Frenemies: The Epic Disruption of the Ad Business (and Everything Else) Read Online Free Page B

component, he said. Our clients “want to know: Can I still trust my agency? Do I get to know of kickbacks or rebates?” Are these shared with the client? Inevitably, the increased wariness of clients “leads to tighter contracts.”
    The fifth component is the agency’s use of data and analytics andhow it measures performance. Clients commonly ask, “Who owns my data?” They want to know the competence of the agency in new machine tools like programmatic advertising. And they want to know if they are paying for fraudulent clicks.
    Finally, and as central to the client as are costs, they want to know about what talent will be assigned to their account. “What I see happening more and more is advertisers want guarantees on key people,” Glock said. They worry whether the agency has enough scale to service the client. And the client defines talent more broadly. “It used to be a given that only the creative agency sat at the table. Now that has changed. Public relations agencies sit at the table. Media agencies sit at the table. Digital agencies sit at the table.”
    â€œThe problem agencies have,” Millard interjected, is that cost pressures from clients “is causing agencies to pay less to their employees. Because of that, they’re not as attractive. Why would I go to an agency that looks like a dinosauric entity rather than go to Google, or Facebook, or LinkedIn? Why would I do that, and be paid what I would be paid to work in a sweatshop around lots of unhappy people?” Contradicting Mandel’s thesis that agency margins swell, Millard said, “It’s a real problem for agencies because they can’t make any money. Their margins are getting squeezed. This is a very bad scenario for everyone, including the clients who are not getting the best work out of agencies because they are not getting the best talent.”
    â€œI remember,” she explained over a cup of tea in her office after the meeting concluded, “when I was growing up in this business the pride General Foods and Young and Rubicam would have when they’d say, ‘We’ve been in business twenty-five years with Jell-O. We built this business together. This is a partnership, a great cause for celebration.’ That’s gone. Agencies live in great fear that they’re going to go into review at any moment. Agencies are now treated as vendors.”
    Millard described a meeting she had that morning with one of herclients, Time Inc. Executives there complained of not being able to “have a strategic discussion with an agency. It’s all about pricing.” She says the same is true of MediaLink’s other media clients who want to sell space to media-buying agencies. She offered this example: “If Time devises an elaborate $3.5 million sale of space for its multiple magazines, the agency says, ‘I need $1 million.’ You’re having a price conversation before you even finish telling them what the idea is. All they know is that they have to skinny you down because they’re being skinnied down. They’re being judged by how well they’re doing on pricing.”
    Little wonder clients turn to MediaLink, Millard said. “We don’t have a dog in this race because we love each agency equally. And we’re going to help the brands through some of this decision making because we don’t care if they choose Omnicom or Publicis. But they can’t go to Omnicom and ask, ‘Am I in the right place?’ They are more likely to come to us and ask, ‘Should we be working differently with our agency? Or should we put our account up for review?’”
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    ï¿¼The tidal wave of accounts up for review swept through the agency business. Agencies lost part or all of the business of longtime clients. Publicis, for instance, lost Procter & Gamble and General Mills, as well as Coca-Cola,