Red Fuse and Commonwealth are the newest names in an increasing trend, where agencies collaborate, to set up dedicated centres to give their best to their client. And it does not matter if the holding companies are not from the same stable.
Commonwealth, for instance, is the result of a 50:50 joint venture between San Francisco-based Goodby, Silverstein & Partners, an Omnicom Group company, and New York-based McCann Erickson Worldwide, an Interpublic Group company, to service the $2billion Chevrolet account. Goodby was Chevrolet's lead agency in the US, while McCann Erickson was lead in China, India and Latin America. Mumbai was chosen as one of the hubs for the new agency.
WPP's Red Fuse merged account teams at Y&R, Wunderman, VML, MEC and GHG. The move came after a three-decade-long relationship in the case of creative network Y&R and media agency MEC, and a 15-year relationship in the case of digital shop VML. Red Fuse will merge the existing Colgate account teams in six cities - Hong Kong, Mumbai, Prague, Kansas City, New York and Paris - at agencies working on its accounts.
Is this trend here to stay? Will brands and agencies want to be tied together like this, indefinitely? With India being marked out as a hub in the scheme of such marriages, the answers could be interesting.
There is precedent
Communications conglomerates - WPP is a pioneer of this concept - that run hundreds of different types of client arrangements through subsidiaries are doing business as usual but in a distinctive manner. The services are the same - advertising, media planning and buying, digital, social media, promotional marketing, public relations, and such other expertise - but, through a single window.
Sir Martin Sorrell, CEO, WPP Group, claims that the agency has been client-driven from the beginning. He told afaqs!, "The team model was set up in response to, and continues to evolve based on, the clear needs of certain clients, who said to us: 'we want something different.'" According to Sorrell, eight years on, the Team approach has a proven track record. "We now have more than 30 client teams in place. These teams align to WPP's top clients, which comprise 30 per cent of WPP's revenues." That doesn't exactly make the dedicated team a new phenomenon.
In the '90s came orchestration, which was a famous Ogilvy creation. "It was trying to sell other services on the back of one service. If you are good in advertising, add PR as well. They were orchestrating a complete marketing communication - the genesis of what is happening today," explains Kapur.
According to Kapur, though the inspiration for today's agencies may have come from there, the trend being witnessed now is not the same. Today, it is more of a horses-for-courses policy, he points out. Others feel that just having a separate team with a new name doesn't make a difference. "If you have a slightly different approach and your ideas and strategies are tailor-made for the client, then it makes a difference," says CVL Srinivas, CEO, South Asia, GroupM.
It was only when Ford unleashed its small car, Figo, for the first time in India that it started playing the big game. Between 1995 and 2011, the company did not have a small car in India. That was also when it moved from Chennai to Delhi. "If you have to play in India, you have to play the small car game. Being in Gurgaon or Delhi, gave them the right neighbourhood, be it marketing, media or their own distribution," states Hari Krishnan, senior VP and head, WPP GTF, mentioning how teams for every aspect of communication scattered around Chennai were brought together to set up a dedicated agency in Gurgaon. "Co-location and co-creation was the agenda when we were forming GTF," he says.
Ajay Kakar, chief marketing officer (financial services), Aditya Birla Group, feels there is a need to have size and the pedigree to demand such a formation. "You can't have a Rs 5 crore account in India and expect that the agency group will create a separate agency unit for you." Prasoon Joshi, executive chairman and CEO, McCann Worldgroup India and president, South Asia, attributes the focus to the command of English as a language and its multicultural nature.
Consumers, today, pick up information from the web, blogs, press speculation about imminent product launches and word of mouth. They form opinions about existing brands by involving themselves in conversations on social media. They use search engines for features, comparisons or pricing. They follow specialist bloggers, ask friends and acquaintances for feedback over Facebook.
In short, "They are kept updated digitally on the countdown of launches," says Hari Krishnan of GTF, adding that advertising plays a key role at the launch stage and retail conversions. That's where a collective of specialists scores. Is that why clients, too, look for such teams?
According to Sorrell, clients seek out the Team approach for several reasons. This includes having a single point of contact, access to the widest possible array of talent across companies, and the ability to coordinate all the disciplines into a truly integrated marketing approach. "Given our success, WPP now gets unsolicited enquiries from potential clients, who are interested to learn more about the Team approach," says Sorrell.
TRACING THE ORIGINS
The 'dedicated service model' in the communications business started with the media buying industry. In the early 2000s, Lintas Media Group had created Interactions as a dedicated multi-city agency for ITC. When the latter moved to Madison, the agency came up with Crest for ITC.
Lynn De Souza, chairman & CEO, Lintas Media Group recalls how the initial trigger for setting up a dedicated agency was to manage conflicting businesses. According to Abdul Khan, advisor to the chairman, Reliance Industries, the reason for creating a room for conflicting business emerged because there were very few large media agencies available. Creative agencies, on the other hand, were aplenty. There are other examples too.
Fulcrum of Mindshare is exclusive to Unilever and probably one of the oldest examples of a dedicated agency set up that can be given. Set up in 1995, it was known as HTA Fulcrum and later Mindshare Fulcrum. A four-planner agency, Fulcrum's team now stands at 120 and it has become a fully integrated, one-stop shop offering services across analytics, ideas and execution across all forms of channels including branded entertainment and consumer activation.
"Fulcrum was set up as a dedicated unit to service all stakeholders in Unilever with an express objective that we should be able to invest (and therefore ring-fence) in talent, systems and products dedicated to Unilever without any distractions. The main objective is focus, identity, pride and purpose," says Gowthaman.
Gradually the dedicated media agency model evolved into a holding company solution for cross country accounts requiring a mix of services from several agencies in that company that are knitted together for seamless solutions. "Such offers provide simplified coordination, supervision, and communication for the client as well as the agencies who come together to provide talent to the dedicated unit," explains De Souza. Creative agencies found it a good model to emulate.
Anurag Mehrotra, vice president, marketing, Ford India, describes it as 'train' philosophy. "They move together and business understanding is paramount." Mehrotra chalks out the difference between working with three different agencies and working with a team that is 'stuck at the hip'.
He points out that earlier, a creative idea started with TV. But now, a creative idea can start with activation. For instance, a month after launching Fiesta, Ford India unveiled an innovative campaign that focused on people's experiences. The campaign, The Fiesta Experience, featured four young individuals and their experiences, while driving the all-new Fiesta across a 10-day, 1,310 km drive from Delhi to Diu. The campaign started with activation and social media interaction and ended with TVC, print and other above-the-line (ATL) activities.
Joshi likens the new approach to bringing up a child. "Unless there is something wrong with the parenting, you cannot change the custody of the child," he says. It also saves money. Before Commonwealth was set up, there were 72 agencies servicing Chevy from 72 offices. Now it is one agency and just four hubs. Chopra of Publicis believes the creation of a dedicated unit can happen only if there is scale to the client's business. "If not, it is difficult to manage a dedicated unit". However, some others believe that it is not good to uproot people.
A team in a regular agency generally tends to draw a lot from the mixed creative environment. To pull out a bunch of people is not the right way to move forward, for the brand or the agency, says a professional from a top-ranked agency. According to him, the biggest enemy of strategic thinking is boredom. "In an agency, if a team-lead is not getting ideas from the auto team, he can easily get them from the FMCG team."
R Gowthaman, CEO for South and South East Asia, Mindshare, who was also a part of the team that founded Fulcrum, confesses how often talent finds itself getting monotonous with an almost predictable set of challenges. But bigger than the challenge of boredom, is that of the meeting of minds. "In such a set up, people come in from various organisations with different work cultures and then it becomes difficult to blend them into one organisation," says Subhash Kamath, managing partner, BBH, India.
Kakar of Aditya Birla Group states that the role of a leader is the most important one for such a unit. He points out to Vodafone. "When I think of Vodafone, I think of Rajiv Rao. There is continuity - other people might come and go. For me, it works best when there is one person leading it," says Kakar.
A leader also needs to be well-versed with the different facets of communication. Narrating his initial experience working on WPP GTF, Krishnan says how every day was new. "I found myself partnering with media and a completely new animal called digital. The initial period went in sitting in the conference room and learning jargons one couldn't even fathom," he says. But he confesses how putting three different companies under one roof and trying to make them work, is a big challenge because everyone has his own concept.
Asserts Kakar, "In a leader you have to look at somebody, who understands brands and understands the ever evolving dynamics of communication, as well." Continuity is important but how long is it before continuity leads to staleness? Different relationships have different yardsticks and one must ensure that the breaking point is not reached.
Gowthaman mentions that Unilever reviewed operations every three years, but evaluation happened all year round. Mehrotra of Ford admits how the company works with agencies, other than the core one, for certain requirements. For example, for one of the social media campaigns it tried out Watt Consult. "What Watt Consult came up with was an idea for an interesting activity called 'One Tank.1,500 kms. One Classic Story' campaign. But they worked hand-in-hand with GTF," says Mehrotra. According to Srinivas agencies do not look beyond such a set-up, but some bring in specialist agency for campaigns on a case-to-case basis.
Kapur has another example. "Let's say I want to do a rural programme, but I am still working on the scope of work. I am not going to commit 10 people to rural without understanding the dynamics of the business. Once my confidence level goes up, I might have two dedicated people for rural. But I may also have 100 of them outside the agency."
For the union to work long-term, the two partners have to think in the same way. Gowthaman feels that there has to be input, output, learning, and feedback so that there is continuous upgradation in service and delivery. "And there has to be mutual admiration, respect and shared goals - pretty much like in a marriage. And in that case, it can last forever," he says.