The message from Venice was that media agencies are neglecting clients' needs, but that they could have the opportunity to take top place at the client adviser table, reports Alastair Ray. The usual industry back slapping and self-congratulation were noticeably absent at last week's inaugural Venice Festival of Media. Instead, delegates were treated to thought-provoking insight into why media agencies were failing clients and how they needed to adapt to prosper, or even survive. An increasingly popular belief is

 that media agencies can realise an opportunity to move to the very top of the client adviser food chain. Alternatively, their planning and strategy role could be taken from them by media owners, specialist agencies, or even creative houses, which are steadily building their own expertise in these areas.

A not untypical view was expressed by Stephen Norman, global marketing director at Fiat, who felt let down by his media advisers. "I haven't seen much change in the way that media agencies are spending my money," he said. "You're still spending 80% of our budget on TV. Go back to 1986 and we were spending around 80% on TV."

If you complain about service, he added, they set up a strategy meeting and bring out the media planner. "The media planner puts on a tie and comes to the office and they bring out a chart and it's absolute gobbledegook." Only a call to the top, effectively naming and shaming agency bosses, had delivered the best and brightest to work on his business.

Remuneration changes

A turnaround in agency performance had also been engineered through changing the remuneration method. Agencies are now paid 50% on fixed fee and 50% based on sales. "We have obliged them to share their work and share their remuneration," said Norman. "We have seen significant improvement in thought creation and ideas."

Part of the problem in delivering what clients want and the agency service they demand is the dissonance between what the people at the top of the media agencies promised and what was delivered. And clients are also culpable, asserted Janet Fitzpatrick, chief strategic officer at Initiative Worldwide.

"There's an incredible disconnect between the head and the body of both clients and agencies. They know what they want, but their organisation behaviour often belies that," she added.

While clients might say they wanted integrated communications, they weren't always set up for it. "Clients are very much siloed - there are very few marketing professionals who have their finger on all the operational touchpoints."

This was one of the factors that left the door open for media agencies to take on the coordination role, according to Steve Harrison, international media director at Henkel.

"What we want is consistent multichannel brand communication. Ad agencies that can do big ideas are not prepared to do the other work - the less glamorous work, such as below the line and sales promotion," he said.

The failure to find a creative agency that could take on both roles left a gap in the market. "We need someone to take strategic guardianship of the brand and that could move from the creative agency to the media agency," he added.

One change that was predicted for the future is the arrival of creatives in the hallowed halls of media. "We are going to see some media agencies having creative staff in there," predicted Joanne Davis, chief executive of Joanne Davis Consulting.

On this merging of creative and media disciplines, Fitzpatrick said clients would have to get used to multiple agency models, with the precise array of talent working on a business depending on the task in hand.

"Holding companies are going to have to do a much better job of bringing estates together," she said. "We are going through a re-evaluation and will have to learn to live with ambiguity - multiple models."

More progress

Meanwhile, Mainardo de Nardis, global chief executive of Aegis Media, told delegates that however fast the business was changing, it was not fast enough. "The world has already changed fundamentally and irrevocably, clients are forcing us to change," he warned. "They are not that happy with our current rate of progress."

"One of the biggest challenges is how to make sure we are integrating, while maintaining a high level of specialisation," he added.

And he argued that the current split between agency types was already on its way out: "I don't think media agencies will exist in three years. We are all communications agencies. Some will tackle it from one side and others from another."

VOICES FROM VENICE

- Dominic Proctor, chief executive of MindShare Worldwide - "We are competing on so many fronts, you'd better watch out. The only way you can sustain that kind of competition is to be good at all these things (buying, planning communications planning, research, content, video-on-demand and mobile)"

- Chris Ingram, chief executive, Ingram Partnership - "Profit figures of the big groups keep going up and up. Even recently during IPG's troubles, its revenues hardly moved. There's a massive amount of stability"

- John Billett, chairman, Billetts - "Agencies will be able to charge more provided they get on the front foot and get rid of the procurement focus"

- Daryl Simm, chairman and chief executive, Omnicom Media Group - "Ads are content and the brand is the experience, not just a message. Every message that consumers receive is in some way competition for the hearts and minds of the consumer"

- Esther Lee, senior vice-president and chief creative officer, The Coca-Cola Company - "Be our business partner not just our media partner. Keep us educated - not just the media people, it's the marketing people, it's the creative people".

(Source: Media Asia)