±±¾©Èü³µpk10

What should advertising agencies do? What do they do that they

shouldn’t, and what should they do that they don’t?

Hold back the horse laughs, those are serious questions. In recent years

they have been thrown into sharp focus by the split of media from

creative work, by the growth of other forms of marketing communications,

by the development of the internet and by competition from management

consultancies.

A few decades ago, when agencies were paid a lush 15% commission even on

mega campaigns,and when many of the other marketing disciplines were

still wet behind the ears, advertising agencies did almost

everything.

And clients got most of it for free - well, for 15% commission.

The agencies bought media, of course. But they also acted as business

consultants, had market research departments, created sales promotion

schemes, designed exhibition stands, employed direct marketing folk, and

PR people, home economists and pack designers, poster site inspectors

and ... J Walter Thompson even employed a team of cardboard engineers

who were experts in the arcane art of cardboard bending - I think.

Then a couple of things happened. First, the traditional commission

system crumbled. Then the ’below-the-line’ disciplines grew - that is,

grew big and professional in their own right. The larger advertising

agencies consequently broke up, spinning off a host of independent

specialists: media specialists, DM specialists, packaging specialists

and the rest. Few specialists wanted to stay tethered to the motherships

they left. They were upset with the high-falutin’ folk in the

motherships, who had treated media and below-the-line people as

second-class citizens who were smart at buying pages but could no more

win a Lion d’Or at Cannes than eat artichokes the right way up.

But nor, for that matter, were the advertising agencies that keen on

holding on to the specialists. As clients squeezed their margins, if

they offered ancillary services they were forced to provide them at a

loss, or even for nowt - as they had done in times past.

So advertising agencies increasingly concentrated on their core

competence: creating above-the-line campaigns. And that wasn’t a bad

positioning to adopt, as clients’ markets segmented, competition

burgeoned, and the creation of truly effective advertising became ever

tougher. The advent of account planning helped disguise the fact, but

the reality was - and is - that the only thing most agencies now offer

is above-the-line creativity. A few claim to integrate above-the-line

with direct marketing in-house, but no agency offers one-tenth of the

services that would have been commonplace yesteryear.

Instead, the holding companies - Interpublic, Omnicom, True North, WPP

and the others - have emerged as giant providers of the multiplicity of

services, through a multiplicity of subsidiaries, that once were

provided under one roof.

Paradoxically, clients probably now pay more, in total, for their

marketing services than they would have done had they had stuck to the

commission system and milked the hell out of their advertising agencies

But they do get better marketing services. Agencies will never again be

jacks-of-all trades, much as some of them would like to be.

Winston Fletcher is the author of ’Advertising Advertising’.