A couple of weeks before Christmas, I had a candidate say a remarkable thing to me. It rang true and is worth repeating. We were talking about ad agency silos and integration. Here is what he said:
“My agency has spent a fortune tearing down walls and making our offices into an open-space plan. The place looks great. But there is one problem. The walls may be gone but the agency is not integrated. It is interesting, but the traditional [above the line] people have some interest in learning digital and interactive. But the digital people haven’t the slightest interest in learning traditional advertising."
And therein lays the problem. If I had said it myself, I could not have said it better.
Agencies are wracking their heads trying to integrate and end the silos. Some of the silos are financial and they cannot be broken down until each discipline no longer has its own balance sheet.
But the silos are also real in terms of psychology. Integration is an attitude. It is a way of thinking about the business. This attitude must come from the top down, but sadly, the people running ad agencies (both traditional and digital) mostly come from one discipline or another. By training, they are not integrated and media neutral. And despite talking the talk, many do not walk the walk.
While the majority of agency CEO’s understand the need for integration, they are not necessarily yet integrated in terms of their own thinking. And that has to happen before the walls come down.
The traditional agencies are still trying to figure out how to make money on social and mobile media. Meanwhile, the media agencies are usurping this realm from both the traditional and digital shops.
The holding companies may be partially to blame for the lack of integration – after all, their interest is in revenues and profits and if their own media companies can do it more efficiently than their other agencies, it makes no difference to them. There is so much financial pressure put upon the traditional agencies by the holding companies that it is difficult for them to invest in new media. Ironically, traditional agencies are in the best position to integrate in the most beneficial way for their clients, but my observation is that they continue to fall behind due to financial pressures, which are preventing them from investing in the future.
I hope that in 2013, ad agencies figure it all out.