Nonline agency

'Nonline' was a term first used in a BBC Radio 4 'Today' programme on 26 September 2007 to describe the 1/3 of UK adults who did not have internet access.

In a marketing context, a 'nonline agency' is a business consultancy which develops creative solutions or promotional campaigns without having a bias towards a particular communications discipline.

For example, you would expect an advertising agency to naturally favour media advertising or a PR firm to suggest leading a campaign with public relations. A 'nonline agency' would approach the client brief and conceptual task without necessarily favouring a particular craft skill or limiting in advance which communication channels or 'marketing mix' should be used.

In practise, this means an agency which is adept at developing and/or managing campaigns which cross the traditional barriers between 'above-the-line' advertising, 'below-the-line' promotions and 'online' digital campaigns.

The term 'nonline' developed from traditional marketing industry jargon. 'Above the line' (ATL) denotes brand advertising designed to change attitudes. By distinction, 'below-the-line' (BTL) denotes more promotional activity designed to generate response (sales promotion, direct mail).

In more recent years, internet marketing gave rise to 'online agencies' and 'online campaigns'. Digital specialists have also occasionally been tempted to describe other forms of marketing communications as 'offline'.

The idea of a 'line' in the advertising industry has persisted since the 1960s.

It began in America where accountants at Unilever described their advertising media expenditure as 'above-the-line'. (A technical accountancy term in which outgoings are deducted from revenue as a cost-of-sale. It may seem an abstruse point, but it aligns marketing activity with brand profitability.)

At that time, advertising agencies controlled all of their client's media expenditure (also known as billings). Agencies then took their commission (almost always 15% gross or 17.65% net) from TV stations, newspapers and billboard owners. In other words, agencies charged clients 100% of the cost of media space, but they paid media owners 85%.

By flawed distinction, other forms of non-commissionable promotions (such as direct marketing) came to be considered as 'below-the-line'. For some advertising purists, who saw themselves engaged in the battle for hearts and minds rather than dollars, this contrast also suggested the supremacy of the advertising discipline.

The advertising industry's 'commission system' (as it was known) gave client companies the impression that the agency's service was free, since it was included in their media allocations, and especially since many agencies did not charge extra for creative, production or project management.

However, in order to gain this commission or discount, agencies had to be accredited by the various media-owners' associations. Agencies bore the credit risk, acting as principal for their media bookings and agreeing to strict payment terms. Even if clients failed to pay the agencies - or paid slowly - the agencies still had to pay the media owners on time. As a result, the financial failure of a single large client was often the cause of an agency collapse.

One other unintended consequence of the commission system was that it rewarded agencies disproportionately for big-billing campaigns with simplistic executions. For example, if a client spent $1 million dollars using small space press ads, the piece-work and admin soaked up the income. But if they made a single high-profile commercial which ran on national TV, the work was more profitable, and more fun.

So, agencies invested much of their commission income in three areas designed to help them win high-profile TV work: account management to build client relationships, often through 'schmoozing'; planning departments to deliver killer insights for clients; and often maverick creative talent. (For an insight into the agency mentality of the period, see 'Where the Suckers Moon' by Randall Rothenberg and delaney book).

As a result, the agencies' media departments ­ the boring people who technically 'earned' the commission ­ went ignored, unloved and under-invested.

Since the late 1980s, media expenditure has been increasingly controlled by media independents. These are specialist companies which plan, negotiate and buy media space and broadcast time at significantly reduced commission rates (often around 3%-5%) compared to the original rate of 15%, rebating the difference to the client.

Outgrowths of the original advertising agency media departments, these firms were able to focus more of their revenues on research tools and higher calibre staff. Media independents rapidly cannibalised the agency's media-buying business to the point that many media markets are now dominated by just a few very large 'buying points'.

With this sudden loss of commission revenue, most traditional advertising agencies had to re-invent themselves as fee-based professional services.

In line with the media proliferation and audience fragmentation ­ the upsurge in digital channels, the democratisation of production, and the convergence of the TV and computer ­the changing market has broken the ad agencies' tradititional link to paid-for media advertising.

Yet the competition for attention is more intense than ever. The consumer is more flighty and promiscuous in their media behaviours and brand loyalties. And so, the challenge for brand-owners remains largely the same:

­ how to engage with their customers and prospects regularly and cost-effectively ­ how to build relationships and trust- how to reduce long-term cost-of-sale and increase life-time customer value- and, perhaps crucially, how to avoid competition from market 'noise' ­ confusing claims and counter-claims based on apparent differences in price and performance.

By taking an initial 'media-neutral' stance, a 'nonline agency' aims to help clients deal with media complexity and deliver planned contact strategies: high impact ideas with cohesive, on-brand messages, using the most appropriate, engaging, 'choose-to-view' communication channels for each sub-audience.

Bibliography

*Anthony,A,Abdo AU (2007) professor, history and geography