Advertising agencies: of specialists & generalists

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In the advertising agency landscape today there are 4 broad kinds of offerings: 1. large global behemoths who belong to holding companies (they could offer specialist units within an agency)  2. independent agencies (full service with or without specialist units within them 3. independent specialists (these could be digital, healthcare or activation specialists) and 4. specialist media planning & buying outfits.

Sometimes, companies work with an agency for what is generally termed ATL work and look to specialists for work in other areas. There are cases when a single client deals with multiple agencies – for advertising, digital, healthcare, activation, media planning & buying and so on. The belief is that specialists understand a medium better, especially when it is to do with new media & technology.

The trend started a few years ago when clients began investing in new media. Several specialist digital agencies cropped up and the trend of  splitting the business into ATL and ‘new media’  continues. The large agency holding companies noticed the trend and acted to plug the gap a few years ago, mainly to keep all the business within the agency. So we have digital agencies or divisions with an identity of their own as part of an agency offering (DDB and Tribal DDB for example). And competing with them are a host of independent digital agencies. There are also a handful of agencies without any ‘specialist’ digital unit who continue to produce great work in the new media space – W+K, CPB, Droga 5 come to mind.

There is logic in the benefit of ‘one idea, one team’  so that the main brand promise or campaign thought is taken forward across media seamlessly by a core team that best understands the brand. The process gets hairy or sub-optimal when there are many silos involved. So in the future will clients continue to dish out separate tasks based on expertise in a medium between several agencies? The media scenario is unlikely to change – clients are likely to work with specialist media buying houses. That’s a trend started off by agency holding companies and they are too far down the road with separate P&Ls, power centres to turn back. What of the specialist independent digital agencies? Will they continue to thrive?

The answer lies in how quickly the advertising agencies transform themselves again. There was a time when the agency was seen as a provider of all brand communication solutions. Agencies positioned themselves that way too. Albert Lasker, known as the “father of modern advertising” demonstrated this approach, for one.

At the time Lasker acquired the account for the California Fruit Growers Exchange (in 1908), most people ate oranges. Lasker conceived the idea of advertising orange juice instead of the whole orange. In addition he emphasized the nutritional value of orange juice. These ideas quickly caught on around the country, as American per capita consumption of oranges more than doubled over the next 26 years.

There are several such stories of advertising greats.

Bernbach insisted on first learning how his client’s products related to their users, what human qualities and emotions came into play. Then the challenge turned to deciding how best to communicate those elements, in TV and print, and capture the consumer’s understanding and support.

Over the years, agencies have been relegated to someone you turn to for ‘creative services in television, print, radio and outdoor’.  With digital becoming an increasingly important component of a brand communication in several categories (not all) it is natural that we need specialists to plan and execute campaigns in those media. Some agencies have been doing that without creating a separate entity (with a separate identity). The Jay-Z campaign created by Droga 5 was fantastic in its use of new media. But it was created by an advertising agency – not a digital arm or a specialist digital agency. Ditto with Old Spice or Burger King created by W+K and CPB respectively. Sure, these agencies had specialists who understood the medium well in order to plan and execute them. Even the large holding-company operated agencies have fared well in the ‘Integrated’ category in global award shows.

Clients will continue to work with independent shops for digital creative. The nature of digital work they farm out varies in complexity – from simple websites, banner ads to complex AR campaigns, branded apps and so on. When it comes to specialist new media or tech-related stuff like apps, independent shops fare better.  Hence those are outsourced. But I think its a matter of time before agencies revert to the old way – of housing several specialists within an agency who all work towards the best expression of a campaign idea – irrespective of the medium. Over time, the practice of turning to specialist agencies who execute brand ideas in new media may actually stop. What say? Do share your views on this subject.

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  1. I don't think the practice of turning to specialist agencies/or just specialists will stop. Considering the pace at which technology is changing, a platform/trend/idea that is relevant/liked/opted today may be totally obsolete tomorrow. So there will always be specialists who will be required to make things happen. Now, if the agencies happen to have those specialists on their side, things might change for the better. For example, W+K's Old Spice social media campaign was a brain child of new recruit Ian Tait, Ex-Poke. Similarly, CP+B, Droga5, Goodby and others are doing great work on the online space because they have specialists working with them.

    • Thanks for the comment, Hehaw. Yes I agree that specialists are required in 'traditional' agencies to make the shift happen. Sometimes it is acquired (Grey-Yolk) as that's seen as the best option. Which may end up creating silos.

  2. Very valid points Laxmi. But to be frankly i don't believe our ad agencies are not yet ready to embrace the new media like the agencies you mentioned. Surprisingly, even the Indian arm of those agencies haven't produced a single digital work worth noticing. The challenge is in the talent gap. Its very, very hard to get the right digital talent. And i'm not sure whether the ad agencies are ready to take that. In other case, collaboration works wonders. When we had a digital idea for our client Tanishq (missing diamond campaign), Lowe team helped us to create those videos and inputs in design. Its all with the right team and mindset to collaborate.
    Still our agencies are fascinated with what they were doing few years back. Unless they give the DNA with fresh digital minds in to their system, we will have this debate keep on going!

  3. gokul sundar Reply

    Partially agree with you Mr. Bhat.
    Firstly I think that setting up digital agency within the agency is not an ideal solution for creating seamless single idea communication as these agencies still works on different P&Ls with its own mandate which will not be in sync with mother agency. Secondly hiring specialist with new media acumen within the agency to offer integrated digital solutions is still the primitive step. The trend of brand communication is shifting from mere campaigns to conversation orchestrations for which agencies have to understand the essence & importance of multi-way communication on a consistent and continuous term. Unless that happens agencies reverting to the old way is a little far away…

    • Thanks for the comment, Gokul. Agree with you – both scenarios: setting up separate units or buy overs can still lead to silos. I guess training is the way out – right across the board. But then…there are so many ifs & buts.

  4. Mumbai Paused Reply

    Big agencies have specializations only on paper. Most of them. They don't have the people to actually do any good work for them, especially in the digital space. The only thing they are interested in doing are TVCs. They are all specialists in making TVCs

    • hi Mumbai Paused – I guess its true in this part of the world. But with some agencies, its all under one roof, one team.

  5. Hi,

    Great piece.

    From my personal experience, I would also like to point out that at ground-zero, there are few 'Dark Horse Brains' that are part of these agencies that are able to execute campaigns in addition to it's core competencies.

    So, about 50% credit would also go these guys who have 'actually assisted the agency' in executing the campaigns, and thus also acting as an additional 'client retention criteria' to it's base at the current economic scenario.


    N Dutta

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