Integration versus specialisation – what is the best choice for your company?

Mihai Cristea 02/11/2020 | 17:06

In recent years, the trend among agencies went from 360-degree communication to specialisation, from strong, independent agencies to consolidation under a single roof of a strong group, from the idea that smaller agencies are more creative while bigger ones that belong to groups provide integrated, stronger, and more diverse services to working more with freelancers and external specialists, with outsourcing growing on both the agency and the client sides. Let’s take a look on how 2020 changed the agency landscape and what we should look forward to in the near future.

By Romanita Oprea

 

Oxygen, a company founded almost 12 years ago as a PR agency with current offices in Bucharest and Cluj-Napoca, took over advertising and digital group Frank, and repositioned itself as an integrated communication agency. Tereza Tranakas took the lead at Oxygen as managing partner. Following a complex brand audit carried out last year, both on the market as well as among clients and employees, the two agencies decided to continue operating under a single brand – Oxygen – with the headline “With a Heart for Business.” Oxygen’s mission is to sustainably grow brands and business through insights, strategic approaches, and result-oriented integrated communication campaigns.

Today, the agency is structured so as to offer strategic communication consultancy services and integrated project management for its clients. Oxygen includes almost 50 professionals who are specialised in several areas: advertising, PR, digital & data, social media, A/V production, content marketing, corporate communication, brand & influencer marketing, crisis communication, internal communication, Public Affairs, and CSR. Together they deliver creative solutions and concepts that bring results.

Over the years, the teams have gathered expertise in several key industries: Financial (banks, insurance, pensions), Energy, Pharma, Telecom, IT&C, Auto, Constructions & Real Estate, Beauty & Fashion, FMCG & Horeca, and Entertainment.

“In 2019, we conducted an internal and external brand audit for both Oxygen and Frank. We looked at the two complementary businesses, strengths and weaknesses, as well as opportunities. It was a natural step for us to consolidate everything into one single brand, one roof, one team, one credo. This results in a leaner and more integrated way of working, which ultimately benefits clients and makes the business more efficient. The keyword is integration, and it leads to better results for our clients,” said Tereza Tranakas. Oxygen will keep its business-oriented approach, but it will do it in a much more focused manner and by placing creativity at the heart of it all. The number of employees has remained constant, although they did change their internal organisational structure for increased efficiency, and they’re strengthening key capabilities such as creative and digital.

Why do they believe that it’s time for integrated communication solutions under one roof? Because more than ever, clients need to see results, to obtain solutions and to have a partner that can provide seamless communication services from strategy and all the way to implementation, irrespective of channels. “Thinking in terms of channels is obsolete. Thinking in terms of solutions is what we do. We put together strategic and creative minds from various disciplines, to solve a client brief or problem. Having those capabilities in-house and running in sync like a perfect orchestra makes the creative process more efficient and delivers better results. We’ve always had this approach, but now I feel we have formalised it,” Oxygen’s managing partner explained.

In turn, Laura Iane, creative director at pastel, believes that this is a matter of choosing a business model. As far as the people of pastel are concerned, they have decided to have an integrated approach – this helps them avoid the shallow road, offering a strong overview which helps them build long-term relationships and keeps strategy and creativity at the heart of any challenge. “At the same time, this approach is not the absolute truth. Integrated solutions need specialised points of view,” Iane noted.

A mix of integration and specialisation would also be the preferred model for marketing strategist Raluca Mihaila. Although specialisation is of great importance, being able to look around, professionally connect the dots and holistically approach your expertise from various angles is of even greater value. “There is a very big ‘but’ here. An expert can’t be a generalist, so it’s really about making a choice, both as an agency and as a client,” Mihaila argued. In her view, a client is extremely comfortable knowing where to find the experts on the market – the only question is whether you can afford them, because top notch expertise is expensive, and whether you can wait for a free spot, as they are usually booked well in advance. Moreover, it is equally comfortable to go to any agency built around the principle of “one place for all” and, for a good enough service and an affordable amount of money, solve your problem when you need it solved.

“As an agency/services provider, when you choose to specialise, you decide to say no to all other activities you might pursue, but you aim to be the greatest of the very few. Plus, you get to set the price, hence narrow down the people who are able to afford you. It should be a choice based on indisputable available talent, skill, and intellectual property!

When you build your agency around the fear of missing out on opportunities and with a desire to cover all areas of expertise just to make more money and constrain clients to have to come to you, you risk becoming too vague in what you offer, too big for your own good, and too slow for your own need of agility,” Mihaila warned. A CEO of a big agency that does everything from creative art to CSR campaigns could ask themselves if they have to do them all, if they are really able to do them all very well, and where the money actually comes from. The three aspects can answer the specialisation/integration dilemma.

And yet, as we have all experienced, things can change during a crisis, as budgets shrink and the greatest experts (with skills that are irrelevant in solving the crisis) can be left aside while clients gather around the cheaper alternatives. In time, things realign and quality regains its reputation.

“For business reasons, mergers and acquisitions, vertical and horizontal integrations make sense every time an opportunity arises, but I believe the wise thing to do is to keep divisions separated, even independent from one another. I believe the future belongs to generalists rather than to niche experts, but I strongly feel that at any given point, when we go through a very special challenge, we will most likely seek that specific place with that specific person who is able to deliver that specific solution to our specific problem,” Raluca Mihaila explained.

Her point of view is supported by both Laura Iane and Tereza Tranakas. “What do we integrate if not specific ideas thought out by different types of specialists? A great integrator has a strong vision, guts, and good team of specialised people,” said Iane.

And, according to Oxygen’s representative, the agency of the future is actually one that has a core team of senior communications professionals who understand strategy and can provide integrated solutions to clients, but at the same time have a flexible network of collaborators to tap into various consumer groups. Because both agencies and brands need to connect directly with that end consumer, not live in a bubble. Therefore, involving key members of various communities in the creation process will ultimately bring more authentic and relevant results.

What about outsourcing? And why should a company do it? “Because communication is not the core activity of any company outside the communication industry. Companies should have a primary focus on delivering the best product they can deliver and then sell it. Any process serving this purpose is secondary (and can be outsourced) but remains important in the products ecosystem (so the outsourcing should be done carefully by experts),” said Utopic Brain’s representative.

“Advertising without outsourcing is a bit of a stretch. Is like thinking that a group of people can cover every topic in this world or know every skill there is. First, I think the main reason for outsourcing should be adding value to the table. It could be a coder or a doctor, a dancer or a social media specialist. It really depends what you think is missing to make the project insightful, real, and helpful. It could also be that you need to make a process more efficient process through an agency or save some money,” Laura Iane added.

 

PR and advertising going hand in hand

In recent years there’s been more talk about PR and advertising blending together and making space for the term “communications.” But do our respondents believe that this is actually happening these days? “Yes and no. There are many ways in which we can add PR to our communication. And it depends on the idea more than one might think. Some ideas deserve a good PR story that will help them earn more media and help reach the desired target. So, yes, this type of approach shows us a very blurry line between advertising and PR. But some ideas need original research at the very beginning of the project. In this example, it is more about a cause and effect type of relationship. There are definitely more than just a couple of ways of interaction between them, but as I see it, the industry is still struggling with press releases. More often than not, they’re not necessarily newsworthy,” said Laura Iane.

“Communication is blending these days. It’s critical for any agency to have key capabilities such as strategy, PR, digital, consumer engagement, advertising, real-time insights, and social engagement, and even the capability to put out relevant real-time content. In the new era, agility and adaptability are key,” Tereza Tranakas states.

In turn, Raluca Mihaila doesn’t necessarily agree with this mingling between disciplines and principles; but they do interfere and it’s fine that they do. “A good advertising campaign is always good PR just as much as building and maintaining a spotless reputation comes down (or should come down) to great advertising of great products,” said the marketing specialist.

 

Change for the future

As easy or as hard as the present is, we are always looking into the future and thinking about how the situation of today will impact the industry in the coming years. So, what should we be looking at? According to Tranakas, the communications industry is no stranger to changes, having been in constant change in the past 10-20 years. Nothing stays the same, and technology has really been a driver for the evolution of our market. And that is the exciting part of working in this industry, as nobody really ever gets bored. “The pandemic is also a game changer, and it does bring forward some of the trends that were already being shaped in the industry – authenticity, no-bullshit brands, sustainability & care for the environment, digitalization, real-time & data, etc,” Oxygen’s representative argued.

“I don’t believe this pandemic was a big enough trigger for the communication industry to irremediable change. While the media mix has already shifted towards digital, the principles they use to plan their campaigns are the same. What I believe would forever change the communication industry would be either a stellar brand that could raise the level of today’s advertising worldwide or a collective intelligence of consumers fed up with how advertising looks today and demanding a new era. The first one is more likely to occur during our lifetime,” Mihaila concluded.

 

Should a company outsource its marketing department?

 By Raluca Mihaila

I wouldn’t recommend a default outsourcing of the marketing department, because there may be cases when it makes more sense to have it developed in-house.

Having to decide between the two options has to do with several aspects:

  • The amplitude of the creative activity and its financial implications. A fully grown marketing department can cover anything from graphic designers to advertising campaigners, art directors or CSR experts. If the company is big enough to handle this ecosystem in its own backyard, then it might be a good solution.
  • The organisational culture/organisation type. Depending on how the management relates to controlling leverage over their own processes, it might be comfortable to have a permanent team under close supervision and reporting.
  • The field of activity. It might be that the marketing activity required for a specific product is too small to need an in-house team. Outsourcing communication might keep their focus on the product and allow flexibility.
  • The speed of doing things. Quick communication plans represent fast creative work and fast execution. If fast requires closeness and “being there” for feedback, then the team should be inside the company. If fast means being in a constant state of creative work, then the creatives should be external, as far away as possible from management.
  • The kind of marketing they need. If the marketing is mostly based on creative work and designing one campaign after another, it might be useful to hire external experts who are able and willing to do it. If the daily work requires routine activity, then it can be cheaper to keep it in-house.

Usually, the best solution is a mix between a few in-house specialists acting as coordinators of their own projects (advertising, CSR, crisis, PR) and a larger team of outsider partner experts.

While the former are always present and up to date with everything that’s going on and acting as great guardians of the company’s vision, the outsider partners represent the playground where communication plans grow and become reality.

In my view, the most effective way of designing a marketing ecosystem is for an inside-the-company mind to coordinate outsourced talents.

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