JOHN CANACOTT EXPLAINS HIS DOCTORATE FINDINGS FROM A FORENSIC EXAMINATION OF INTEGRATED MARKETING COMMUNICATIONS, AKA IMC
While I felt I had a clear view of the issues involved in integrated marketing communications (IMC), that all changed about three years ago when I started my doctoral research. The direction my studies would take was obvious to me. After all, I had worked in most marketing communications disciplines for over 25 years in all sorts of agencies – and with brands of all sizes across many business sectors. Not so. Read on to find out why…
SOME REVELATIONS
Having done the research, it seems that as practitioners we are often so consumed by day-to-day work that we are guilty of not thinking beyond narrow conventions and perhaps some academic studies could help. We have an opportunity to change things for the better for consumers, clients, agencies and staff. Some of the research findings merely confirmed what I would have known already, while others were more revelatory and interesting.
The research methodology adopted was qualitative and consisted of two stages. Stage one centred on a series of semi-structured interviews with senior executives from agencies and clients. My aim here was to gain deep insights into what clients and agency people at various hierarchical levels saw as IMC, its definition, strengths, weaknesses and strategic role.
The second stage of the study allowed me to observe a form of IMC being developed and implemented for the first time in an organisation, allowing me to observe at first hand the interactions – overt and covert – of participants as IMC (including in this case, the integration of sales) moved from concept right through to implementation. The two stages were linked insofar as stage one outcomes informed the structure and operation of stage two.
This article focuses on the outcomes of stage one.
WHY DO IT?
On the one hand, I had read lots of academic papers on the subject of IMC and could see that there was an academic void concerning IMC implementation which warranted further study. Similarly, there was a dearth of deep qualitative work which could result in insights that had not been revealed by way of previous quantitative approaches.
In essence, I felt that sufficient voice had not been given to practitioners in key roles and that in some respects preconceived notions had been overly tested in the past. Furthermore, there have recently been calls for this kind of study from both academic and leading practitioner publications internationally. Purely from a practitioner standpoint, it was important to make sense of the incredible rate of change experienced in the sector over past decades and to get some views from industry leaders on what we might expect to see in the coming years.
There has never been a more exciting and unnerving time to be in marketing services and communications. Below are some edited extracts from my stage one research.
ACADEMIC REALISTS?
Academics are out of touch with the real world of IMC. Well, that’s what I thought, except that IMC has been a topic of academic debate since at least 1993 and there have been some illuminating studies. When read now, many of the studies were amazingly predictive. The topic is as vibrant as ever, evidenced by the fact that the European Journal of Marketing is preparing a special issue on IMC with practical submissions from all over the world.
It illustrates the current demand for new knowledge with practice, to add to extant work. In some ways if there is a gap between the stance of academics and practitioners it may be because there is not enough collaboration. Major benefits could be gained by fostering closer relationships, which would help define key issues and structure research. It could potentially yield dual benefits of practitioner knowledge advancement and academic development.
CLIENT AND AGENCY VIEWS
From the outset, I suspected that client/agency practitioners knew all about IMC and that we all saw it in a similar way. But while there are many areas of agreement, there are significant differences too. The differences are in fundamental areas, highlighting that IMC meant different things to different people. Even more interesting was the evidence that there are sizeable differences of opinion and approach within and between clients and their agencies.
DEFINING IMC
Discussions centering on defining IMC resulted in substantial agreement at a basic level and almost everyone spoke about the unity of message content or delivering a cohesive story across all media as central to IMC, in essence no real surprises at this point. There were contrasting and diverse views about what IMC meant beyond message unity.
Figure 1 pyramid below (adapted for this article) highlights the four levels of IMC integration, in this case as proposed by two prominent authors Kitchen and Schultz, back in 2001. What is interesting is that even back then, some 14 years ago, there were strong views that for IMC to be truly effective, it really needed to operate at four levels.
At an initial glance, it looks as if perhaps with the exception of the fourth level, most have been adopted by proponents of IMC. But the research suggests this is only partially true. While the first level has been adopted, levels two and three are at best partially adopted (and often in a siloed way), while the fourth level is at best still an aspirational work in progress.
So, to the earlier point, were the academics out of touch? Not really, as at worst some produced timely studies on contemporary issues, at best they produced thought leadership pieces signposting the road ahead. What services should be included in IMC?
Virtually everyone indicated the disciplines one would expect. Most notable was that nobody spoke openly of the inclusion of sales, or had clear views on whether PR should be included. It was interesting vis-à-vis the “full communication” spoken of when respondents earlier defined IMC and also when one considers that most definitions of a communications mix refer to both. They also feature in the paid/owned/earned figures often referenced.
Sales inclusion is most pertinent, as some leading authors, practitioners and academics have discussed adding value and proving outcomes as a way of agencies earning more income, pointing to ways to move agencies up the value chain. However, the research showed that sales were often referred to as a loosely connected end result of a number of processes, only some of which related to client/agency relationships or outputs. More on this later.
Clients indicated that they saw IMC as desirable but recognised it was inherently imperfect in practice. Clients saw IMC as an ideal and often one that they had bought (or might buy) in preference to any other mix. But there was a strong undertone that in buying IMC they knowingly were not buying the best in breed of each discipline.
In fact, some clients said that agencies, in an effort to be seen as IMC experts, oversold capabilities and then failed to deliver. Interestingly, even those companies that said they had a ‘one stop shop’ IMC relationship actually had more than one agency working on the same brand. Effectively, clients questioned the credibility of an agency to deliver all of the IMC services from its own resources, but allowed this to be outweighed by other key drivers such as a belief that they received better value for money and that it was easier to manage a single relationship than to manage several specialists. My interpretation of these views was also that procurement departments had played a role in the decisions.
A key finding was that clients actually were not overly fussed about IMC being delivered by one agency, but that a single agency leading on behalf of the client was equally desirable, and possibly much more appropriate from a credibility point of view. It is often referred to as an orchestration model. Questions then arise as to who leads this and whether you can/should separate implementation from strategy. The expectation of participants in this research was that the advertising agency would typically lead, perhaps because of the planning capability they often possess, but this may also be a transient legacy issue, with ‘newer’ agencies increasingly being seen as the lead IMC agency in certain sectors, like digital.
Up, up and away: The crazy, hazy days of Mad Men now seem a distant memory. The arrival of integrated marketing in the late 1970s helped put pay to regular long lunches and endless agency expenses. Ideally, accountability and ad effectiveness became agency-client priorities.
AGENCY REMUNERATION
As one would expect this was a hot topic, with client and agencies often agreeing on key issues, for quite different reasons. Most agencies spoke of seeing their rates fall and of not being valued or rewarded fairly, and while I would guess it has long been the claim, we have possibly been slow to adapt to changes in the marketplace which could improve the lot of both clients and agencies from a value and services reward perspective.
Client side respondents spoke of a belief they were often receiving poor value for money about hours billed and had doubts about performance metrics in place. They certainly did not see these as 100 per cent fit for purpose nowadays. A recent report in Business Insider highlighted the suspicion clients had about abuses in remuneration practices by bigger agencies. Agencies could equally produce negative commentary the other way around. Much of this has to do with inadequate measurement and transparency issues.
For different reasons, both ‘sides’ wanted to see change. It is an enormous area and there are views that there must be a move from payments being largely based on performing some behaviour to one which links rewards to outcomes – what did X deliver? If it can be proved that incremental sales were caused by our actions, then remuneration should increase.
What’s more, the more agency marginal income is in line with marginal sales contribution for the client, the more everyone can win. Of course, safeguards are needed to cover costs and agencies were quick to point this out. But one way of getting everyone to work together and set the right balance is to have fair rewards for the right outcomes. Associating behaviours with outcomes across IMC will allow the remuneration discussion to change for the better.
While there has been lots of work carried out in the area there is not yet a magic measure of sales attribution across all elements of IMC. But mediated sales is a rapidly developing area and the media companies in particular are in the driving seat here. It is fair to say with some certainty that whoever can deliver and prove behaviour and outcome links will command higher levels of remuneration and potentially drive at least some of the IMC agenda.
Of course this will also depend on the client. Do they see their agency budget as a fixed cost or an investment, with perhaps a variable cost associated with performance? The latter is a different approach and one that possibly has to run across many organisational departments. The old objective and task method of setting budgets is no longer valid and should be replaced or augmented by something that more closely associates remuneration to outcome. There is little in the way of negative or positive reinforcement on either side. The Association of Advertisers in Ireland (AAI) produced a report on this topic, some of it based on approaches proffered many years ago by academics and some new approaches.
There is no doubt we are heading towards greater and more accurate attribution which should change the remuneration debate. Academics are also on the case here. The aforementioned Kitchen recently referred to “after the fact” measurement as a current weakness and pointed to a requirement for greater immediacy when carrying out IMC measurement.
Reaching conclusions: John Canacott found major differences in IMC in organisations, as well as between clients and agencies. Media agencies are ahead of the curve. There is no one best way, but specialists are growing in some overseas markets. Linking behaviours and outcomes across IMC will allow the rewards issue to move in the right direction.
ORGANISATIONAL STRUCTURE
If you are a bit of an anorak, then this is an interesting area. Practitioners are nothing if not practical people as a rule, and generally find ways to get things done. But we now have a situation where the marketing department has to influence the entire organisation to deliver IMC at its fullest, as depicted in Figure 1. From a client-side perspective it makes sense that there is complete integration across all internal functions to be closer to the customer, and to initiate, communicate, respond effectively, optimise customer satisfaction and drive ROI.
Interesting to note, many people now see this complete client side integration as an ideal. It could be headed by someone from any one of a number of backgrounds, not just marketing. It would lead some people to conclude that the day of the current marketing director role as we know it may be coming to an end. If we contrast this with an integrated agency, we need to ask the question: Just how integrated is an integrated agency? Ask some questions.
Is its service offering, culture and outputs based on a sequential factory-like conveyor system, or is there evidence of truer integration with more input. Tim Williams discussed the client as being part of the integrated creative process, not simply the recipient of the final presentation. Which is somewhat similar to the way we often think of digital NPD, working in a collaborative interative way with an interpretive audience – in this case, our clients.
A further consideration is does the agency structure affect the client set-up and vice versa? Is it less effective when an IMC agency works with a silo-structured client? The answer seems to be yes, as it appears to be easier when both match up in a similar way. It may mean we are cosily delivering a sub-optimal offering, but that’s a job for another researcher.
MEDIA COMPANIES
It’s ironic that when we originally had IMC 20 or 30 years ago, ‘full service’ meant media buyers were part of an agency. It has been argued by some that they then commoditised the business and deskilled it as they became scale operators in many ways. But not anymore.
Not only are media companies experts in media planning and buying, they are increasingly au fait in data and sales attribution and have the ability to link behaviour to outcome.
It allows media agencies to have the kind of conversation with a CMO/CEO that traditional advertising agencies rarely can. It is no surprise to see media companies broadening their offerings into other areas that really matter and they are getting closer to full service once again – recognising the current meaning of ‘full service’. Effectively they are answering the question “if you were to start with a blank sheet of paper, what would you create?”
So where does this leave creative agencies? Well, there is no doubt that traditional creative agencies are still seen as the best place for a brand. If I wanted a brand developed and nurtured, they are still the place to go. But there is a subtle power shift happening here too.
IS IMC WAY TO GO?
Current academic and practitioner thinking has moved on from message unification to where the issue is about implementation. It examines how best to get agencies to work together internally with the client and with external partners to deliver IMC. In a market the size of Ireland, it is likely that one agency cannot really ‘own’ all the disciplines for full IMC.
It is far more likely that a lead orchestration agency, or company, will contract with partners either in their international group or unconnected, to deliver. A challenge appears to be around the depth of knowledge required by the orchestrator in all the elements that make up IMC and – crucially – in its implementation. A second challenge is how do we measure this in a way that each element can be rewarded, at least partially, based on performance, when we know that simply rewarding an agency for their ‘own bit’ is unlikely to lead to the best result and value for money? So there is no easy answer, and it is too easy to be led to what is currently popular – which in Ireland is a limited version of IMC with a single agency.
Based on aspects of my research and other cotemporary work there appears to be no ‘one best way’ in agency structuring to deliver IMC, but there are strong arguments for both points of view – generalists and specialists. But if one could put orchestration issues to one side (not possible but let’s go with it for now) then specialists should win out.
After all, if we can assemble best in breed and have them work in a cohesive manner, results should be better. If we can then overlay real attribution, it should be possible to drive up agency income equitably. It concurs with the view of Williams, who also argues that the best option now is for companies to specialise in CRM, health, PR and digital, as this is where all the growing agencies are and not to try and be a ‘jack of all trades, master of none’.
Others, such as Clayton Christensen, also argue that the trend is away from one stop shops in favour of specialists. In my view, whoever can couple the skills the media agencies have and are currently developing with the best creative output and can structure it in the right way, including implementation, they will be the ones closest to the real meaning of IMC.
It is now really about full orchestration of media and all other specialists; orchestrated implementation and integrated measurement. At best, the approach is still work in progress.
John Canacott has worked at a senior level in sales and marketing for over 25 years. His agency experience includes working with Irish International and Publicis groups. He holds a MBA from Durham University Business School, where he received a doctorate for his work on IMC. He is a member of the adjunct faculty specialising in marketing communications
