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Manufacturing Indaba 2018

Consolidation strategy for marketers requires focus on BTL agencies

A new emerging money-saving trend in the marketing world is 'consolidation'. This trend makes sense from a procurement and management point of view, and by following a well-planned consolidation process you will ensure that your company stays lean and efficient in these tough economic times.
Many marketing departments use a range of small below the line agencies (BTL) who are briefed to work on a project by project basis. But more and more of these marketing departments are seeing the value of consolidation.

Focusing on strategy

"Reason being, the result of using many BTL agencies often results in poor campaigns with no real branding links, or links which are so tenuous that the brand strength is not improved," says Johanna McDowell, Managing Director of Independent Agency Search and Selection Company (IAS).

"This has also happened often as a result of a marketing department focusing so much on strategy." She points out that locally and globally multi-nationals end up with six or seven companies, putting different brands in different agencies. "Much of this has happened by accident, while other companies think this is a clever tactic."

The truth is that 55% of marketing budgets go below the line - according to WPP's Martin Sorrel - and it is increasing.

Developing a plan

"So we are advocating a much more strategic focus on BTL," explains McDowell, "where it may well be advisable for marketers to consolidate work that is currently handled by several small BTL shops into one or two bigger, strategically led, integrated below the line agencies - those agencies where there is a strong level of strategic and creative thinking."

When considering consolidating, one has to weigh the pros and cons very carefully and develop a detailed plan to implement change. "A company like IAS is able to help clients view the market options without upsetting their current arrangements until they are ready to consolidate," maintains McDowell.

Offering more for clients

Globally consolidation is already a recognised process. Some South African agencies have caught on and have created business units to provide for all segments so that they offer more strategic importance to their clients.

"Consolidating should be viewed in exactly the same way that you would a business partner, and done with the same scrutiny, due diligence, inquisitiveness, and proof of performance, honesty and candour," concludes McDowell.