Personal relationships rule when it comes to choosing an agency

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One of the most overused cliches in the modern-day workplace is that advertising (or publishing, the law, retailing) is "a people business." What does this statement actually mean?

What we all think it means is being sorely tested as the recession throws up issues like loyalty, employer and employee responsibility and corporate vs. individual business relationships.

As income falls away and the toll of layoffs mounts; as struggling clients look to save every last cent through centralizations, and as "creative work" becomes increasingly commoditized, one person's loyalty becomes another's treachery.

In any survey of marketers, they usually claim the reason they appointed their new agency was "creativity." We all understand why they feel obliged to say this, but I would venture to suggest that this isn't really the case.

Nobody wants to admit that saving money or a close relationship at the very top of the client or agency (or holding company) is the real reason. To do so is to suggest a diminishing of the professional skill involved in the advertising process. This, understandably, makes everyone associated with it extremely uncomfortable.

So agencies are hired, retained and fired on the basis of their consumer insight or their outstanding creativity? Yeah, right. Talk to enough marketers, or study the plethora of surveys on the subject, and the reason they fire their agencies is seldom "creativity"; it's "the relationship."

In good times, agencies throw more people at an account, switch creative teams, perhaps hold internal creative reviews or throw in extra services-free. In good times, marketers have the internal resources to ensure their advertising campaigns are chosen for the right reasons.

In bad times, economies of scale prevail. Huge accounts move between similar networks for reasons of cost-saving alignment; smaller agencies are knocked off rosters, their edgier work less valued. The cost of creating and running advertising becomes the overstretched client's focus-not its value.

All of these issues are seen at play in one current story: the defection of key Foote, Cone & Belding Worldwide staff in FCB's Chicago office, including Brian Williams, the former Chicago office president, to an as yet unnamed agency affiliated with DDB Worldwide, Chicago. Their defection came as $350 million worth of PepsiCo's Quaker Oats business switched from FCB to DDB parent Omnicom Group. Were they in the wrong to do so, as FCB's parent company, Interpublic Group of Cos., would have us believe? Or was Interpublic being naive?

The answer depends on whether you believe clients are loyal to their agencies or to the people that work on their account, and vice versa. Is the basis of the relationship personal, or corporate?

But what is a corporate relationship other than the amalgamation of long-term disparate individual relationships on numerous levels? Some people within Omnicom have spent much of their working lives developing close relationships with their clients within PepsiCo. The Brian Williams scenario is in part the fruit of their collective labors.

The challenge for agencies is to prevent any one account becoming dependent on a key individual or individuals. Unfortunately, that dependence is often exactly what a client wants, except clients call it by another name: dedication.

The PepsiCo blow has been sweetened a little for Interpublic by the arrival of millions of dollars of extra Coca-Cola Co. dollars at different Interpublic agencies, including FCB. It would be strange, wouldn't it, if these agencies did not cast an eye over various talents at Coke's losing agencies, such as Wieden & Kennedy or Cliff Freeman & Partners? The client may even insist upon it.

This switch of Coca-Cola business, in turn, is in part the result of long-term high-level personal relationships between Coca-Cola marketing executives and Interpublic's Phil Geier and John Dooner, who hung in there during Coke's prolonged flirtation with the Creative Artists Agency and others.

The advertising industry should not be embarrassed that business stays or goes because of personal relationships. To be able to build and maintain them is perhaps the greatest business skill of all.

Stefano Hatfield is editorial director of Ad Age Global and Creativity.

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