In today’s business world, the pressure for financial performance has created a supercharged atmosphere in which the only goal seems to be to make as much cash as fast as possible. Few industries have changed under this pressure as much as the advertising industry.
Industry professionals are caught in a crossfire between clients who demand ever increasing return on investment (which generally means lower price) and their own managers who seek ever escalating revenues. Today fewer people are doing more work than ever before and earning less. The resulting pressure has taken a lot of the fun out of a business that was traditionally focused on delivering big ideas and powerful solutions.
The problem has been exacerbated over the last fifteen years as the ad agency business has gone public. Estimates vary, yet most agree that over ¾ of the U.S. advertising billings roll up to eight publicly traded agency holding companies. During the ’90s, these financial enterprises bought almost every agency of size and character in America. An industry that once saw its revenues as a consequence of doing great advertising switched its priority to financial performance above all. The grind of quarter to quarter financial results is taking its toll.
A law of physics says that a system under pressure reveals its flaws, and the flaws of our industry are being revealed. Take the case of the United States versus Ogilvy & Mather. A few Ogilvy & Mather executives are accused of encouraging employees to falsify time reports to make up for a revenue shortfall of $3 million dollars on the White House drug office advertising account. Two people have pleaded guilty of the charges, and others are on trial. Those on trial will serve prison time if convicted.
Are these a few bad eggs, or is their behavior a reflection of the pressures our entire industry is under to deliver unrealistic financial performance day in and day out?
The shame of it is that Ogilvy & Mather is still a great ad agency, yet the actions of a few individuals sully this great name. It also speaks poorly of our industry and casts a shadow of doubt on our industry’s trustworthiness. A recent Gallop poll rates advertising industry ethics just above those of used car salesman — the perennial loser in the poll. This is a drop in status over previous years. Just 10% of Americans think the advertising industry has good or excellent ethics.
My greatest fear is that young people coming into our industry grow to believe that business is all about money and nothing else and that whatever it takes to get ahead is OK as long as quarterly goals are met.
We need to put the horse back in front of the cart. Business is about enterprise with people working toward common goals and serving clients’ best interests by doing what is right for them rather than what is expedient for us. The consequence of investing in our enterprises may be thinner margins in the short term, yet the long term benefit is superior performance due to stability, goodwill, and trust and — ultimately, better overall results and ROI for our clients
Investment — not cheating — is the way. Great businesses build enterprises that encourage trust, creativity, and teamwork. They understand that it takes time to build teams that work well together and have the capacity to create great ideas that move business. Investing in people is a catch phrase in our industry that many use, yet few embrace.
One shining example in our town of a publicly-held advertising agency investing in their future is Publicis. Three years ago, they began shelling out huge dollars to attract world-class creative talent and reshape their agency. Their hope was that their investment would lead to major account wins in the Northwest.
Their efforts are paying off. Their recent win of the Dish Network account and their advancement to finalist status in pursuit of the Mitsubishi automobile account is welcome news for Seattle and those who work within our industry. Media companies, photographers, printers, freelancers, producers, and a host of others stand to benefit. Our region’s credibility as a creative place gets a boost as a result of Publicis’ winning ways.
More and more, we need to see each other less as competitors and more as partners in helping Seattle take its rightful place as a one of the most creative places in America. To do this, we should follow Publicis’ example and invest in our enterprises and our people. More importantly, we need to re-educate ourselves that our industry is about fun, energy, and big ideas and that money is only a consequence of doing these things well.