The Agency Review Shuffle

Jim1In the last few weeks, some of the nation’s – the world’s – largest advertisers have announced putting up their media accounts for review. Johnston & Johnston, Sony, General Mills… Coca-Cola, Unilever and L’Oreal announced doing the same thing not long before that. These companies represent billions of dollars. That’s right, billions with a “b.” Procter & Gamble put its North American media business up for review. That’s estimated at $2.6 billion alone.

Why the sudden frenzy of casting billions upon billions of dollars in media spending up for review all at the same time? Is this a coincidence, or is there something in the water?

The real reason, most likely, is that a lot of the very biggest advertisers haven’t gone through a serious review of their media business in a number of years. This is not to say that a process such as a media review should be conducted with too much frequency, but if it’s been more than five years during the last five years, enough has changed in the media business to warrant a close examination of how an advertiser is spending money and how their agencies are managing it. If it’s been 5 years since your last review, think about what’s changed…

  • Social emerged as a major marketing platform and a source of more data about what potential consumers do with their time than any data source in the history of data sources came.
  • Televisions got connected to the Internet, and is now capable of being delivered, measured, and targeted like digital.
  • Netlfix and, to a lesser extent, Amazon have become major content providers, and can provide that content through devices that have nothing to do with cable or broadcast networks.
  • Big data has become de rigeur to back nearly each and every business decision. This goes for advertising targeting and delivery.
  • And much, much more!

It makes sense that if you spend oodles of money on advertising, you want to know that you’ve got the best team using the latest and greatest to make it all happen smartly and efficiently.

However, the following contemplations as to the reasons why these reviews are taking place are additional inspections wholly unencumbered by the process of thought and “has no basis more reliable than my own meandering experience.”

Procurement made me do it! This is something that any of you will have had experience with if you’ve worked on some of the bigger advertisers. Once things like packaging, ink, tomatoes, and sugar syrups had been subject to the efficiency-birthing of the procurement process, it was only a matter of time that less “phenomenal” elements of a businesses costs were subject to the cost-balancing exercise of precisely determining things like the costs of legal or of advertising agencies and media to ensure the organization was not paying too much relative to others in the category – or any category – for the same sort of things. Understanding that quality, while important, is not the primary consideration. But hopefully that’s borne out to in the process.

Quest for blame. When business is going poorly, advertisers often like to blame others first. The agency is sometimes just the closest dog at home to kick. Bad product, weak offers, highly competitive landscape, and improper prioritization are rarely looked at as first causes for poor performance. Nobody’s baby is ugly; it’s gotta be something wrong with the camera.

Scare ‘em straight. Sometimes the existing marketing services provider is slaking off. The client generally likes the work and knows the agency is capable of it, because that’s how they got the business the first time, and the work was good at first. But time went on, maybe teams change, there was no longer as much top-to-top communication, and the relationship weakened. The work, in turn, became less accurate or tardier or any number of things that demonstrates a fall-off in performance. The thing is, a wholesale change in agencies for very large pieces of business can be extremely high friction, losing accumulated institutional knowledge, transitioning to new systems, and in same cases paying for two agencies at once – the old one on its way out and the new one on its way in. Nothing like throwing everything into review to get the old juices flowing again and reignite that loving feeling. And maybe a better fee structure can get worked out at the same time!

Grass is greener. Some advertisers feel like they are missing out just because they are reading about other advertisers doing cool things and they want to do cool things, too. How come the agency isn’t bringing us cool things? Maybe a new agency will be better. But maybe the current agency is doing its job just fine and you, the advertiser, are not right for the cool things? In this case, it would be good if the agency was at least keeping the advertiser abreast of cool things. But then get a serious senior management meeting on the calendar and express it. A knew agency doesn’t have the answer because it is a new agency.

Nepotism. Don’t think it doesn’t happen. Very, very, very large advertisers will take gigantic pieces of business away from their AOR and give it to a smaller specialist shop just because the client’s wife is a friend with the smaller shop’s owners. In cases like this, there is little to be done. Unless you can mount a shareholder revolt for bad decision-making practices, you’re kind of SOL.

A genuine quest for improved everything: resources, services, tools, and processes. The advertiser is just all around ready for a new car or even a new house. They loved the old car and the old house, but neither honestly fit the advertiser’s needs anymore.

And that pretty much what is at the hear of the very first reason stated above. And if that’s the case? It is the cycle of life, for “this, too, shall pass away” applies to all of the known universe.

Jim Meskauskas is a co-founder and Chief Strategic Officer of Media Darwin, a consultancy specializing in strategic planning of commercial communicative action. He’s a medialogist who has spent the last 20 years living, breathing and thinking about how to use media to move people to action. Outside of that, his likes are horror movies, Southeast Asian cuisine, his wife and his cat — not necessarily in that order. His dislikes are mean people, people who text while walking in or out of the subway entrances, pestilence, war, famine and death.