Art & Commerce – Beware: Converging marketing services companies

Things That Go Bump
Almost all of the big agency holding companies have strategies designed to win a greater share of their clients’ total marketing outlays. That’s a big reason behind many of their acquistions: Let’s buy a company that provides yet another service our already happy clients can buy from us. Let’s buy a company with a good list of clients and try to cross-sell the rest of our catalog.
Amid all the talk of media convergence–the AOL-Time Warner deal is merely fuel for the flames of this bonfire–don’t lose sight of the other convergent trend, the marriage of various marketing communications disciplines. Is it really happening? Are we seeing giant steps toward integrated communications?
Sort of, but not convincingly. Or at least not yet.
The larger holding companies typically have well-designed programs to sell the idea of integrated marketing, first to their own troops and then to their clients. A big problem is turf. Many clients are quite unprepared to buy these services on an integrated basis, and the bigger the client, the less prepared. A large client with a substantial advertising department also, most likely, has both big public relations and big sales promotion departments, each run by someone who is competing with the others for the next big corporate promotion.
“Why,” the ad guy might ask, “should I buy into a program that reduces ‘my’ ad budget and also makes the PR guy look good?”
Why, indeed. Even as the large, multifaceted marketing support companies learn how to sell a suite of integrated services, few clients have yet learned how to buy them. At least few big clients have.
At smaller clients, where the CEO may double as the head of marketing, there is often a greater willingness to buy a total solution rather than pick services ˆ la carte. For one thing, it’s faster and often cheaper. And, generally speaking, the higher up the client’s chain of command you go, the more likely you are to find a decision maker seeking to solve a business problem and not just make an advertising decision or protect a swath of corporate turf. That’s the setting in which integrated communications services can most readily be bought and sold.
But midsized clients typically use midsized agencies, which, unlike the industry’s megas, may not offer a full palette of services. So here, although the client may be ready to buy, the shop doesn’t have much to sell.
There’s no law that says the process must start with an ad agency. It usually does, but it doesn’t have to. Public-relations specialists often deal at the senior-most levels of client hierarchies, and they have ready access to the corner office. Now, PR folks, when asked by clients for help with an advertising problem, may either shrug or, as wastefully, steer the lead to some unaffiliated shop and get no reward but a thank you.
Can an integrated marketing communications company evolve from a PR nucleus? In the world of great convergences, you never know what will bump into what.
Alan Gottesman is principal of West End Consulting in New York. He can be reached at