In Search of Marital Bliss - advertising agencies and clients

Brandweek, Oct 18, 1999 by Gerry Khermouch, Karen Benenzra

Client-agency 'partnerships' need stability, power on marketers' side to be sustainable.

With the longevity of agency-client relationships seemingly shorter than most Broadway runs or theme restaurants, Procter & Gamble chairman John Pepper exhorted marketers attending last week's annual meeting of the Association of National Advertisers to forge close relationships with their agencies based on trust and candor as the best means of getting solid, strategic work from them.

The meeting at Amelia Island, Fla., was themed "Brand Champions" and opened with Brandweek's presentation of its Marketers of the Year awards. While much of the conference agenda was devoted to new media, a lot of discussion was provoked by Pepper's address, a variation of one he'd given earlier this year to ANA members' agency counterparts at the American Association of Advertising Agencies. In both, Pepper stressed the virtues of forging long-term, close partnerships with agencies, a move abetted by P&G's recent effort to tie agency compensation directly to the sales performance of the brands being supported.

At the conference, it was hard to find dissenters to Pepper's views, although several marketing and agency execs warned that talk of partnerships is not meaningful if the marketing team is not vested with the power to make them stick.

"He's absolutely dead-on to say that you need mutual trust and respect," said Ian Parmiter, a former Young & Rubicam exec who in his current role of vp for 7Up brands marketing at Dr Pepper/Seven Up has worked with that agency to find an approach that can get the brand growing again. "Everybody needs to hold themselves accountable. If the supplier doesn't view the client as a business partner and the client doesn't respect the creative, then there will be problems."

Judging by bottler reception, Parmiter and Y&R may have finally turned the corner creatively with 7Up, but Parmiter said that even during a period of false starts there was little thought to threatening a review. "I don't think you get the best work out of an agency if they don't realize you're in it with them," he said.

Keebler Brands president David Vermylen, one of Brandweek's Marketers of the Year, offered a similar response when asked why he didn't ditch incumbent Leo Burnett, Chicago, once he got control of the foundering Keebler brand.

"I'd always had an appreciation for the elves in the valley," he said of Burnett's work on the brand. "Once we got into the brand, we quickly realized the problem was not the advertising, the agency or the majority of the organization," but rather "dysfunctional" senior management and the lack of a coherent strategy. Burnett's work has since gotten the brand briskly growing again.

There was a greater divergence of view on the matter of who should take the responsibility for owning a brand's strategy, advertisers or their agencies. "It's the client's responsibility," said Lou Shultz, vice chairman at Campbell-Ewald, Warren, Mich., which handles various Chevrolet nameplates. "[Clients] create the product and set up the agency briefs. Our goals are to take the tools we specialize in, like identifying consumer trends, and apply them against the brands." The approach leads to a stronger partnership, he asserted, because it allows the agencies to "do what we do best."

Others felt clients who don't give their agencies ownership of brand strategy are headed for trouble. "You've got to have both," said Stone Roberts, CEO of Gotham, New York, noting that frequent management shifts at clients and agencies have led to discontinuity on brand strategy, and ultimately failed relationships. To succeed, both sides need to "understand, develop, invest and believe" in each other's abilities.

"It's very important to make a leap of faith from creating the creative strategy to really turning over the brief to the agency and leaving them the time and space to push the envelope and take a calculated risk," said 7Up's Parmiter.

For some, such a view is incompatible with having numerous agencies involved in marketing a single brand. Former IBM and Compaq exec Jim Garrity, now at First Union, Charlotte, N.C., said he could understand why clients might view maintaining a roster of two or more agencies on a brand as a hedge against misfires at any one agency, but "to me it reflects a lack of orientation." In such situations, Garrity recalled, "I've struggled with my [marketing] team and agencies to get them to think like a single agency."

Several ANA attendees noted that for marketing execs to forge tight relationships with agencies, they've got to have the clout to hold up their end. "You've got to have the juice, the influence with the people who are going to pay the bills," said Peter Finlay, director of corporate relations, Americas, with BOC Group, Murray Hill, N.J. "Without that, you can't have the trust."

First Union's Garrity said it may have been no coincidence that back when IBM retained multiple agencies, such decisions were made by execs five or six levels down from the CEO. By contrast, IBM's current CEO, Lou Gerstner, empowered long-time confidante Abby Kohnstamm with those responsibilities, making it less than a complete surprise when Kohnstamm consolidated ad duties with Ogilvy & Mather.