There is no more perplexing position to hold at an ad agency these days than director of new business, a.k.a. chief rainmaker. Perplexing because the new-business drought stands in stark contrast to expectation. If an economic downturn brings with it any consolation prize, it is supposed to be a flood of new business that gives agencies an opportunity to snare new billings by a route other than acquisition.
Yet here we are, more than halfway through 2001, and new-business directors are still waiting for the phone to ring. And waiting. And waiting.
Here's how it was supposed to work, at least from the ad agency perspective: As the economy softened, marketing directors at companies were going to either lose their jobs or come under intense pressure to produce better results. In cases where new marketing directors were brought in, they would make their marks quickly by staging a review and bringing in a new agency. Those with jobs on the line would buy another six months by blaming (and firing) their agencies, conducting reviews and introducing new campaigns.
Regardless of the scenario, new-business directors stood to gain the most. And they thought all they had to do to find a review was answer a ringing phone.
The only thing is, it hasn't happened. There have been many media reviews in the last few years as the business of buying and selling media in the U.S. was radically transformed. Even those are slowing now, although they remain more frequent and visible than creative reviews.
The dearth of creative reviews has baffled even the best minds and magnified the attention paid to those that have surfaced. The just-completed AT&T Wireless review would have been noteworthy in any year because of the brand and the size of the account. But at a time when nothing else was going on, it took center stage under a surprisingly bright spotlight. (There were other reasons for this, including the East Coast-West Coast rivalry; agencies in Los Angeles desperately wanted TBWA/Chiat/Day to succeed, if only to validate the continued viability of their ad market.)
In recent weeks, I've asked every agency CEO, review consultant and rainmaker I meet for their theory. Why isn't there more business up for grabs? Unfortunately (and this is not a knock on their intelligence), I have yet to hear one answer that makes sense. To their credit, many executives won't even try to explain the paucity of reviews; they simply shrug and ask, "What do you think?"
The most common hypothesis is the deer-in-headlights theory, which proffers that clients are frozen in place, unsure of where the economy is going and therefore reluctant to initiate change. A similar scenario holds that businesses are so focused on cutting costs and other bottom-line fixes that advertising is not a top priority. One person suggested to me last week the drought may not end until the economy turns around, which spins conventional wisdom completely on its head.
None of these stands up to close inspection. Even if recession has yet to be officially declared, the weakness of the U.S. economy is not open to debate. And advertising remains one of the few functions a company can change quickly to produce results.
I don't have an answer for why there were so few reviews in the first half, but my personal theory is that the floodgates will open soon after summer ends. Because of vacations, nothing will happen over the next two months. But as we enter the fourth quarter-and as more businesses realize turnaround is not yet in sight-the finger-pointing will begin, followed quickly by reviews.
Of course while that represents an opportunity for agencies, it's also a threat. There will be more business up for grabs, but more to lose as well.