Confessions of an Agency CEO

What’s the most frustrating part of running an agency?
It is getting increasingly more difficult to do great work and make money doing it. The power has swung entirely to the client’s side of the equation. I don’t see it changing anytime soon. Clients now have procurement departments that buy creative services the same way they buy staplers and paper. They demand transparency into the agency financials, then seek to extinguish the agency’s profit margin. They don’t understand the creative process, nor do they care. Their job is to ensure that the agency makes as little money as possible, and they are good at their job. Also, fewer clients are looking for long-term relationships. They want to sleep around and have flexibility and are only willing to sign up on a project basis. This doesn’t give the agency any predictability in building teams and growing the business. The agency can never get comfortable and get into a groove with a client. It also feels like we are in pitch mode. A lot of clients still expect that initial ideas should be developed by the agency for free and they should only have to pay for production of the ideas they approve. And as PR, digital and advertising grow closer, there is less differentiation between agency offerings and more competition for projects that are out there. Advertising pitches can now start with as many as 20 agencies from every marketing discipline.

Bottom line: The most frustrating part of running an agency is that clients want ideas for free, want to pay as little as possible for production and are unwilling to give the agency a long-term commitment, and there is more competition than ever to win these projects. And if you happen to lose, you’ll be lucky to get a phone call from the client.

It’s often said that clients get the work they deserve. What separates
the truly good ones from the awful?
I am big believer that, whether they want to admit it or not, agencies are defined by their clients. A client’s willingness or desire to do interesting or innovative work is what’s going to help you or hurt you in your attempt to create successful campaigns, build a portfolio, win awards and recruit new talent. The client’s culture invariably rubs off on the agency. It’s important to consider this going in to any new relationship. Good clients are secure and accountable individuals, who know what they need to do and can give clear direction. They stand behind their word and defend their position. They don’t hang the agency out to dry at the first sign of trouble. Good clients are secure enough to take risks and are not afraid of being wrong. They trust the agency and can effectively manage from a distance, which allows the agency to focus on delivering a great product, not managing an erratic client. Bad clients, conversely, are insecure, political and weak. They are afraid to stand up to their peers and bosses. They try to make everyone happy and get incremental credit along the way. Making great ads is secondary to their petty need for constant validation. Their insecurity and weakness leads to fear. And the fear leads to constantly second-guessing their decisions.

What’s having a bad client like?
For bad clients, the means is more important than the end. They live to control and micromanage the process. They delay approvals and won’t commit. They believe that their high-touch involvement is helping things, when it is actually derailing the process, de-motivating teams and leading to uninspired work. Interestingly, bad clients aren’t necessarily afraid of delivering uninspired work. They would rather produce a shitty campaign and blame the agency for it, than produce a stellar campaign and not get credit for it. Great clients are fearless and increasingly hard to find.

What’s the craziest thing you witnessed in your time in advertising?
Probably that Walmart pitch a few years ago, which I wasn’t part of, but I followed in the press like everyone else. This was the pitch where Draft FCB won the business, and then it was quickly taken away because it came out that Howard Draft was “over-servicing” the client during the pitch process, and the client was subsequently fired for having an affair with her assistant. Those are stories you can’t make up. The Subway pitch video, which was the precursor to the death of Agency.com was also pretty epic.

Do you think the advent of holding companies has made the ad industry worse?
I don’t think they’ve made the industry any better or worse. Most holding companies are made up of lawyers, accountants and real estate agents. They don’t often affect the strategic or creative offerings of their agencies. They find ways to use their size to leverage efficiencies across their networks. Usually this works in the best interest of the agency. Other times, the agencies are victims of decisions that look better on paper than they do in real life.

Give me an agency you truly respect and tell me why.
I have a lot of respect for Weiden & Kennedy. They are consistent, unaffected, and they let their success speak for itself. They have been able to grow, expand and win big pieces of business without ever losing their creative edge. You never see any blowhards from Weiden & Kennedy sitting on panels espousing some BS about the future of marketing. Instead, they are doing the work that everyone else is talking about.

Is advertising still fun? Would you recommend it as a career?
Yeah, it’s still fun. It’s not “Mad Men” fun, but in the grand scheme of things, it’s way more fun than most jobs. A lot of the young people I talk to aren’t necessarily dreaming of a jobs in advertising. They want to be part of an organization that is doing something interesting and progressive. More than ever, agencies are competing for talent with entertainment companies, mobile gaming, social media startups, etc. Agencies are an inherently fun and youthful place to work, but “fun” may not be enough to attract the best talent. They are looking to leave their mark and be part of something bigger.