New era for integration

Fresh approaches to integrated marketing are making clients top priority

Fresh approaches to integrated marketing are making clients top priority

Media agencies, direct-marketing firms, and PR agencies all know the significance of the five minutes before lunch. Industry folklore has it that this is the time allocated to their disciplines at the end of a morning-long, so-called integrated pitch. Thankfully, it's a lament that is fast becoming consigned to history. Conventional wisdom now states that the hierarchy of disciplines that saw advertising agencies reign supreme has been overthrown. A marketing democracy now has agencies of various disciplines working together to try to provide the best customer-focused solution for a client. After all, if a client doesn't ask for a TV ad and a little multidisciplinary frou-frou, then why insult them with such a "solution"? Trouble is, not everyone's methodology is up to speed. Many clients are still finding it hard to articulate what they want, as their agency partners haven't offered them anything new. And historically, all the talk of holding companies buying diversified agencies just to make more money from their ad-agency clients sowed the seeds of doubt in some minds. "In the bad old days of integration," recalls Lou Capozzi, CEO of MS&L, "everyone named their model. D'Arcy [MS&L's former sister ad agency] called it One Voice; we called it One Invoice. It was just a thinly veiled attempt to sell the client more." Patrick Sherwood, formerly CEO of D'Arcy North America and now CEO of new Publicis Groupe agency Chemistri, admits, "While the idea of the big communications organizations claiming to have an integrated offering is actually quite old, the fact is, if you speak to clients who have a need for multidisciplinary marketing, you'll find they believe that the promise is vacuous, that there really hasn't been a model that most have seen as being effective in truly integrating an idea across all the contact points for the brand." Client-driven demand An increasing number of RFPs now require a multidisciplinary and multi-agency approach. Harris Diamond, CEO of Weber Shandwick, and now guardian of all of Interpublic Group's PR interests and branding agency Futurebrand, has noticed a significant increase even in the past year. "The economic recession in marketing is a big reason," Diamond says. "People are looking for a more effective use of marketing dollars, so to an extent, clients drove this process. If a client has a spend of X dollars, they want the best recommendation of how to divide that." Another reason is the ongoing consolidation of the advertising holding companies. "We're all ending up within the same family," Diamond continues. "If you look at the five major holding companies, there's an assembly of talent never seen before, and we've all come to know each other. For example, Futurebrand is now part of [WS]. You'd never have seen that before." Many client companies have seen the advantages of having all their marketing suppliers working to the same drumbeat. Capozzi points to group methodology as being an advantage of keeping the integrated account in the family. "When we work with a sister agency, we're working with common strategic development tools." Offering a convincing integrated approach, however, takes more than an organizational relationship with a handful of other agencies. Pitching for such a piece of business takes knowledge of and respect for each other's disciplines. On a traditional integrated account, there will often be a lead agency. No matter what discipline that agency specializes in, "they have to understand all the expertise that each team must bring to the table," says Jim Lake, managing director of US public affairs at Burson-Marsteller's DC office, who led the integrated pitch for the Bureau of Engraving & Printing's currency redesign. "Whoever has the client relationship has to have an understanding of all the disciplines. What the client wants has to be the number-one motivator." "Clients have already expressed the need for the full gamut of services," agrees Diamond. "So how do we do this? First and foremost, it's the quality of the work. When the PR part becomes that five minutes before lunch, that's when someone believes the quality isn't there." WS was originally pitted against its sister ad agency Foote, Cone & Belding (FCB) in the IRS' agency search at the end of 2001. But when both agencies made it through to the second round, they decided to join forces. To ensure that no one particular discipline hogged the limelight, a pitch team was created to be led by two people: Barb Iverson, EVP of the financial services group at WS Minneapolis, and Marc Reppin from FCB. "Our understanding was that we were to immediately throw out our ideas and traditional roles," says Iverson. She says there are three important lessons she learned from the process. "Open your mind to working in a new way; that's true for both PR people and ad-agency people. Always focus on the client results. And don't start any conversation by bickering over the budget." There's no denying that carving up the budget is still a problem, however. How is it done? "With knives," says Diamond, wryly. "But when you're a pro in the business, you understand what the issues are; it's not the percentage, it's the total buy." An integrated account doesn't necessarily require the same combination of agencies on the ground for every market in which it operates. Philips DAP (the domestic appliances division) and Lighting uses what it calls a loop team for its marketing strategy. The team comprises senior executives from MS&L, ad agency Leo Burnett, and sales promotion agency Arc, who work together, full-time, in dedicated office space, either in Philips' offices or at one of the component agencies. Rather than executing Philips' programs in every market, however, this loop team creates and defines them centrally. Strategy central "At the end of the day," says Lex de Rooi, VP of marketing communications for Philips DAP, based in the Netherlands, "they come up with a big idea, which is always very campaignable in the various directions and disciplines. That will be laid down in a strategic concept that we present to the regional offices. That concept is mandatory for the countries to implement." De Rooi came up with the model before he arrived at Philips eight years ago, after 40 years in the communications industry, including public television and the agency world. "More and more, I look with different eyes on how to really develop an effective campaign," he says, "and it's not based on the above-the-line, but on optimizing synergy." While this kind of integration model ensures that all on-the-ground marketing efforts will emanate from the same, single idea, it might still leave the possibility of local agencies duking it out for their share of the work. Conventional practices of division of labor between different agencies have to be turned on their head, some say, in order to truly achieve that holy grail of media neutrality. "Integration starts with internal financial alignments," insists Aaron Kwittken, president of Euro RSCG Middleberg, which last year had its bottom line merged with a number of agencies in the Euro network. "We're now in one P&L, under a CEO, Ron Berger [cofounder of ad agency Messner Vetere Berger McNamee Schmetterer]. By merging the bottom line, we're all incentivized based on how the entire partnership does; not just PR, but everything." Chemistri's Sherwood agrees, "It's vital that bottom lines are merged. You have to compensate people fairly for their efforts, and not penalize them if an idea is better expressed as CRM notion instead of advertising." This might, at first glimpse, appear to be a throwback to the old days, when a number of so-called full-service agencies roamed the industry. But a critical difference, as Sherwood agrees, is that today's new models - such as Chemistri and Middleberg's new incarnation - still have their fingers in the organizations from whence they came. And while it can make it harder for the unit to work together, that's the key to a quality offer for a client. "I still want the best ad people, and incredibly strong PR pros," Sherwood concludes. "It would be easier if everyone was in the next office, but I want the best-in-class work that these agencies can still offer." ----- Chemistri's fresh formula When Publicis Groupe bought Bcom3, and subsequently shuttered struggling ad-agency brand D'Arcy, arrangements had to be made about the group's longstanding relationship with General Motors. "There was clearly some soul-searching," says Patrick Sherwood, formerly CEO of D'Arcy North America. "Nine different companies were touching the GM organization, and apart from a couple of very important exceptions, most of them weren't communicating with each other in anything more than the most casual way. There were just a number of silos." Because of this, he says, GM was seeking out other partners because its needs were not being met. "The traditional holding-company model was less effective; [GM was] going to smaller boutiques." With all these issues converging at that crucial time, a decision was made to change the service model. "We decided to get these things together and put GM at the center," Sherwood explains. "We reassigned other non-GM business, found a way of bringing the organizations together from a P&L point of view, and created Chemistri with them." Chemistri now comprises people from such agencies as sales promotion shop Arc, ad agency Leo Burnett, and Hass MS&L, with Sherwood heading up the operation as its CEO. Speaking as a former ad-agency head, Sherwood admits, "What most often happens is the strategic planning takes place, a brief is created, the ad people take off and make a 30-second ad, and then invite other organizations in to see what they could do with the remaining budget. We needed to flip that on its head, to involve all the disciplines that think in different ways - PR, CRM, diversity - early on in the process. It's sometimes a messy process, but I do believe that what will come out of this process are more robust ideas."

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