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Thoughts & Musings

Agency-Client Relations Hit All-Time Low

Such is the headline of this article, published yesterday in Adweek. The opener:

“Once upon a time, the agency was the most important outside relationship most clients had,” said Bill Duggan, group evp for the Association of National Advertisers. That is no longer the case.

No kidding.

“The industry really is at a breaking point,” said Crossmedia CEO Martin Albrecht, “because clients don’t see the value, period.”

What could be the reason? A piece like this would be a great opportunity for a little introspection on the part of big conventional ad agencies. What’s offered up instead is mostly a list of agency-side grievances about Fortune 500 procurement processes, big client RFPs, falling rates, and lengthening payment terms. Buried deep down in the article, however, is this interesting nugget:

Greg March, who launched Noble People after leading Wieden + Kennedy’s media team, said clients may just be “accurately valuing something that has become, in fact, a commodity—especially on the larger end of the agency services spectrum.” In other words, large brands and conglomerates can almost always grow profits by cutting costs, and marketing will inevitably be among the first on that chopping block.

In other, other words, a big part of the reason large clients aren’t recognizing — or paying for — big agency value is that they’re not seeing very much of it. Most traditional ad agencies have jettisoned many of their own high-value strategic and consultative services to focus on production and implementation, which earns them a lot more money. That in the end these big firms simply become carbon-copy executors of carbon-copy campaigns should come as a surprise to no one.

Seems to us that instead of spending time complaining that they don’t get no respect, the big firms ought to be focused on finding ways to earn that respect back.