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Tuesday, April 17, 2018

Clients Wanting Creativity And Allowing It Are Two Different Things



I just read a good LinkedIn article about Grey investing 75% of its resources into creativity and, at the same meeting, P&G’s Chief Brand Officer, Marc Pritchard, spoke about encouraging and connecting its agencies in order to improve the creative product.  Bravo to both.

But there is something wrong with this picture.

If there is a lack of creativity in the business, it has been led by advertisers who, through their purchasing and procurement departments, have squeezed agencies (and holding companies) to the point that they are only able to service their clients by cutting costs in all areas.  This has especially effected creative. The problem, as everyone in advertising and marketing knows, is that clients have demanded that agencies continually have to cut their blended rate (For those not familiar with the term, a blended rate is the aggregate of all salaries paid to those people who work on an account.) This has severely affected the creative product because this rate has continually diminished during the past several decades.  It has reached the point that agencies are no longer able to hire the best, brightest and most creative talent; they just can’t afford it.  As a result, too much talent has gone elsewhere and creativity has suffered. 

So here comes Procter demanding better creativity. Good for them, but it is ironic since they are the cause. P&G is still the leader in the marketing and advertising business. What they do and say, other companies follow, even when those companies don’t have the comprehension or wherewithal to actually execute in the same manner as P&G. 

There are no statistics that I know of about freelance writers, art directors and producers, but I would be willing to guess that their numbers have significantly increased over the past several decades.  Freelancers prefer being in charge of their own work and their own time; they can work when and for whom they want and will forego the lack of benefits for creative freedom.   

So, good for Debbie Reiner, CEO of Grey for committing to spend 75% of its resources on creativity and good for Marc Pritchard for wanting better work. I want to point out that this 75% is considerably less than it would have been just a few short decades ago, simply because Procter and other advertisers have continually reduced the amount of compensation they pay their agencies, which, in turn, has lowered agency resources.  I hope that Grey and parent company, WPP and all of Grey’s clients will find a way to both increase revenues and increase creativity.   

Now what has to be done is for the clients like Procter to allow their agencies to make a greater profit so that it can be reinvested into the creative work that these companies so desperately demand.



5 comments:

  1. Agree completely Paul. http://whatstheidea.com/marketing/ring-around-the-agency

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    1. Thanks, Steve. Nice to hear from you and glad you agree!

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  2. Big clients and big agencies - big problems.

    This continues the cycle of commoditization at this level of the business. I like creativity. What I don’t like is the continuing indignity of agencies not being allowed to manage their own internal priorities and operations. Client should hold them accountable for results rather than try continuously to dictate their methods. There are excellent independent alternatives to the hulking shells these clients have helped create. Choose them, and leave the losing agency with at least the dignity of having been held accountable. Or, better yet, don’t - so our clients can continue eating your lunch.

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    1. Thanks, Mark. I couldn't agree with you more.

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  3. Pretty sure Paul will disagree and say I missed his point, but I HAVE to say … Increased profits for agencies do NOT translate to more or better creativity. They simply drop to the bottom line these days.

    As for clients and more importantly, you can count the major advertisers with a legitimate “reason why” to buy their Brand on two hands. The rest are simply chasing bright shiny digital and social media objects. Counting digital dashboard KPIs instead of sales, market share, brand loyalty, brand switching, etc. Creative production and entertainment values replacing actual benefit-oriented “Brand Sell”.

    Of course I like to feel good about the brands I buy, but I feel best about those that make an actual product or service-based “promise” which they deliver and keep. And that’s on THE CLIENT. Because, as the old saying goes, “You can’t make a silk purse out of a sow’s ear”.

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