Tuesday, October 16, 2018

Seven Reasons Why/How Ad Agencies Lose Business

The late, great David McCall used to say that the day an agency gets an account they are a day closer to losing it.  A bit cynical, but very true.  As a recruiter, I have asked many advertising agency executives why they lost an account and many client executives why they pulled their business from their agencies.  Here are my observations from the many answers I have received.

1)    Change in client key personnel
No surprise here.  As they say, “The new broom sweeps clean”.  Many a CMO, CEO has fired their agency and hired a new one in order to work with someone they previously knew or a friend who they trust.  Many simply hire a new agency to insure loyalty to them.  It happens frequently and often without warning, but this happening should be at least anticipated by any ad agency if a new senior person joins their client.

2)    Clients who become tired of their advertising
Clients often become tired of their own advertising long before the consumer does; after all, how often can a company show the same commercial to their sales force? All agencies should anticipate this problem and should be constantly working on ways to refresh a current campaign in order to keep the client enthusiastic.  

3)    Agencies do not listen to their clients
I have had dozens of client advertising and marketing executives tell me that their agencies just don’t listen.  Sometimes what the clients want is significant and, ironically, sometimes it is merely the feeling that the agency is not paying attention to their needs.  I had a client tell me that he had been asking his agency to prepare an FSI (Free Standing Insert) coupon ad for both print and digital and his agency simply ignored him.  He hired a new agency to do that and it opened the door for the existing agency to lose the account. 

4)    Agencies become arrogant about their own work
Apropos of two and three above, sometimes the work does wear out.  Many agencies have insisted on not changing the campaign when a new solution is long overdue.  This is very common, especially with long-running campaigns.

5)    Agencies don’t insert themselves into their client organizations
A common complaint is that clients don’t see their agencies except for major presentations.  One client told me that he had actually not seen his agency management in two years (although he had seen his account team). Agency management needs to see its clients, no matter how small, on a frequent basis.  Another client told me that his account team never came to see him on a one-on-one basis.  They only came to see him en masse or for major presentations.  Many have told me that they do not hear from their account teams with regularity.  Account people need to talk to their client counterparts every day, even it is just to say hello and ask if there is anything they can or should be doing.

6)    Agencies that have not learned their client’s business
I have heard about agencies presenting work that is rejected because it is not consistent with the client’s objectives or which is inconsistent with the client’s business situation or issues.  In many cases, the client has not communicated its problems or objectives to the agency, but it is up to the agency as a service supplier to learn its clients’ business, even at the risk of being pushy.

Agencies need to have a constant presence at their clients in order to know and understand their account(s).  They must take the time to learn their clients’ business.  And agencies cannot use the excuse that the procurement people won’t allow frequent visits.

7)    Agency Merger and Acquisitions
Never been sure what actually happens, but from observation, accounts seem to leave agencies once they have been purchased or merged.  Change in management and procedures certainly has a lot to do with it.  All too often, senior account and creative people get moved, rotated or terminated which angers clients because it upsets the status quo.  I have never figured out why one agency buys or merges with another and then completely decimates the culture – causing the very clients they purchased to leave.


  1. I think that right about now, it might be a good idea to add something about CEO's and senior management team members being forced to resign due to sexual harassment as a modern contributor for reasons a client can part from their agency.

  2. Good list, Paul. Agencies, unlike consultants don't seem to practice a land-and-expand biz dev strategy. Too much focus is on the campaign and not enough on the mechanics of the client's marketing needs and organization. Agencies zero-in on the icing and miss the cake.

  3. I would add #8.) “SCAPEGOATING THE AGENCY”. When Brand sales, market share, and/or profits are down, Clients have to blame somebody or something. And all too often that turns out to be the Agency and its advertising, which may have nothing to do with the Client’s overall marketing situation. Yes, PROMOTION (advertising) is certainly one of the 4Ps or four legs on the marketing table, but so are PRODUCT, PRICE, and PLACE (distribution) – the other three “legs”, and things agencies have NO control over. Or to turn a phrase, “Nothing kills a bad product faster than good advertising”. Same thing when a Client takes a price increase while competitors don’t; when a Client loses distribution or suffers high out-of-stocks (OOS); or when a Client suddenly cuts it brand’s A&P budget to hit its quarterly or year-end profit targets. Of course there is usually plenty of “blame” to go around when things head south, but when was the last time you heard a Client say to their boss or agency, “It’s my/our fault? Never! The obvious and default quick-fix answer being … Get a new agency.

    1. Bill, there is some truth to what you say, but it is covered in a number of the listed points. These problems can often be anticipated and cut off if the agency, especially management, is plugged into the client's business. I have known many agencies which have recommended to clients that they pull their advertising because of out of stock or other business problems; the client then learns to trust the agency. Good client relations help solve a multitude of problems. On the other hand, if the client does not trust the agency with the information on their business issues, it is very easy to blame problems on the advertising.

    2. Totally agree that many of the Client’s brand marketing problems could be cut short, if only the Agencies had the trained account management staff to know, recognize, and care about them. And then have the “moxie” to point them out to the Client - with recommendations. But that kind of “Account Management” (instead of “Service”) died a long time ago.

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