Advertisers to Agencies: You Stink

About eight out of ten advertisers polled say that their agencies are overpaid, understaffed and unable to provide the creativity they once did. The criticisms leveled also include inadequate staffing, inexperience, high turnover and weak strategies.

The percentage of advertisers who said they were satisfied with their agency corresponded eerily to the rough number of people who believe O.J. was innocent and that Iran wants nuclear technology because it doesn't think it has enough oil.

The springtime survey fielded by Continental Consulting Group quoted one respondent to partly explain the high scrutiny: "The current environment demands a certain level of success from quarter to quarter, whereas in the past, those pressures weren't necessarily as intense."

I have a better idea: advertisers squeezed agency compensation so low over the past years that they're not getting only what they deserve. I lived through the demise of the 15 percent commission and the advent of the pay-as-you-go model of advertising at the big agencies. It wasn't fun to have to let go account executives, media planners and account planners. When the clients later complained that the work wasn't of the same quality, we regularly told them "Hell, yes, it isn't nearly as good. In fact, now it's barely adequate." We told them that every year during contract renegotiations.



Here's the thing that the CCG study didn't take into account: all those head advertiser guys are really middle managers, perhaps high-level middle managers. The people who actually sign the contract - the CEOs and CFOs - are happy to have those guys beat their heads against the wall now and then, so long as they get a great-looking financial deal with the agency. That this will core out the quality of their marketing over the next five years isn't really top-of-mind for them, were they to believe it, and they don't.

In the very same study, advertisers said both that the agencies were making too much money and that they were understaffed. Were that true, we should be able to look up IPG and WPP on the various exchanges and see some big fat profit margins. When we do take a peek there, we find (at least for those quarters where they aren't doing funny, complicated stuff) that their margins are about one to three percent. You can do better in a money market fund! Heck, Japanese bonds did better than that over the same period. Might that just be incompetence? Well, you got me there - I can't entirely rule it out because, you know, this is marketing after all.

As to the creative product being worse than in years past, that's a tough one to call. I see such poor quality creative extending back for such a long period of time, I don't think these people are being realistic. It's not unlike the average person's opinion of Saturday Night Live: great in the past, terrible in the present - and probably for the same incorrect reasoning. In point of fact, SNL has always been terrible, but we only remember the funny skits from the past, making us mistakenly think the shows were generally good. That they rerun only the better ones only strengthens the deception.

Yes, advertisers, we stink. And when you run that big account pitch to choose a new agency, you will fall into the same trap again, choosing a company desperate enough to offer an even cheaper deal. And your advertising will stink even more.

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