The Integration Debate: All for one and one for all ...

or is integration just the latest advertising buzzword? Campaign asked
five UK network chiefs - Stephen Woodford, the chief executive of
Engine, Paul Bainsfair, the chairman of TBWA UK Group, Cilla Snowball,
the chairman of Abbott Mead Vickers BBDO and Proximity London, Gary
Leih, the chairman of Ogilvy Group UK, and Tim Lindsay, the chairman of
Publicis UK Group - to explain how they make integration work in
practice.

- Why are so many networks choosing to move towards an integrated
model?

SW: Over the past 20 years, the advertising silos have grown like mad in
their own way. Now the growth of traditional media has plateaued, those
disciplines are less bullish as other media become more important.

PB: Also, the proliferation of digital TV and the personal video
recorder, combined with not being able to buy the ratings that we used
to, means we are seeing examples of activity in non-traditional media
having a dramatic effect. There is also a generational shift occurring -
you can almost draw a line when you meet marketing directors; most are
under 40. And the days of a brand having a single-minded proposition and
one thought and sticking to it have gone.

- Who is driving integration?

GL: It's a shared agenda. Clients have become more skilled at it but you
still see some unbelievable mistakes made when a company's PR and
advertising are doing different things. Young people are agitating for
it and clients are agitating for it, but it's mostly up to us. If you
offer it to a client, they're not going to refuse it. It's about a brand
idea that transforms behaviour, not a buzzword. The word integration
should be banned.

CS: Clients such as Unilever, Sainsbury's and TV Licensing are trying
new things and making huge progress. Integration isn't just about
communications, it's about commercial integration too. You need a client
champion and they need to be integrated for it to work. Then their
internal communications can join up with their external activity. If
you've got integrated communications and a disintegrated organisation,
it's not going to work.

- What practical measures need to be implemented?

SW: The key to integration is being under one roof. There are barriers
to break down and you trust people more if you see them every day in the
lift and in the bar - the corridor conversations are important.

CS: I don't necessarily agree. I think you can get good integration with
good teams. We can do it without being in the same building and if that
becomes the crutch for success, the actual bricks and mortar will not
help.

GL: We're currently in five different locations but we have the bulk of
our business - 800 people from OgilvyOne, O&M and Ogilvy PR - in one
place. The integration between those businesses is far greater than
those outside. You've got to be able to do it even if you're in ten
locations. But I've grown up in a place where everyone is together and
it's better that way.

TL: We're in the process of merging our creative departments. We're
lucky that we've got our marketing services company, Publicis Dialog, in
the same building.

But you can take it further. Even though you need separate front doors
because you need to be able to do pure advertising and DM pitches and
manage conflict, the issue of physical and geographical proximity is
huge.

Our Renault, Procter & Gamble and Army account groups sit together. It
is unbelievably liberating and the feedback is fantastic. The teams get
more joined up, the conversations you wouldn't normally be bothered to
have are had. The best things that happen in advertising happen where
disciplines overlap metaphorically and also physically.

- How easily are staff adapting to the changes?

TL: The generational shift is important. Out of the four teams on our
graduate summer school this year, none of them started with TV in their
pitch.

PB: I would extend that beyond graduates. If you look inside your
creative departments, the young creatives get really excited about viral
films or events or in-store marketing. The older creatives regard that
as some kind of below-stairs activity that they don't want to get
involved in.

Five to ten years ago, young creatives only wanted to write TV ads, but
that has gone now.

- How can you overcome the prejudice that exists between
disciplines?

PB: One building would solve the issue that advertising is the daddy in
the relationship, because if all the teams were together then the leader
on a particular project or account would emerge naturally. The
informality and intimacy that comes from being in one place would make
it easier.

What I've also noticed is that as well as designers or sales promotion
or digital people, we've got people from music publishing or event
management or rights negotiation in the room. They're the people the
clients want to talk to now. When I started in the business, advertising
people knew things clients didn't. But that has changed and now they
want to talk to the people who can negotiate with Hollywood.

SW: You know when you've reached the endpoint when the creative idea
comes from anywhere and each discipline can embrace it. Account handlers
and strategists can be more enthusiastic about the idea than some
creatives are.

- What management issues do you have to overcome?

TL: I think there's a wave about to break that will see people outside
of advertising start to take positions of responsibility in
communications groups. Three of our management group, excluding the
finance guy, are not from advertising backgrounds.

GL: There is an ego issue to consider. We need to remove the titles so
we can take away the managing director and chief executive roles from
the different silos. When you take away these titles, the trade-off to
staff is the gaining of experience. A lot of our staff have grown up in
silos, so you have to tell them they're going to be more marketable.
They might not be specialists in everything but they're going to be
strong generalists. You can't have the client - who is skilled in
integration because they have to be - marked off by specialists in
agency silos.

- Should all this affect the way agencies are paid?

PB: These ideas that we're now having - we don't get paid for them.
Integration hasn't affected us with remuneration and it should have,
positively. We've got to get better at measuring the effect of the
things we do.

SW: It's a virtuous circle: the more successful clients are, the more
they invest. It's at that macro level that if you're doing more and more
for the client across more channels and it's delivering, you'll get
rewarded for it.

- How important is sharing a P&L?

PB: In addition to being in one building you have to remunerate to one
bottom line. Even within a holding company, if the different
organisations are structured to have different P&Ls, each company wants
to improve their share of the cake. It gets harder when a client wants
to bring in an outside PR or DM agency.

We have a bonus pool that works across the group, so if the group
doesn't make its target then no-one gets their group bonus. Even though
we measure each unit as a separate P&L, everybody knows the additional
bonus comes from the group success.

GL: You have to keep measuring individual units, but you also have to
keep saying you will all be rewarded for this.

SW: Ultimately there has to be one bottom line and one management team
responsible for it.

- Do clients want integration at pitch stage as well?

TL: Martin Jones (the AAR chief executive) says that everything that
comes through his door is about advertising. That's still how most
people move their business.

CS: It's rare that you are asked to compete in an all-discipline pitch
when every bit of business is up for grabs.

TL: Most of our integrated accounts have started with advertising or DM
and we've sold in other services.

GL: And it will continue to go that way in the foreseeable future. But
if you want to open the door, talk to them about the brand solution
rather than the agency and then they will talk to you. That's the
currency of discussion currently. Whether that means you automatically
get the brief or that it goes to three or four competitors as well - the
point is you've engaged the discussion at the right level and you're
getting to talk to the chief executive about it.

- Why is advertising still the dominant force?

PB: I think this Jones effect is caused by something that we must
acknowledge and that is that even in 2006, marketing budgets will
contain a large amount of money for advertising, but hardly any for
branded entertainment or PR. Their mindset - the way they do their
forward thinking - is old-fashioned.

SW: Between 40 per cent and 50 per cent of a client's budget is
advertising.

When they're running an ad pitch, they're generally expecting the
outcome to decide which direction the rest of the communications is
going to go.

Nine out of ten pitches might be for advertising, but they're
agenda-setting pitches and you can't have a pitch where the brand idea
comes out of the advertising and the DM and sales promotion go on in
their own sweet way.

- How can you ensure that advertising isn't always automatically
presented as the answer to a client's problem?

GL: Have one business director to head each piece of business.

CS: That's a good point. You've got to have a good leader and they can
come from any discipline and it can vary by account. Without seniority
and strong leadership, integration just falls apart.

- Can integration work between unaffiliated companies?

TL: Some of the agency teams COI puts together are shotgun weddings.
Integration doesn't have to happen within an owned group. Some of our
best relationships are with agencies from other networks.

GL: I'm not entirely sure about taking bits and pieces from all over the
place. I think advertising people are generally tribal. People take a
long time to get comfortable with each other and to trust each
other.

CS: But it's a good test of whether the idea's strong enough.

GL: You have to be able to do both. If you can't, you're dead in the
water. Whole big chunks of business will move that way.

- How does media fit into an integrated agency?

PB: The media agency issue is a big question - by allowing them to exist
separately, we've created a monster. I would love to go back to the days
when media departments were inside advertising agencies. Clients would
get better ideas, better thinking and better joined-up initiatives.

GL: I don't think we need buying - that's a specialised service - but
there's a whole generation of creative people who have grown up without
media input and a whole generation of media people who have grown up
without creative input. It's impossible to provide integration without a
high-level media strategy.

SW: The paradox here is that the rest of the communications process is
getting incredibly close to the customer. We're getting much closer to
the sharp end, apart from in media. When you take channel planning out,
you're still not getting very close to the space and airtime that
clients are spending their money on, whereas ten to 15 years ago, we
were very close to that.

TL: The biggest barrier to truly holistic communications is the
separation between media and creative agencies. Media companies are the
enemy of creative companies because they are competing for the same
upstream relationship with the seat around the boardroom table. And it
is a competition.

Even with media companies in your own group (and I'll probably get the
chop for this), there's this sense that you're in competition for
influence, for relationships. Most of the time, people co-operate but
they don't give much to each other in the sense that ideas need to be
shared.

CS: Sometimes the buildings are used as an excuse for lack of
collaboration but, provided you've got a clear set of objectives and
goals to work toward on a piece of business, it can work. But if you try
to pull the whole (media) business back in, you've got a hell of a lot
of conflict issues.

You've got to look at that seriously.

GL: If you can have representation of each of the disciplines around the
table, around the water-cooler, at the bar, you will get better
cross-pollination. But what we're going to do is bring representation of
all the disciplines under one roof. I do believe in having everyone
around one table.