Sell the Hole, Not the Drill

05 March 2014

Writing a blog has its ups and downs. On the upside, there are several handsome, well-informed, intelligent people who mail me, or comment on my site to say how much they enjoy what I write and how much they agree with me. Clearly these are people of taste and distinction.

Then there are those who feel I need to be put straight in my opinions, or that I am badly misinformed, or that I simply don’t understand how the business works these days. Sometimes where it’s practical to do so I meet with these people – and very convivial these meetings have been. Generally I leave them convinced I’ve won them over and that actually we are in violent agreement with my published point-of-view.

Naturally they leave the same meeting with an equal sense of certainty, but from their perspective. They’ve put me right; and I will from now and forever respect the views of whichever organisation I’ve been meeting.

Sometimes I am genuinely taken aback. A while back now someone came up to me at a media function and said (I paraphrase) ‘the trouble with you is you just hate agencies’. The fact that I worked in advertising and media agencies from 1969 – 2003; that I absolutely loved it and was over that period a (highly vocal) apologist for both advertising and then media agencies against all sorts of criticisms from all sorts of people apparently doesn’t count for much.

I am still proud to describe myself as an (ex) agency guy; I have many friends in agencies and I genuinely believe that they add real value to those many businesses who use them well.

Which is why it saddens me that the media agencies are in danger of tearing themselves apart.

There have always been two conflicting forces at work in any media agency – in old language there’s the buyers and then there’s the planners. The hot and the cold. The analytical and the dealer. The client-focus and the media-owner-focus.

Of course these categories are by no means exclusive – some of the best dealers are highly creative and/or analytical in their approach to deals; many client-focussed leaders are admired by and achieve brilliant results from their media owner relationships. But what have for years been fault lines, easily explained away as constructive tension by anyone who knows what they’re doing, are becoming gaping cracks.

The cracks are caused by attempts to deal with conflicting approaches to ‘what’s best’. Agencies will tell you that clients say they want one thing (creative and original communications planning underpinned by strong analytical thinking)  whilst at the same time imposing lower fees, later payment terms and so on.

Clients point out that agencies appear dishonest and even hypocritical. They are regularly accused of keeping discounts; they say they prepare truly objective plans whilst at the same time pushing their clients’ money into properties they either own, or with whom they have over-arching deals.

There’s also the point that agencies aren’t always great at explaining the benefits of what they do. On the buying side (and this is especially true in the digital space, they construct deal policies that resemble in their labyrinthine complexity some of the investment instruments invented by some of the banks, which everyone pretended to understand but were in fact truly understood by the very few – and that didn’t end well.

The issue of course is that the definition of ‘what’s best’ rather depends on where you’re sitting. What’s best for the agency, I would argue is more clients who trust them, reward them with more responsibility and a greater range of tasks, and pay them accordingly. I would also argue that this model is best for most clients, at the very least those involved in brand building activities. This in effect is the management consultancy model we used to hear was the goal of so many agencies.

Their detractors would say that agencies are peddlers of a commodity, who don’t deserve trust and should be paid as little as possible as everyone knows they’re pocketing money on the quiet anyway.

Whatever the truth, and of course there is light and shade on both sides, one cannot forget that agencies agree the low fees they complain about – it’s rare (but not unknown) for any agency to walk away because the fee is too low, blinded as they often are by the glare of the headline.

Furthermore, claims of poverty don’t really wash. Any client worth his salt can estimate the sort of margins achieved by the large media agency groups – and they’re not exactly low.

If agencies want to fulfil their undoubted potential they need to sell the true business benefits they bring; the results not just the mechanics. They need to sell the hole, not the drill.