When the term “omni-channel” first appeared in the pages of the business press, it was meant to describe how consumers move seamlessly among all retail environments, from physical to virtual. But soon ad agencies commandeered the expression, and now “omni-channel” has earned a place on many agency websites right alongside other claims like “360-degree thinking.”
More to the point, “omni-channel” is just the latest way agencies are trying to portray themselves as one-stop-shops, with experience in all the channels a marketer might need to employ on behalf of their brand. But as many agencies continue to ramp up their claims to be masters of the communications universe, the attitude of sophisticated marketers is headed in the opposite direction.
As Mondelez CMO Dana Anderson said recently in a Wall Street Journal article, “It’s just not possible for one agency to be expert in all these areas.” As a result, she says, Mondelez has “significantly expanded its roster of agencies.” From her perspective, “It’s time to accept that the Agency of Record model is not longer the pathway to Oz for clients or agencies.”
Today’s great brands are the sum of many parts
Today’s marketing programs are much like a modern-day aircraft, often beautifully functional when assembled, but made from many different parts from many different companies. The new Boeing 787 Dreamliner is made up of sections supplied by specialized producers in countries literally around the world. The wings are made by a specialist manufacturer in Japan. The landing gear comes from France. Cargo access doors from Sweden. The center fuselage from Italy. Couldn’t Boeing do all of this by itself? No, actually. Each of these components has state-of-the-art technology that Boeing wouldn’t be able to replicate without a massive investment of resources.
Similarly, today’s marketing landscape is populated with technology and specialized knowledge that no single company (or single agency) could reasonably master. But of course that doesn’t stop most agencies from continuing to claim “full service” offerings as if they’re experts in everything from ethnographic research to data analytics.
A new study by Marketing Week reports that “specialist consultants are gaining ground on agencies as marketers’ first port of call for business advice.” So when agencies insist on playing the role of “generalist” they move down on the list of trusted advisers, behind strategy specialists (like London Strategy Unit), channel planning specialists (like Horizon), experiential marketing specialists (like Mosaic), experience design specialists (like Adaptive Path), and the rest of the focused firms that comprise the long tail of marketing.
Focused marketers want to work with focused agencies
Harvard’s Clayton Christensen observes that we are seeing a shift in the competitive dynamic from the primacy of integrated solution shops, which are designed to conduct all aspects of the client engagement, to modular providers, which specialize in supplying one specific link in the value chain. He explains that the growing sophistication of clients leads them to disaggregate services, which reduces their reliance on one-stop providers. “They are becoming savvy about assessing the jobs they need done,” says Christensen, “and funnel work to the firms most appropriate for those jobs.”
One thing is for certain: the marketing world (and the business world at large) is increasingly dominated by focused business models. The agencies moving up in Advertising Age’s annual size rankings are specialized in areas like CRM, digital, public relations, and healthcare. The agencies moving down in the size rankings are (you guessed it) the generalists. This trend has been playing out for at least a decade now, and appears to accelerate year after year. Some of the agencies that ranked 1st or 2nd just ten years ago now rank 10th or 20th.
Is there still a need for firms to play the role of general practitioner, to help clients diagnose their problems and then dispense at least some of the solutions? Of course there is. And this need is especially prevalent among smaller client organizations in smaller markets. The question for you and your firm is whether that’s the kind of client you want; the unsophisticated patient who seeks the services of the country doctor, or the larger national/global companies who seek the help of world-class specialists.