Eight Advantages Of Independent Vs Publically Owned Ad Agencies

There are fewer and fewer large independent ad agencies. That is possibly due to the fact that as an independent agency matures and the owners are looking for an exit strategy, selling to one of the publically owned network agencies is an obvious and easy choice. Unfortunately, if you ask any former owner of an independent agency, they will tell you that they happy with the payout and are unhappy by the constraints placed upon them by their new owners.  This is especially true if the agency was successful as an independent; suddenly having someone poking through the business is difficult.

David McCall (McCaffrey & McCall) sold out to Saatchi (at that time WPP).  He confessed to me that he would give them back their money.  He hated the idea that he couldn’t even hire a senior administrative assistant without Saatchi’s permission.  While his agency had been immensely profitable, with the restrictions placed on them, he was actually making less money than before and with no incentive to make more.   Independent agencies can make profit and loss decisions with no consequence except to the owners. David McCall lasted through his contract and then retired.

Here is what I have observed about independents vs network owned:

1) Fear of Being Fired

If an independent agency loses an account, they do not necessarily have to cut staff.  When Deutsch lost the profitable Tri-State Pontiac Dealers in the mid-1990’s, prior to being owned by IPG, they kept the staff on hand and used those people to help them pitch several automotive accounts until they finally won Mitsubishi.  There are many examples of that kind of horse trading.

2) Freedom to Hire and Give Raises

Independent agencies don’t have absurd restrictions about hiring or giving raises.  The networks have dictated the timing and amount of salary increases that can be made. While those rules are breakable under certain circumstances, the HR department and management rarely do so unless a candidate gets an offer from another agency.  When that happens, there is generally an available budget to make counter-offers. The network agencies have ridiculous salary restrictions on hiring; most have to get specific permission to hire candidates at pre-ordained salary levels.  WPP, for instance, will not allow its agencies to hire people above $150k without specific permission.  That permission requires time-consuming paperwork and can often take weeks to complete. Meanwhile, both clients and the agency suffer.  These arbitrary rules hinder agency operations, and in some cases have actually affected the agency and client relationship.

3) Control of Expenses
Independent agencies do not have restrictions put on them for new business or other expenses.  Just last week, WPP asked its agencies to cut back on spending for non-billable expenses, including Cannes.  Cannes?  Give me a break.

4) Control of the Culture
Face it, the holding companies only care about the bottom line.  There is no real concern for culture.  That is why so many agencies have been bought and disappeared.  As I have often said, one plus one is often far less than two.

5) Less Fear About Clients Being Bought

Independent agencies may be limited to only domestic U.S. accounts – the international affiliated independent groups are only effective on a very limited basis. And big, worldwide brands tend to be handled by the big worldwide network agencies.  But, on the other hand, unless and until their client brands are sold to the international conglomerates, they are pretty much protected from corporate shifts in marketing policy – consolidation vs. decentralization, which occur constantly with the huge multi-nationals. This is all true unless, of course, their client companies are bought or sold.

6) More Objectivity

Independent agencies probably give better, more objective creative and strategic advice to their clients because they are not under pressure to keep an account.  I have heard many stories about holding companies forcing agencies to retain bad accounts for any number of reasons.  Independent agencies don't face this pressure.  I can think of Cramer-Krasselt resigning Panera Bread a few years ago because they did not agree with the client. It was great for the agency and may have also been good for the client.

6) Better Access to Senior Clients

Somehow, independent agencies seem to have more access to the management of their accounts.  One former independent agency owner whose agency was taken over by one of the top five holding companies told me that their agency had far more contact with the top brand people when it was independent. I am not sure why this is, but it is.

8) Better Focus on Creativity

Most of all, as agencies grow and get absorbed, the work tends to become homogenized as well.  Jay Chiat had a wonderful quote.  He said, “I wonder how big we will get before we get bad.”  Truer words have rarely been said. I have written many times that I believe that culture is everything.  It is interesting to note that the agencies which remain independent or which are part of smaller holding companies, tend to be more creatively focused – Wieden+Kennedy, RPA, David & Goliath, Cramer-Krasselt, Droga 5, etc.  When they get bought, they tend to have to conform to whatever network has purchased them and often get merged and submerged into oblivion.

In the past decade, there have been many ad agency start-ups, especially in the digital arena.  These independent agencies have grown well and, ironically, have been able to attract many big-name multi-national clients who are looking for better work.

Adventures In Advertising: The Worst Account Group, Ever

I once worked as head of account management for a terrible mid-size advertising agency which, I discovered, was totally dysfunctional.  In the account group, there were 12 other account people.  

Among them:

There was an management rep who had not gone to visit her client in New Jersey in over a year. Neither had the two account people who reported to her.

There was a management rep whose client was the worst payer in the agency. And then I discovered that the agency system was that the account people had to approve and then send out the billing.  The accounting department assumed that it would be approved and sent immediately, so it was marked as “due” as soon as it was released to the account manager.  This account person had gotten away with allowing client invoices to sit on his desk for weeks, even months.

There was another account director who expected the creatives to accept assignments through conference reports.  When the work was late, be blamed the creative department for not reading the conference reports.  He never went to brief them in person.

There was an account supervisor who was working with a client on a marketing analysis but refused to accept changes the client made despite their mutual agreement.  And, instead of discussing her disagreements with the client, she just did nothing until the client complained to me.

There was another account supervisor who the client complained about because she was always late.  She only worked on this one account.  When confronted, she told me she was too busy to get the work out in a timely fashion.

All these characters were account people at the same agency at the same time.

When I went to the president to tell him that I needed to fire the account guy who did not get the billing out (he was worse than just the billing issue), the president said the me, and I swear this is true, “Not him.  Anyone else.  He is the only one who will come to my apartment on a weekend to help me move furniture.”

I started looking for a job.

15 Questions You Wish You Had Asked When You Were Interviewing

Over the years, many candidates have told me that they found out things once they started a new job that they wish they had discovered while interviewing.  These questions apply to everyone at every level.  If you can find out this information, you will be able to make a much more informed decision as to whether or not to take a job.

1)     What is the number one reason for turn-over at my level at this company?

It would be great to determine what or where employee dissatisfaction comes from.  Glass door could be a help, but meeting other contemporaries at the company while interviewing might yield a treasure trove of information.

2)     While I am meeting the senior executives during this interview process, what      is their involvement in the business I am being interviewed for?

Many people tell me that they had to meet the senior management while interviewing and then never saw them again.  Not a good sign.

3)     Does senior management like the business I am being hired for?

Terrible to get hired and afterwards find out that senior management is not involved and does not like the client you are being hired to handle

4)     Would my clients willingly be a reference for this agency?

If the clients do not like the agency/company, it should be a yellow light signal.  It is one reason why you may want to meet your client before accepting a job.

5)     Are there any other accounts that are in jeopardy now?

Be wary if there are businesses in jeopardy.  It could significantly affect your employment.  I once had a young assistant account executive fired on his first day of work because the agency lost another large account.

6)     What are the biggest conflicts among management at this company?

Terrible to find out after you are hired that the management team does not get along or that they have differing points of view on direction.  Best to find out, if possible, before you start.

7)     If there were a strategic disagreement between account management and  creative management, who would win?

Best to find out before you start where the power lies.  If you are an account person and creatives control, you must meet the creatives you will be working with.  And vice versa – creatives don’t normally interview with senior account people, but if the account group controls, best to find out in advance what they are about.

8)     If offered this job why should I take it?

Let the company sell you on them.  Where do they see you and how will you progress. This is true at every level.

9)    How will I be evaluated?

This is a critical question to find out before starting work.  It lays out the criteria you will need in order to achieve advancement.

10)  What problem(s) do you want me to solve/resolve?

This should give you clear direction before you start and will give you criteria against which to measure your own success.

11)  What tools will I be given to resolve those problems?

Will you have control of your budget?  If there are client problems, will you be able to establish a relationship?  I can think of one executive who was told that he should not visit the client so often because the client was in a different city and the travel budget was low.

12)  How extensive will my authority be? 

Can you make the decisions to hire and fire staff?  I was once the head of account management at an agency with a terrible account group and the president of the agency would not let me clean house.

13)  Why me?

This small question packs a big wallop.  It will give you insights into what the company has in store for you as well as where they see you going.

14)  What will be my security if I accept a job here?

Most companies do not give contracts, except to their most senior employees, but you should find out what their plans are for you.  This information can become part of an offer letter.

15)  What can I do to stand out from the other employees at my level?

You need to find out if you are special or just part of the herd, especially at larger companies.

How To Find A Great Mentor When Interviewing

Almost every successful executive will tell you that they had a mentor.  Mentors are people who can not only teach you, but who can help move and promote you.  The best mentors are found when you interview, but they can also be found as you work for a company - the trick is to identify them.

It doesn’t matter if you are an account assistant or a president, we all report to someone.  The smarter those people are, the more you will learn. So the trick is to find wise people who you can learn from.

Hopefully, you can find these people when you are interviewing, generally not your immediate supervisor (mostly not senior enough to be a true mentor), but someone who is in your chain of command.  And, if not, once you take a job you can identify people who will take an interest in your career.

To find and identify these people may require some work.  The first thing you need to do is identify them. To help, I am going to give you my favorite saying (an Arabic Proverb):

He Who Knows

He who knows not and knows not that he knows not,

Is a fool, shun him.

He who knows not and knows that he knows not,

Is simple, teach him.

He who knows and knows not that he knows,

Is asleep, awaken him.

He who knows and knows that he knows,

Is wise, follow him.

By this definition, we all know many fools.  So how do we identify the people we want to work for?

First, ask tough, direct questions while you are interviewing.  There is no reason you can’t turn the interview around and interview the interviewer. You must be able to engage them in a real conversation so you can ask them how they got to where they are. Their answers and their attitude will help you determine if, in fact, they can become a mentor.  Ask them what they think of the business.  Ask them what they would change if they were the president of their company. Ask what they are proud of accomplishing in business.  Finally, ask how they would teach you or how you can learn from them. You want to determine that you are more than just a body to fill a role. (If you are afraid to ask these questions, there is probably a lack of chemistry and they will just be your boss, not your mentor).

If the company is right, but your supervisor is not going to be your mentor, you must get exposure to others in the company who will take an interest in your career. Sometimes it is your bosses boss.  Often it is someone else in the company.  If you can, identify those people and then find ways of contacting and connecting with them, so that they can know who you are and what you are capable of. You can always simply introduce yourself.

It is essential to your career that you have a mentor who believes in you.  I had one who constantly volunteered me for tough assignments he knew I could do. It got me management exposure and it helped make me a senior vice president when I was in my late twenties.

What The New NYC Law Making It Illegal To Ask for Salary History Mean For You

For years I have actually been telling candidates not to fill out their salary history on written applications.  It is no one’s business.  Yesterday, the New York City Council wisely made it law that companies cannot ask for or use this information while hiring.  Its purpose is to help close the gender pay gap.  The law takes effect in 90 days. 

Just two weeks ago, I wrote why recruiters need salary information. I stand by that post.  However, I am firmly in favor of equal pay and, if salary history is used to suppress pay for any employee, it is wrong.  Companies will and have done anything they can to keep salaries as low as possible – it is the largest single expense of any employer.

This law is a specious law which, by itself, will not help women to earn more.  However, I am totally in favor of any method which will help prevent pay discrimination. For honest companies and honest recruiters, salary is one method of putting a career in perspective. I, for one, have never used this information to pay women less than men.  My head just doesn’t work this way. However, I do know that companies will find a way around this question.  The law, as I understand it, allows people to volunteer this information – companies will find a nice way of getting their applicants to provide it. One way would simply be to ask a job applicant if the anticipated salary on a particular job is ok with the candidate.

Prospective employees generally do not withhold any information.  Companies have always found a way of determining marital status, ethnicity and age despite the fact that asking is illegal.

In advertising, I actually do not see a gender pay gap at any level.  In my observation, male and female executives in account management, media management, planning and creative are making similar salaries. These days, for both men and women, advertising salaries are low compared to many other professions.  Because of long hours and low pay, working in advertising is a labor of love.  We all know that if one is looking for money, there are many other fields which pay better.  I have advised many candidates, both male and female, to reject jobs which pay too low.

There is, however, a glass ceiling – there are too few women in the C suites of the big agencies.  That is the bigger issue.  And because there are too few women at that level, it is difficult to make comparisons between their pay and those of their male counterparts.

But this law may be a step in the right direction for many companies.