If a thermometer was placed on marketing departments right about now, the mercury would be rising faster than you can say ROI.
There are higher expectations and stepped-up accountability for chief marketers -- and anyone else up and down the chain who has a hand in directing a company's advertising efforts. The heavier burdens mean companies are more vocal about their failures on the ad front, oftentimes publicly laying blame at agencies' doorsteps.
Last month, Gap Inc. CEO Glenn Murphy bluntly told analysts on an earnings call that he was "disappointed" with marketing efforts for the company's largest brand, Old Navy. Around the same time, adland was agape over General Motors' Global CMO Joel Ewanick doling out grades for his highly-regarded agencies, Goodby, Silverstein & Partners and Fallon , to the press. And when Groupon's Tibetan plight-themed Super Bowl spots were deemed tasteless, CEO Andrew Mason vented to Bloomberg BusinessWeek about its work with CP&B, saying he placed too much trust in the agency. "We learned that you can't rely on anyone else to control and maintain your own brand," he said.
It's an about turn from a time when companies were reluctant to talk about ad partners at all, let alone criticize them publicly.
And it begs the question: Isn't this a partnership? Where does blame for bad advertising lie—with the agency or the marketing executives?
"I don't think it's great practice to publicly deflect blame," said Scott Davis, chief growth officer at marketing consultancy Prophet. "But ... what shareholders and investors are expecting from these companies is pretty lofty."
The recession that crippled the U.S. economy was a tipping point for the accountability of marketing departments. Companies rushed to scrutinize every aspect of the ROI from advertising initiatives. No more leniency, and no more road-testing of campaigns. The rise of the social web—where the saying "everyone is critic" actually rings true—means one lousy logo can threaten to engulf a sea of marketing successes.
Casey Jones, former Dell marketer and head of BriefLogic, recalls when former Microsoft top marketer Mich Mathews asked him in throes of the recession to help evaluate compensation structures for its roster shops. "By early 2009, Mich was managing unprecedented pressure from executives like COO Kevin Turner to be cost-conscious and value-driven in agency negotiations," said Mr. Jones. "The pressure on marketing departments translates almost exponentially into pressure on agencies."
"It's almost like as soon as the stock price falls, their blood pressure rises," said Christine Fruechte, president-CEO at Minneapolis-based agency Colle & McVoy, of clients. "One failed campaign can mean their career at that company."
"I can't tell our clients what to run," she said. "Agencies have to be bold enough to state what they think will work and boost business results. A CMO who blindly blames their agency isn't doing their job, but an agency who says "Well, the client approved it' isn't, either....If our clients are successful we are successful, and if it doesn't work, your relationship is over and that makes you look foolish."
Ideally, both an agency and the client should take responsibility for a campaign that flopped—or even one that 's merely not going as well as expected.
But Prophet's Mr. Davis said if he had to "point the finger and choose one" to shoulder the blame, he'd say it's on the marketer. "The marketer, who is part of the C-suite, needs to own the customer insights and the entire value proposition. ...The advertising is only one part of the value proposition. To blame any one single element of the marketing mix, I don't think that 's appropriate."
A silver lining to the public bashing and increased pressure? Agencies are viewed less as vendors and as more integral to a company's success.
"The flip side of the boss looking hard is that if you're doing a killer job, your value to the company is far higher than it's ever been in the past for agencies," said Mr. Jones.
Recently Yum Restaurants CEO David Novak called together its lead agencies to help discuss how the company could boost sales for its brands, Pizza Hut, Taco Bell and KFC. Mr. Novak didn't blame the agencies, but rather asked them to help assess causes for problems and come up with solutions. And, he asked what could be done on Yum's part to help improve the creative product.
"The platform that marketing has today has never been bigger or bolder," said Mr. Davis.