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Did we still need advertising agency?

The story of local media channel as a ‘one-stop’ shop

While waiting for my friend in a much crowed vegetarian ‘fast-food’ restaurant named Miss Seven, I began to think of how creativity and flexibility had miraculously contributed to tremendous business opportunities in Vietnam during an inflationary period. As a consequence, advertising had become a competitive market since the emergence of  local agencies. Undoubtedly, it was also interesting to note that several local media channels in recent years had played a role of the creative agency and the production house in order to grab a profits pie. A few minutes later, my friend had arrived and joined me for a discussion so as to identify a clear picture regarding to this issue. She walked in rather quickly as she remained to be active at work.

Image Her name is Ho Le Thao Trinh – Marketing Team Leader at Kenh 14 (Channel for Teen), one of the ‘top-of-mind’ online news for Vietnamese youth. With more than eight–years experience working for the Marketing and PR Department in communication field, she seized my topic easily and broke it into every little details.

The philosophy of becoming one-stop shop

Image

One-stop shop related to an agency that offered all the communication serives that a client needed.

In order to realize the reason that a number of media channels nowadays had taken the role of an advertising agency, she pointed out two fundamental changes among this industry in Vietnam. Firstly, as also indicated by Dickinson (2009), there was a growing trend in broadening communication and marketing services to satisfy client demand. She stated that it would be much easier for the client to get everything they needed in a ‘one-stop shop’. According to Davis & Prince (2011), integration was a crucial factor that affected the longevity of agency and client relationship. Hence, the client tended to look for a full-service provider so that they could ensure the consistency and could manage the process effectively. Another important factor that transformed her media channel into an innovative ‘one-stop-shop’ might relate to the huge potential profits in the Vietnamese advertisement market. Since ‘below-the-line’ service had grown rapidly in recent years, many agencies enjoyed a significant increase in income thanks to this sector. However, the success of this ‘all-in-one’ model depended heavily on how the media channel played its hand.

The core combatants

Image

 Kenh14 (Channel for teen) was a leading online news for Vietnamese teenagers with more than three million views per day, five-times higher than competitor’s statistics, ranking 17 among top websites in Vietnam (VC Crop 2012).

As a medium, there were enormous competitive advantages to fulfill the road of becoming a trustworthy ‘one-stop shop’. For example, the most recognizable value was that media channel already had a deep insight on itself as well as its target audience analysis and identification. According to those specific statistics, including the number of comment, like or view, media ROI (return-of-investment) analysis and post-campaign evaluation could be easily conducted, which made the plan be more and more presentable to the client. Obviously, this service would be charged if the client did not work directly with ‘Channel for Teen’. Moreover, media channel was like a close friend to the audience because it was a trendsetter and it always created the favorable content that the audience preferred. ‘As we were the one who published news everyday, we knew how to write an advertorial that included an exact and outstanding hook,’ she mentioned. ‘Moreover, we also added some more values by providing useful information in an advertorial that could gain attraction from the public.’

Image

In 2010, ‘Channel for Teen’ had launched an interactive campaign named ‘Bee Team’ for Vespa Vietnam

This capacity had supported ‘Channel for Teen’ to win two giant clients (Vespa and Lambretta) from the hand of other advertising agencies. Moreover, the client of ‘Channel for Teen’ was varied from small start-up companies to large business firms. ‘From a perspective of an agency, we did everything we could to provide a clean solution for their businesses without losing our identity,’ she shared. ‘It contradicted to the viewpoint of most young agencies in the market because their goal was to please the client in any way so as to gain a contract.’

Image

 After the successful campaign with Vespa Vietnam, Channel for Teen had launched a second interactive campaign for Lambretta Vietnam named ‘Lambretta Face Contest’. 

Could agency think of itself as being promotable?

ImagePower is in the hand of the Fourth Estate 

On the other hand, news media had long been acknowledged as the ‘Fourth Estate’, which distinguished itself as an authority in communication field. This led to another or two significant advantages in order to serve publicity. As described by Salamon (2008), advertising was not only a creative business, but also a relationship business. Hence, media channel had the potential to dominate in this industry because it was familiar with many other relationships far beyond those in advertising or marketing field. Furthermore, Hameroff (1998) also pointed out that it was convenient for media channel to advertise itself because its publicity could be released easily and it could be influential among the public, while a simply advertisement of other advertising agency on the media was not credible enough to call for immediate action. ‘Our online news on the Internet was a place where our firm could compete on a level with other giant agencies in attracting client’, she said. ‘Owning a media channel was essential to expand the ability to weather recession and to serve client.’

Airing Concerns

ImageCrowdsourcing could make the industry better?

It was obvious that media channel had also suffered from several difficulties like any other advertising agency in the industry. Meanwhile, its priority was to build trust and reputation so as to retain the client. Hence, it was important for the media channel to participate in professionalism. ‘Even though we were good at the execution and production, there were still limitations in creative and planning process,’ she added. ‘Not only higher salary was paid, but also interactive campaigns had been launched as an effort to attract and recruit talented employees’. By receiving tremendous ideas and artworks from participants, crowdsourcing had also been established in order to raise a profile of ‘Channel for Teen’ as a creative agency. However, the most challenging issue was to select an appropriate amount of advertorial content, banner or pop-up because excessiveness might negatively affect the content quotas. At ‘Channel for Teen’, it was really difficult to find a common voice in accelerating the number of published advertorial per day.

Stick to the success or expand for more?

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Nowadays the client asked for a full-service, creating a trategic dilemma that could tear the limited-service agency apart. 

To sum up, several media channels nowadays had triggered the ‘one-stop shop’ model in advertising industry. The need for an agency was still there, however, it was slightly pointed to the full-service model, which was more integrated than ever before. On the other hand, every ‘one-stop shop’ had its own strengths and weaknesses. Consequently, it led to the current diversity of advertising market. Maybe it was the time for others agencies to evolve. Global agency could buy small local agencies to accomplish a ‘one-stop shop’ model and large local agency could develop and open up a new sub-agency for full-service trial. Otherwise, it would be a lot smoother to gain support from local media and suppliers if the agency you were buying had a good reputation in the local industry. Just remember that we were no longer competing in the 100-yard dash. For the survival of your agency, would you ready to take the change?

Word count: 1113

References:

Brewer, B 2012, ‘A name in the crowd: ad agency goes online to find new moniker’, Los Angeles Business Journal, September, p.31.

Cleveland, B 2009, ‘Can your agency be a one-stop shop?’, Ad Ages, viewed 6 September 2013, <http://adage.com/article/small-agency-diary/agency-a-stop-shop/136250/&gt;.

Davies, M, & Prince, M 2011, ‘Switching Costs and Ad Agency-Client Relationship Longevity: An Exploratory Study’, Services Marketing Quarterly, vol. 32, no. 2, pp. 146-159.

Dickinson, D 2009, The new account manager: Redefining the crucial role of account service in the changing business of advertising, 2nd edn, The Copy Workshop, Chicago.

Hameroff, EJ 1998, The advertising agency business, McGraw-Hill, New York.

Solomon, R 2008, The art of client service, Kaplan Publishing, New York.

VC Crop 2012, ‘Digital content: Overview and Strategic Viewport’, Slideshare, viewed 6 September 2013, <http://www.slideshare.net/actionstartup/vccorp-chin-lc-pht-trin-ni-dung-s-12936895&gt;.

Waite, TJ 2002, ‘Stick to the Core or Go for More’, Harvard Business Review, vol. 80, no. 2, pp. 31-36.

*Most of the images in this entry had been provided by the interviewee, Ms. Thao Trinh.

photo

‘proof-of-life’ photo

Interviewed by Lai Thanh Son (s3357752)

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2 thoughts on “Did we still need advertising agency?

  1. -Can add Service Excellence, Client Planning, Trust and even Advertising Business Models or Agency Remuneration in your categories/ tags.

    -“during an inflationary period…” When was this? provide approximate time frame. Try linking some online news articles to the words: ‘competitive market’ or ‘in recent years’.

    -Good connection/ linking sentence between interviewee insight and academic resource: “she pointed out two fundamental changes among this industry in Vietnam. Firstly, as also indicated by Dickinson (2009)…”

    -Great transition sentence to the next section: “However, the success of this ‘all-in-one’ model depended heavily on how the media channel played its hand.”

    -Become the Trendsetter, research TA and provide advertorial services what a great way to get clients!

    -Great links to see examples, this definitely saves on word count. However external like to ‘channel for teen’ should only be done once 🙂

    -Could use more explanation about crowd sourcing as it is definitely new in Vietnam. Did they do something like Kickstarter?

    -Overall, the topic is timely and relevant to client management. It has been presented in a unique way. Great stuff. To improve, review grammar and do a bit of spell check 🙂

  2. “Do we still need an…” not Did, + an 🙂

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