Advertising Agency Reviews: It’s a Mad, Mad, Mad Ad World

It would seem traditional advertising agency reviews are the best deal going for marketers looking for new agencies. Agencies invest hundreds of man-hours and thousands of their own dollars developing creative solutions to business problems for prospective clients. Then they take their place in line to show off their ideas for free, presenting research and insight-based strategies along with complete ad campaigns ready to execute. One shop gets picked, and the rest hit the road in search of others who will see their show. The entire process reeks of desperation.

Most observers would say agencies get the short end of the stick in this peculiar exchange, but I’m not so sure. I think marketing executives fare even worse, and here’s why. Chief marketing officers have it pretty rough these days. Their average tenure is right around two to three years, and they rarely make the big move from CMO to CEO. Just 10 percent of CMOs at B2C companies believe their next title will be CEO. Contrast that with data showing nearly 50 percent of Fortune 500 CEOs were formerly COOs.

Clearly, corporate America puts a lot of stock in good operators with an ability to build efficient systems and run tight ships. But no man is an island. Top-notch suppliers, considered essential for designing and delivering a firm’s products or services, always surround strong operators. None of these vendor partners are required to participate in the kind of review process routinely used to evaluate and hire ad agencies. Sure, they work with procurement teams and labor through RFPs, but they aren’t asked to actually do the work before they’re hired like agencies are.

Why does that matter? I think it’s part of a broader lack of respect for the marketing function that many CMOs unwittingly make even worse. When a CMO holds a traditional review and trots out a chorus of agencies willing to perform for free, the value of the solutions, the agencies offering them and the CMOs leading the effort are diminished in the eyes of C-level peers.

The simple psychological fact, as observed by Adam Smith, is that people value what they pay for and dismiss what they don’t. And the old guilt by association principle makes matters worse for ambitious CMOs leading the charge. If the agency’s value is diminished so is the CMO’s. CMOs have long been the Rodney Dangerfield of the C-suite, and hanging out with agencies willing to play the role of stooges doesn’t help matters. Redeeming the role of the CMO must include redemption of the role agency partners play, and that starts with re-thinking the traditional review process. In fact, much of the re-thinking has already been done and is illustrated nicely in a Business Week article titled, “How to Hire an Ad Agency.”

Good marketers know first impressions are difficult to change. It’s in the best interest of CMOs and agencies alike to make sure those first impressions come from a position of strength, not desperation.

– Mike Sullivan is President of Dallas Ad Agency The Loomis Agency

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