'Demystification' of Advertising Agencies Apparently Complete / Have Gone a la Carte
Philip H. Doughery, Ny Times, THE JOURNAL RECORD
Manufacturers ensconced on the unromantic side of business no longer look in awe at those who can do such miraculous things for a sales chart. For all their strange talk and cheerful ways, for all their huckster images and dream-peddler reputations, those people on Madison Ave. do have feet of clay after all.
Agency people were once looked upon as partners in marketing, well worth the 15 percent commission they got from the media on all client spending, and they wouldn't quit a client to take on a larger company in the same field. And, oh how fat and sassy those agencies were 25 years ago. The payrolls oozed excess.
The change may have been slow in coming, but 1987 certainly finished the metamorphosis.
``They've gone from a consultancy relationship to a vendor relationship,'' said Robert S. Marker, former chairman of McCann-Erickson, who is now a consultant. He added ``on the client side there is more management by committee, more people involved in agency review. It's gone from a craft and shop ambiance to a factory ambiance. The whole thing is dehumanizing.''
Certainly a proof of that is the number of people interviewed who thought that change in agency compensation was one of the more important events of the year.
And that change merely reflects the change in agency structure and the way services are offered. The full commission reflected full service - creative, media selection and buying, research, marketing. How many clients want full service today? Everything has gone a la carte.
Client companies have built their capabilities in areas that were previously for agencies. And client involvement in the advertising process has reached the highest circles - circles that must also worry about the bottom line.
Among that group, the thought that Ted Bates Worldwide executives got $450 million from the agency's sale to Saatchi & Saatchi and that Robert E. Jacoby, the chief executive, got at least $100 million himself, still galls and continues to affect discussions on compensation.
A lot of advertiser interest is about the agency's media function and many clients are moving all or part of it in house. As Alvin Achenbaum of Canter Achenbaum Associates noted, ``There is concern about the stewardship of media spending.''
But what about 1987? What kind of a year was it?
Alan J. Gottesman, an analyst with L.F. Rothschild, commented calmly, ``There hasn't been a profound change since cave painting.''
But he thinks that the year might have marked the return to a normal curve from the ``aberrational'' years of 1985 and 1986 with all of the mega mergers on both the advertiser and agency side. …