Will Project Work Become The Dominant Agency-Client Business Model?
If anyone wonders why client-agency relationships have grown shorter and shorter over the years, the reasons are simple. They have to do with loyalty and attention span. As with just about
every other business partnership on the planet, no one is loyal to anyone any longer. Gone are the days when a handshake would carry a business relationship for decades. Now, if an exec on one side of
the relationship wakes up on the wrong side of the bed or gets a weird look from a stranger on the way to work, they pitch a fit and kibosh their agency-client relationship. Couple that lack of
loyalty with Shiny New Object Syndrome and you've got the perfect recipe for short term client-agency relationships. Why else did every brand clamor to work with Crispin Porter + Bogusky...and then
Today, agencies have had to shift their mindset from the mentality that retainer fees will keep them afloat to a mindset that entails hitting the pavement every day and earning business with project work. One such agency, Falls Church-based SmithGifford knows this and has adjusted their business model accordingly. Of the shift, SmithGifford President Karen Riordan says, "The biggest change I've seen in two years in our book of business is that clients are interested in a project. It may be a six-month engagement that's more similar to a consultancy engagement that Booz Allen or Accenture may have. Then the project is over. The old style of, 'Let's sign on with an ad agency and be together for 20 years,' is really not the way clients and agencies are working with each other anymore."
Acknowledging this shift in loyalty and attention span, Riordan has, quite successfully, shifted her agency's focus and now uses project work to continue winning project work. Most recently, the agency won a large project from Inova Health Systems because they had impressed Inova CEO Knox Singleton with earlier project-based radio work.
As if lack
of loyalty and attention span weren't enough to eat away and the advertising agency business, agencies now have to contend with ad tech companies honing in on their turf. Just as agencies have
worked through the process of building--either through relationships with third party providers or homegrown efforts -- in-house audience buying technologies, the companies behind those buying
technologies are now doing end runs around the agency and hooking up directly with the client. Clients' desire to own their own "big data" and vendors' desire to cut out the middle man have spurred
the shift. Advertising Age digs deep into the shift.
While reading the above might dissuade some from launching an advertising agency, South African ad execs Zibusiso Mkhwanazi and Veli Ngubane are not the kind of guys put off by a few challenging industry shifts. In January 2012, the pair launched Johannesburg-based Avatar with 2,000 Rand. That's $200. No, seriously. They started the agency with $200. And it appears to have been a success. The agency, which now has 28 employees, currently works with 20th Century Fox, National Geographic, Fox International Channels and Diners Club International. As they, you can do anything if you put your mind to it.
This weekend, top executives—as many as 100--from Publicis Groupe
and Omnicom will gather at The Four Seasons in Miami for a "secret" meeting in advance of the
merger. So secret in fact that Omnicom CEO John Wren confirmed it on a conference call with analysts Tuesday morning. The execs will work towards ironing out any kinks in advance of the merger's
approval. Individual executives, many of whom have never met before, will deliver presentations to familiarize the rest of the soon to be merged executives with what each of their companies brings to
the table. Executives have been advised by their legal counsel not to divulge too much since, prior to regulatory approval, everyone in the room are still to be considered competitors.
Congratulations go to Publicis Groupe's Bartle Bogle Hegarty and Omnicom's PHD for recently picking up the Newell Rubbermaid account. BBH will handle the brand's creative needs and PHD will handle the brand's media needs. The selection of these two agencies was the result of a consolidation effort the brand undertook to reduce the plethora of agency relationships it had. Of the move, Newell Rubbermaid CMO Richard Davies said, "For the first time, we are aligning all our brands and categories behind one set of agency partners to drive big ideas that create a strong point of difference for consumers. BBH and PHD are the best in the business at what they do. With their partnership, we now have the power to achieve much greater scale, reach and impact as we invest behind growing our brands worldwide."
Mother London has hired former Saatchi & Saatchi director of integrations Matt Groves as the agency's first operations director. Groves will oversee the agency's integrated production, design and digital capabilities. Of the addition, Managing Director Sara Tate said, “Matt will be joining us at a time when we are innovating and re-inventing the way we make things. He will be critical as we continue to make dramatic advances in our digital capabilities. It’s an exciting time for us and we can’t wait to have him on board,”