Friday, February 13, 2009

Thinning the agency ranks

Coke announced that it's reviewing its portfolio of advertising agencies and considering where they can trim the fat.

It's a sign of the times. Agencies in the States have lost 65,000 employees in 2008 and client marketing budgets are under greater scrutiny for the impact advertising has on actual sales.

Coke's actions suggest a strategic opportunity for agencies based on the following:

  • Campaigns executed using channels with high awareness and low cost. Experitential, events promotion, and SMPR are some of these. Television isn't.
  • Global orientation, either based on a flexible network of interlinked agency offices, or the capabilities of a single office with a seriously multicultural talent pool.
  • Integrated marketing strategy services which allow an agency to take a stepped-back approach and look at the most effective way to speak to a customer, then you customize a channel based on that.
  • Close interaction between the ad shop and the media shop (small agencies are often merging these together) to fully optimize how advertising is being used in the right channels at the right time to the right audience. Because of a deliberate separation of media departments in the 1980s, agencies really slit a vein in terms of how much value could be added to clients.
Ultimately a leaner demand for marketing services improves campaign quality and consumer experiences. Agencies are being put to the screws to deliver a better product and more value.

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