Moderator:

(A) Joan McArthur, consultant, Black Bag Creative

Panelists:

(B) John Bradley, marketing consultant, Yknot Solutions

(C) Tony Chapman, founder and partner, Capital C

(D) Dawna Henderson, president & managing partner, henderson bas

(E) Alan Kay, president, The Glasgow Group

(F) David Moore, president, Leo Burnett Canada

(G) Rob Young, SVP planning and research, PHD

McArthur: In today’s reality [of media fragmentation and clutter,] who will be the lead agency?

Moore: Historically the AOR has been defined by the dominant media. With digital technology, that is gone. Whichever agency owns the strategy, the architecture and communication planning, and the creative talent, is the one that deserves to be the AOR in the future. Creative talent tends to lie with the mass agencies. Architecture and communication planning – media agencies have done a tremendous job on that front. And strategy – that can come from anywhere: consultants, mass agencies, other disciplines.

Chapman: A lot of agencies are very motivated to buy GRPs. Most marketing companies are still led by VPs of marketing that got to where they are with a very TV-centric approach. They knew how to buy great creative, they knew how to place great creative, they knew how to do great strategy. Everyone’s scrambling in this new world. I don’t think anybody will have the answer for many years.

Bradley: Radio and TV were once so powerful, they overcame a lot of strategic areas. Even crap ads worked. Because nothing had changed for 40 years, you had these long relationships [with agencies]. Marketing turned over faster than agencies did, so by default they became the repository of strategic expertise.

These days, the need for strategic insight has never been greater. Lots of CEOs are losing confidence in marketing. So as a VP you spend 90% of your time managing the internals. So who’s managing strategy right now? Nobody. And that’s the big opportunity.

Young: One of the best ways to handle it is by using the new Unilever approach. They call it ‘communication channel planning.’ The client is clearly designated as the team leader, and various specialties – the brand agency, the channel agency, which is the planning/buying operation, PR, often the Internet agency – are brought to the table as a very first step.

So when you ask the question who’s the lead agency, it’s the client, and we are team members. It’s worked very well. [Unilever] has been doing it for [about] five years. Their bible is highly disciplined, addresses a lot of issues, timelines and steps. But that doesn’t mean there isn’t a facility for a lot of good work and creative thinking to be done by all parties.

Bradley: To me, the value was who you got around that table. Because I want smart people thinking about my problems, because I have too many problems and I’m not clever enough. The biggest attraction of the Tony [Chapman] model, is that I have Tony thinking about my business while he’s in the shower. That’s worth a lot to me. What I worry about with the Leo Burnett model to be frank is, you probably have too many things to worry about in the shower. I have to work harder to get [Moore] to worry about my business.

Chapman: It’s harder for a company that’s economically structured in a mass marketing world to change strategy. The guys that might come in the middle of all of this are the [consultants] McKinseys and Bains and then we’ll all be in trouble.

Kay: The traditional model was that marketing in the P&G-type firms was important to the enterprise. In a lot of cases, the customers have the power now. That’s why P&G does commercials asking consumers which flavour they want. If you go to eBay, they put the customer right in the centre of the business. So that’s a pretty radical shift, which means the role of the marketer has changed a lot.

You have the big spenders – the Bells, the Rogers, the banks – who have moved from marketing being a service to being an enterprise strategy. So they put it in the middle, and the next step is to start bringing customers into that decision-making process.

What’s happened with the marketer is that a lot of their job is to coordinate, because marketing has become widespread. The call centre, sales force, as well as other traditional aspects – all of that is being

de-siloed. That’s the issue for suppliers. How do you restructure your business to deal with that significant change? We do quite a lot of work with IBM, bringing their bank customers in to find out what they’re looking for. They all say the same thing: ‘Come to me with business solutions.’ The opportunity for the marketing service orgs is to offer business solutions, which would allow you to become the AOR. Marketers are resource stuck – they haven’t got all the people to do the work they need to do.

Young: A consumer-centric approach is critically important, more so today than ever before. A large portion of the Canadian population isn’t in control of channel consumption, and that group will get progressively smaller each year. A consumer spends 20 hours a week watching TV on average, and it suggests there’s a relationship between consumers and TV that’s traditional and that has value. But we should appreciate the consumer is changing, and how. The idea that a client has the potential of reaching a consumer through 25 different channels [apart from TV], utilizing as many as possible, is very important.

Chapman: There are two things we have to be concerned about in Canada: influence and authority. Where’s the authority coming from for strategy? When you see a global strategy come down, it’s a creative idea versus what is the strategy for me to succeed in my marketplace. And global creative and enterprise strategy are very disconnected. John, have you ever seen a global strategy that’s bulletproof on a multinational basis?

Bradley: It’s a contradiction in terms.

Moore: Look at Nike. They have a global strategy and do they execute that in France, as well as Brazil? Absolutely.

Kay: It’s about having a strategy, but then having the resources in every country to understand how it works differently. And sharing that. So that what you learned in Thailand, might work in England.

Henderson: With Nike, each country/region reports into their regional contact for approval. That’s how they protect their brand. They have CDs, which I believe most organizations should really start to think about. Marketers need to take more responsibility for what goes on air and on the Internet. They rely far too heavily on their agencies, and when it doesn’t go right it’s the agency’s fault.

Chapman: [Leo Burnett] is a great mass agency and I’ll bet at one time you could say, ‘18% of Canadians have Frosted Flakes in their house.’ I can honestly look you guys in the eyes and say, ‘which 18?’ We never knew. Today, with the digital world, you’re going to know who those 18 are, and you’re going to know their value. Someone needs to create a community where there’s a constant exchange of content and value. That’s the Trojan Horse.

Moore: The future, in terms of tactics, is where you see the growth in direct and digital. There’s a measurement discipline to it that gives clients a lot more confidence.

Chapman: That’s a strategy to me that says: ‘I’m going to make my marketing dollars accountable.’ Clients got synergized, work went off to India, everybody cut, cut, cut, and guess who’s in la-la land for the last 15 years? The marketing because it was intangible and nobody understood it. All of a sudden, procurement comes up and goes ‘How much? What am I paying for?’

Kay: It’s a huge issue. Twenty years ago we were innovating products. Today in large firms we innovate productivity and efficiency.

Bradley: Client spending is an outcome of change, not a driver. The balance of the efficiency and effectiveness agendas has fundamentally shifted internally. I had colleagues on the Cadbury Schweppes main board who looked at marketing and said: ‘You look like a commodity to me. So you can get 2%, and we’ll talk about 1.5% next year. You guys [Moore] are now starting to look like a commodity, because it’s all about the creative. You don’t do strategy any more. You’ve fired all your planners, and you swap all your creative people like there’s no tomorrow, so does it really matter? I’ll go for the best deal.’

Within the business, we’ve all these stupid strategies in all these markets, results all over the place, and the concept is not to raise the roof as it used to be, or to get better. It’s to raise the floor, to get more efficient. The main reason I left the corporate world is my company, which had always been very entrepreneurial, suddenly decided we’re going to have global strategies and processes to execute them – and a global way of coming up with insights, which I found laughable. But actually it was all about: ‘We’ll stop the idiots. We’ll try to cut out the real crap marketing that we do. And then, fingers crossed on the rest of it.’ Every company I know has spent more on its internal systems than it’s spent on the consumer in recent years. Why? Because it makes more money for the company.

Chapman: Until we can defend the dollar, which the digital world will allow us to do.

Moore: From the mass side, we are getting paid the same, whether our idea and our work triples All Bran’s business, as we are for bad work that hasn’t moved a piece of business. We’re getting paid for the execution and not the idea.

Chapman: We live in a world of abundance in North America. Retail profitability can only come from the manufacturer, and who’s going to be willing to take their plant from 100% efficiency to 70% efficiency to spend money on marketing that they can’t measure?

Moore: In packaged goods, the future is in the store. The whole concept of shopper marketing has never been a science before. It has not had that strategic level of attention paid in store, what P&G now calls that ‘first moment of truth.’ When the consumer walks through a door, they become a shopper. And that mind-set is going to be different in Shoppers Drug Mart than it is in Wal-Mart. Our industry hasn’t done a good job of getting at that, or understanding it.

What I’m excited about is that the creative talent and idea that you need to deliver is going to be more, rather than less, important. Now it’s all about engagement. I would say the successful agencies of the future are the ones that define the brand idea. Crispin Porter – to me, they’re the agency of the future. Everything is blurred. When they put body bags in New York as an anti-smoking campaign – is that a PR stunt? It’s delivering an engaging brand idea, irrespective of the form, and that’s why Crispin Porter has been awarded Volkswagen without a pitch.

Henderson: [At henderson bas], we don’t start with creative strategy, we start with marketing strategy. That’s where a lot of agencies gave up brand to do the almighty TV commercial. We’re finding that the results are so much better on the other end. Agencies for the most part have really focused on the wrong thing, and they’ve forgotten about what keeps a client up at night. We have to get back to what the business issue is.

Kay: That’s the way to get around the payment-by-results and ROI question, because a lot of times ROI is measured against the wrong stuff. If you understand what the business issues are, you can link your work to that, it’s easier to measure.

Henderson: I agree with Rob Greenberg out of Interpublic NY that CRM will sit in the middle, and then we will make the decisions of what will happen. I look forward to the day I get a brief that doesn’t [mention] a channel. I think a brief should come out and the best idea works. End of story. And I think the data is central to that. Kraft has been really smart. They got on the data collection early, and I think they’ve done a fantastic job. And they have real brand advantage.

McArthur: I have a fundamental question: if I’m a client and I have a table of suppliers, all of whom have their own separate profit centres, how credible am I going to consider any individual one of them?

Moore: If you’re an agency worth your salt, what’s right for the brand is to collaborate and recognize and value the client’s other relationships. I think there is going to be a lead AOR. There will always continue to be that need, to have that one agency supplier that owns the intellectual direction of this brand. And it is whoever has the right to

be there.