No doubt the economy has been the biggest culprit, but there's also
a more troubling trend -- one that has little to do with a
stock-market crash and consumer-spending decline. In our reportage
from all areas -- the marketers, the agencies, the media companies
-- we hear of cracks in the already-complex relationship between
agencies and the marketers they service. Just last week, Chevrolet
parted with Campbell-Ewald
after 88 years.
Some blame the rise of social media, which has agencies rapidly
trying to expand their offerings and sometimes promising
capabilities they are unable to deliver, some blame even more
agency partners at an already-crowded marketing table. At one point
the No. 1 enemy was Google (no
more) but today it's more commonly the procurement officer,
often called a cost-cutting zealot who treats advertising like
office supplies. We decided to get their side of the
story and spoke to the chief procurement officers at Pfizer
and Intel. Yes, they actually care about quality and creativity and
no, to them shopping for an agency is not just like buying paper
Make no mistake: Examples of successful longstanding
relationships between clients and agencies, such as the one between
Apple and TBWA/Media Arts
Lab, still abound in many corners of Madison Avenue. But
some of the things those types of relations are built on, such as
the trusted keepers of the client-agency relationship, are becoming
Meanwhile, everyone's getting into everyone else's
business, which can be confusing for marketers and create new
competitors for agencies. Take, for example, the kerfuffle around
Home Depot's recent Hispanic agency review and the tension it's
created between Hispanic agencies and general-market shops that are
their multicultural practices. Or the media companies that
have started to tread on traditional-agency territory. Want to
create an integrated campaign for your latest luxury launch?
Nast is open for business -- and you don't even have to buy
ads in Vogue.
In all, it's leading to an unprecedented strain for the agency
community and the marketers it services -- and we hope in Ad Age's
first Agency Issue to diagnose some of the problems and help point
the way toward solutions.
Yes, there are solutions. To find them, we canvassed people
across the industry to get a feel for what's prompting the problems
in the first place -- Kimberly-Clark CMO Tony Palmer flagged five
areas keeping him up at night -- and what sorts of actions can be
taken to remedy the relationship.
What's straining the
agency-marketer relationship today?
FORMER PROCTER & GAMBLE CO. GLOBAL CHIEF MARKETING OFFICER,
"Too many agencies are wondering, 'Am I going to have a job six
months from now? What does my client really think?' When the agency
doesn't know where it stands or if the client believes in it, it
becomes dysfunctional. That's the biggest thing that's missing. If
the client's not happy, get on with it. Tell them what's wrong and
what they need to do. Marketers also shouldn't be afraid to
challenge their agencies. The best teams ask outrageous questions
of their agencies. And agencies love that. And when you answer
those, you get great work."
CREDLE, CHIEF CREATIVE OFFICER, LEO BURNETT USA:
"There is a bottom-line issue that is affecting all of us, not just
agencies -- clients are being asked to deliver more. When I started
in this business in 1985, the production budgets then felt like
they were higher than they are today. Some of it makes sense,
because you can do a lot more for less with technology. I just hope
we don't sacrifice quality. We're treating ideas as commodities,
and sometimes the worst idea is funded the same as the best idea."
FIELDING, GLOBAL DEMAND PROCUREMENT DIRECTOR AT
"Design and creative agencies are better than media agencies at
convincing brands that they have the brands' interests at heart.
That may explain some of the pressure media agencies feel from
clients, and some of the reason clients seem to view media as a
commodity more than certain other crucial areas."
ORTON, DIRECTOR, EFFECTIVEBRANDS:
"Huge tension exists as marketers and agencies strive to globalize.
What's the domain of global marketing teams and their agency
counterparts? What's the purview of local teams and their agency
counterparts? Often today the desire to take advantage of
opportunities and the need to get to market first are so great that
less thought is given to how that should be done -- inside the
marketer, as well as inside its agencies."
CLINICAL PROFESSOR-MARKETING AT THE KELLOGG SCHOOL OF
"It's very hard to figure out what's appropriate compensation. You
go back 10, 15 years ago, and people knew how to pay a traditional
agency. But now it's very hard. What do you pay somebody when
they're setting up a Facebook page? That gets very confusing.
That's why you get some of these purchasing departments getting
involved. And that creates tension because there's no generally
GLOBAL CEO OF HAVAS WORLDWIDE AND EURO RSCG WORLDWIDE:
"It's probably the same dynamic that has played out for a few years
now: Clients want better, faster, cheaper. If you as an agency can
do that you're in a good space. Most clients today want to pay less
for doing the same job they would have five years ago."
WOHLWERTH, ARK ADVISORS:
"What you saw in the past was a much tighter collaborative
relationship between agencies and clients. There are still a lot of
questions in corporate America about the power of advertising.
There is also procurement -- which we should support as a
discipline -- but not everyone in America is using it as a
strategic discipline, they are using it as a cost-cutting
discipline. Agencies continue to struggle to demonstrate their
GLOBAL PRESIDENT OF OMNICOM GROUP'S RAPP:
"[There's] impatience for efficiency and effectiveness with little
or no compromise toward delivering either. There are higher
expectations of accountability from clients driving the need for
more rigorous and relevant creativity. This is an enormous force
for change in marketer-agency relations because of its impact on
the way both do business."
U.S. CEO OF OMNICOM GROUP'S OMD
"One of our biggest challenges as an industry is that as the
consumer has faced millions of media choices, the agency landscape
has fragmented as well. We are challenged by some clients that have
upward of 10 or 15 agencies and, while [they are] all
"microspecialists," sometimes that hurts our ability to develop a
cohesive strategy. We all know that the same consumer is online and
offline -- sometimes at the same time!"
GULATI, PROFESSOR-BUSINESS ADMINISTRATION, HARVARD
"This contradictory tension [is] between someone who can solve my
business problem but who also can be price-competitive. Once you
deliver real value to the client you deflect that focus on price.
The conversation should be about value."
How can the relationship be improved?
KREMBS, DIRECTOR OF MARKETING, SOBE:
"Those relationships that allow for change as culture and climate
evolve should be fine. I am a firm believer in flexibility in this
economic environment and in this consumer-led environment. The
agency-marketer relationships that build in flexibility have a
greater chance for success."
CHIEF MARKETING OFFICER OF KIMBERLY-CLARK:
"Have senior, seasoned impact players on the front line (who are
experts doing what the client can't do vs. what the client doesn't
have time to do) focused on deploying their creativity on ideas
that drive client's business. Be focused on value creation, embrace
and use data and analytics to elevate work, and be collaborative."
EDELMAN, GLOBAL CEO OF EDELMAN:
"We have got to be more comfortable experimenting with different
models. So maybe a client just needs execution people or a lot of
young people who are great with social media. We don't always have
to give them the pyramidal structure of senior VP and account
supervisor. We're doing models that suit us, and I'm not sure
that's so smart. We also have to take the risk of saying our media
mix has changed, and here's a better strategy. We shouldn't stay in
our little boxes of execution. ... We have to be brave enough to
take that risk."
BEAVEN, WORLDWIDE CEO OF INTERPUBLIC GROUP OF COS.'
"The opportunity for improvement centers on an ability to find new
models that link price, performance and value. Within that,
agencies must have the ability to track, measure and synthesize,
and this must be synchronized with client objectives. The best
discussions occur when the marketing and procurement functions are
unified and seeking value in all areas."
CLINICAL PROFESSOR- MARKETING AT THE KELLOGG SCHOOL OF
"You really need clear alignment on goals between agency and
client. And people need to think about, what are the deliverables?
And what are the expectations? Often where you see trouble is when
there's confusion as to what somebody is thinking they're getting
and what somebody thinks they're delivering. Eventually what
marketers will need to get to is an understanding that this all
takes real resources and real money to do great work on the
agency's part. Clearly, there's an onus on both sides. As we learn
more about how to evaluate some of the new marketing tools that we
now have, it will be easier to structure the agreement."
COWDELL, CEO OF MINDSHARE, NORTH AMERICA:
"The keys to improving the relationship are clarity, better
understanding of who can do what versus the hyperbole of promise
and less of the promises made on PowerPoint and more substance of
delivery of business results. Everyone relaxes a bit when they know
ORTON, DIRECTOR, EFFECTIVEBRANDS:
"Assessing the goal and then clarifying roles and responsibilities
of teams within the marketer's organization and the agency's ...
and ensuring that team members have the proper skills and
experience to get the job done according to regional market needs
as well as global ones are crucial. Finally, budgets must be
aligned, and leaders must sign off on the new model of working
DIAMOND, GLOBAL CEO OF INTERPUBLIC GROUP OF COS.' WEBER
"It's all the normal issues ... great clients are ones that bring
you in and make you a partner rather than a vendor. The No. 1 thing
to make things better is, as long as you are at the table they make
you a full partner. The second an agency accepts a lesser status or
a client imposes a lesser status on them is the second the
relationship goes into a downward spiral."
GLOBAL PRESIDENT OF OMNICOM GROUP'S RAPP:
"Efficient and effective creative solutions are more likely to come
from marketers and agencies who work together seamlessly. Great
creativity starts with great teamwork founded on mutual
understanding and open minds."
Five pain points in
the marketer-agency bond