Everybody seems to be trying to eat creative agencies’ lunches these days, not that they have as many of them as they used to, alas.
We have production companies offering alternative sources of ‘content,’ a process that probably started with the giant CAA in the US. Digital agencies have taken about 30 per cent of budgets although many of these are owned by agencies. In-house client creative departments are growing – Specsavers is a model in the UK and what we might call ‘tied’ agencies are becoming bigger too, particularly in the car industry with Innocean for Hyundai and Spark44 for Jaguar Land Rover. The UK’s Oliver Group instals creative/production departments at client offices around the world.
But the really big beasts in this jungle are media agencies, already the supplier of the biggest part of the holding companies’ revenue and profits. They are under pressure too, of course, with advertisers on the both sides of the Atlantic belatedly waking up to the fact that their media agencies make much of their money – directly or indirectly – from media owner rebates. Sometimes this is cash, more often free time and space that the giants of the industry – WPP, Omnicom and Dentsu Aegis – use to offer the lowest media prices to big advertisers. Advertisers like the prices but don’t like the system.
Media agencies say they need this revenue as clients don’t pay enough. And they have lots of mouths to feed. There aren’t many creative agencies in London with as many people as Maxus, the newest of the WPP/GroupM media agencies alongside MediaCom, MEC and Mindshare.
And Maxus has just promoted its top planner, Jen Smith (left), to the new post of global creative director. Inviting the question: why does a media agency need one?
Maxus says Smith will aim to deliver outstanding creative work for clients, as well as expand the UK creativity leadership programme to all Maxus employees worldwide. She developed the agency’s creativity training scheme, in which ten per cent of Maxus UK employees are tasked with improving creative problem-solving and becoming “creative champions” across the agency.
Nobody would deny that in a joined-up communications world media planners and buyers need to know something about creativity and that this should inform their choices. Whether it does or not is a moot point: there’s pressure on the media agencies to use the media that offer them the biggest discounts, whatever a planner might say.
But, that aside, what will follow from the appointment of such creative leaders in media agencies? Maxus isn’t the only one.
The logical consequence is that they’ll start pitching for, winning and producing creative work. Why have them otherwise? It already happens to a degree. Successful UK indie media shop the7stars is running the latest instalment of a campaign, ‘Suzuki Saturdays’ with the ubiquitous Ant and Dec, that might have been expected from Suzuki’s UK creative agency The Red Brick Road. In this case the production is supplied by ITV but it’s the7stars acting as creative as well as media agency in all but name. And the campaign (below) is fine if that’s your thing. The sub-titles are a bit peculiar but maybe research shows that people don’t know their Ant from their Dec.
Once the real biggies of the media agency world start doing this at scale there’ll be trouble. Media agencies already take the lead in most campaign planning.
Creative agencies are trying to fight back, mainly through trying to grab media planning from media agencies. MullenLowe has its Mediahub operation while The&Partnership has m/SIX Media, which offers the works as it benefits from part-owner WPP’s volume deals with big media owners. But these are really minnows in comparison to the big media agencies which employ thousands of people.
Increasingly we see big accounts moving both media and creative to the same holding company. Someone told me the other day that this is because the winners offer the creative at cost or less so long as they keep the media – which is where, as we said, the real money is. If the creative goes somewhere else, then the client is no longer guaranteed the supposedly advantageous media deals.
It’s a big issue for creative agencies, whoever they’re owned by. What seems incontestable is that, in many cases, they’re being pushed to the margins of the business.