The internal turmoil at Ogilvy over its contract with the Customs and Border Protection has meant new questions for agencies — and is turning into a test of how the business is run, as well as a question of how much agency management must listen to its people.
Agencies are dealing with a new market reality that affects agency culture, employees and how agencies do business.
At issue in this case is not just Ogilvy’s contract with the government agency but a question of the kind of clients agencies can accept and how they should respond to employees who question the work that they do. It’s also bringing into sharper focus a political divide inside agencies, mostly composed of liberal, left-leaning employees.
It’s not entirely a new problem, though it may be a tenser one now. While agencies have certainly had to figure out their stance on taboo clients like Big Tobacco or Big Pharma in the past, the new era of political polarization comes as the agency business in general is grappling with a new reality of fewer agency-of-record contracts, more project work, in-housing, competition with consultancies, extended payment windows and other various issues that affect the bottom line.
“It’s not a new thing that agencies have had to walk a fine line between making money and working with clients that ‘do the right thing,’” said Allen Adamson, brand consultant and co-founder of Metaforce. “But that world has exploded now. The world has become so polarized that everyone wants to vote in different ways, with their paycheck and with the business they work on. Ogilvy is the first [agency,] but it won’t be the last.”
Ogilvy is certainly not alone — companies like Wayfair, Microsoft, Amazon, Salesforce, Deloitte and Marriott have all dealt with some level of employee protest in response to connection to the Trump administration in recent years — but it may be the first high-profile advertising agency to deal with it on this level.
Initially, following the election, the political divide within agencies was one of personal political preference and internal culture. Now, as a humanitarian crisis plays out on the U.S. border, Ogilvy’s work for the CBP has been called into question and stirred up a debate among agency employees.
On July 24, Ogilvy CEO John Seifert sent a memo notifying employees that the agency would continue to work for CBP. The memo followed a meeting Seifert had with 45 employees on July 9 to not only clarify Ogilvy’s relationship with the government agency and address employee concerns but defend the work. Since early July, Ogilvy has grappled with scrutiny of its contract — both internally (by employees) and externally (in the press) — following a tweet by immigration advocacy group RAICES that claimed the company handled PR for CBP. Per the memo, Ogilvy’s “assignment focuses exclusively on hiring better and more diverse applicants.”
“There’s nothing seemingly more divided these days than one’s politics,” said Rob Shepardson, co-founder and partner at creative shop SS+K, which worked for the Obama campaign. “It has divided the country, it’s divided families, it’s divided companies and agencies. We’re not immune to it. It was always the case in many ways and any responsible owner or founder of an agency would be conscious of who they worked for. But it’s certainly has ratcheted up in the last couple of years since Trump’s been in the White House.”
Money versus values
Historically, agencies have always had to figure out if they should work for controversial or taboo clients like companies that are military contractors during times of war or Big Tobacco or even Big Pharma. But now, under this political climate, even commenting on the issue can be seen as too sensitive to consider. (A number of agencies, both independent and within holding companies, declined to comment for this story.)
Agencies are handling the new political divide in different ways. Some creative shops, like Stink Studios, believe that agencies need to accept the new reality rather than justify working for companies or organizations that don’t align with the shop’s values.
“Everything is political, and always has been, but that we’re hyper-aware of how politics informs our decisions during times of supercharged political turmoil,” wrote Mark Pytlik, CEO of Stink Studios, in an email. “In the era of Trump and ICE and conscious capitalism and the environmental crisis, the stakes are just so much higher these days. The old excuse of ‘business is business’ to justify a questionable contract is simply no longer a viable response, if it ever was, and the internet makes it impossible to sweep an ugly client under the rug. Brands are increasingly becoming more purpose-driven, and there’s no reason that agencies shouldn’t be as well.”
Others, like creative shop Forsman & Bodenfors, will poll employees about a particular piece of potential business to take the pulse of the agency, said Mike Densmore, CEO. “We ask how they would feel,” said Densmore. “Would they be proud to work on it? Is the work not aligned with our mission as group? People really respect that and feel they are included and that drives the decision for us.”
“If an agency takes on a client whose ideology is polarizing it has accepted that it too, and all its employees wear the badge of this client,” wrote Scott Goodson, founder and CEO of StrawberryFrog, in an email. “It’s very dangerous for leadership to take on a client that staffers are strongly against. The new structure agencies is not the topdown structure of the past where the chief sits in a bugle in the penthouse of a marble office structure. Today modern leaders sit among their teams, work closely with their people, understand them and their values and try to understand their point of view.”
You can work anywhere
Some agencies have offered employees who feel uncomfortable working on a certain account the opportunity not to work on that account and instead be put on another piece of business. That solution is one that Bryan Christian, CEO of Proof, an Austin-based shop that has worked for government contracts as well as the Army, has employed in the past. But for Proof, whether or not the company resigns an account, is up to the agency management.
“You have to trust your agency management,” said Christian. “But people can choose where they work. If someone is the polar opposite of what our accounts are, they should look for a place where they’re more comfortable. It’s fine to raise concerns to the management of the agency. It’s also fine to look for a job if your agency has an account you’re not supportive of.”
Adamson believes that while Ogilvy may be at risk to lose employees over maintaining the CBP account, the bigger risk to the agency will be if the CBP decides to leave the agency. Agencies already struggle with differentiation at a time when they are strapped for cash and clients who feel an agency doesn’t want their business may leave, causing further headaches.
“It’s not so much the agency’s choice but clients saying they don’t want people on their business who don’t believe in what we’re doing,” said Adamson. “Or are creating PR or social media challenges. Clients are fickle, and this gives them yet another reason to leave an agency.”