Agent of Change: Decision to Defend

It’s friday. you’re thinking about the weekend. then you hear that the marketing director for your biggest client just left. You hit panic mode. A few days later, the phone rings. “We want to make sure we’re getting the best from our suppliers,” says the new voice on the other end. You know the rest.
The question for the incumbent is: What’s our chance of retaining the account? Here’s one answer: Your odds of winning the lottery are better. Of the 15 major reviews in the last 10 months which included the incumbent, all 15 clients changed agencies. Consider some of these major account shifts:
United (Burnett) to Fallon, Young & Rubicam
Delta (BBDO) to Saatchi & Saatchi
GTE (DDB Needham) to Ogilvy & Mather
Bank of America (Ketchum) to Deutsch
Acura (Ketchum) to Suissa Miller
Samsonite (Burnett) to TBWA/Chiat Day
Gateway 2000 (Carmichael Lynch) to DMB&B
In two recent cases, the incumbent chose not to compete: Ammirati Puris Lintas with MasterCard and Grey with Domino’s. (As a point of reference, I do not include agencies that know they’re being fired and resign the business to save face. That is a whole different category.)
The million-dollar question is: If the odds are stacked against the agency, why bother to defend? What factors are considered? Sometimes, it depends on who you ask.
To begin, let’s take the case of AT&T, which I happen to know intimately.
Ayer and AT&T were married for 75 years. They went through being a monopoly together. They went through Judge Green’s idiotic divestiture together, keeping a 75 percent share of the market immediately afterward, even with intense cost competition from the upstarts. They went through the phone wars together and managed to beat MCI at its own game with “Put it in writing.”
Then Ayer and Y&R were asked to compete on a big strategic piece of business meant to attract millions of new customers, as well as secure its present base. Ayer won the competition with the ill-fated “I” Plan.
This campaign, which was to include loads of marketing innovations to benefit AT&T’s highest-spending customers, ended up more Zenlike than the Infinity rock campaign! It was more like, Huh? What’s an “I” Plan? After 75 years of success, this effort was cited as evidence of Ayer’s failure to do effective work.
But there was an added twist-for Ayer and for agencies in general-and the impact is intense.
An informal survey done at Adweek found that when a new marketing director is hired, there is an 80 percent chance the account will go into review.
Surprised? I didn’t think so. This theory played out in the AT&T review.
Joe Naccio, the new CEO of AT&T’s consumer division, didn’t know that marketing failed to add substance to the “I” Plan, so he hired a new head of marketing, Dan Clark. The only thing both men knew about Ayer is that it did this stupid “I” Plan. The upshot?
Clark and Naccio put the account into review. From my biased viewpoint, the scenario went something like this: Clark includes Foote Cone, the agency from his Nabisco days-and guess who got the business? The 75-year marriage is history.
We knew it the minute Clark was hired.
Grey knew it with Domino’s.
BBDO knew it with Delta.
Martin Puris knew it with BMW and MasterCard.
But Ayer had to participate in the review. Even keeping a small part of the business, which we did until October 1996, was better than letting ego get in the way of business and risk losing everything. This account was the mainstay of our agency. Giving up would say to staffers and to the ad world that we were through.
Let’s set the scene another way: You’re married or living with someone for years. One day your partner says, “You’ve been terrific all these years, but I’d like to see other people. You understand, don’t you? I mean, you can try harder, and maybe I’ll stay. We’ll see.”
Agency life is a bit like that. It’s not just business; it’s personal. So what do you do when you get that horrible phone call from your client telling you the bad news?
You know perfectly well what you’d like to do. You’d like to say, “Go —- yourself!” But this is ego talking. Let’s be real. Advertising is business, and hurt pride isn’t always helpful when making a critical decision. Instead we say, “We consider it a privilege to be part of the pitch.”
Bob Welke, who is now chairman and chief creative officer of Tatham, Euro RSCG, has a lot of experience in this realm from his years at Burnett. “You don’t want to let ego get in the way. You get all the principals of the agency together in a room. You close the door and take a deep breath. Then, very unemotionally, you discuss the odds of keeping the account,” he advises.
“You have to factor in your people and revenue and their jobs. Then you decide. Oldsmobile was a good example. The dealers wanted the agency lynched. There was only a minuscule chance the agency would keep the account,” Welke explains. So why did he defend the business?
“We felt it was worth it because the circumstances played to our strength. We had a long relationship with GM. Another agency would be playing catch up. And in this case, we wanted to try something different. The work we did was not the work we wanted to do,” he says.
Isn’t that what every agency says?
“Here it was true,” Bob insists. “This is not an easy company to turn around. John Rock, Oldsmobile’s former general manager, trashed the ads in front of us. But he’s sharp. He understood. That’s not always the case. So with Olds, we felt if we can save the marriage and the kids, why not try.” The good news: The agency kept the account.
United Airlines is another story.
Pat Fallon was recently quoted as telling the United people in his pitch that “The Friendly Skies” was the best irrelevant advertising in the airline category. Burnett decided to defend the business, but I believe it was a hopeless effort. They clearly weren’t in tune with studies rating the concerns of airline travelers.
In the same article, Rick Fizdale, current chief executive and chairman of Leo Burnett, admitted that United wanted to transform the airline. “We did not see that their needs had changed.” Fallon McElligott did.
The issue remains: to defend or not defend? After all, it isn’t wrong to put an account into review. Obviously, there are times when an agency is doing a lousy job, or it’s a bad mix of people, or sales are down-and advertising is the easiest thing to blame. But defending an account may not always be in the agency’s best interest.
Personally, I take a radical view. I happen to believe that the incumbent agency should not be part of the review process. There are better, more honest, more timesaving alternatives. I agree with Martin Puris when he says he would rather be fired than put on the defensive in a review.
“If it’s basically a good relationship,” Puris notes, “the client should say, ‘We have some problems, and they’re serious. We expect you to solve them by a certain time. If you don’t, we’ll fire you.’ This approach is straightforward and fair.”
But Puris is quick to add, “The first thing you need to decide as an incumbent is whether you want to continue with this client. If you win, is this going to be a healthy relationship? Usually, there is considerable doubt about that if the account is already in review.”
A second reason to decide not to defend is when you know the deck is stacked. Delta Air Lines is a case in point. Clearly, BBDO made their decision to drop out in midreview because they felt it was a no-win situation.
Domino’s is another example. Grey had the account for six years and lived through four marketing managers. The client had the best year ever when the competition’s sales were down.
But Domino’s brought in yet another marketing director, Cheryl Batchholder, and Grey, after six months, saw the handwriting on the wall. She wanted her own agency.
In my opinion, new marketing directors who come into a company that enjoys a long-standing relationship with an agency view it is a threat. They want to be the expert on the business, not the agency. (For my money, if marketing directors spent more time on managing brands, as opposed to their careers, we would all be better off.) Remember the 80 percent probability of account loss? There has to be some reasonable explanation for this. I cannot believe that so many agencies, giving this statistic, are doing bad work.
Trust me.
My experience with the review process is fairly significant. I’ve been partially responsible for getting the largest account ever at Ayer, or anywhere else for that matter (the then $250 million Burger King account) and losing it 18 months later. In that time, as with many franchisee accounts, there were six marketing directors, three presidents and the company was bought.
Burger King wasn’t really in review, but we were told to give it one last shot. So when yet another marketing director appeared, we thought, “What have we got to lose?” We wanted to keep the grand prize: a $250 million account. That’s a lot of jobs at stake. We did, I believe, our best work on that pitch. We lost it. And we knew we would. But we felt we finally showed our stuff.
What did it cost us? In part, the question is asked rhetorically. Frankly, it’s not only psychologically draining to participate in a review, it’s expensive. It can, depending on the seriousness of the review, cost the same as a new business presentation-anywhere from $300,000 to $1 million. For example, the AT&T review cost Ayer around $400,000 in late 1993, which included research, rip-o-matics, music, storyboards, even hiring a famed political consulting firm.
Similarly, we had two or three reviews over Seven Up in a period of seven years.
I would define it as wake-up calls. In most instances, a review was held because of our own stupidity, not our work.
For instance, Ayer had a fractionated team at odds with each other-and the client knew it. Worst of all, we committed the cardinal sin: Our top management was not having a relationship with their top management. Not exactly a winning formula in a people business. This was our downfall-and we deserved it. What we didn’t deserve to lose was AT&T.
Sour grapes? Don’t forget that 80 percent account zinger.
I refer back to the stacked-deck syndrome. Now I realize that it is virtually impossible to sound objective in a case like this. But since I readily admitted our Seven Up failure, you should be inclined to believe me.
Indeed, the whole experience raises a fundamental question: What lesson did we learn? In Ayer’s case, it can be summed up in one word: cheat.
In retrospect, I think we should have gone to the AT&T chairman and discussed the situation openly. We should have fought and defended ourselves, placing blame on those responsible, instead of being so prideful and counting on our work to win the day.
Instead, we closed our eyes to the stacked-deck syndrome and pushed on ever optimistically. Would we do it again? Yes, but differently.
Optimism is the key word here.
Keith Reinhard, the chairman of DDB Needham, referred to it when I asked him why he stayed in the GTE review.
“Why do we pitch these accounts like GTE when we know we probably don’t have a chance? The tendency is to jerk accounts out of an agency. There’s a lot of zigging and zagging with brands. But we believed we could protect some of the revenues. Mainly,” he says, “we’re all incredible optimists in this business.”
Think of this way: Keith once told me a story about his two sons going into advertising. He asked them point-blank if they were comfortable with rejection. He made it clear to them that this is a business where no good deed ever goes unpunished. I love that.
Or bear this thought in mind during your next review. It’s a line from Mr. Smith Goes to Washington, courtesy of the ever-hopeful director Frank Capra: “Lost causes are the only causes worth fighting for.”