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Tuesday, September 24, 2013

Making The Case For Stronger Advertising Account Management

Recently, I read an article in Ad Age that was disturbing, but should serve as a wake-up call for all adverting agencies.  It was about the growth of in-house ad agencies based on an Association of National Advertisers’ survey.

Given the tight economy, it is not surprising to find that clients are pulling some services previously performed by their outside agencies in-house.  What is shocking is the finding that the development of creative strategy is moving in-house.  The article blamed this movement on cost cutting.  But I would propose that if ad agencies were truly offering services that the advertiser could not do on their own, that this would not be happening.  It is a simple question of value added.

The trend of moving services in-house has been developing over a long period of time.  I honestly believe that it started twenty-five years ago with the advent of planning.  Yes, that is right. Planning. Planning, as it has evolved, may have inadvertently hurt the business. (I am not denigrating planners.  I believe in them.)

Until about twenty five years ago, the development of strategy was part of the account function.  The original reasoning behind planners was to strengthen the creative product.  At that time, there was a school of thought, particularly at the creative agencies, that account people were too busy servicing the logistics of the business including traffic, billing and other daily duties.  Planners, originally, were to obtain consumer insights and ostensibly replaced the research function as well as to partner with account people in the development of strategy.  Over time planners have displaced account people from the strategic function which has now left account management responsible to simply get the work out.

As a result, account people are no longer trained to delve into their clients’ business. Planners get the insights as to how and  why consumers buy and use products and services.  So account people no longer spend time doing sales analysis, going out with client sales people, doing store checks and, in short, becoming fully conversant with their clients’ marketing and sales.  The marketing function has now been fully taken over by most clients and, in my observation, most account people rarely are involved with significant internal client marketing meetings..  At the same time, procurement has cut back on servicing and slashed agency compensation to the point where senior people are actually doing the day-to-day work including the things that were once relegated to more junior account people. Procurement cost cutting has made it difficult for account people to do the very things which they should be doing in order to provide a value-added service to their clients.

And now, social media is beginning to replace some planning functions because so many consumer insights can be gained for relatively low cost on line.

As a result, everything is starting to move back to the advertisers themselves.  Because in-house people are right there, under the thumb of client marketing executives, agencies may no longer be providing anything other than creative execution.

A few months ago, I published a post on how agencies had been keeping and saving accounts.  It all amounted to strong account people who got their agencies fully involved with their clients. In every case, strong account management leadership contributed to winning or saving accounts. It is time for ad agencies to strengthen their account groups and to reinvest in them by allowing them to learn their client’s business so that they can make a true contribution to client marketing, strategy and advertising.  Agencies once received commission.  I always said the purpose of the commission was to buy objectivity.  Clients respected that point of view.

Most clients still respect a strong and informed point of view from their agencies.  Account people must be responsible for that once again.

There is absolute proof that this strategy is successful and profitable.

20 comments:

  1. Paul, we know each other, but I have to post w/o name due to my position and company. And change a few small facts for privacy. I am a long-time agency exec who went to the client side. We have retained a number of the larger/more famous creative and media and digital brands as our agencies. All the strategy comes from in house. We have in-house planners, in house quant, in-house reporting and tracking. Account service is the weak link of our creative agency by far. Note takers, regardless of level. Not even good "old school drinks and dinner" people. The work is very good, because the creative talent is very good. But there is little they move the ball forward on except on execution. That said, the kind of creative talent they employ would never work client-side. Wrong culture and wrong fit. Thus, unless we were simply hiring rock star $2,000 a day creatives freelance, during production season, in-house isn't an option really.

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    1. @Anon: Thanks for your comments. I hope all my agency management subscribers are reading your comment. It is exactly what I was trying to communicate.

      When I was an account guy, if anyone accused me of being a "note taker", I would probably have slit my wrists. It is a sad commentary on the state of account management, but I know what you write is a sad truth at most agencies.

      I am a big proponent of account management. Hopefully both agencies and clients will realize that strong account management breeds great creative. The wonderful work of Bill Bernbach was supported by great, strong account people who presold it and also fought for the work.

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  2. I read both the Ad Age article and your blog post with great interest. I'm an "old school" account man who cut his teeth working 90 hours a week at big shops before planning took hold and account management started to "fade".

    And then things changed. I started working in-house.

    Today, I'm running the account team at an in-house shop where we've seen massive growth since account management was put in place. Organic growth came through better strategic understanding of our business that soon translated into better work. And make no mistake some of that has to do with the very real need for project management as a function of the account team, but it's far more than that. We are faster, cheaper and supported from the CMO down. Account Management isn't the only reason but it's a strong contributing factor. We have very strong creative folks that came from big agency that understand what we are and more importantly what we aren't.

    I've never felt more valued as an account person and I believe most if not all of my team feels the same way.


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    1. @Anonymous: Feeling good about what you do and how you are valued is a really important element in one's life. I always believed that if an account person can really learn his or her client's business that they will be able to make a real contribution. Over my years as an account guy I had so many achievements which came from knowing and learning my accounts. Good for you for being able to do the same.

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  3. Speaking as a relatively young creative (10 years in biz) only a few of the AEs I've worked with could think strategically above a rudimentary level. And planners were hardly better.

    In fact, at one job creatives were expected to do 75% of the strategic thinking + all the concepting, presenting, executing, etc. We were told this reality was reflected in our salaries compared to the AEs but obviously we were never presented proof of that.

    Happily, I have worked with a few fabulous AEs and planners so I know what value they can bring to the table.

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    1. I always said that a good writer or art director was also a good strategist. It comes with the territory. There is no question that, even in the heyday of account managers, the vast majority didn't really understand strategy. To this day, many think that "tastes good" is a strategy. That said, there were many who could make a great contribution to their creative partners. A really good account person should be paid as well as a creative.

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  4. Spot on Paul. I grew up in an era where great Account people were required to have great strategic and creative intuition, were masters of client service, possessed an uncanny and thorough understanding of their client's business, and understood how to cultivate and grow successful, sustainable client relationships. We were seen as the indispensable "go to" resource for our clients. Through the years, the function has been neutered, first with the advent of Planning (as you suggest), then with the presence of in-house "Business Development" teams. These days, I'm consistently amazed and disappointed by a typical Account team's lack of grasp of the client's business. The function has regressed to the point where it is the rival of Project Management, with greater focus on timetables, budgets, etc. Quite sad. Some of still left in the business still hold on to the traditional ideals, and our clients are quite grateful for it. Just a shame they see it more as a surprising "exception", rather the norm.

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    1. Kieran: Your comment about account management and project management being rivals took me aback. But you are right. I always had thought that project management was a fancy name for the old traffic people who were useful if they didn't get to bureaucratic and interfere with getting work done. I interview lots of clients who complain that their account people really don't add much to the creative equation, but you are right, when they find a good account person, they are grateful. Agencies have got to figure out how to reinvest in strengthening their account people.

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  5. So true, Paul. Sadly, so true. It's a different era.

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  7. I think the agencies and holding companies can take a big share of the blame due their never ending cost cutting measures. Most of the seasoned account people who were more strategic and helped build client businesses over the years have been shown the door. Too expensive. "Cheap and cheerful" is the order of the day for account groups today, who focus mainly on project management tasks. Most agency training initiatives are long gone, and agencies wonder why consulting firms and tech companies are so successful at growing their relationships with clients. They're simply offering objective business perspectives and high value strategic insights / marketing initiatives that deliver measurable business growth - often based on the same KPI metrics that clients use as incentive comp targets for their employees.

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  8. wow. you almost had it right. your insight was brilliant and largerly right on until you said: " in-house people are right there, under the thumb of client marketing executives...". really, under the thumb? in-house creative teams are as "under the thumb" as the law department, sales department, IT, finance, customer service, research, etc.. The reality is, Paul, that in-house agencies have proven to be smart investments (and not just because they save a ton of money-- though they do). they are invited into strategy sessions, often leading the discussions. they know the customer and marketplace infinitely better than an outside agency person who rotates on and off a piece of business as often as the seasons change.

    Its about shared goals. its the ultimate pay for performance model.

    its about building a better mouse trap.

    there are outstanding in-house CREATVE agencies in all business segments doing all creative outputs.

    all are created by professionals who are trying to do the right thing by their employer (who just happends to also be their client).

    no one is under anyone's thumb. but nice try.

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    1. A lot of this is chicken and egg stuff. Clients were always threatened by strong account people and tried to keep them out of marketing meetings. Agencies were paid commission for their objectivity, which most clients liked, even if they did fight it.

      In-house marketing people are, indeed, under the thumb of corporations. I can think of one company which was never a television advertiser. Its in-house people could and did get fired for suggesting it. Their agency constantly pushed, but eventually gave up. Then the account went into review on the outside. Every agency proposed TV. The company polled its in-house people and discovered that they wanted TV as well; the president of the company then obliterated the in-house agency (except co-op and FSI's, etc.) for not being vocal. This is one of many examples.

      I never for a moment suggested that in-house agencies were weak or unprofessional. I was merely saying that ad agencies have got to build value back into their proposition and stronger account people would make a big contribution towards that.

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  9. no argument here on that front.

    glad i never worked for the President that fired people for making a suggestion. what a boob.

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    1. @anon: Looking back, when I was an account guy, believe it or not, I had a handful of clients who were boobs like that. The CEO's of those companies were not interested in any real suggestions if they conflicted with what he wanted to do..

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  10. I'm an old school account guy also. Went through the training program back in the early 80's at one of the big shops. We were taught to be strategic, to understand our clients' business better than they did, to be the voice of the consumer. The research folks were our partners, helping us figure out how to learn as much as possible and interpret research results. And then came planning...

    All of a sudden we weren't "needed" for strategy any more. Or for understanding our consumer. Our role became relegated to client liaison, keeper of the budget & schedules, and doing competitive spending & copy analysis. Our ranks were decimated by layoffs, and the training programs eliminated. New "kids" in account management weren't taught strategic thinking or analysis any more.

    Agencies seem to have lost sight of the real value of strong account guys/gals. They don't train them any more, and they don't promote them to clients as being of significant value.

    I gave up, and went client side about 10 years ago. In my last position I ran an in-house full service agency. I made sure to train my AEs on thinking strategically, developing insightful creative briefs, and understanding their clients' needs. Agencies need to get back to that.

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    1. There is a great story of the revival of the US chocolate candy business in the late 1980's, which is very much analogous. Apparently, for about fifteen or twenty years, American candy manufactures were replacing real chocolate with carob, which, in small quantities mimics chocolate. When they tested 100% chocolate against 98% chocolate/2% carob no taste difference was detected. Each year the percentage of chocolate was reduce, but the taste was tested against the previous year's formulation. Sales began to slip after a couple of years. When the manufacturers were putting in 40% plus carob, someone tested the candy against 100% chocolate and, of course, consumers all preferred real chocolate. All candy was reformulated and sales again regenerated.

      This is what agencies have done to account people. They have become carob. I think it is a great analogy.

      Once they strengthen account management to previous levels, there will be a resurgence of advertising and clients will again have faith in ad agencies. I believe it with all my heart. And, if it is done correctly, there will still be a place for both strategic account people and for planners.

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  11. I couldn't agree more. A great, strategic, creatively-minded account person is worth her weight in gold

    If you are in account service, and you are not frequently consulted by the creative teams through the development process, even as the planners are, you need to take a good hard look at why.

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  12. Thanks so much for posting a lot of this awesome content! Looking forward to checking out more!


    Playboy Brand License & Harper’s Bazaar Licensing

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