Creating New Divisions Is Not the Answer to Channel Fragmentation
"Agencies are going to need to invest in entirely new divisions focused solely on managing multi-channel marketing." So said Chris Gomersall of Atomized in an Ad Age op-ed last week.
No one questions that channel fragmentation is a big problem for marketers and agencies. As a matter of fact, "omnichannel" has been the buzzword du jour for quite a while, which is indicative of how acute marketer woes are. Mr. Gomersall correctly points out that it has become extremely difficult to manage a campaign coherently, cohesively and efficiently across channels with different formats, tech specs, audiences, platforms and metrics.
Most importantly, this issue goes way beyond difficulty of execution for brands. The fundamental problem is that often, consumers are confused or dissatisfied with the brand experience. Have you ever tried to conduct an online banking transaction, just to be told you needed to call via phone? How did that feel?
However, creating a new division within the agency (or marketer), as advocated by Mr. Gomersall, isn't the solution.
The irony is that "new divisions" are a standard agency response to market challenges and one of the reasons the industry is struggling with fragmentation today. Years ago, when marketers began shifting spend to digital, agencies created digital divisions led by the chief digital officer. Later would come chief officers for mobile, social, analytics, data, programmatic, native -- the list goes on. This is a problem that adding an "omnichannel" layer won't solve. It will actually compound the effect: another team, with a set of goals different from other teams' goals, metrics, methodologies and so on. In the parlance of our times, too many cooks.
What if, instead of adding divisions, we actually simplify and have existing ones cooperate? It is harder to do, but it may actually work. Here are five ways agency teams can cooperate to solve the omnichannel problem:
1. Have a unified view of the consumer with common data and insights. Agencies can help marketers aggregate and mine massive amounts of behavioral data to deliver individual and household-level intelligence -- taking demographic, internet site visitation, TV consumption, location and transaction data to derive unified household-level insights. This can be done, and it gives everyone a common base.
2. Simplify the organization. Do we need chief digital officers anymore? What does "mobile" mean today, exactly? Do not confuse titles with skill sets. You need fewer of the former, and probably many of the latter.
3. Create the right incentives for cooperation. This is especially tricky, but advances in social science, game theory and microeconomics can help. What are the subtle incentives that will make creatives want to work with programmatic technologies? Consider rewarding strategists, account managers and creatives on the same KPIs, so they can be accountable for the common goal.
4. Revamp your talent strategy. Rather than hiring specialized resources, agencies will have to look for "hybrids" who can plug and play in multiple situations. These employees are scarce, and attracting, developing and retaining them will be a challenge.
5. Partner with other agencies and stakeholders (vendors, publishers, platforms) to serve clients. Holding companies have traditionally followed a "private equity" ownership model, mostly passive with the exception of setting financial goals and extracting some obvious synergies. Today, this puts agencies at a disadvantage. Clients are working with multiple agencies, and many don't believe in the agency of record model. Learn to develop joint offerings, pitch together, and work with common tools.
Channel fragmentation won't be solved by taking shortcuts. The hard route is about fundamentally changing the way agencies and marketers operate. Those who succeed will generate a competitive advantage that is very hard to replicate -- precisely because you can't build it by addition.
Note: the views expressed in this post are my own, and may not necessarily reflect the views of my employer