I’ve always likened agencies to baseball managers and football coaches. We are hired to be fired.
Make no mistake. The termination clock starts ticking as soon as the letter of agreement is signed. The relationship may last a month, a year, a decade or, in the case of Ogilvy, 75 years. But it will end.
In Ogilvy’s case, the “Dear Agency” letter came from Ford when the latter decided it was time to seek a divorce from WPP (Ogilvy’s owner).
The reasons for the break-up included: “….Ford’s slumping sales, weak demand in Europe and trade tariffs with China.” Mix that toxic potion with the reality that “….clients are increasingly taking work in-house and using the giant online platforms of Google and Facebook” and you have the perfect storm for any freshly-minted CMO whose most logical first move would be to blame the incumbent agency and hire fresh thinking. It happens all the time.
Simultaneously, Ford is filling 100 new in-house global marketing positions (while Ogilvy probably laid off just as many employees who had worked on the account).
Expanding in-house marketing teams is a trend and Reuters says “….has stripped the big advertising groups of some of their income in recent years.” No question about it.
That’s why I’m so happy to be positioned as a mid-sized firm led by public relations but offering an array of strategic integrated services ranging from web design and employee engagement to societal crisis management and all forms of content creation.
The most vulnerable firms right now are in the digital and advertising spaces. That’s because those service offerings can easily be duplicated by an in-house team.
PR is a relationship-based business in which long-standing personal relationships with influencers, reporters, producers and editors are owned by individuals at the agencies. Those expansive and valuable relationships are difficult to replace.
Even if PR is slightly more strategic and less tactical than its sister disciplines, I know the clock is ticking with every single Peppercomm client (and we have terrific clients at the moment). I know the clock is ticking because I’ve experienced longstanding relationships end in a heartbeat due to:
- A new CCO or CMO deciding they wanted their own team.
- A major retailer deciding it made more sense to allocate the PR/social spend to upgrading their IT.
- A clueless PR manager who believed that “….every relationship has a five-year window before things get old and tired.”
Having seen and experienced it all I totally empathize with the fine people at Ogilvy. And, I also know I need to double down on feeding the new business pipeline at my shop. What’s here today may be gone tomorrow. Or 75 years from tomorrow.
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Uplifted admonition ! a euphoniousstimulus
You’re right RepMan — nothing lasts forever except the Cold November Rain.
In Ford’s case, I think Ogilvy/WPP is better off in the long run. They saw this coming the day Mark Fields was fired. Not that he was any genius, but Ford has had a management shift which leaves that company run by a furniture executive overly-focused on futuristic mobility concepts that don’t move their near-term product. Their theoretical global marketing head Jim Farley (cousin of Chris Farley) has failed upward, alienated many internally at Ford and has no concept of what he’s doing. Watch this transition go badly.
What I’m learning about the client relationship is that sometimes you have to push the boundaries, even if there’s risk. Growing business with existing business is tough when your internal champion who wants to keep you for themselves. That’s hardly a fair business relationship, and there’s no reason to shore up business within other power silos because yes, the day will come when someone will fire you.
It only took me about 50 years to work up the courage to think and act this way.
Thanks, Gerry. Some clients get it. Others don’t. And the latter discard an agency with as much compassion as they would with yesterday’s newspaper.
We are in a relationship business not a relationshop business. You words are spot on. Let’s hope companies understand and act on it.