Five things you didn’t know about advertising agencies: 2000s (2)

In the 2000s agencies jumped through endless hoops to try to make themselves cool and trendy again; even to the point of decrying good ‘ole paid-for advertising on TV and in other above-the-line media in favour of anything digital and, well, new.

Digital continued to attract client budgets, rising to 20 per cent or more of total advertising by the end of the decade in Europe and not much less in the US. This despite the decade kicking off with the famous dotcom bust when stock markets around the world collapsed as a bunch of over-funded internet traders found that customers didn’t share the enthusiasm of their investors.

2/ The forthcoming decade was given a further kick in the teeth with the 9/11 attacks on New York which knocked the stuffing out of Western confidence and led many people to think that the economic model which had bubbled happily away in the later 1990s was, somehow or other, flawed.

It was of course but it had less to do with Al-Quaida than greedy and credulous bankers who were busy priming the pump of sub-prime mortgages in the US and elsewhere.

But it directly affected advertising too with many clients cutting their budgets or switching money online (even though there was no concrete evidence this worked). Even WPP’s Sir Martin Sorrell flapped, trying to pull out of his £434m deal to buy Chris Ingram’s Tempus media buying group on the grounds that the world had changed. The stock market authorities wouldn’t let him and a reluctant Ingram (he didn’t get on with Sorrell) took his personal £60m cheque to the bank.

3/ In the meantime agencies became the mothers of invention, the likes of Anomaly, founded by former Simons Palmer director Carl Johnson, setting up as a media-neutral ideas shop and a bunch of clever media planners setting up Naked which offered a cleverer solution to matters media than the supposedly clever media planners at the likes of Mediacom and Carat could manage. Somehow both survived and prospered. Former Naked partner Ivan Pollard has just been hired as a marketing whizz at Coca-Cola.

If nothing else this showed the endless willingness of clients to take on more and more consultants, at more and more cost, even as they were moaning that their agencies were charging them too much. But, to paraphrase the old saw about IBM, you never got fired for buying too much advice.

4/ Some old-style sense seemed to be on the point of restoration when Sir Frank Lowe left Lowe Group, the agency he founded and then sold to Interpublic, to set up The Red Brick Road in 2006, taking the £40m Tesco account with him. Frank had fallen out with IPG, as he was bound to, ending by being booted off the board.

Of all the clients not to be swayed by sentiment Tesco’s Sir Terry was the one and this therefore seemed a reminder that big important companies were still in thrall to their agencies. Well they may be, but Tesco has not been followed at The Red Brick Road by a tidal wave of other mega-clients although the agency, now without Lowe who’s retired, remains a factor on the London agency scene.

But strangely enough the financial crisis of 2009 actually seems to have done agencies a favour. Some companies at least finally got the message that the snake oil merchants of investment banking and management consultancy didn’t have all the answers and, in many cases, their remedies were likely to make the patient/client worse when the money they seemed to able to spirit out of thin air ran out. Our friends in Ireland are suffering this rude awakening at the moment.

So client companies began to return to the time-honoured practice of building their brands and sales through marketing, even advertising on good old telly, posters and, intermittently, in print. Digital remains popular of course but if you want to make a big impact in a hurry there isn’t a digital version of the X Factor or America’s Got Talent.

Some pundits blame the current popularity of advertising on a febrile world economy where clients are unwilling to splash out on takeovers or build factories, so it’s easier to spend the money on marketing, which you can turn off when a better option comes along.

But that’s always been the case. It’s now the job of the big marcoms companies (and others) to persuade these ever-reluctant clients that there isn’t something better around the corner.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.