Integrate or collaborate?

The growing clout of emerging media and expanding importance of non-advertising communications have had both clients and advertising agencies under pressure. Under such pressure, ad agencies have begun to seriously address the way they work. In the process, they are either beginning to restructure their work models or further strengthen, through a sustained focus, what they have identified as strengths worth taking forward.

While big agencies continue to talk integrative models encompassing all services, smaller agencies may veer towards a more collaborative model, partnering independent specialist agencies. “There are the convergent (integrative) and the divergent (collaborative) strategies. There is no third strategy,” agrees Mahesh Chauhan, president, Rediffusion | DYR. “Both have their merits. We are clear on the convergent strategy at Rediffusion.”

There are two things Rediffusion is doing differently now: one, hiring people (a large number in 2007) from non traditional domains such as media, entertainment and marketing. Two, “we’re moving more to a client profit and loss perspective. It’s all about one client, one structure, based on an authority matrix (of that single client) and the practice matrix. There will be a business head from the driving practice. Other services will dovetail in.” Deliverables for each brand will be defined for the year. This model is being triggered off through a few pilots with clients.

Madhukar Kamath, MD & CEO, Mudra Group, has spearheaded a transformation in Mudra’s way of doing business over the last five years. By now, says Kamath, “we are a new Mudra in terms of content and have added on another Mudra in terms of size.” Mudra, he claims, has more than doubled its topline, bottomline and clients. People have grown from 400-odd to 1,000-odd. When he started the shift, Mudra was 98 per cent an ad agency and two per cent other businesses. “We looked at two things: Where is the world going, from a client and consumer point of view. And, where is the rupee going? Mudra had to shift from being an ad agency to being a communications group.”

Mudra’s services have been organised into distinct, specialist verticals and clubbed under three umbrellas – Mudra Advertising, Mudra Media & Content and Mudra Marketing Services. By April this year, the target is for Advertising to contribute 40 per cent, Media & Content 10 per cent and Marketing Services 50 per cent to the agency’s turnover. The verticals’ heads meet periodically to keep the flow of work smooth.

Madhukar Sabnavis, country head – planning and discovery, Ogilvy & Mather India, states: “I don’t think clients are looking at one-stop shops. They will go to the best in practice. For the agency, the cutting edge comes from being best in practice in each area.” More depth in each practice, in other words. Structurally at Ogilvy, each brand has a team leader across disciplines, responsible for the bottomline.

What about egos across disciplines? Sabnavis says, “At Ogilvy, we believe in growing people from within. While P&L considerations do create struggle sometimes, our people have partnered at junior levels and grown, so there’s less conflict.” He adds that today’s youngsters are getting more collaborative. “They want to win using people around them in order to grow.”

Josy Paul, who’s just quit as creative chief at JWT to start BBDO India (he used to run David before its merger with Bates earlier), strongly believes in a collaborative model. He feels that agencies have been slow to respond to shifting client needs. “Consumers are running faster so clients are running faster too. Clients are meeting more people also and so running faster. Maybe agencies are running faster, but not as fast as clients.”

To deal with this challenge, “you have to have more people collaborating from the outside. The ad agency should own the idea but not the whole process. Don’t control the process, channelise it.” Paul is convinced that monolithic pyramidal structures, being controlling, won’t work any more. A collaborative structure leads to channelising. Integrative or collaborative, convergent or divergent, in the end, the results have to prove themselves. And the client is getting particular about this.