Agency/client gap widens

This is the first in a regular series of articles by John Dalla Costa which will appear in every other issue of Strategy presenting a counter-conventional look at contemporary advertising and the year I have been away from the advertising...

This is the first in a regular series of articles by John Dalla Costa which will appear in every other issue of Strategy presenting a counter-conventional look at contemporary advertising and marketing.

in the year I have been away from the advertising business, I have discovered a growing rift between clients and their agencies.

This is disconcerting.

While many companies are overhauling their attitudes towards suppliers to be more inclusive, while they are creating more intimate strategic partnerships with other groups to enhance competitiveness, the relationship between client and agency seems to be deteriorating rapidly.

This sense of a rift has emerged in numerous discussions I have had with advertisers in the last year.

Last January, I stepped down as president of Miller Myers Bruce DallaCosta Advertising and started a new vocation as a writer.

Perhaps I am hearing things a little differently now that I do not have a vested interest to protect.

Or, perhaps, my being from the business, but no longer of it, has provoked people to speak more honestly to me about advertising.

Whatever the reason, the candid comments I have heard paint a picture of an industry that is dangerously out of touch with its clients.

Some of the advertisers I spoke to I have known for a long time. Others are people I have only recently met.

Consistently, they express a feeling that advertising agencies were ‘out of step,’ ‘out of sync’ with the tough reality of business in the 1990s.

The economy is causing massive restructuring, and many companies have been through difficult reorganizations and painful cutbacks.

Internal pressure for performance has intensified even while prospects for the economy grow more dismal.

People are expected to do not only more with less, but more continuously better with less.

In this twisting, unpredictable and traumatic business climate, many of the advertisers I have talked to view their agencies as stuck in a time warp, operating with the slower speed and fuller bureaucracy that they have struggled with so much pain to overcome.

Agencies may have been through scale-backs and cost-cutting, but the impression is that these changes are cosmetic, that the fundamental operating style, which many clients have had to shed, is intact in the ad world.

Business today is about results. Fast results.

Agencies logically argue for the long-term, for investing in and nurturing consumer franchises. Yet, even while acknowledging the validity of this thinking, clients face enormous, unrelenting pressure to deliver results immediately.

Hearing what they should do does not help what they must do. Jobs are on the line this quarter. Careers are at stake this fiscal year.

Viewing the business from such different time perspectives jars clients. It confirms the impression that the agency does not fully understand, or empathize with, the brutal reality of managing a business in the 1990s.

In their drive to survive, many clients have implemented far-reaching quality and continuous improvement programs.

Many spend aggressively in research and development to stimulate the market with new products, new services.

Agencies are supposed to be creative, yet their management seem to have been slow in adopting any innovation.

Advertising planning follows the same cycles and time-frame that it seemingly always has. Same thing with creative development and production.

Where is the urgency to improve? Where is the investment in learning? Where are the structural changes that prove agencies have become as customer-directed as clients have?

One of the competitive imperatives of doing business in the 1990s is improving productivity while reducing costs.

This is a pulse accelerator for so many of the people I talked to.

While other suppliers have made often dramatic strides in improving service on these dimensions, advertising costs seem only to be going one way – up.

Budgets deliver ever more sparsely shaded blocking charts. Production, especially tv, is costing as much as if the 1980s never ended.

The overall impression is one of profligacy, and this angers many marketers. They see too many people from the agency at a meeting.

Or, too many people at a meeting who sit and do not say anything.

They see layers. Departments. Layers within departments. They have a hard time keeping track of the often pompous titles.

They see awards and their ritual of tv production (‘All those bagels for all those people!’) as proof that advertising is trying to hard to be ‘Hollywood.’

Whether these reasons for the displacement client feel are valid is irrevelevant. As we know in advertisinp, perception is reality.

Clients have learned painful lessons about straying from their customers. They are also making huge efforts to build better relationships with the constituents they need to compete.

These skills have sensitized them to expect more from their agencies, to measure that partnership against new standards.

For agency people this is a difficult realization in what is already a difficult economy. While not all clients may feel this way, and while not all agencies are so out of alignment with their clients’ expectations, it is clear that relationship rebuilding is in order.

The challenge is not to build this relationship back to what it was, but rather to recast and reconfigure it to be relevant and effective for the business today.

This reconstruction has interesting twists because there has been a role reversal in the source and inspiration for innovation.

Clients now are often more daring, more responsive, more creative than agencies.

In fact, the same passion and focus for the customer which clients have used to remake themselves can provide the model for agencies to re-engineer their process, structures, and service delivery.

Who would have thought?

John Dalla Costa is an author and consultant to senior business executives. His first book, Meditations on Business: Why Business As Usual Won’t Work Anymore, came out in 1991 and he is hard at work on a new book. Dalla Costa spent 16 years in advertising, and was president and chief executive officer of Toronto ad agency Miller Myers Bruce DallaCosta.