Advertisers are changing ad agencies at a feverish pace. Since the first of the year, more than $1 billion in ad billings have been put in review, and agency/client relationships of more than 40 years have been severed. A recent report indicated that another $500 million of billings is presently in review and more than 30 agencies are busy pitching the business.
We know the huge costs in time, money and brand momentum to both agencies and clients in account turnover, so why is there so much activity now?
IMPACT OF CONSULTANTS
I see three significant factors influencing today's climate:
The "consultant" factor in the agency selection process.
The decrease in the involvement of the client CEO in advertising and agency relationships.
The lack of training and understanding of advertising among young people working in marketing, advertising and brand management positions.
The very idea of hiring a consultant to help select an agency does not bode well for good agency/client relationships. Does the client hire a consultant when selecting an attorney, accountant or Wall Street investment firm? Of course not. The client feels sufficiently secure in interviewing a few candidates, checking with colleagues and then making a decision.
When selecting an ad agency, however, there is feeling of doubt and insecurity. A fundamental lack of confidence causes the client to look to a consultant. If the selection process starts out that way, what chance is there for a partnership built on mutual respect and trust?
In recent years I have observed a substantial decrease in the involvement of corporate CEOs in advertising. My own personal experience in the agency business indicates there was a better agency/client relationship, and the advertising was better, when the CEO of the client was intimately involved. There are still some CEOs, such as Phil Knight at Nike, who set the tone and personality of their advertising. But too often CEOs are busy with problems of production, finance and Wall Street; they turn over the role of advertising to subordinates.
CEO MUST SET STANDARD
I feel strongly that the agency CEO and the client CEO must make a joint commitment to the relationship and set the standard for great advertising. The American Association of Advertising Agencies publishes a book titled, "How to Work With Your 4A Agency" and the Association of National Advertisers has instituted a one-day seminar, "How to Work More Effectively With Your Agency." These tools should be used by client management to better understand agency culture and structure. Both CEOs should meet regularly to check progress and make adjustments.
Many agency principals complain today's clients treat them like vendors rather than marketing partners. I suspect this is a two-way street. Client personnel don't have the training or understanding of agency operations, and agency people don't have sufficient understanding of the client's business.
Today's colleges and business schools teach Too often agency and client staff aren't on the same wave length. They talk at each other rather than with each other.
Account people and the creative group should be required to spend time in the field with the client learning more about the distributor, the wholesaler, the retailer and the consumer. The advertising and marketing staff of the client should spend more time at the agency, perhaps even have an office at the agency. The creative team, with a keener understanding of client problems, will have a much greater chance of selling great advertising.
Finally, let's add fun to the entire process. When the preparation of advertising becomes a chore, the effectiveness is sorely diminished. The creation of great ads should be an exhilarating experience, not an exhausting one.
The agency/client relationship is both important and fragile. It frequently starts with great excitement and enthusiasm; however, with personnel turnover and changing managements, the initial harmony is severely disrupted. It should be the responsibility of top management of both companies to keep the early excitement alive.
AN INDEPENDENT VIEWPOINT
If clients could create and produce effective advertising on their own, they wouldn't employ outside ad agencies. The agency provides the independent viewpoint, the creative expertise and an understanding of the marketplace so important to the client. Therefore, it is incumbent upon advertisers to work harder at forging more meaningful relationships with their agencies. And the agency must improve communications with its clients.
Agencies and clients will then be able to work in a climate of mutual respect and honest communications. The benefit to both will result in a team effort that will produce great advertising, increased sales, improved agency profitability and far fewer agency reviews.M
Mr. Levine, a founder of now defunct agency Levine, Huntley, Schmidt & Beaver, conducts seminars for the Association of National Advertisers and is a consultant to ad agencies and clients.