Responding to a Wall Street Journal commentary by 4As President Nancy Hill largely blaming tight-fisted marketers for Adland’s inability to draw top talent into its ranks, Bob Liodice, president of the Association of National Advertisers, responded that agencies would do better to adapt their business models to today’s marketplace realities instead of playing the blame game.
Writing, as Hill did, in the Journal’s CMO Today column, Liodice asserted: “Agencies have had decades to transform their business models and adapt to the tight realities that every business in America ascribes to. There is no magic bucket of cash that marketers are keeping from agencies.”
While the agency model has changed over the years, it has probably exacerbated Adland’s talent problems, Liodice charged. He noted the unbundling trend that agencies launched 20 years ago that split creative and media offerings into separate shops in a bid to extend client rosters and revenue streams. “This has led to silos, increased overhead, and mixed messaging back to the client,” he said.
Liodice also pointed to analyst estimates that Adland holding company profits in the current fiscal year will significantly exceed estimates for many big marketers like Procter & Gamble, Coca-Cola and General Electric. “With these robust financial profiles, why are starting agency salaries so poor? And why are agencies pointing the finger at marketers for their issues?”
“Poor agency starting pay has been with us for decades,” Liodice argued. “Back to the years of the 15% agency commissions. These were the good old days when we heard little about ‘unfair’ marketers practices.”
Liodice noted that many marketers are taking agency capabilities in house at a time when “transparency issues are breaking down trust between agencies and clients.”
Such factors, he added, “have made an agency career less attractive — but the fault does not rest with clients.”
Liodice also questioned how serious the agency community is about changing the status quo. “There has been no call to action for transformative change,” he said.