Two stories have caught my eye in the past week - McCann’s decision to launch a series of Harry’s agencies around Southeast Asia, and the move by BBDO to roll out Hard Drive, a below-the-line, retail and design shop in Singapore.
These are clear responses to the current climate. There’s more project work floating about, and a lot of it is in areas outside advertising. We’ve heard plenty of agencies saying they can make some money on brand consultancy projects or on quick-turnaround tactical initiatives (see here). It’s not the ‘big idea’ stuff the networks are set up to deliver.
So it makes sense for some of these big agencies to have low-overhead operations that can plug into the main network without being part of it and make a fast buck on some of this business. In many cases, these spin-offs can be used to target local clients put off by the large overheads and bureaucracies of the big boys.
There’s a few questions though. What do these spin-offs mean for the mother agency - is there a danger of robbing Peter to pay Paul? When the economy picks up, will the raison d’etre behind the spin-offs remain intact? Input welcome…
Tags: BBDO, McCann Worldgroup
This entry was posted on Tuesday, June 9th, 2009 at 11:06 am and is filed under Advertising, Marketing. You can leave a response, or trackback from your own site.
Editor's Blog
June 9th, 2009 at 5:59 pm
Agencies need to follow the old money as it gushes out into non-traditional long-tail areas. This is a trend that has been picking up steam over the past 10 years. Forming agency spin-offs is the fastest way to break the baggage of ingrained comfort zones and perceptions.
Although one could argue that in a world of integrated touchpoints, Peter and Paul should be the same individual. This should change over time as the agency business morphs into the new business realities.
June 10th, 2009 at 11:40 am
These spin-offs stand a chance to work far better if the overall agency (main + spin-offs, collectively) stays focused on solving the client’s broader marketing challenge - rather than a specific channel challenge like ATL, Digital, retail etc.
By owning the broader marketing challenge, the overall agency can offer the right combination of its services, at the right time - in an orchestrated manner (irrespective of main or spin-off).
Client wins because their marketing challenge gets resolved in the best possible way. And agency wins because they generate revenue - from one line of business or the other, rather than ‘losing out’ to another cheaper or specialised agency
But often the stumbling block is the fact that the main agency and spin-offs have different P&Ls. This creates internal competition and parochialism. And the focus becomes maximising revenue (a reality) instead of focussing on what is right for the client
I reckon those that get the balance right and stay focused on client needs will manage this main agency v spin-off situation better. Both now and going forwards. Admit it not easy, but certainly something to aim for. Provided big agencies have a burning desire to stay big…
June 12th, 2009 at 9:46 am
I think the creation of these spin-offs are a necessary part of today’s advertising landscape. Especially in Japan, the “big” agencies are simply not geared to “sell” ideas that are outside the traditional offerings. Clients are looking for something with flare, something that will hook the consumer in this cluttered market. At the same time, being locked into a particular agency reduced their ability to do this. So, having the option to do one-off projects at a “spin-off” gives them this chance. They can still get the high level of product they expect from a networked agency, but get the “coolness” of a boutique. I think more and more specialized “project” based spin-offs will pop-up in this difficult economic time. And why not? Crazy to let money go to your competition!