The Week of the Agency.
Maybe it was all planned around the Mad Men premiere, or perhaps just the result of cosmic alignment, but there seemed to be an awful lot of commentary on life within ad agencies this week. And not much of it good. If I were one of the agencies with engaged planning teams, professional standards and strong customer relationships, I’d be cringing right about now.
Continuing its “Confessions” series, Digiday (who are doing some of the most meaningful coverage of our business these days) gave us “Confessions of an Agency CEO.” Apparently clients can be dumb, insensitive, shallow and calculating, all at the same time. Who knew? Bitching about clients’ lack of appreciation seems ingrained in the agency culture. (Who can forget the boorish, closet-case Lucky Strike client on Mad Men?) But based on Brian Morrissey’s Digiday piece, that client now has far greater means to inflict pain on the agency: procurement, transparency, the assignment of “projects” rather than a long term commitment to any one shop. Running an agency profitably seems a pretty tall order these days. And at the leadership level, it doesn’t seem like much fun.
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In fact, it seems that agencies have become so unprofitable and glum that they’ve been forced to outsource both nutrition and entertainment to publishers and other media sales organizations. As Digiday’s Jack Marshall writes in “The Consequences of the Gift Economy on Online Ad Sales,” “…What media agency jobs, particularly at the low level, lack in salary they make up for in rooftop parties and VIP concerts…This is, in some ways, a business-model decision. Lower staffing overheads means bigger margins and bigger profits.” But as I wrote in this space last year (“Buy Me a Couch!”) we’ve gone far beyond free meals and Yankee tickets. Today it’s increasingly about merchandise. Just last week I was forwarded an e-mail exchange in which a seller invites the agency team for a night out. The reply comes back that what they’d really like to do is go shopping for expensive personal items and accessories. You can’t make this stuff up.
I’m judging neither those who run agencies nor the media planners who take what they can, while they can. But the system is profoundly broken. Those charged with spending the client’s money wisely and effectively are having their lifestyles and wardrobes subsidized by those whose wares they are supposed to judge. Imagine if the Federal government hired border agents by telling them “The pay’s not very good, but you’ll be getting tips, small appliances and cases of liquor from each of the truck drivers who pass your checkpoint.” Cue the outrage.
There was talk in the article about vague agency policies on gift acceptance, but it seems they are pretty ambivalent and mostly optional. If I were an agency CEO out to make a value and culture statement about my shop, I think I’d draw a line in the sand here. Meals? Yes. Merchandise? No. Rep takes you to a sporting event or concert? Yes. Rep hands over tickets but is not with you? No. Make a clear distinction between relationship building and graft. And for God’s sake, if you already have a policy then go public with it and wear it as a badge of honor.
And I’ll put the same message out to sales leaders: challenge your reps on how they’re using T&E budgets. Buying off planners with sneakers and jeans is not just morally suspect but also largely ineffective. The current culture is cynical and self-defeating. The elevation of our business is going to happen one judgment call at a time. I hope we start making those calls very soon.