A typical agency had planning, servicing, media and creative departments. Agencies worked on a brief –a creative idea was developed into a campaign. The role was clear-cut for the agency. Develop a communication idea, and get it developed through its creative department. It was later realised by the media people that the department can attract lot of money. They splintered from the creative agencies. With the exit of the media, creative agencies finances came under stress. Another development is the rise of the digital media. This made it necessary for the creative agencies to change.

Clients spend on advertising and the budgets have not shrunk. But their budgets for traditional agencies have shrunk.

To attract more money, agencies can resort to mergers and acquisitions. Another approach is to reorganise –clients are offered services, under one single leader and there are no fences and no administrative divisions. Rebundling of services may solve the problem to some extent. However, if an integrated team works on a brand, their working capacity can be stretched to a few brands only. There are problems of ego clashes in the team, and a larger team may have co-ordination problems. Even the response times may be slow. Traditional advertising agencies were structured around the media platforms, but with the advent of TV, the first disruption came in. There were specialised set ups to begin with to offer better value to clients, and then integration takes over to exercise greater control over the results. The issue is whether to bundle or unbundle the services.

Media agencies bought media in bulk. They then sell off. However,to maximise revenues they need great ideas. Media agencies thus have started hiring creative people. Media is also splintering more and more. Clients too want all solutions under one roof. They are tired of fractured solutions.

Clients can approach a single agency for the communication package. Multiply agency system becomes inefficient. The agency must understand the new media context. The agency could have the freedom to outsource the expertise it itself does not have.

Traditional silks have to break down. There would be a shift towards craft agnostic think tanks. These will produce pure communication strategy. It will be devoid of execution. Craft execution, if necessary, can be outsourced.