Lots of agencies assert that they provide full-service. But just what does that mean? And is full-service what most marketers are looking for? And do they even believe that any one agency can do it all?
Transcript of "The Folly of Full-Service Advertising Agencies"
The Folly of Full-Service
Life presents each of us with an unending series of choices. When to get up
each day. What tooth paste to use. The clothes we put on. What we eat for
breakfast. The route we take to work. And on. And on.
Some choices are made quickly and easily. Almost without us consciously
considering the decisions we are making. While other choices are thoroughly
vetted, with careful calculation of many alternatives and possible outcomes.
The key factor in all of our decision making is differentiation. The differences,
real or perceived, between the choices before us. While it may happen almost
instantaneously, we evaluate those various options and then select one.
It is differentiation that drives that choice. For if there were no differences, how
would we make a selection?
Marketers Are No Different
Just like us, marketers are faced with endless choices. How they budget their
marketing money. The agencies they choose. The assignments they give them.
And they make those choices based on their ability to differentiate one agency
from others. Thus, how each agency differentiates itself is crucial.
So, the way an agency describes itself – such as being full-service – has an
impact on marketers’ perception of how to differentiate that agency.
Is Full-Service a Differentiator?
That leads us to the differentiation value offered by a full-service agency. While
the term full-service is bandied about freely in our industry, we should stop to
consider what it means. Probably the best definition comes from The New York
Times online service, about.com. Here’s what about.com has to say:
“A full-service agency is one that handles all aspects of the
advertising process, including planning, design, production and
placement. Today, full-service generally suggests that the agency
also handles other aspects of marketing communications such as
public relations, sales promotion, Internet and direct marketing.”
We suspect that most folks would generally concur with that description.
A Few Facts
Advertising Redbooks, a LexisNexis enterprise, is probably the most
comprehensive source of information on agencies. They currently have detailed
listings on about 15,000 agencies worldwide. And their definition of agencies
includes PR firms, sales promotion houses, interactive shops, social media firms,
design studios, etc. The entire range of marketing communications services.
Of those 15,000 firms worldwide, just over half – 8,000 of them are in the US.
And of those 8,000 US organizations 4,800 describe themselves as full-service
So, if you put the facts from Redbook and the definition from about.com together
that means that 60% of US agencies – from giant holding companies to one or
two person shops – claim to competently offer a full and complete range of
An American Peculiarity
As an interesting aside, Redbooks also reveals the striking fact that geography
plays a big role in the use of the full-service agency description. For of the 7,000
agencies they list as located outside the US only slightly more than 200 describe
themselves as full-service agencies. The contrast is stunning. From 60% in the
US to less than 3% in the rest of the world.
Clearly, the full-service description is an American thing that has not gained
much popularity elsewhere.
Not sure why this disparity exists. Nor precisely what it means. But we do know
that there are a lot of agencies outside the US that are growing quite nicely in
their markets without describing themselves as full-service.
Could it be that they are onto something that has eluded Americans?
The Sales Proposition
Essentially, when an agency says it is full-service it is an assertion that “we can
do it all.” That regardless of what the marketer’s needs might be, the agency can
successfully handle those needs. That the marketer does not have to retain any
other resource to accomplish its market communications objectives.
It is basically an appeal to the benefits of one-stop-shopping. And the simplicity
Two Important Questions
This leads to two key questions:
1. Are today’s marketers primarily looking for the convenience of one-stop-
2. Just how believable is the assertion that a single agency can do it all?
The Way it Used to Be
There is little doubt that proximity, personal relationships, and convenience
played a bigger role in past agency selection than they do today. Clients typically
would choose a nearby agency. And it was not uncommon for the selected
agency to be led by someone the marketer already knew through community
Thus, while not directly articulated, convenience was at or near the top of the
criteria list when choosing an agency. This convenience factor was supported by
the notion that the chosen agency could do it all. One that would become the
“agency of record.” Which made the full-service claim – while probably not a
primary selection factor – a reassuring validation of the marketer’s choice.
So, having the full-service benefit claim was an important supporting element.
That Was Then, This Is Now
There is also little doubt that agency selection criteria for most marketers has
changed. Expertise that is directly relevant to the marketer’s specific needs has
become much more important. And one could easily argue that expertise has
displaced convenience on the marketer’s criteria list.
Marketers want to feel that the agency they select is the best qualified to solve
their unique marketing challenges. In this environment, geography, personal
relationships, and the convenience of one-stop-shopping tumble down the list.
If you don’t believe that, just take a look in the trade press for the experience and
locations of the agencies included in a marketer’s agency search short list. It is
almost always about special expertise. And location seems almost immaterial.
Now you could argue that there are still lots of marketers that choose
convenience over expertise. And that is true. But they are in the ebb tide. The
incoming tide belongs to expertise.
The Believability of Full-Service
Marketing communications is a whole lot more complex today than it used to be.
The number of tools for connecting with and engaging consumers has literally
exploded. And the consumer, including B to B, is no longer just a passive
recipient of marketer messages. The potential customers are now actively
engaged in the public dialog that influences market perceptions and behaviors.
In this environment, no agency, not even the biggest holding companies, can
have all of the expert talent in-house that a variety of clients are likely to need. It
just isn’t economically feasible to hire on a full-time basis – and keep productively
occupied - all the needed skills.
At the same time, there is increasing evidence that knowledgeable marketers
don’t believe anybody can do it all, anyway. Or at least, do everything they need
as effectively as they desire it to be. As a result, there is a growing pattern of
clients hiring multiple agencies. With each service provider assigned a specific
responsibility aligned with their special skills.
This brings the believability of a full-service claim into issue. If an agency says it,
but the marketer doesn’t believe it, what does it do to the agency’s credibility? Or
to the trust the agency wants the marketer to invest in them?
Does the full-service claim inadvertently subject the agency to kind of “Jack of all
trades, master of none” position? And if so, is that desirable?
What We Can Learn From Healthcare
It wasn’t so long ago that most of us had a trusted family physician. This person
was usually a nearby generalist who we looked upon to treat most, if not all, of
our healthcare needs. It was a convenient, one-stop-shopping personal
But healthcare delivery has changed. Today folks will search the world for the
physician or facility with the most expertise in treating their specific malady.
Location and personal relationships are immaterial. Expertise is what counts.
Just look at the healthcare ads in the airline magazine the next time you fly.
Marketers are no different. They have a business problem that needs to be
solved. And they want the expertise of the agency best suited to solve that
Like the healthcare patient, if they have multiple problems they are very
comfortable working with multiple agencies simultaneously. With each agency
focusing on its area of strength.
Relevance and Differentiation
Thus the question, Is the concept of full-service still relevant? Or is it a relic of
the past that is just kind of hanging around?
And in America where the majority of agencies continue to describe themselves
as full-service, what differentiation power does it have?
Another Dimension - Being the Best
If specific expertise is of increasing value to marketers, wouldn’t being the best at
that expertise be the most powerful differentiator? After all, it sure looks like that
goes directly to the core of what marketers are questing for.
Now, no one is the best at everything. But the truth is that each of us is probably
the best at something. Not everything, but just something. Some one thing that
we truly excel at. A capability in which we are dramatically superior to others.
Some ability or experience that can set us apart. Differentiate us.
Same is true for agencies.
In fact, I have never known an agency that I didn’t feel that in some way had
some capability or experience that was truly extraordinary. Something in which
they excelled. In which they were, in fact, the best.
A unique strength that would perfectly fit some marketers’ needs.
Yet, ironically few of those agencies aggressively promote their uncommon
strength. Rather, most of them tend to aspire to the notion of being good at
everything – just like all the other full-service agencies. While almost taking their
strong suit for granted.
Which is Better?
This then leads to the question, Is it better to be wide and shallow, or narrow and
Each agency, and each professional for that matter, needs to answer that
question. There is no right answer. Each answer must fit the unique situation for
each agency and each person.
But we do know this. In most fields, specialists command greater respect and
greater rewards than generalists. And as specialists, they are the antithesis of
full-service. Their service offerings are very limited and tightly focused.
Think of healthcare again. Or law or accounting or management consulting.
Being perceived as “the best” or among the best, at just one thing can make
marketing and sales a whole lot easier and a whole lot more effective. As well as
usually being a more profitable business model.
One Big Challenge
Unfortunately, there are dramatically fewer potential clients in any geographic
area for any particular specialist. This means that the narrower the niche being
addressed the larger the geographic market must be. This calls for a
fundamental rethinking of where clients and prospects might be located. And
how to connect with them.
This, of course, is the reason for all those airline magazine specialized
healthcare ads. The marketing strategies and their implementation have to be
quite different for specialized professional service providers.
What it Takes
“OK,” you say, “Mine is a full-service agency. I’d be interested in exploring what
might be involved in shifting my agency’s focus from being a full-service
generalist to a more tightly focused specialized service provider.”
To begin, here are some things you might want to think about:
1. What one thing is your agency the very best at?
This is the most difficult question. And there almost certainly is one
thing. But it may take some work to identify and articulate it.
There is a tendency to say, “We’re very good at a lot of things.”
And that is surely true. But that leads you away from the one,
singular characteristic that can make you truly world class. Not just
a very good generalist agency.
And the thing that you are the best at can reside in a variety of
agency capabilities. It might be specific industry expertise. Or
media expertise. Or client type. Or management of the process.
Or strategic visioning, Or accountability, etc., etc. The potential list
is endless. And real objectivity and creativity is called for in the
As well as some independent outside opinions on your singular
strength. Folks who can see your agency more dispassionately
than you do.
2. Are there enough marketers out there that need that capability?
Here you will want to really expand your horizons. The reality is
that in today’s world ease of travel and communications have
erased geographic restraints.
This is really a market potential evaluation. Who are the marketers
that might have needs that are in complete alignment with your
special capability? Where are they located? How serious is their
need? How are they addressing that need now? What is it
currently costing them to meet that need? And more importantly,
what is it costing them to not address it as effectively as you can?
What is the economic value you can bring to them?
3. Are there enough marketers with this specific need to support you?
This, of course, is a key question. But remember, you are looking
at an unlimited geographic area. Obviously, if this specialized
market segment is not big enough to support your aspirations, you
need to go back and deal with questions one and two again.
4. What will be required to market effectively to this specific segment?
Many of these folks may have been outside your traditional
marketing arena. So building a brand reputation with them may
take considerable time and effort.
However, because you are extraordinarily good at that service,
direct competition should be reduced. Since you are playing from
your demonstrated strength, likely against generalist agencies, you
probably will compete less often but your win rate should go up
Clients are more likely to seek out an agency with demonstrated
5. Do you have the right people?
Being best at a specific specialization will probably require different
people than generalists in a full-service agency. You will want to
develop a comprehensive strategy for how to move from the current
talent base to a more specialized one.
And don’t forget, outsourcing and/or extensive use of free-lance or
contingent talent may be just what is called for.
6. Can you manage the transition?
Your business model will not evolve from full-service to a
specialized provider overnight. It will take time and patience to
navigate the transition. And there will probably be a fair amount of
Beguiling full-service opportunities will undoubtedly pop up. How
you deal with these siren songs will have a major influence on the
speed, clarity and effectiveness of the transition.
As you think through the issues outlined above it becomes abundantly clear how
challenging making this kind of transition can be. It will not be quick or easy.
The Future Reality
But the reality is also abundantly clear. The future belongs to highly effective,
highly specialized providers who are the best at what they do. They will be in
demand. They will rightfully speak with authority. They will be highly respected.
And highly paid.
They will reap the rewards for what they are able to accomplish. And they will
rise above the typical RFP cattle calls reserved for generalist full-service
Agencies trapped in the full-service folly of yesterday.
Copyright 2010 Carlton Associates Incorporated
About Mike Carlton
Mike has spent most of his life in and around advertising agencies. For over a
quarter of a century he served in various agency functions, including general
management and ownership in a 150-person shop. Along the way he held
offices in the American Association of Advertising Agencies, agency networks,
and became a frequent writer and speaker on agency issues.
In the 1980s he founded Carlton Associates Incorporated, a consulting firm that
focuses on agency business and leadership challenges. He was also a founder
of World Systems, a first generation accounting system supplier for agencies,
and 600 Monkeys (now a part of Computer Associates), a provider of new
technologies for agencies and other professional service firms. In addition, he
founded Centre for International Business, which has assisted advertisers and
His consulting, systems and international work has taken him to agencies all over
the world. The client roster numbers more than 100, including strong, mid-size
independent agencies, offices of global agency organizations, as well as
successful smaller shops. He currently serves on the advisory or corporate
boards of a number of agencies and related firms.
Mike is a former Army officer and holds a business degree from The University of
Delaware. He regularly lectures to marketing, communications and MBA
students around the world. He and his wife Ruth have a large family and live in
Chagrin Falls, Ohio, USA.
Carlton 100 N. Main St. #115 Tel: 440-247-6672
Associates Chagrin Falls, OH www.carltonassociatesinc.com
Incorporated 44022 USA firstname.lastname@example.org