Advertising reshapes to reflect new industry realities

"The programme of visits we had to agency CEO's showed clearly that the ad business is finally re shaping itself in three fundamental areas" said Herve de Clerck 'Dream leader' and CEO of AdForum.com the summit organiser. "The key changes are being seen in the role of the holding company, the establishment of the media networks as broad based marketing communications agencies, and the arrival of the advertising management consultant as client leader and agent for change."

Over the course of the 4 day summit, meetings were held with CEOs & senior management of 4 global media agencies, 6 advertising agency networks and 3 global "Hub" agencies. A meeting with David Bell, CEO of Interpublic was also part of the agenda. Agencies presented a compelling and confident vision of the future, a picture in stark contrast to the image of resignation and frustration so often depicted by senior ad managers in recent years. Consultants were offered a confident vision of new leadership based on a thorough understanding of the new realities shaping the advertising business, and the direction it will take in the coming years. The new realities are:

1. The fact that many agencies have organised their capabilities in silos of talent and discipline makes them out of sync with their clients needs
2. Agencies have driven specialization so far that the management of those agencies can no longer provide an integrated delivery of those assets
3. Clients are screaming as never before for accountability from their advertising investments, and media networks are starting to provide the answers.
4. The merging of content and commercials, and the introduction of new entertainment technologies has a huge effect on the management and implementation of effective campaigns
5. Clients do not pay agencies fairly for the effect their work has on their business, and the relentless downwards spiral of compensation is hurting the clients themselves over the long term.
6. Procurement specialists will play a key role in future, but handled properly this could be a positive move for agencies.
7. The agency management consultant has a recognised and important place in the industry. This role is increasingly shaping the future of the agency landscape as a professional and informed mediator between the conflicting demands of agencies and their clients.

The Holding Company is dead

These realities will herald the end of the holding company as constructed today, towards a future model of a single company able to deploy central control over its assets to solve client need. "The holding company as it is constructed today is dead, instead IPG will increasingly be seen as a single company actively organising its assets in a way that matches our clients' needs" said David Bell of Interpublic.

At the same time the networks that invest in consumer insight and develop distinctive planning functions will retain their leadership role in account handling, driving the agenda on consumer thinking and channel planning, but often in partnership with outstanding creative specialists.

The final shift will necessarily take place at the client end as new models of remuneration must be developed to reward agencies for the work they do, as well as rewarding the effect that the work has on the client business. Long term client interest is best served by motivated and resourced agencies, and a new age of business partnership between both sides is proposed. The challenge has been set out, and the client community with their advisors in agency search and management consultancies are poised to respond.

About the AdForum Global Summit

The AdForum Global Summit is an annual 4 day meeting in New York City held -10 October. This gathered the world's leading agency management consultants together for a series of meetings with agency CEOs and other presenters. The group representing 21 consulting firms handled over 485 assignments in the past 12 months representing new business billings in excess of $4,5 billion.

The AdForum Worldwide Summit gathered consultants with the CEOs of 16 agency groups: Carat, Initiative, Universal McCann, Starcom MediaVest, McCann Erickson, Grey, TBWA, Lowe, J Walter Thompson, DDB, Red Cell, Fallon, BBH, Y&R and Euro RSCG.

The Summit is organised by AdForum.com, the world's largest professional website focused on the advertising business. AdForum.com serves over 150,000 unique users per month with information on advertising agencies and the campaigns they produce. More than 18,000 agencies are represented on the site and users can consult a fully searchable database of over 28,000 campaigns from around the world including most of the world's award winners.