Here come clusters, CBUs super groups . . . . By Alison Fahey with Michael McCarthy and David Kile

NEW YORK--It used to be that industry buzzwords were "integrated marketing" or "breakthrough advertising." These d

DDB Needham, Chiat/Day, Ayer, Leo Burnett, Ketchum Advertising, Lintas, Saatchi & Saatchi Advertising, Young & Rubicam and McCann-Erickson are among the agencies actively reengineering themselves to prepare for the ’90s and beyond. The agencies believe that the structure that saw them sure-footedly through the ’80s has gone the way of the three-martini lunch in the face of client downsizing, cost pressures and the rapidly changing technological and media landscape.
“The world is changing,” said Pat Cunningham, vice chairman/creative director of Ayer. “This is a service business and we have to change too or we’ll be gone.”
The approaches vary in theory and in magnitude. For example, in France Y&R is testing a system where its office will be transformed into a rendezvous point and staffers will spend more time working from home or with clients while linked by laptop computers. The system could conceivably reduce physical plant costs if it proves successful (“Global News,” March 1).
Chiat/Day is also manipulating its offices to accommodate a new internal structure that envisions staff members spending less time at the agency and where, for example, account people work a few days a week at the client’s office. This structure will also be linked by a computer network.
Lintas has restructured itself into six Client Business Units (or CBUs), each meant to function as “an agency within an agency.” McCann has toyed with a similar agency within an agency concept called “Super Groups.” For GMC Trucks the agency even went so far as to develop McCann SAS (Strategic Advertising Services) in Troy, Mich., which is devoted solely to GMC Trucks.
DDB Needham’s efforts to maximize client contact comes in the form of “Clusters,” or satellites of people or businesses that are dedicated to certain clients.
“(Agencies) are trying to get a lot closer to the client,” said Harry Paster, executive vp/consulting at the American Association of Advertising Agencies. “They won’t necessarily have department heads, they’ll have groups of specialists working together dedicated to one client.”
Paster added that the trade group is hearing so much talk of agencies “reinventing” themselves that it is considering adding a session devoted to related issues at its annual meeting next year.
“I think there’s a great future in the advertising business but there will be a huge shakeout,” said Paul Alvarez, chairman of Ketchum. “Clients are surprised that agencies haven’t struggled more with their structure and I think they’re fight.”
While management struggles with the future, not all the plans are embraced by staff members, who in many cases are seeing their familiar environments radically altered.
At DDB Needham, for example, the “Cluster” plan is said to have upset several senior creatives at the agency who were concerned that the process would dilute a traditionally strong creative product. DDB Needham’s creative department then became exempt from the structure.
Meanwhile, some agency executives argue that the current wave of “reinventing” exercises is little more than “collective grandstanding” as one industry veteran put it. As usual, it will ultimately be the clients which decide.
Copyright Adweek L.P. (1993)