Why aren’t more agency wins integrated?

Asda appointed Publicis after a short pitch process this week.
ASDA
What was notable about the win was that it covered both creative and media briefs. Notable enough to become a conversation topic when I met up with industry friends for coffee. Integrated wins are not that common.

WPP has managed to win global single agency accounts:

  • Ford Motor Company
  • HSBC
  • Colgate-Palmolive
  • News International
  • Bank of America
  • Miller Coors
  • Ford Motor Company
  • Mazda
  • Huawei

Then there was Enfatico for Dell.  Enfatico struggled with personnel changes at the client and client culture.

The Publicis deal is is more modest in one respect, it only affects Walmart’s UK business, but is still £95m.

On the face of it, integrated appointments have a lot to offer, so why aren’t they more common?

Let’s first look at the pros of an arrangement:

  • Better chance of not getting silo-ed thinking from the agency. Both creative and media can be part of the ideation process.
  • New ways of audience targeting as part of the creative process. The concern is the combined profitability of the account. Rather than a focus on media profitability

Barriers to adoption:

  • Current contractual timings don’t allow for pitching media and creative business together. It seems so obvious, but there may not be a convenient break clause in place
  • Pitches are often driven by procurement teams; who look at better value in continuity, rather than a more holistic approach

Weakness of a combined media and creative agency arrangement:

  • The marketing group may not have strength in all areas. I worked for a large marketing group which held the global account of an FMCG company. Despite being part of a global marketing group, we couldn’t execute in two markets for the client. This affected the social media marketing work we did for them and they weren’t happy
  • Dependent on the marketing team, they may not want to work with a media agency that:
    • Operates an arbitrage model. Having bought the ad space from the media, they then sell it on to clients with targeting data
    • Operates a model that isn’t media neutral to meet wider internal goals
  • Clients often think of the arrangement only as a way of cost reduction

There are also weaknesses with the single client agency model as WPP has done it:

  • Set-up costs are usually shared across clients, but where there is dedicated infrastructure. This cost will have to be borne by the client, upfront or salted in the fees
  • From a client perspective there is moral pressure to maintain the agency relationship. This complicates the client’s ability to ensure cost-competitive rates
  • Less opportunities to cross-pollinate ideas across categories. This is because the agency is focused on one client only

While Asda have taken an interesting first step, hiring an integrated offering. The hard work is only now starting:

  • Putting in place the right working practices client and agency-side
  • Changing the creative process to take advantage of integration
  • Have a proven positive effect on Asda’s sales figures in the face of competition from Lidl and Aldi

More information
Asda hands £95m media and creative to Publicis Groupe in double coup | Marketing Magazine
WPP Folds Ill-Fated Dell Agency Enfatico Into Y&R Brands | Advertising Age