The last time I expressed my views on our industry to our industry was at the 2006 American Association of Advertising Agencies' Management Conference. In my speech, entitled "The 5 Percent Solution," I encouraged holding companies to allow their agencies to retain one-fourth of their individual operating profit for growth through investment, incentive or reward. My feeling was and remains we are unable to get bigger if we are unable to get better -- and that requires money.
 
I'm sure you'll be shocked to learn that nothing happened. Nothing changed. Not with my holding company or anyone else's that I am aware of. A hindsight reality check reveals the near impossibility of that goal. Was a guy who runs a midsize shop in Atlanta really going to convince a half-dozen companies that control our entire industry to voluntarily sacrifice a quarter of their short-term profits to invest in the agencies that actually earned it?  Please.
 
So, I have launched a new cause: the agency business model.
 
I believe there are just three things wrong with being an agency today: 1) How we are selected, 2) what we are asked to do, and 3) how we are compensated. Other than that, sheer perfection. I am still a midsize agency guy, so I accept I will never change the industry. I'll settle for changing the way I do business.
 
Selection
Do you know why marketers think agencies are interchangeable? All of us tell all of them that each of us is perfectly qualified to do anything for anybody. If it doesn't matter who the client is, it must not matter who the agency is. RFPs, cattle calls and credentials presentations have become ill-fated attempts to merely tell us apart. It has become so difficult you need "trained professionals" -- search firms -- to eliminate those agencies that refuse to eliminate themselves. They have leveled the playing field and eliminated almost all of us except a chosen few that apparently are perfect for everyone.

There are clients who still bear the burden of finding their own agency. Legions of agencies will withstand countless review rounds, and provide broad recommendations and multiple creative executions. None of this enhances their stature nor reverses a rapidly shrinking tenure in agency-client relationships. Our agency no longer participates in these reviews. The odds of success are too low, the costs too great and the potential relationship too short.
 
Assignment
Countless companies will decide to hire a new agency this year. They will determine their lack of market success is a direct result of their advertising. After all, their pricing, product line, R&D, channel partners, quality assurance or customer service is beyond the realm of marketing. While I couldn't know what real problem is prohibiting their success, I am almost certain it is not their advertising. And if it is not the problem, it is most surely not the solution. Yet agencies will jump at the chance to create an even funnier way to say the exact same thing that the last three failed agencies did.

We believe in one empirical truth. It doesn't matter how well you say the wrong thing. Our new clients must allow us to at least confirm "what" should be said and not merely focus on how to say it. We now decline client opportunities when strategy is predetermined prior to engaging our agency. Too many companies are going to market with a bad message, not bad creative. That all-important shift to alternative media will merely help you find an elusive customer who still doesn't care about your offer.

Compensation
Why is it that companies want to pay less for success than they did for failure? It's because they have to pay the same for failure as they do for success. And when you fire your agency an average of every three years, failure seems to be a safe bet. Agencies should not be paid based on how many hours they work or on how much of their clients' money they spend. And giving away your thinking for the right to get paid to execute it is backwards and silly. Our new compensation is simple. We have to start with strategy and they have to pay for it. The client then owns the strategy and can put it in review (see above). If they want us to execute that strategy, we will place at risk all of our execution compensation. If the client doesn't achieve greater results than with its previous agency, we don't get paid any more money. If they achieve a little more, we get paid a little more. But if they win big, so should we.

There is no such thing as a partnership with your client. One partner never actually pays another and clients don't "buy their agencies out" of their relationship. We can, however, share their risk and invest in their success.

Andy Fletcher is president and CEO of Fletcher Martin in Atlanta.