Whatever happened to selling a client what he needs?
In response to Nick Manning’s “Blueprint for a new business model” article, Brian Jacobs, founder of Brian Jacobs and Associates, explains why agencies are on the brink of becoming a “South Wales solution”…
Nick Manning’s article last week raised some important issues on the current media agency business model. This considers what practical steps media agencies need to take to get out of what I believe to be a deep hole.
What qualifies me to comment on the workings of the media agencies of today?
I spend a lot of time these days visiting agencies, typically meeting with mainstream, front-line, client-facing executives. Many of BJ&A’s clients are small-scale entrepreneurial businesses – the sort of businesses that agencies don’t have the time to discover for themselves, yet which could potentially be valuable to them.
I am also a partner in The Agency Review Business, an intermediary competing with the likes of The AAR. The ARB’s business is in helping clients identify, contract with and manage the resulting relationship with their media and market research agencies. In this role I do of course come across agencies in pitch mode, as well as in delivery mode.
I describe agencies as being ‘in a deep hole’. The potential opportunity for them remains huge. They are perfectly placed to become the client’s ‘trusted advisor’ (a role claimed by everyone from ad agencies, through branding consultancies, to market research agencies). The best media agencies manage successfully to blend creative abilities with analytical skills, which makes them well suited to work successfully across disciplines.
And yet they are in danger of blowing the chance. One agency group CEO has described his industry sector as being on the brink. On the one hand, the agency becomes a true communication consultancy, charging high fees for smart advice and with payments linked to the client’s marketplace success. On the other hand we have what he described (with apologies to that part of the country) as the ‘South Wales solution’. In this scenario the agency simply buys; the sector invests in online auction technology, stops investing in research and tools, automates everything, moves to an industrial estate and becomes a pure trading organisation.
The former is all about high margin fees, and advancing knowledge. The latter is about trading models and low fees.
I agree with my CEO friend when he states that the industry’s future is in no way certain. What I see in my dealings with agencies is a disconcerting disconnect between the conference platform platitudes of CEO’s, the pitch promises made by them and their senior colleagues (not just pricing promises, but promises on research, tools, analytics and the like), and the beliefs, vision, competencies and skills displayed by those responsible for the ultimate delivery.
More than anything else clients want to see integrated, joined up thinking from their marketing service suppliers. They want to see intelligence – applied. They want to see their agency deliver them a competitive advantage.
What they get is an over-reliance on price. It’s easy to say that procurement has come to dominate all discussions on remuneration. I firmly belief that this is a cop-out. If agencies want higher fees and a position of influence, then they need to justify why exactly they’re worthy of this trust and responsibility.
Agencies have cut back on the very disciplines they should be developing; they’ve surrendered the intellectual leadership ground to others. They’ve developed more and more specialist units, operating in silos and disconnected one from the other.
When I was active in agency management, I and my peers were criticised for talking in some weird language that clients didn’t understand. The debates of my youth were all about bringing media centre-stage, about relating media activity to business success, to leaving behind the jargon, the gobbledegook, to being a true partner and not just a supplier.
And where are we today? I look around agencies and I see specialists specialising in less and less and talking some strange language. I see a lack of integration (whatever might be said on conference platforms). I see planners divorced from the many new and exciting ideas emerging in our business (some agencies ‘discourage’ their planners from seeing ‘suppliers’). I see people who are unaware, and worse uninterested in the business of advertising, let alone the business of business. I see people who have forgotten how to sell new ideas; who would rather sell their client the ‘same old, same old’ on the basis that ‘that’s all they want to buy’. Another cop-out.
Whatever happened to selling a client what he needs? Whatever happened to invention? To trialling new things? To feedback loops? To ‘search and reapply’? Whatever happened to at least trying to do the right thing – as opposed to the easiest thing?
Clients depend on their agencies more and more, in a world that’s ever changing and ever more complicated. It’s up to the agencies to train better, to engage in the debates, to learn more, to be more curious, to push the boundaries. To make the most of the research, the analytics, the tools they’ve invested so much in and have used so little.
The choice is simple. Be open, be interested, be curious. Or it’s off to South Wales.
Just read your article and find myself vigorously agreeing with you. It’s
not just media agencies who are on the brink though, I feel
creative/full-service agencies are in the same place. There is a sameness
about everything on offer from agencies.
Client mentalities, procurement and the rush to all things digital hasn’t
helped, but to blame any and all of these exclusively is, as you say, a
cop-out. In my experience, pitches are won or lost on the back of ideas,
prices, relationships and luck. Again these are not valid reasons to not
challenge the status-quo and to be passionate about your ideas, inventions,
approaches to research, price bench-marking etc.
Agency senior management seem to be very fixated on doing whatever it takes
to retain/win a piece of business, notwithstanding GFC, market melt-downs et
al – can we really blame them? To loose is to hand another chunk of your
agency’s net worth across to a competitor, to have to reduce operating costs
(people, salary freezes, bonus cuts etc) and contend with a myriad of other
issues such as the emotional disconnection (particularly if it was the loss
of a long-term client).
However, this attitude has resulted in a sameness of agency offering,
enhanced clutter in specialisation, unrealistic promises and an
unwillingness to rock the clients boat by challenging them. The sad reality
is that advertising has/is becoming mainstream, mundane and more process
than ideas oriented. Granted there are exceptions, but they are less and
less likely to be agencies inside the massive four holding companies.
Advertising used to be exciting, fun, challenging, different and a unique
segment. Now it’s not and that to me is sad. The passion for brilliance
seems to be dying out, the quest for ideas that challenge norms and cause
clients to sweat because it’s outside their comfort zone, the desire to
fight for what you believe in etc. I’d like it back as it was for these
reasons that I fell into advertising to begin with.