approach

Separation led to a blinkered approach that no longer stands up. According to Enyi Nwosu, media partner at CHI & Partners: "Traditional creative agencies are divorced from how ideas are executed in media because they're behind the game in terms of what the media are doing.Media agencies can become divorced from the development of the brand and make decisions that may not be in the brand's best interests."

The advent of digital channels has complicated the landscape, putting planners at the centre of the creative process.

"Media planners are reintegrating with ad agencies because of the increased use of 'content-based communications' that you immerse yourself in," says Forsyth.

"There is a requirement for planners who understand, recommend or even help create the media in which content ideas operate. They are the ones who have a relationship with media owners."

One concept that unites the new wave of full-service agencies is that of the "big idea" - a media-neutral framework on which to hang the brand's central proposition. CHI & Partners, for example, has "ideas teams" and other agencies operate along similar lines.

AnalogFolk's Ling maintains: "Clients used to talk to the ad agency about the creative idea and to the media agency about the media idea. We deliver big brand ideas played out across creative and media."

Another common trait is the decision to eschew media buying and commission-based revenues in favour of fees.

"Buying is commodity-driven; it acts as a distraction from where we want to go and what we want to achieve," says Forsyth.

Others are even more pragmatic. Ling comments: "There's a lot of heavy-lifting that needs to be done with buying, requiring specialist skills and resources."

The fee-based approach reflects the resources required to make new media work. "Digital is very labour intensive," says Grimmer.

"With TV you make money, with digital you lose it. A TV buyer could be handling £4m of business a month, while someone working in search could be handling £1m in a year."

Ultimately, moves to revisit the full-service model may not represent a seismic shift. "It's happening around the margins; a number of different developments are being connected up as a trend," says Naked's Collin.

However, the logic of integrated working does seem irresistible as old boundaries begin to lose their relevance in an increasingly digital world.

BREAKING THE BOUNDARIES: CHI & PARTNERS

After six prosperous years, Clemmow Hornby Inge transformed itself into CHI & Partners in May 2007. Internal boundaries were broken down to create a single multidisciplinary unit with an investment in media expertise.

A significant part of that investment was the recruitment of TBWA\Connections director Enyi Nwosu to the post of partner. Working alongside Tim Allnutt - former managing partner of CHI's Naked Inside joint venture - Nwosu's brief was to oversee the integration of communications planning with account planning.

"Before this move, a number of joint ventures such as Naked Inside and the direct marketing operation Hall Moore meant that there was a lot of silo thinking, as every discipline had its own bottom line. Now this has gone," says Nwosu.

Allnutt and Nwosu have history, working together early on in their careers at ad agency Lowe Howard-Spink. The duo have helped CHI staff break down the old disciplinary boundaries to embrace the new model of "ideas planning".

The agency's revamp coincided with WPP taking a 49% stake in the agency. Nwosu is at pains to stress CHI's independence, but acknowledges the advantages of access to the significant media muscle of WPP's GroupM. "GroupM agencies will carry out the media-buying tasks, but CHI manages the process on behalf of clients. We have staff co-located in here and within GroupM agencies, which means we remain fleet of foot and clients enjoy the best of both worlds."

Nwosu believes the joined-up approach brings clear advantages when it comes to persuading clients to use CHI for all their communications needs. "Because Naked Inside remained a separate business, it had to be upsold to clients," he explains. "Now it's integrated into the agency, it is no longer a case of what we sell, but what we do."

The agency's ideas teams comprise creative, digital, design and media strategists. "We line up a solution and because we are fees-based, it doesn't matter what that solution is, be it setting up a website, launching a new product, or running a TV campaign," says Nwosu.

The fees-based model is central to CHI's proposition and Nwosu insists GroupM's involvement has no bearing on this arrangement. "We charge clients based on the resources they require and not on what they spend in the media marketplace," he says. "It's fully transparent and all down to fees, not commission."

So far, The Carphone Warehouse and Tiger Beer are the company's only full-service clients. The agency also won Virgin Money's £12m media planning and buying account in February. True to its full-service model, Nwosu says the agency provides this latest client with input on more than just media. "We advise on business strategy, not just media strategy, and advise on new products and markets," he adds.

The agency has 200 staff, of which 20 are involved in ideas planning and six have a media background. Nwosu believes future expansion will come from persuading more clients to embrace the agency's full-service offering.

International growth is also a priority, with CHI opening a New York office last September.

HURRELL MOSELEY DAWSON & GRIMMER

Greg Grimmer's transition from his former role as managing director of Publicis-owned media agency Zed Media to partner at Hurrell Moseley Dawson & Grimmer was not a swift one. News of Grimmer's involvement with the new agency broke last October, but it was March 2008 before he could finally jump on board the agency that now bears his name.

Hurrell and Dawson launched in October 2006, and its expansion into media and comms planning under Grimmer coincided with the appointment of Al Moseley as creative director and the fourth partner. The agency's new full-service remit is fully endorsed by Grimmer, who had clear ideas about the need for integration. "We didn't want to create Grimmer Media. I didn't want to open a traditional media agency just so that we would work together like Walker Media and M&C Saatchi. We've taken media expertise in-house so that we can take responsibility for media investments," he says.

The concept of taking responsibility for all areas of a client's marketing strategy is central to the agency's proposition. "If I introduce a client to Zed Media and Zed messes up, then the responsibility for that comes back to me," says Grimmer.

Like others in this tranche of new full-service agencies, Hurrell Moseley Dawson & Grimmer has no plans to engage in media buying. "We've talked to clients about buying but that will be outsourced, just as the creative director would outsource photography for a shoot," says Grimmer.

The agency has so far worked on a fee basis, although flexibility is the name of the game when it comes to working media arrangements. Grimmer says: "We'll have a good working relationship with a client's existing media agency if that's what they want."

The agency has a staff of 30 and full-service clients include Auto Trader. Grimmer hopes agency ranks will swell to nearer 100 with an emphasis on open-minded staff. "These won't be people who have spent their careers in just one discipline," he says.

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