From The Editor

A resort in the Arizona desert hardly seems the logical setting for an exercise in crisis management. But that was the dominant theme set forth by most of the speakers at the recent annual meeting of the American Association of Advertising Agencies in Scottsdale.
To hear clients, agency executives and representatives of the new-media elite tell it, agencies are dysfunctional. They don’t listen to or respond to their clients; they don’t deliver enough big ideas; and they charge for their services in a manner that skews solving clients’ problems to a TV screen. Traditional agencies, they suggest, are standing in the middle of the information superhighway, destined to become roadkill.
The most telling criticism came from clients. Marketers from Procter & Gamble, Ralston Purina and Pepsi-Cola had clear complaints: Agencies should change their remuneration scheme to make it media neutral. There should be more “alter-ego” top-level relationships between the agency and the client. Shops should spend more time interfacing with those who consume their clients’ products. All told, hardly an endorsement of a service industry from satisfied customers.
WPP Group chief executive Martin Sorrell opined that agencies operate in a “marketing myopia.” Indeed, most have infrastructures that have been made obsolete by advances in technology. Agencies must be less functionally organized by internal departments and more client-service oriented. Sorrell also warned of the continuing encroachment of management consultancies into ad agencies’ domain.
Of course, this was noted before America Online’s Steve Case warned agencies that their clients were moving onto the Internet, often without their help. “Your clients are learning to operate without you. If you are hamstrung in thinking of yourself as your clients’ advertising agency, you are not going to be able to think about your clients’ future,” Case said. Case is right to some degree. Yet agencies still make money. Frankly, it’s hard to evoke a crisis response during good times.
The ad industry has responded to drastic change before. The capable operators will do so again. Bartle Bogle Hegarty’s John Hegarty believes “the power of the brand is what will define [businesses] in the future.” At BBH, he says, they see themselves as the “manufacturers of the difference between one brand and another.” Adhering to that vision, he feels, ensures the agency’s prospects. It’s a simple but effective definition of what agencies do.
The current 4A’s chairman, Jordan, McGrath, Case & Partners CEO Pat McGrath, ended the meeting with a novel idea: Have the ad trade apply its own branding expertise to itself in an effort to increase clients’ perception of the talent and skills the industry offers.
“I’m not proposing to you that we waste a single moment trying to turn back the clock to those glorious days when the full-service agency was the only game in town. I am proposing that we approach this problem with our own brand franchise the same way we’d approach it for a client’s brand,” McGrath said.
It will be a daunting job. If there is one brand that agencies are woeful in selling, it’s clearly their own.