Last month, while brands were busy painting their products, services and social media personas in Pride colours, IPG-owned agency FCBmade an announcement that shook up and shocked the international ad industry. The agency resigned the Nivea account, a business that represents 1% of the agency’s global revenue, over alleged homophobic remarks made by one of the client’s representatives. According to reports, the Beiersdorf-owned brand’s executive rejected the idea of two men’s hands touching with “We don’t do gay at Nivea.”
In an internal memo sent to employees, the agency’s global CEO Carter Murray, a vocal proponent of inclusivity and diversity in all aspects of business, said that they will be resigning Nivea’s global account at the end of the year when contracts expire. However, he did not directly address the alleged remark. Nivea released a statement after the news broke that stated, “We don’t comment on unsubstantiated speculations.” The statement also cited its non-discrimination policies.
FCB’s decision to end a hundred-year-old relationship has spurred a fresh round of heated discussions on the imbalances in client and agency partnerships. Although the ad industry has been applauding FCB’s gutsy move, some observers believe it also could be a result of accumulated frustration. Nevertheless, right now FCB is a superhero for the global ad industry.
According to Govind Pandey, CEO, TBWA\ India, “Principles are nothing if they don’t cost you something. These decisions clarify the values, reinforce the culture, and the pride of belonging. One has to watch one’s own brand as much, if not more than the brands we manage. Every such decision defines who we are. Morals make money over long run and it’s not a trade-off.”
In a world where brands and clients are fighting for accountability and relevance, Pandey feels, “One has to watch the line between being of service and being servile. Know your values, stick to them. Because what you stand for is what you stand on.”
Veteran adman K V Sridhar, who is the founder of HyperCollective and former chief creative at Leo Burnett, agrees with Pandey. “If values are not attached to a relationship, the ship of trust will sink.”
However, in tough business times decisions like FCB’s will be a rare find, says Sridhar. Especially in India where agency-client relationships are getting more transactional. With mounting business pressures, the basic formula is to keep afloat. Though a few clients and brand experts have different perspectives on business sustenance and the evolving nature of client-agency partnerships.
According to Saujanya Shrivastava, chief business officer, MakeMyTrip, “Co-creation and co-ownership are the two tracks on which a rock-solid relationship between agencies and clients run.” Shrivastava says at a time when brands are seeing agencies as an extension of their own business, long-term commitment is a must to strengthen trust. “A strong partnership is about the ability to take singular cohesive view of business imperatives that a brand focusses on,” he adds. Delhi-based MagicCircle Communications came on-board as the creative partner for MakeMyTrip last year when Hemant Misra, former CEO of Publicis Capital, decided to launch the full-service independent agency. Misra had been partnering the brand closely in his previous role at the Publicis-owned agency and, as per reports, was one of the main reasons why the account was moved out when he quit.
As far as widening fissures between clients and agencies are concerned, Satyaki Ghosh, CEO – domestic textiles, Aditya Birla Group, thinks that happens when work done is for immediate short-term gains. “The problem can be on either side but as suppliers often the brunt is borne by the agency. When that happens, I think it is better to part ways rather than losing self-esteem even if that means some business loss in the short term,” he says. On agencies ‘standing up for what is right’ and fighting for their own cause, Ghosh thinks it is both a business and emotional decision. There is nothing right or wrong, different situations demand different actions.
Ambi M G Parameswaran, brand strategist and founder, Brand-Building.com, has similar views. However, he thinks agencies have a bit of work to do. “There could be fissures, but those are not insurmountable. Agencies need to demand to be paid well, and then they need to invest in talent, processes and tools. So that clients see value in what they are paying for.”
Transparency is the key to winning a client’s confidence. It’s like a thumb rule to attain growth in business and brand performance, thinks, Amit Tiwari, vice president – marketing, Havells India. Tiwari also says marketers today look at the value that an agency brings to the table for the brands. However, he observes that agencies are struggling in two areas these days. “One, there is too much burden on the agency teams to deliver with limited resources and multiple accounts. Two, agency structures are too complex and metricized which leads to a lot of operational challenges at the cost of actual productivity.”
Gone are the days when agency-client relationships were “made in heaven” and stayed strong “till death do us part”, today these relationships appear to be brittle, says Ajay Kakar, CMO, Aditya Birla Capital. “These days woes rarely get discussed and addressed. This results in the possibility of a flash point, at any time, on any pretext, even if it appears to be petty. More often than not, the client asks for a divorce. And is soon looking out for a new partner. While many agencies recommend cause based marketing to their clients, it is time they stand up for a cause themselves; the cause of their self-worth and self-respect. But wearing my client hat, let me also confess that clients are not suicidal. If they get value, why will they not give commensurate value,” signs off Kakar.
From The Fact Files: Ulka resigned the Complan account in the mid-1980s because the team could not handle the insults being hurled at it by the client. Interestingly, the account was also resigned (or sacked) by Lintas a few years later, for the same reason.
The Rising Pitch Fever – Stop the ideas bloodshed, say agency heads
Earlier this month, a Twitter thread opened up another topic of decision that the industry usually likes to discuss over a drink or two. It was about the great pitches league. Several independent shop founders were spotted sharing their recent pitch experiences, and questioned the process that brands have in place. Many agency and creative heads feel that startups, typically, call for an agency “’swayamvar’. Recently, a new-age brand met 27 agencies, and still didn’t end up with a match. There are also instances where marketers have approached agencies for a pitch via social media.
Satbir Singh, founder, Thinkstr, says, “The problem with these big agency pitches is that they’re usually called by someone who doesn’t know what he’s looking for, has a lot of free time, doesn’t have the product ready, will probably be too confused at the end of it all to take a decision. That one or two ideas will be stolen too is another long story.”
Lack of patience from marketers, is another reason for these frequent pitch meets, says Arun Iyer, founder and chief partner, Spring Marketing Capital. “One bad meeting may put the agency on the red line. You rarely find marketers these days investing in their agency relationship. There is so much pressure on agencies to make sure they survive, that sometimes saying “No” to a pitch may not be the best solution,” he adds. Iyer’s fairly new company has refused to participate in about six pitches over the last few months, and is focusing on building consulting solutions for brands.
Naresh Gupta, CSO & co-founder, Bang In The Middle, admits that tough calls do hit the business, but it’s time agencies grow a backbone. He says, “We don’t go for every pitch that comes our way. Also, we said goodbye to a fairly large client because the client had no respect for anyone in the agency. That call did hurt us, but it was taken. I am sure there are many such stories inside every agency, if they do come out, the pitch process will become far smoother and systematic.”
Singh suggests a broad industry agreement on a pitch fee as a good start to fix this issue. Taproot India, Law & Kenneth Saatchi & Saatchi, and Creativeland Asia, are a few agencies that have been experimenting with the pitch fee system. However, what the system lacks is an industry-wide pact.
Gupta observers, the India advertising community is united during “awards show”. When it comes to critical industry issues there’s usually total silence.
Singh agrees, “We work with the (ad)film industry that has rules which no agency or client dare violate. Try not paying the music director while running a TVC on a medium other than TV. A notice will arrive in your inbox before your consumer hits the skip button on YouTube. Privately, agencies have been fantasising about it for years. If nothing else, in these tough times, pitch fees can be a viable revenue stream. Also, most importantly, a client that pays for a pitch will also take a (quick) decision,” he adds.
Singh, who has been in long term brand relationships, observes that the wise client knows the value of consistency and continuity in brand building. “Deeper consumer and category understanding comes only when you have been involved with the category for a bit. Pitching every campaign only satisfies your sadistic side, does nothing else for the brand.”
As a client, Saujanya Shrivastava, chief business officer, MakeMyTrip, supports the pitch fee proposal. He suggests, “Sanctity of the pitch process should be maintained because if some elements of the brand pitch process are facetious, agency does reserve the right to seek project fee for resources deployed and bandwidth stretch that a pitch process may demand. The process of charging pitch fees could help reduce the practice of shopping for ideas. Since one of the core values that agencies provide is the generation of ideas and if a brand wants to assign rights to these ideas as part of the pitch process, it’s only fair that the agency is paid for that work.”
The difference between a pitch and an agency swayamvar – Taproot Dentsu is one among a handful of Indian agencies that has taken a rather vocal and consistent stance on the pitch process. Agnello Dias, co-founder and chief creative officer, Taproot Dentsu, shares his candid views on how client pitches should be done.
Some pitches are good.
Clients are genuinely seeking a solution to a problem and if they find that solution, they will go with it. These are not agency pitches, they are solution pitches. They’re not looking for a tailor, they’re look for an outfit. And we respect that.
However, these are the minority. Most brands call pitches in order to seek internal clarity on what they ought to do. A bit like going window shopping on bespoke avenue.
How have we reached this stage? I guess it’s a simple demand-supply equation. Clients call dozens of agencies for pitches because dozens of agencies show up.
I don’t think it’s because clients don’t trust agencies. It’s often because clients don’t trust themselves… with the outcome. So, the next best option is to max the process.
At Taproot-Dentsu, we try and get as much clarity about a pitch if we do have to take part in one. Smaller agencies do not have the elasticity of resources that pitches demand. So, we ask questions. About budgets, about number of agencies taking part, deadlines and pitch fees. Not because we’re arrogant or tough but because we are honest. With ourselves more than anyone else.
After all, truth be told, when clients call a dozen agencies for a pitch, they are not really looking for answers. They’re looking for questions.
And if questions that have no answers are frustrating, it’s even scarier to come up with answers that have no questions.
We really have to be out of their minds to do that.