Eleven years ago, two advertising agencies merged: Draft Direct Worldwide and Foote, Cone, and Belding (FCB). Draft was a successful direct marketing agency specializing in direct mail advertising. FCB was more of a traditional ad agency that specialized in creative work for Television and Print.
The thesis at the time of the merger was to apply the creative work of FCB to the effective media tactics of Draft. Take the effectiveness of Draft Direct, add the creativity of FCB – get the best of both worlds.
I first heard about this strategy in 2007 at a company all-hands, shortly after I started working for DraftFCB in the media department. The address was given by then-DraftFCB New York President Peter DeNunzio – who truly amazed me by his ability to remember the names of all 1000 employees in the New York office.
On the surface, this type of integration seems like a logical idea – but at the time, a move to combine media and creative cut counter to the dominant industry trend. Most large advertisers preferred to shop a la carte for their creative and media services – commonly partnering with two or more different agencies to handle media and creative for a single brand. To some degree the axiom of agency success was: bigger is better when it comes to media (to aggregate buying power and get better rates with national TV networks) and smaller is better when it comes to creative (to get more agile and creative ideas). Another benefit of working with multiple agencies was that advertisers could leverage their supply chain diversity to demand lower rates – often forcing each of their agencies to price themselves down to the brink of unprofitability.
When DraftFCB combined creative and media in the mid 2000’s – it was a smart bet. If it worked, it could have helped DraftFCB escape the “race to the bottom” on fees by selling advertisers a bundled product across media and creative.
There was only one problem. It didn’t work.