Agencies Should Push Back -- After Getting Ducks in a Row

An Ad Age Editorial

Published on .

For a moment, we found it refreshing that agencies, faced with outrageous pitch demands from Kraft, had rediscovered something resembling a spine.

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The marketer had demanded agencies interested in pursuing its business not only forfeit ownership of their ideas but accept legal liability should Kraft later deign to use them.

But the fact is, the demands were so laughable that even the marketer -- with a little prodding from fed-up agencies -- had enough sense to recognize them as such.

And we can't escape the feeling that agencies have only themselves to blame for much of this. On one hand, as they've grown increasingly desperate to hold on to old business and win accounts, they've given up miles of ground in reviews -- everything from relinquishing rights to their own ideas to spending thousands of dollars on dog-and-pony shows that are pointless and raise an entirely different set of ethical issues. It almost seems a logical next step for a marketer to see if it can push just a little bit further.

Kraft, officially spun off by Altria Group in March, is under intense pressure to perform: The food giant's stock has fallen year to date and is little above its 2001 initial-public-offering price even as the overall market has surged. Given its issues, one could read Kraft's move as an attempt to shake up the formula and challenge the status quo of compensation.

More important, though: Too many agencies haven't adequately addressed client concerns about issues such as costs and pay for performance. And that more than anything else tempers our initial impulse to cheer agencies trying to push back against marketers.

Agencies that still labor under the illusion that the ad world is exempt from standard financial models and that old-fashioned Madison Avenue pricing schemes are still relevant don't have much of a right to demand much from clients until they get their own houses in order.

But those agencies that have straightened out their books, reduced overhead costs and figured out reasonable and realistic compensation models? They should have the confidence to march into a review without feeling it necessary to give away the baby and bathwater. Those agencies should not only publicly draw a line in the sand, they should reclaim some ground -- and some dignity.
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