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Who owns the strategy?

Strategic planning used to be the bailiwick of the creative side. But since the unbundling of media services from creative, media agencies have increasingly taken the lead. Hence a turf war has emerged, as some creative agencies, hit hard by the transition from commission- to fee-based payment, consider generating revenue by beefing up their strategic capabilities.

Strategic planning used to be the bailiwick of the creative side. But since the unbundling of media services from creative, media agencies have increasingly taken the lead. Hence a turf war has emerged, as some creative agencies, hit hard by the transition from commission- to fee-based payment, consider generating revenue by beefing up their strategic capabilities.

But which side of the business is really best suited to deliver strategy? Predictably, opinions on the subject tend to fall along partisan lines.

David Verklin says the solution lies in the answer to this: What is the marketing communications plan of tomorrow going to look like and which part of the advertising process is going to drive the strategy to get there?

According to Verklin, the New York-based president/CEO of Carat Americas, plans will have even more elements than they do today – consumer, ethnic, print, broadcast, online, experiential, branded entertainment and sponsorship, just to name a few. They will also be designed to generate ROI through higher degrees of engagement and interactivity.

For these reasons, while admitting to bias, he believes media services companies are better equipped to lead the strategic planning process needed to deliver a more diversified media and marketing mix.

‘The media services agency is much more solution-neutral than the creative agency. Most creative agencies are built [on the premise] there is no marketing problem that a 30-second spot can’t solve. That is changing and that’s going to be the key to whether creative agencies can reclaim strategic leadership. At the moment, media and marketing plans driven by creative agencies have less componentry and more of a focus on television. They have to change to be comfortable doing a variety of different creative.’

To compete against media, Verklin says creative agencies will need to downsize, cut back creative staff and make large investments on the strategic end by hiring the right people and developing the right products.

This could mean duplication of services and spending since the mammoth multinational holding companies have already spent heavily on planning and research resources for their media services agencies.

Paul Woolmington says big firms have shown they want strategic planning to happen before advertising planning or media planning and Woolmington, chairman/CEO of NYC-based MDC Partners company The Media Kitchen, sees it as an opportunity for a new type of company, one that is truly media neutral.

‘Media agencies…are not neutral. They have huge vested buying agendas because of compensation programs and huge buying departments. I think there is [client receptivity] for a new breed of company or new services from creative or media agencies that is more akin to strategic consulting, or brand strategy aligned to communications strategy,’ he says.

‘Clients are often prepared to pay for…brand consulting, but I think in this new era they’re going to be looking for true guidance in communications architecture and planning, which is truly neutral, to support a creative or buying function.’

It’s clear that the ad industry has reached a critical juncture and while power struggles between media and creative don’t seem as heated in Canada, this issue is sparking talent raids and the spawning of new units in larger markets such as the U.S. and U.K.

Last month in Forbes magazine, an opinion piece from veteran U.S. advertising and marketing consultant and author Jack Trout offered Trout’s tips on fixing the ad industry (i.e., creative agencies) and recapturing the strategic leadership role. He suggests that agencies need to rebuild their reputations and eliminate all creative award shows. Trout thinks award shows damage credibility and make creative types think they’re doing something much grander than solving problems and selling product.

Paul Lavoie, chairman and CCO of Taxi, says the tug-of-war between media and creative is not just a power struggle but also a financial one, and adds that it’s not something he has experienced due to the inherent structure and philosophy of Taxi. He says the consumer touch points have always been an important part of the agency’s creative process, but that back in 1992, he vowed that Taxi would never have its own media department.

When agencies try to bring every discipline in-house, Lavoie says they create an infrastructure that has to be fed and that means pitching for everything that moves.

He says: ‘We believe working with outside media partners gives us that media neutral position we want. Sometimes we select [the media agency] and other times the clients have existing relationships. In either case, it is so essential that we work together as one unit. If there’s no sense of cooperation, you don’t do great things.’ (See ‘Together at last,’ page 26, for examples of greatness courtesy of collaboration.)

On the strategic side, earlier this year Taxi New York hired Ira Matathia as VP of development and integrated strategy. He is former president of TBWAToronto and is well known in the U.S. as an agency executive, author and trendspotter.

Toronto-based Lowe Roche is also well known as a creative agency, and while it doesn’t have a sister media agency, strategic planning has always been a major component of the agency as is recognition of the importance of all consumer contact points.

President Brett Marchand says the agency takes a hub-and-spoke approach, with a strategic planner on an account, as well as a creative lead and a business director, who works internally with all outside partners, including media, to ensure the right integrated marketing plan is put together.

That system has worked well, but Marchand says Lowe Roche has recently added another member to the team, a connections planner. Joy Sanguedolce joined in this post in the strategic planning department earlier this month. Sanguedolce previously spent seven years with Cossette, most recently as media supervisor.

Lowe Roche’s goal with the hire is to work more seamlessly with its outside media and specialty partners.

Marchand says with the media landscape now largely populated by opportunities that just a few years ago would not have been thought of as media, it is crucial that every marketing plan takes into consideration every connection with the consumer.

‘If the strategic planner is in charge of the message – What it’s going to say? What does the consumer want? – then the connection planner will be in charge of how you go to market. What’s the role of media, of PR [or] in-store?

‘You’ve got to try to be provocative and stir emotions about the brand every single time you talk to them. If we had our way, we’d write voicemail messages for our clients.’

Jockeying for strategic leadership is most apparent in the U.K., where media agencies are hiring CDs, creative shops are hiring media talent and pundits speculate whether this signals a return to the full-service agency.

Whether through client demand or design, the virtual full-service agency system already seems to be a fact of life in Canada. The media and creative groups function as an integrated team and all sit together at the strategic planning table with the client.

‘It’s not a question of them and us,’ says Jack Neary, president/CCO for BBDO Toronto. ‘We haven’t viewed it as a question of the media or agency group leading the charge, it’s the right people being around the table working closely to deliver the right insight into the target and the relevant strategy coming out of that. We have a close relationship with our partners at OMD and we really haven’t noticed that kind of tension.’

BBDO has five planners in its Toronto office working with OMD’s traditional media planners and its research and proprietary planning tools. Neary believes Canada’s smaller market and tighter budgets have brought agencies around to an integrated approach well ahead of other countries. ‘We have to look for alternative ways to find money and drive revenue.’

Clients believe the process is working well to give them the benefits of a full-service agency.

Anne McNeil, senior product manager for Visa Canada, is one client who wants and is very happy with this type of integrated collaboration. Visa works with sister companies Leo Burnett and Starcom Worldwide. From McNeil’s vantage point, the process is seamless.

The content integration strategy for Visa Canada involves putting the brand closer to actual purchase situations such as the shopping guide segments of magazines. With History Television, Visa has linked with travel themed programming as well as the travel booking process on the network’s Web site.

Integration can also work with unrelated agencies. Lowe Roche worked with Wills & Co. handling media on a viral campaign for Virgin Mobile in July. It introduced Billy the Finger, a character that gets caught up in the euphoria of a free phone by signing a long-term phone contract and ends up with The Catch.

The French/English campaign included Polaroid prints with a handwritten URL dropped in buses and bars, banner ads on youth sites, adult classified listings and sex show handbills. In just over two weeks, the site got 50,000 unique visitors.

While the strategic planning tool kit may be in flux, ultimately whether creative or media agencies are structured to take the lead comes down to the individual corporate visions of Havas, Interpublic, Omnicom, Publicis and WPP. Creative has always been the core business of these ad agency groups. They now need to decide whether creative agencies become creative boutiques orbiting around a media mother ship or if media once again gets relegated to the back room.

Alan Kay, president of Toronto consulting firm The Glasgow Group, says it really doesn’t matter how agencies organize, marketers are likely to continue picking and choosing the services they want and need.

Kay says: ‘The client’s business is getting much more complicated. Marketing is widespread throughout an organization now.’ He adds clients are much clearer about what they want to have happen. There has been a lot of global consolidation of media services accounts and clients who are separating communications planning from buying. P&G, for example, consolidated communications planning in the U.S. with Carat and Starcom while piecing out assignments to various independent and network creative agencies.

Kay says the configuration of a client’s agency roster ultimately varies by needs, such as whether they want a lot of input from an agency about strategy or whether they want to decide what they need and place an order. ‘P&G is obsessed about getting the strategy right before they even talk to the agency.’

Serge Rancourt, president and COO of Publicis Canada, sees the industry heading back to simplification and integration if only in a virtual way because the clients want it and it’s too costly to duplicate services.

Rancourt says the seamless approach is fairly simple for the agency to deliver, because most of its clients are also ZenithOptimedia clients so it does seem to operate as a traditional agency. Any agency that returns to a

full-service model should only do so, he says, if they offer best of class in every service or clients will unbundle their account work again.

He says the network of the future will consolidate everything that is not strategy, sharing knowledge and services with strategic planners working with both creative and media services.

Rancourt doesn’t see it stopping there: ‘If a network has four agencies in Toronto, why would you have four studios? Consolidate into one studio. It’s a non-strategic place. Why do you need four research companies? We have to start to think about using the strengths of our network to deliver efficiencies on the

non-strategic work and add value on the strategic work. The savings can be reinvested to help us be more strategic. And when you deliver value to clients they will pay.

‘We’re all looking for the same thing. It’s

not one against the other. With everyone declaring independency, that will not work.

It’s very expensive.’