Are Agencies Too Big, Too Controlling?

Just how much power should an agency have over its clients? It's a really interesting point I was chatting about with a pal first thing this morning before reading the headlines and seeing that the rift between Omnicom Media and Channel 5 has deepened.

I don't think anyone's quite got to the bottom of why Omicom took its client's reputed GBP30m worth of spend away from Channel 5 last summer, although it's clearly the reason why the broadcaster has dropped PHD. The most convincing explanation is that Omnicom had underspent with ITV and so had to move budget that might have otherwise gone to Channel 5. It can't admit to this and so just doesn't comment on a "spat" that might well be nothing of the sort -- more a balancing of the books.

To be honest, the real issue here isn't necessarily the spat because disagreements are not that uncommon. The real issue here is Omnicom will have sold itself on having clever planners and buyers who know how to maximise a brand's budget and get it out in front of the right people. So long as, of course, they're not the type of people who watch Channel 5. How can an agency sell itself on having the brains a brand needs and then strike off an entire television channel in favour of another? Have the brands' customers all shifted from Channel 5 to ITV? I doubt it. Does Omnicom, for whatever reason, need to increase spending on ITV? Well, yes, that's where the budget is going, so that appears to be what's happening.

A huge brand might not miss out on advertising with Channel 5, although roughly the same roster of clients were on board over the past two years when Omnicom was the top spender on slots during Big Brother. Considering that intention to get in front of 16 to 35 year olds is still there, the decision to drop the channel altogether is looking increasingly odd -- unilateral doesn't even seem to cover it.

If Omnicom is evening up the books with ITV, we need to remember two things. It's bending its clients' strategies and reach to achieve this, with its clients' money. At the same time, it's pushing the prices of prime ITV slots up, due to the excess demand. For clients, that's hardly a dream scenario.

Little wonder, then, that the most open rumour in London is how the other agency groups are wooing Omnicom clients.

The whole episode gives more weight to the coincidental chat I was having with a pal who has just co-founded a new agency. We agreed that one of the biggest challenges for brands is the unchecked power of agencies. Just go ahead and appoint one and you'll see how quickly projects which require a sister agency's input and expertise are sold-in. I once had science explained to me as being at least as much about the pursuit of funding as the truth. I rather think the same could sometimes be said about agencies, if I'm brutally honest.

Why don't brands kick back more, we both wondered aloud? It's their budget, after all. The cleverest bits of planning and search strategy were, in our agreed opinions, normally fairly common-sense rectifications of strategies which had been allowed to go pear-shaped, so why presume only your agency can suggest some rather obvious remedies? Why presume only their sister agencies can be brought in to help with this?

I can't confess to know the answers to this. I have a theory that the deals are usually signed so far up the command chain that when it comes to bright brand marketers at the coal face, they find their hands are tied. I know one household name where this is the case. A change of agency has meant they are bound in to one of the huge agency networks and their options of working with bright sparks outside the circle are severely limited.

So, if the rhetorical question is whether the huge agency networks too controlling, it will comes as little surprise that the answer is, at least sometimes, "yes."

The really interesting follow up is what the big brands going to do about it -- after all, it's their money.

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