Tuesday, January 28, 2014

What Is Ad Agency Culture, Anyway?

In mid-December, I wrote about how ad agencies could grow and retain their culture.  I got a direct email from someone who felt that the concept of agency culture was, in his words, "bullshit".  I couldn't disagree more.

From 1966 to 1988 Philip Dougherty was the New York Times advertising columnist.  It was long before the internet and social media.  Phil was a powerful and influential icon in the business.  He had previously, as I recall, been a real estate columnist. But for 22 years he pursued advertising with a vengeance.   Not long before he died, he and I had lunch.  He made a very interesting comment and to me which has stayed with me.

At the time, Chiat/Day was one of the hottest ad agencies in the country.  Its New York Creative Director, Bill Hamilton, had just moved from Chiat to Ogilvy.  Phil’s observation was that Ogilvy and Chiat had to have similar cultures; after all, if the creative director of one could go to the other, he reasoned, wrongly in my opinion, that they must be similar. (I wonder if the person who emailed me knew Phil?). What he missed was that Ogilvy wanted to become more like Chiat and hired Bill to do just that.

Ogilvy was huge, worldwide and still very much under the influence of David Ogilvy, who was, at the time, semi-retired, but still occasionally active.  Ogilvy was formal and had many rules, most of which were spelled out in his seminal book Ogilvy On Advertising.  Chiat was the diametric opposite – they had few rules, other than to do the unexpected. At Ogilvy, they still wore suits and ties, and at Chiat, jeans were the norm. Jay Chiat, could not have been more different than David Ogilvy.  And the agencies were very different from each other.  But Ogilvy hired Bill Hamilton in an effort to do the kinds of breakthrough creative that Bill had fostered at Chiat/Day.

At that time Ogilvy hired big agency trained and very smart people.  New employees, for the most part, came from the best colleges and the biggest accounts. Chiat was different in that it hired passionate advertising people and didn’t care where they came from or what their background was. Chiat's people were driven by the creative work.  Chiat believed in its work and often sold breakthrough creative; Ogilvy, while it did excellent work, was much more conservative. Like their founders, their cultures were very different.

In the seventies, eighties and nineties, there were many different agency cultures. There were highly strategic agencies, many driven by research (no planning then, except Chiat/Day, starting in the eighties) – Grey, Compton, Leo Burnett.  There were very media savvy agencies - Ted Bates, Cunningham & Walsh, Dancer, Fitzgerald, Sample. (Dancer and Compton were both bought by the Saatchi brothers and merged together to form Saatchi & Saatchi.) There were creatively driven agencies – Wells Rich Greene; Doyle Dane Bernbach; Scali McCabe Sloves.  And there were tons of smaller, boutique agencies – Delehanty, Kurnit & Geller (DKG); Levine Huntley Schmidt and Beaver; Ally & Gargano;, Della Femina, to name just a few. Chiat/Day would have fallen into the creative or boutique agencies as would have the original Deutsch. 

While each agency hired some of the same people, each of these agencies had very distinct personalities and persona, often driven by their leaders who were well known, charismatic and very public.  When clients hired them, they were hired for their expertise in specific areas.

In those days, ad agency culture was defined by its leaders; most of whom were well known and fairly public.  Their philosophies determined how each agency operated.  The culture they established pervaded the entire agency.  For instance, David Ogilvy was very proper, as was his agency.  The popular perception was that creatively driven agencies could not be strategic and the strategic agencies were not creative (both perceptions were wrong, in my opinion). As an aside, the great Alvin Hampel, creative director of D'Arcy, McManus, Benton & Bowles (DMB&B) came up with the wonderful positioning line, "It isn't creative unless it sells", which was a great apologia for their effective, but less than scintillating work. 

When the buying frenzy of agencies started in the late seventies through the mid-1980’s, ad agency cultures started to become homogenized. The holding companies purchased agencies  and put them together, not for creative kinship or philosophy, but for financial savings and efficiencies. I have written about why in many of these mergers why one plus one, instead of equaling two or more actually ended up equaling about one point five. Today, one of the hardest issues facing the big network agencies is to define their own culture and positioning and to set themselves apart from other similar agencies.

The differences between most of the big agencies has become, at best, subtle.

There are still a handful of big agencies which have their own well defined persona.  One of the best examples of this is BBDO, which has maintained its positioning and culture for many decades.  Many smaller agencies have well defined cultures.  Jay Chiat had one of my favorite all time quotes about Chiat/Day, "I wonder how big we will get before we get bad."  That about sums it up.

Tuesday, January 21, 2014

Why The Draft/FCB Merger Was Doomed From The Start

For those of us who have followed the Draft/FCB merger, the announcement last week that they were going back to the name FCB (or Foote Cone Belding) came as no surprise. What I find interesting is that there has been so little chatter, which goes to my point that the merger was doomed from the start and the whole business knew it. The decision to change the name was a good one.

During the past three decades most of the ad agency mergers have been less than successful.  One would hope in a merger that one plus one would equal three, or at least two.  Unfortunately, mostly in the ad agency merger equation, one plus one usually equals considerably less than two.  

There is an essential element in combining companies which the holding companies simply ignore – corporate culture and personality.  If they don’t mesh, the merger is doomed from the start.   

Take a look at IPG for a moment.  Putting Ammirati into Lintas was a total failure.  Putting Scali into Lowe was somewhat successful, but then putting Lowe into Lintas to shore up the Ammirati merger was a disaster.  And then, finally, putting Lowe into Deutsch was simply disastrous.

And so it was with putting FCB into Draft.  FCB was never huge, but it was a big, successful worldwide agency with lots of consumer goodsand a great history.  Draft was one of the biggest direct marketing agencies with, as I recall, significant strength in financial accounts, but very little worldwide experience, if any.  In theory their merger was a good idea. At the time of the merger, the trade press was very complimentary and bullish.

But there was one problem.  Their cultures were diametrically opposite each other. FCB was a good creative agency.  Draft was a good, nuts and bolts direct marketing agency. Whatever plan to merge them ignored these cultural differences.  Or so it seemed to observers like me.

In 2005, just before the merger, FCB had hired two of the smartest advertising people in the business.  Steve Blamer and Steve Centrillo were brought in to run the agency and right the ship.  It was Blamer who conceived of the idea of combining a general agency and a direct agency to create one truly integrated advertising entity. He and Centrillo had plans to combine the cultures in a way that would work. The idea of putting the two together was well received at the time.  If successful, it would be one of the first truly integrated ad agencies.

They were barely there long enough to put their imprint on FCB.  When the merger with Draft took place, it was clear that the Draft culture and ethos would prevail.  Blamer left immediately and Centrillo clashed with Draft management and was gone soon after.  It is a pity that IPG let them leave; in my opinion, they would have made the merger work.

If anyone has read the wonderful Lester Wunderman book, Being Direct, they would understand that direct, as it existed before digital, was a very different business than traditional advertising.  At the combined Draft/FCB the problem was to integrate these diametrically opposed businesses. To my knowledge, IPG management and Draft management never made a real plan to integrate the two cultures; they were just thrown together.  Consequently, the agencies never really integrated.  Draft just took over.

In Chicago, the biggest FCB account was S.C. Johnson, one of the country’s (and the world’s) leading package goods manufacturers.  This client just did not mesh with the Draft people or culture.  Gradually, the FCB people started leaving. The senior FCB management held on to the account as best they could, but my understanding is that when, after a few years, the Draft people started to insinuate themselves into the SCJ business, the account began to unravel.  The huge loss of the S.C. Johnson business in 2011 was the beginning of the downfall of the combined Chicago office; and it probably effected New York as well.

In New York, as many of the FCB employees and clients started to bail, the only area which did well was healthcare, which was a holdover from the old FCB Healthcare practice.  Again, my understanding is that the Draft people stayed away from this part of the business because they had no real healthcare experience (and possibly no interest in it).  

There was a succession of management changes during the past eight or so  years.  I believe I can count at least four heads of the New York office.  Howard Draft managed to hold on to Chicago until the loss of the S.C. Johnson business. Today, Chicago is a mere shadow of its old self.

The problem was always culture.  The direct people couldn’t do the general advertising and the traditional ad people didn’t know anything about direct. Neither had any real interest in the other.  As a consequence, the agency was never fully integrated. And there was no clear direction.  Perhaps if there had been a real plan, as Blamer and Centrillo had envisioned, there might have been success, but without any preparation and without considering the cultures, there was little chance for success, in my opinion. 

Interpublic hired a new CEO to run Draft/FCB last year.  Carter Murray has defined the problem. And changing the name back to FCB signals a willingness to correct the situation and set the stage for a new beginning.  

It takes a big man to admit past mistakes. 

Tuesday, January 14, 2014

11 Tips For Success From A Recruiter

It doesn't matter what your discipline or what you do, really successful people seem to have these traits.
I normally don't like lists because they are often so obvious.  But you would be surprised at how many people fail to adhere to these rules and traits.

Forgive the odd number, I could have combined some, but each is worth a comment.  I thought I would share them with you.  When successful people interview for jobs, they exude these qualities and communicate their leadership.
Do What You Say You Will
If you tell someone that you will do it over the weekend or do it tonight if you can, that becomes an obligation.  They will expect it done.  If you don’t deliver, you will get a reputation as being unreliable. If you say you will do something, do it.  People will rely on your word.

(Just as an aside, I work with many, many people who tell me that they will call me at a certain time or, worse, tell a client that they will call at a precise time, and they just don't do it.  Always with an excuse.  It tells me a lot about them.)

Never Say,  “I’ll Try”
“I’ll try” is an excuse.  If you are going to do something, say that you will do it.  Remember that if you are going to do something you don’t say, “I’ll try” - you wouldn't tell your kids that you will “try” to pick them up from school.

Be On Time
Nothing irks people more than someone who is constantly late.  Failure to be on time breeds distrust and communicates a lack of planning and discipline on your part. If you are a supervisor, it also communicates that it is permissible for your people to be late.

Manage Expectations
People often don't return calls or emails immediately - often they are waiting for additional information.  Better to simply communicate that you are waiting. That way people know you are on top of the situation. By managing expectations, you communicate that you are both buttoned up and involved.

Get In The Trenches
People who work with you and for you should know that you will do whatever it takes to get a job done.  If it means staying late just in case someone needs you, do it. You will earn respect and loyalty.  If the people who rely on you know that nothing is beneath you, they will follow you.  It is the true sign of a leader.

Be Friendly
I once had an account person who worked for me. He befriended every support staff person at the agency, including the telephone operators.  He remembered their names and what they did.  He always stopped to talk to them.  When he needed something they would jump through hoops for him.  If you are friendly to everyone, it will come back in spades.

Talk To People – Don’t Rely on Email
When I was in advertising, an account person who worked for me was surprised when some creative work he was expecting was not done.  His comment, “But I sent out a conference report.”  He never actually briefed them but he expected that people would actually read his memo and do the work. There is absolutely no substitute for in-person conversation.

Don’t Be Afraid To Delegate
Always put someone between you and the problem.  If you supervise properly you will be rewarded with performance and loyalty. Besides, delegating allows you to have the last word, which is the ultimate control. 

Give Clear Precise Direction
If you set expectations properly, people will deliver.  Telling people what you want, when you want it and how you want it, is critical to success.  I would recommend that everyone read Kenneth Blanchard and Spencer Johnson’s fabulous book, “The One Minute Manager” (plus other books in this series).

Give Credit When It Is Due
When you give your people the credit they deserve, you also earn credit.  Only fools take the credit for themselves.

Plan Ahead
Every successful executive comes in fifteen minutes to half an hour early to have undisturbed time to make lists and organize their day and, if necessary, their week.  Most prioritize their lists into what must be done and what they would like to do.  At the end of the day they re-review the list to make sure that they have accomplished what they need to do.  This kind of organization helps breed satisfaction - the satisfaction of accomplishing work in a timely fashion.

Tuesday, January 7, 2014

New Business People Should Not Be On Commission

I would say that the overwhelming majority of the time that new business/sales and marketing people look to leave their companies it is because of disputes over commissions.

In April of 2013, I wrote about commissions vs. salary. At the time I wrote that post, I was ambivalent but leaning towards salary, today I am totally in favor of salary plus a liberal bonus.  This post tells why.

Any firm which pays commissions to its sales people knows that no matter how well a contract is written there are always gray areas. And because the company controls the payments when there are disputes (or at least differences of opinion), commissions tend to be cut or not paid at all.

I would like to share a few stories I have heard.  I will not comment on these stories. The issues are evident.

  • A new business person spends several years cultivating a prospect.  He gets the prospective decision maker into the agency for an initial presentation. The prospect meets the chairman and other principals.  He is not yet ready to make a change, but for two years the new business person stays in regular contact. Then the chairman attends a friend’s dinner party and the long-term business prospect is there.  They remember each other.  Three months later the agency lands the account but the chairman tells the new business person he is not entitled to a commission since he, the chairman, reinvigorated the process and brought in the account.
  • A sales person decides to cut back to four days after giving birth.  She agrees to a 20% reduction in her base, which is fair.  When she makes a couple of sales and receives her commission statement, she discovers that her employer has  also reduced her commission by 20% as well.
  •  A new business person takes a new job with a cut in base salary for a large commission structure.  The commission is a sliding scale depending on involvement.  When a new account is landed which she solicited, the agency lowers her commission because she did not attend the final presentation – at the agency’s request.
  • A very well known CMO does not bring in an account but the president asks him to lead the pitch and the process knowing that this will take most if not all his time for about six months.  So, at the president’s request, he pretty much gives up the entire new business process for six months (a significant proportion of his compensation is based on commission for accounts he brings in). He leads the team and all aspects of the pitch, including the research, strategy and the creative. The agency wins this immense account but refuses to give him any commission or bonus because he did not solicit the account even though he ran the pitch for six entire months, to the exclusion of all else.
Why do companies do this?  I suspect it is most often the CEO or financial people who are more concerned with the bottom line then about their people.  Unfortunately, they consider their sales people as an expense rather than an asset.

New business is a relationship business.  And by allowing its new business people to get angry and leave, the company loses all the relationships and momentum built by the departing person.  If they leave, the company has to restart its entire new business program.  And for what?  A mere few thousand dollars?

In most cases even if the commissions are significant to the individual, they are generally only a small amount for the company.  So for the sake of a pittance, the company loses a good employee and destroys its entire new business program.  It makes no sense.

And, of course, word of the unfair deed gets out causing immensely bad P.R both internally and externally.

New business people should receive fair compensation. If they are on commission, they should receive the full amount for any and all business which comes into the company.  That way there is never any dispute or ill will.  If the new business person is not on commission, bonuses should be fair and significant.

Paying well and fairly avoids so many problems.
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