Ad-agency heads clash over ongoing 'identity crisis'

In a panel at the AdAsia Taipei conference earlier this week, Tom Doctoroff, CEO, J. Walter Thompson, Asia-Pacific; Chris Reitermann, president, Ogilvy & Mather, Asia-Pacific; and Charles Cadell, president, McCann Worldgroup, reflected on the challenges that have unsettled the ad-agency business in recent years and postulated on solutions for the future. Edward Pank, managing director at Warc, Asia-Pacific, moderated the session.

What role should ad agencies play?

In the past few years, ad agencies have been in a state of “massive disorientation”, the panellists agreed. With clients demanding more, ad agencies have suffered a kind of identity crisis regarding their service offerings.  

“In the last six years, we’ve been distracted by all the new stuff,” said Reitermann. “We need to stop talking about all the buzzwords and look back at the fundamentals of our industry. We will probably find our way a lot better than trying to be something we’re not.”

To that, Doctoroff half-jokingly said that JWT had banned the word “TVC” internally. The new phrase for TVC at JWT is “filmic expression”, a more open term reflecting the role of ad agencies as “engineers of media neutral ideas.”

However, more than just nitpicking over terminology, Doctoroff said that agencies are still in the business of advertising and should remain true to that.

“We still need to do fundamental communication principles,” said Doctoroff.  “The challenge in our industry is to combine the timeless with the new. I agree with Chris. And as an industry we need to go back to our USPs and focus on being the craftsmen of ideas that build relationships with consumers.”

Considering the industry’s confusion, the three leaders attempted to define the future direction of ad agencies and used a few campaigns as examples highlighting that the “best work is where agencies have a sound understanding of the client’s business, service, product and customer”, which is then “combined with fundamentals of advertising while harnessing the right technologies and means.”

Those campaigns (see below) highlighted work from Australia and the UK.

Reiterman at AdAsia Taipei

Competition and data ownership

Understanding the client however, requires data. Without data, there isn’t a holistic insight in which “strategy, creative, and communication can be built upon.”

“There’s a great challenge because many players are now offering various services to clients,” said Cadell. “Clients are giving us less and less of their data. Which makes it challenging for our jobs. We need to find ways to gain our own data.”

Cadell believes this is due to clients’ realising the value of their data and the often-changeable agency-client relationship.  

“What happens when a client is no longer working with the same agency?" Cadell asked. "Will the client still want the agency to have knowledge of their data? The tenure of agencies has increased because the agency is no longer core to the client.”

Reitermann disagreed and believes the bigger issue is the ability to get insights from the data. “I don’t think there’s a problem with clients sharing data with their agency partners,” said Reitermann.

Doctoroff added that “data insight” is an oxymoron. “We need to have a clear point of view on where it fits in and doesn't and what we specialise in. I think we’re in the business of crafting business solutions and human solutions from these insights as well as pioneering, which is forging ideas from chaos.”

Cadell at AdAsia Taipei

What ad agencies shouldn’t be

The panellists discussed the role of technology creation, commissions and fee structures in the new age of the client-agency relationship. Looking at the example of the 'Optus clever buoy', Cadell questioned the idea of intellectual-property ownership.

“When you see something like that, you got to think about who owns the IP?” said Cadell. “As agencies going into technology creation, this is very important.”

Citing 'Dumb ways to die”, Cadell said the campaign cost the client $150,000 Australian “in total in terms of agency fees”. The “IP rights” of the campaign, however, remain with the client. “Two years on, 'Dumb ways to die' is still going strong,” said Cadell.

“With Optus’s smart buoy, Optus could sell it to other countries that need the technology,” said Cadell. “Optus aren't going to do it, but the agency could and should. As an industry, we should consider moving on from fees to a structure that’s more encompassing of this kind of work as well.”

Doctoroff disagreed with this approach and said that if agencies “hang themselves on being hawkers of ideas and IP frameworks”, the advertising industry will be in for a “grave disappointment.”

“We are not inventors and we are not set up to develop and create IP," he said. "It’s a completely different business model. We harness the power of ideas and apply technology.”

He added that the advertising industry often feels limited by “brand communication and conceptualisation” but instead it should be proud of “forging ideas from chaos”. Doctoroff said that “packaging ideas that work” and then selling them off to other clients is not a sustainable means for the industry.

Reitermann was similarly sceptical. “Utility is one thing that harnesses long-term yields for a brand,” he said. “But I doubt that the smart buoy helped Optus sell anything more than what they otherwise would have. We often get too excited about these things and as an industry, get sidetracked.”
Doctoroff at AdAsia Taipei

The future: would you send your kids into advertising?

The three leaders believe that the ad industry is responsible for evolving advertising fundamentals for the current age.

“I hope we can instil something right in what we do,” said Reitermann. “For the last five years, we’ve been distracted. We need to focus on making brands matter in people’s lives. At the same time we’re not in the business of just doing commercials. And we shouldn’t be about the quantity of output but the quality of our ideas.”

Cadell went on to ask himself whether he would send his own kids into the advertising industry.

“The answer is that I absolutely would,” said Cadell. “It’s a brilliant business with an incredibly long life and I would put my kids into it.”

Case studies discussed during the panel

Nutrigrain Unstoppable by JWT

V/Line Guilt trip by McCann Worldwide

Great Chinese Names for Great Britain by Ogilvy & Mather

Optus Clever Buoy by M&C Saatchi