When Coca-Cola’s Islam ElDessouky stressed agencies should ‘take risks and have skin in the game’, was he talking financially or creatively?
If he meant financially, then he may be a tad unrealistic. Agencies don’t have enough margin to have skin in the game, stresses Pepe Marais, group chief creative officer of Joe Public. “There isn’t enough skin in advertising to have skin in the game… Agencies are so marginalised at this stage by procurement, you literally have not much to put at risk. You’re barely making half the margin you made 10 years ago,” he explains.
“When you start saying ‘I’m paying X for your services and the value you bring to the table, and if my campaign doesn’t work then I’m going to take away from that’, it doesn’t make sense. You need to gear your business to service your client,” he adds.
The margins are slimmer for various reasons. If you compare large corporations with agencies, they don’t run on the same efficiencies. Plus, a massive number of factors make a campaign successful or not; it’s not just the advertising.
Agencies always have ‘skin in the game’
Josh Dovey, CEO of Africa for the Omnicom Media Group, has a different take on ElDessouky’s comments. “I don’t think this is new, agency remuneration has been linked to KPIs for many years. It’s reasonable to expect that if we perform well we benefit, and if we don’t there is a downside. Ultimately, of course, an agency always has ‘skin in the game’ because if we screw up we lose the business,” he says.
Dovey argues that most campaigns have some element of shared risk in terms of how agencies get paid. “This is standard practice for multinationals and actually procurement departments rather than marketing departments generally control that process,” he explains.
True partnerships to produce great creative
If, however, ElDessouky was referring to the creative work agencies do, and the fact that they need to take more risks to improve the quality of that work, Marais is 100% behind this call.
“There’s very few agency client partnerships that even create the calibre of work he is speaking about,” says Marais.
Why is creative work disappearing?
Marais points to the fact that the industry has become process driven, to the point where months are spent on work that ultimately isn’t talked about, as one of the major problems.
“The world’s forgotten that we should be doing quality product,” he adds.
This seems to stem from the financial struggles that agencies are experiencing, resulting in bland work that keeps the client happy so they can keep accounts.
“Agencies have become like subservient chickens, that do what the man or woman says and tick all the boxes and have forgotten about being creative … I’ve seen the decline of the creative product and the way agencies slowly started to roll over just to keep clients happy and getting a band of mediocre work,” Marais believes.
Creative that is relevant to a brand and highly talkable will always succeed. Marais’ solution to begin remedying the situation? “The only way to fix this is to do better work for your clients, and inevitably stand out above the market, and then make them pay more for what you’re doing.
“It’s very easy to sit and go ‘it’s agencies’, but marketers need to also start looking at themselves and look at their portfolios and how much work they do in their careers that hits the lights out, as they have an equal part to play in that story.”
Another issue is that most of the real money goes into media buying, not the fees for creative agencies and their work. This results in poor work dominating media platforms, leading to a large amount of wastage as it is boring, uninspiring and not engaging enough.
Eliminating wastage from all sides
In his presentation, ElDessouky addressed this, calling on agencies to further eliminate wastage and ensure the value of ad dollars is stretched even more.
“As much as there is waste from agencies, that notion can be pushed straight back onto clients as there’s equal waste there,” comments Marais.
Stifling creativity to please clients
Are agencies scared to do really creative work because if the campaign fails they could very well lose a valuable account? Marais thinks this is the case.
“Agencies are not doing brave work because they’re just trying to keep the clients happy and stay in business. When you do brave work it’s a bit more of a fight because it’s scary. Agencies are just protecting their income and not pushing as hard as they could,” he stresses.
“Over the years people have forgotten what this industry is about; the value you bring to the table, and that’s fear of losing clients and you just want to keep them happy,” he adds.
Marais believes there is a big job for the industry as a whole to get back to true creativity, something which he is pushing for and encourages others, both on the agency and client sides, to strive for. “For some reason average work works, but no one is asking ‘can my work work better?”
Michael Bratt is a multimedia journalist at Wag the Dog, publishers of The Media Online and The Media. Follow him on Twitter @MichaelBratt8