Agencies -- Playing a Loser's Game?

Industry developments and agency executive inaction have pushed agencies back on their heels. Client relationships have become one-sided. Clients want more and better creative work across all media (fine!). Clients want measurable results (understandable!). Separately, they want lower costs, which means fewer and more junior agency people (not so great).

It's this latter expectation that is out of sync with the client desire for more and better work. They're trying to get something for nothing.

Agencies are coping as best they can, delivering as much service as possible and adjusting their headcounts downwards to meet declining fees. The resources are being stretched.

This is an inadequate response. Workloads are growing, and fees and resources are declining.

Agencies are playing a loser's game.

Agency executives need to restore balance in their relationships with clients and take control of their own operations. Here are a few key actions that should be initiated now:

  1. Agencies need to document and track the deliverables they are carrying out for their clients. This needs to be done uniformly across clients as a matter of agency policy.  
  2. Senior agency executives need to establish a policy: "All clients will have a documented and approved Scope of Work in the agency's approved format. All Scope of Work changes will be tracked in a uniform way."
  3. Agencies need to determine "how much work" these deliverables represent, and how many creatives, production people, and account management / planners the work ought to require to carry out the work at an acceptable level of quality
  4. Thus, the agency needs to develop uniform "resource standards" for the different types of work, so that resources can be evaluated against workloads. Senior agency executives need to initiate this effort.
  5. Client heads need to be made accountable within the agency for achieving an acceptable balance among workloads (scopes of work), resources and fees.
  6. Accountability needs to be reinforced through routine client head reviews. Senior agency executives need to begin reviewing client heads for the balance among their workloads, resources and fees.
  7. Clients that are under-paying for their scopes of work and are being under-resourced as a result need to be flagged -- and negotiations need to begin now.

These steps will not restore health to all agency clients, of course. The overall initiative will improve the odds of success. It will motivate client heads to act in responsible ways that benefit the agency. It will improve agency financial health. Importantly, it will re-engage the agency in an active executive process that restores pride and control. 

These steps are leadership steps. They need to be initiated by senior agency executives. The loser's game has gone on too long. it's time for a change.