That's what's happening to ad agencies.
Management consultants are poaching on their territory on the high end, and TV production houses are taking away business on the low end.
There was considerable hand-wringing at the American Association of Advertising Agencies confab last month over the intrusion of management consultants who know how to talk the talk and even walk the walk.
The new chairman of the Four A's, Jordan McGrath Case & Partners' Pat McGrath, put the dilemma this way: Once upon a time clients perceived "immense value" in agencies' products and services. "But now some of our best. . . customers have turned to specialized niche brands to serve many of their needs.
"We all know the reasons: The perception that management consultants offer superior expertise. The perception that marketing consultants offer greater objectivity. Client marketing managers who like the control they get by making themselves the maestro of an orchestra made up of many separate communications instruments. And finally, client CEOs who are so preoccupied with quarterly earnings that they remain detached from advertising -- and of course from the ad agency -- and view advertising as an expense, not an investment."
The result of all this, Mr. McGrath stated, "is a growing number of advertisers who have come to regard agencies -- not just their agencies, but all agencies -- as little more than vendors."
As if that's not problem enough, agencies face competition from TV production houses willing to do spots on speculation -- and, in some cases, the client is buying.
Anthony Vagnoni, in last week's issue of Advertising Age, detailed how Anheuser-Busch bought a couple of spots created and produced by a production house on spec. "This relegates the agency to just a supplier," said one agency creative director. "It's inherently disrespectful of the creative process."
Hmmm. Is there a common element here? Pat McGrath said clients are looking on agencies as "vendors." The creative director said agencies are being perceived as just another supplier. The problem is that agencies have allowed their competitors to define who they are.
Time was when agencies were the only game in town, and bigger-than-life agency chieftains had the trusted ear of clients, just as William Paley of CBS used to tell advertisers how to spend their money on network radio and then television.
But those were the days before management consultants started whispering in the ears of all-too-willing clients and before cable started siphoning off viewers and ad dollars from network TV.
And those were the days before the management consulting companies like Andersen Consulting, Ernst & Young, Coopers & Lybrand and Deloitte & Touche used slick advertising to convince top management that they could fix whatever needed fixing. One Ernst & Young ad says, "There isn't a business we can't improve."
Don't you find it the height of irony that ad agencies are building powerful brand images for their biggest competitors? And when business hits a rough spot, ad agencies are probably calling in the same management consultants to find out why clients don't respect them any more.
Pat McGrath, in his talk to the 4A's, implored agencies "to focus the same thinking we apply for our clients' brands to the umbrella brand we all operate under -- the advertising agency. . . I am proposing to you that we approach this problem with our own brand franchise the same way we'd approach it for a client's brand."
This is just a wild guess, but I would venture to say that somewhere in their advice to the client the subject of advertising would be broached. But this radical suggestion falls on deaf ears when it comes to themselves -- ad agencies rarely advertise.
Shops preach that a strong brand franchise helps products command premium prices, and yet ad agencies' lack of advertising has allowed clients to view agencies as interchangeable pawns that work for whatever they can get. Is it a surprise that agency turnover is rampant?
I've always thought that clients must wonder why agencies almost never take their own advice. Agencies do nothing to differentiate themselves from each other and from other competitors, and so clients are beginning to wonder why they're needed at all.