Commentary

The Age of Unbundling

What do you think of "unbundling"?

When I started in advertising way back in 1995 (insert snicker here), the pendulum had just started to swing towards the model of unbundling. Agencies argued that you needed to unbundle media and creative; unbundle brand development and direct response; unbundle traditional from interactive. The terms thrown around were "Best of Breed" and "Category Experts."

This year the pendulum has swung back somewhat towards consolidation. Over the last 10 years marketers have employed multiple agencies to handle numerous aspects of their business and have succeeded in making their lives as difficult as possible. I believe we are starting to see that unbundling is a brilliant idea, but can complicate the execution of your efforts and can have detrimental effects on your brand when you take it too far.

The working model appears to have one to two agencies that coordinating the entire campaign, unless you have a third-party agency that layers on top of the others and is not tied to budget allocations. This is the model that communications planning satisfies and one that the United States is starting to utilize. The fundamental problem with unbundling is that every agency is first focused on the budget, so the clients' needs become secondary. In a model where one agency handles all the budgets, this problem is avoided. In a model where one agency is responsible for the allocation and is not beholden to execution of those budgets, these issues are resolved.

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The shift is beginning to occur because of these factors:

a. Agency consolidation is taking place once again.
b. Agencies are building communications planning as a strategic service.
c. The large holding companies are pitching business as one organization.

The first response is typical of the one-stop-shopping model. The second response follows the model that European agencies have followed for some time now and are attempting to carry-over to the United States. The third model worries me. It seems to be smoke and mirrors and the one that will likely be successful in confusing the clients than solving their problems.

Part of the argument for consolidation, or re-bundling, is that tightly knit teams are best at reacting to a changing environment. When you have too many chefs in the kitchen and everyone is trying to influence the meal, the food gets served cold. When the kitchen team is small, tightly knit, and has worked together for some time, you get a hot plate with the right wine, and the presentation is impeccable.

If I were on the client side, I would definitely move to consolidation, but I would trim down to two agencies. Those two agencies would focus on differing elements, but not to conflict. For example, one agency might handle media while one handles creative. Or one would handle strategy and one would handle execution. One could handle the strategic communications planning and consumer insights while the other would be responsible for buying, optimization, and revisions of the campaigns.

I am curious what you see as the direction of the agency world. How do you work with your agencies and what do you see as the necessary shifts to handle your business effectively?

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