Thursday, September 18, 2008

Integrated agency: rather missing the point...

This article was first published in marketing magazine

What does integration mean?

It’s a word we’re hearing a lot at the moment, and as you might expect, there are a lot of agendas in play here.

Back in the early eighties when direct marketing agencies started springing up all over the place, the integration argument was a hot topic – “how”, asked marketers then, “can I integrate my brand and direct activity?”

These marketers were concerned principally with media leverage and creative consistency, and the agency networks responded by acquiring DM agencies. But as marketers have discovered, there’s a difference between acquisition and integration – and plenty of DM agencies still exist separately, even within networks.

But does this mean the work isn’t integrated? Of course not. Many marketers have found that so-called ‘integrated’ agencies might be convenient, but they sacrifice focus and expertise to achieve this.

Think of the Swiss Army knife. It’s not a very good screwdriver - the corkscrew is painful to use and even the knife isn’t the best knife you can use. But you can put it in your pocket, and it’s useful for lightweight general occasions – though you won’t use it if you’ve got serious work to do.

Right now, this argument’s being rehashed in digital media, where the agency networks tell us they’re upping their game, “putting digital at the heart of the organisation”.

They point to dozens of studies that show that TV and press influence response rates to digital advertising, and stress the convenience of one call for busy marketers.

But to be effective in this space, an agency needs to combine triple-A standard display, search, SEO, affiliate marketing, technology and data practises.

Search and affiliate marketing may deliver some of the same outcomes as media, but they’re planned, traded and managed in completely different ways, using different tools and different skills.

SEO is principally a technical discipline, although objective-setting and measurement align it to marketing.

Even media is a different kettle of fish online. Trading uses different models, with agency deals a disadvantage particularly in the current market. Smart agencies are using workflow and knowledge management tools, whilst most agencies still use excel spreadsheets for planning. Media exchanges and auctions are on the horizon, and technology plays a central role in effectiveness.

Finally, data is critical. Sophisticated data models are the key tool here, analysing the interdependency between the different digital channels, the influence of offline, and driving investment based on real customer responses in real time.

If none of these skills look like those of the average traditional media planner or buyer, it’s because they’re not. The networks failed to anticipate their clients’ demands for digital expertise, and are now engaged in an unseemly rush to build capability - but they’re missing two key ingredients.

First, the real challenge of integration is between the different digital channels. Combining digital with offline is relatively straightforward – integrating digital channels requires skills most traditional agencies simply don’t have. So their claimed advantage lies in the easy bit.

And there’s a bigger challenge.

For many brands, the internet is fast becoming the dominant channel for consumers – it’s where they hear about products, buy or make decisions to purchase, and crucially, where we as marketers can hear what they have to say about us.

As this shift happens, it will become the core of marketing activity – sales, advertising, market research and customer service, putting digital at the heart of strategy and making offline media a downstream activity.

So all this focus on integrating the media aspects of digital and offline activity is missing both the real challenge and the real opportunity. This isn’t about administrative convenience. It’s about the challenge of integrating digital’s many complex aspects, and the opportunity of moving marketing itself from a broadcast past to a future that reflects consumers’ new relationship with brands.

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