I know we’re all supposed to haggle these days but if you go into a decent restaurant and say you’re only prepared to pay a tenner for the turbot then you won’t get any – and likely be shown the door.
But clients have been doing this to agencies for years and most agencies deliver the turbot – although probably not the nice fat bits in the middle.
So is the worm (not the turbot) turning at last?
After 11 years Butler Shine Stern & Partners has resigned BMW’s Mini in the US, telling Ad Age that “aggressive cost-cutting and procurement-mandated reviews” and the consolidation of BMW and Mini media business into Interpublic’s UM (which has led to a reduction in staffing they say) have “all contributed to the financial challenges of managing the business profitably.” So it’s resigned it.
Apparently Mini is planning another creative review imminently (the last one was in 2012). So BSSP may be walking before it’s pushed. But it’s still unusual for an agency to be so candid about the devil procurement and the financial struggles with even a pretty sizable account.
Creative and media reviews have more or less doubled since account budgets were handed over to procurement. The marketing department may be happy with service and performance but procurement is always after savings, through re-determined reviews mostly. These usually have nothing to do with agency service and performance. Brothers and Sisters in the UK recently lost Carphone Warehouse to Dixons Currys main agency AMV BBDO in what the company admitted was a procurement-led review (that’s what it said in the first version of the press release anyway).
Clients are entitled to seek lower costs but, sooner or later (as in the case of our would-be turbot muncher) agencies surely have to say you’ll have to go elsewhere. If they had more confidence in what they offer they’d say it more often.
The problem is compounded by the huge expense of pitching; another case of agency follies catching up with them. If they think their rivals are going to spend north of £100,000 on making a finished commercial then so will they. Even though, considering the odds against due to ever-longer pitch lists, it’s commercial madness. Particularly if it’s a re-pitch.
So congratulations to BSSP. Now when will one of the real big boys have the balls to do it?