The Musings Of An Opinionated Sod [Help Me Grow!]

We all know times are tough … we all know everyone is having to look after the pennies more than before … but when did adland become a charity?

I am getting increasingly alarmed at how many big agencies are lowering their pants in a bid to secure any business that is up for pitch.

I’m not talking about fee reductions of 5 … 10 … 15% … I’m talking about taking on the business without a hope in hell of making a profit.

Why would they do this? Well it tends to be for 2 reasons …

1/ With the size of the companies in question, they think turnover is better than nothing.

2/ They believe when times improve, they’re in prime position to get their unfair share.

Now I don’t know if either of these outcomes is true, because in my experience once you sell low, the only way tends to be even lower … not only that, but one of my mentors told me that in business, turnover is vanity profit is sanity … so to me, the approach adopted by many of the big networks to be seems quite anti-successful-business to say the least.

In a perfect World, I’d try and get all the smaller agencies to come together and form a class action against multinationals who do this sort of thing, under the guise of it being ‘uncompetitive behaviour’ … but given the law tends to favour the side who has the money, I don’t fancy the idea of living in a bus shelter for the rest of my life just to make a point that, in the big scheme of things, will have no positive effect whatsoever.

However there is something that is putting the lazy multinationals in their place …

Whilst everyone is looking for more ‘value’ from their business relationships, the economic crisis means there is an increasing number of clients who are after more pragmatic responses to their business problems/goals, not just the usual cheap brainwashing strategies favoured by agencies who number their employees in the thousands.

Of course these companies are still in the minority but when brands like Google, Coke, Singapore Tourism, Unilever and Microsoft have started to seek out smaller, more hungry, less mono-process driven agencies to drive their business forward, you know that as much as price is important, so is the quest to develop ideas that can really drive longer-term growth and value.

Jesus, I sound like I work at Landor with that last sentence … hang on …

URGHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!

That’s better, must have been a management consultant bug.

Now where was I?

Oh yeah …

As I mentioned, the big brands that are engaging the smaller agencies are still in the minority … and even then, quite a few still expect champagne ideas at beer prices … however I think it’s a positive step, not just because it means quality is starting to be really valued again, but because the share-holders of companies like WPP, Omnicom etc will start asking why their ‘blue chip’ investments are missing out on opportunities to work with big spending organisations and that could result [note: I said ‘could result’] in forcing the advertising giants to start releasing the shackles off their many talented people, which inturn could start helping the whole industry become more pragmatic, interesting and valuable again.

Of course it might not happen … especially when so many brands still treat their agencies as over-priced scum and view working with them as a daily battle, of which being petty and penny pinching is the ultimate achievement.

I remember a client once told us they wanted us to reduce our already VERY competitive monthly remuneration by 60%.

When I said I’d be happy to do it if they let us buy all their products at the same level of discount, they looked at me as if I was mad.

I admit it would have probably been wiser had I not said, “You started it” but I hate how some companies act as if it’s a gift to even be allowed in their shadow, let alone get paid for making them shitloads more cash.

Oh, and for the record, we did lose the business … another agency DID agree to their vastly reduced remuneration package … and they did see double digit sales decline … however as they have asked us to start working with them again, I won’t fuck it all up by naming and shaming them. Yet. Ha!

The wonderful Chris Jaques told me a story of an agency he once worked at that was losing so much money on clients, they tried to register the agency as a charity to get tax breaks – genius – however whilst one persons version of ‘fair’ is anothers ‘rip off’ I do think the below video does a good job of explaining why we’re experiencing the age of marketing devolution …