$46.8B Record U.S. agency revenue in 2015
With Valentine's Day around the corner, there's no better time to explore the dos and don'ts, ups and downs and secrets behind longstanding agency-client relationships. What keeps these partners monogamus over decades, what reunites them after a breakup, and why do some prefer short-term, project-based flings?
A good agency-client relationship, it turns out, relies on the same qualities that mark a good personal relationship: trust, communication and understanding -- and a little bit of spice.
Even though General Electric and BBDO have worked together for nearly a century, GE Chief Marketing Officer Linda Boff said the relationship is "96 years young."
"Communication is key. It's kind of trite, but it's the secret to any great relationship," said Ms. Boff. "BBDO and GE have a super open, very communicative relationship. We talk, we see each other and we spend time together."
In addition to not being "mired down in process or formality," John Osborn, BBDO New York president and CEO, said the relationship works so well because GE allows the agency to come to the table with ideas. And the company gives BBDO the freedom to fail at times, he added.
Karen Kaplan, chairman and CEO of Hill Holliday, said one of the reasons the shop's 30-year partnership with life insurance company John Hancock has been such a success is because it's never lost sight of the "truth in the brand." The agency has even stayed on board through numerous CEO changes at the company, a demutualization and an IPO.
The way Hill Holliday and John Hancock teamed up in the wake of the twin bombings at the Boston Marathon in April 2013 truly "speaks to the way we work together," said Ms. Kaplan. The agency conferred with John Hancock, the title sponsor of the race for years, at 10 a.m. the day after the tragedy, and within seven hours, they created One Fund Boston, a foundation designed to help victims.
"Our relationships with the iconic Boston Marathon and Boston Athletic Association and Hill Holiday are class acts that we're proud to be associated with," said John Hancock Exec VP Jim Gallagher.
All partnerships – no matter how good – have their challenges. Jerri DeVard, chief marketing officer of ADT, which has worked with Doner for about 17 years, said each partner has to remember not to take each other for granted. "It's like a marriage," said Ms. DeVard. "You have to cherish the relationship and nourish it."
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In Fall 2013, ADT did a review and hired Arnold, but returned the business to Doner after only eight months. During its brief breakup, Ms. DeVard said she looked at the body of work Doner did over the years and how well it performed, and "it was clear that they understood our business and customers."
Doner Co-CEO and President David DeMuth said you have to constantly add energy to the relationship. The agency often gets new talent involved in the business to get fresh ideas.
Jealously can also rear its ugly head in longstanding partnerships, especially if a company brings on another shop to handle a project or campaign. Mr. Osborn said BBDO keeps from getting jealous by locking arms with the other shops. "You have to be open to partnership in today's world in order to stay on that cutting edge of creativity," he said.
While GE does work with other firms on occasion, the company cherishes its bond with BBDO as lead agency because it has a "deep, inherent understanding of our brand and knows the ins and outs of our business," said GE Chief Creative Officer Andy Goldberg.
He added that a company can always choose to review its business, but that can often be a grass-is-always-greener phenomenon. "It's just a change of scenery, so it's sometimes better to keep what you have," said Mr. Goldberg.
Al Golin, founder and chairman of Interpublic Group PR agency Golin, said he never understands when a competitor brags about having thousands of clients, because his shop prefers have fewer accounts and more meaningful partnerships. For example, Golin has been the global PR agency of record for McDonald's for nearly 60 years – ever since Mr. Golin cold-called Ray Kroc, the founder of the McDonald's Corp., who had just opened his first location a couple years earlier.
"Somebody from McDonald's once said to me that the reason we've been successful is because we've always treated them like we just got them, like they were a brand new client," said Mr. Golin.
But while long-term bonds work for some, a number of other agencies and marketers prefer briefer affairs. Last March, Chobani shifted from an agency of record model to more project-based agency work. A year before that, Mondelez launched a global marketing experiment called "Project Sprout," which involved working with multiple agencies at once, using small teams, accelerated timelines and putting an emphasis on linking advertising to short-term sales results.
And the preference for shorter relationships isn't only on the brand side. Los Angeles-based creative agency Mistress touts a message that its sole focus is not on agency of record status and it's open for projects with anyone.
In November, former Bohan Advertising CEO Kerry Graham opened his own project-based shop in Nashville named The Brand Hotel. The agency is currently working with brands such as premium drink garnish company Filthy Food; cigar brand Debonaire; and American Music Water, which uses the money earned from its bottled water to support and promote music and musicians in the U.S. Mr. Graham said he decided to go the project route for his shop because he noticed fewer long-term agency of record deals.
He said that his shop works with a lot of mid-size and well-funded startups, and the project method allows for "an easier way in, because they like the idea of a test drive." The Brand Hotel also takes equity or a percent of the profit for some of the startups it works with.
The project-based model has its downsides, though. Mr. Graham said his shop can't carry too much full-time talent, so he has a number of staffers working on a contract basis. Call it an open marriage.