At Advertising Week, All Hail Fragmentation

Realizing you have a problem is the first and most important moment in the recovery process of any addict.

So it was with traditional agency executives at Advertising Week in New York, where digital media and the deep strategy shift it requires dominated a large number of keynote and panel events — rather than appearing as a bullet point in more general discussions of advertising, as it has tended to in recent years. In session after session, agency execs conjured up the specter of fragmentation with a relish verging on emotional catharsis.

“The agency has to be a more collaborative, communicative organization,” enthused Mark Rosenthal, CEO of media operations for the ailing Interpublic Group, during a session at the MIXX conference in Times Square. “New kinds of internal incentive plans to socialize this behavior are crucial. The agency of 2010 has to provide total transparency. How else can you talk to the Internet generation?”

During his address on Tuesday morning, R/GA Chairman Bob Greenberg called the holding company model “seriously broken,” and even agency execs working within the mega-agency groups appear to agree. Ron Berger, CEO and COO of Euro RSCG Worldwide, called for the reuniting of media and creative. And Publicis CEO Maurice Levy said the account manager of the future will act as a bridge between creative and media teams.

“We will have one single navigator coordinating the work of the media agency and the creative agency,” said Levy. “I think that when digitization and the Internet and cell phones become the core of what we are doing, it will change the lives of advertising agencies…. The most exciting challenge is to reinvent ourselves, to reinvent the way we are working, to groom new talent, and to think differently. We are at a crossroads.”

David Verklin, CEO of Carat Americas, used more than 10 minutes of his Wednesday morning address to paint the picture of a bumbling expectant father named Rob who uses Internet, TiVo and content tagging to respond to his wife’s emotional needs while accepting several super-targeted marketing offers along the way.

“We are now, ladies and gentlemen, advertising to the interested. We are no longer trying to bludgeon… with advertising,” said Verklin.

Rare was the speaker who did not comment on the primacy of media strategy. Verklin, Levy and IPG’s Rosenthal all said that for the agency that positions itself as an expert in consumer behavior, fragmentation and consumer control are marvelous opportunities.

On the topic of ad-skipping, Levy said, “It is not a problem. It’s a big issue, but it is not a problem. The more there are issues of this kind, the more the knowledge we have of the consumer is something that will help make our service indispensable to help advertisers get over to the consumer.”

It’s a little tough to tell who’s walking the talk, but some holding companies are clearly in stronger positions than others. Aegis counts many top digital marketing holdings — including iProspect and Carat Fusion — among its units. Publicis meanwhile has Starcom MediaVest.

Levy argued that the holding company model is not broken, and that big holding companies have a special advantage when it comes to breaking into emerging markets, such as India and China. In these places, he said, local upstart agencies have virtually no shot at the bigger accounts.

Verklin, who recently became chairman of the agency’s Asia-Pacific operation, would likely agree.

“Picking an apparent future and not looking at Asia seems at odds to me,” he said. “Our industry’s not dying… It’s evolving and it’s growing. We’re seeing reforestation. We’re not seeing the creeping in of the desert landscape in advertising.”

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