Review Fatigue Leads To Rise In Handoffs

When Deutsch/LA was approached by executives from General Motors’ Saturn division last month, Eric Hirshberg, the agency’s co-president and CCO, figured the client was taking his shop for a “test drive.” The request was for Deutsch to create advertising around the Aura model’s recent Car of the Year honors at the North American International Auto Show, and they were given a tight deadline.

“Jill [Lajdziak, Saturn vp of sales and marketing] asked us to present ideas on a Wednesday [Jan. 17], and by the following Monday we showed them a complete integrated campaign, including ideas for seven television spots,” said Hirshberg. “Jill then came to L.A. for a dealer meeting a couple of days later. … She popped the question and we went nuts.”

The question? Whether the shop would assume creative duties on the nearly $200 million Saturn account from Omnicom’s Goodby, Silverstein & Partners. The shop accepted—allowing both client and agency to avoid a costly, drawn-out review.

“All reviews take time, resources, people, and in this instance we just didn’t consider it,” said Mike Jackson, vp of marketing and advertising for GM. “We have to make decisions as efficiently as possible. … Deutsch was the best fit for what we are trying to accomplish.”

Saturn isn’t alone. In the first month of 2007, three other sizable accounts have shifted without reviews: Macy’s moved its $200 million media account from Publicis Groupe’s Starcom to WPP Group’s Mediaedge:cia; Johnson & Johnson moved media planning duties on its Tylenol brand to Interpublic Group’s Deutsch, New York, from sister agency Universal McCann; and Hasbro moved its $40 million games business creative account from WPP’s Grey to Omnicom’s Uproar.

Granted, several other companies, such as Sprint Nextel, Nokia, Volvo and Virgin Mobile have opted to undertake traditional, multiple-agency reviews. But a look back over the past two years indicates that clients are more frequently shifting business without seeking ideas from more than a single non-roster shop.

According to Adweek research, only 12 percent of all accounts that changed agencies did so without an open review in 2005. But in 2006, that number had grown to 28 percent of the accounts shifted. And conversations with industry figures reveal a palpable and possibly growing disenchantment with the review process itself.

“Pitching in some ways is a little bit artificial,” said Matt Weiss, chief growth officer for Interpublic Group’s McCann Worldgroup. “When you’re in a pitch situation, as good as the consultant may be, there is an artifice to the process. You focus more on the end product than you do the relationship. … When you don’t have a review situation, you operate in a more real-life environment.”

There are also financial advantages for both clients and agencies by not holding reviews. For a client, that can include hard costs such as flights and hotels, and soft costs such as lost work hours spent evaluating agencies over the three-month duration of the typical review, said Joanne Davis, principal of Joanne Davis Consulting in New York.

“Some reviews can cost over a million dollars when you add up hard costs and soft costs,” she said. “At minimum, if you put in the soft costs, no review is less than $100,000.”

The costs can add up for the agencies as well. One new business chief at a global advertising network said that an account that would produce $2 million in revenue would cost $75,000-100,000 to pitch. Extended reviews, such as the U.S. Army’s aborted and restarted pitch for its account in 2005, can run upwards of $1 million for an agency, the executive said.

The decreasing tenure of CMOs is also playing a role. “Today’s CMO has zero time to ponder the possibilities. You’ve got to take action,” said Rob Schwartz, ecd at TBWA\Chiat\Day, Playa del Rey, Calif. “If I were a CMO, I’d say: What work do I admire? Who’s got a track record? Who embraces the big idea and can back it up with metrics? Then I would see if they were available to meet this Friday.”

Straight agency shifts can also make a statement to Wall Street that executives have a plan for their company and brand. “If the CMO hands a big piece of business to an agency without a review, it comes off as, ‘I know what’s best for the company,'” said one agency exec. “If something goes into review, the Wall Street take is, ‘The brand’s in trouble. Something went wrong.'”

And some clients might question whether the results of an agency review will yield any better results than simply shifting to an agency they’re already familiar with. This is particularly true if they’re a large global client with multiple shops on their rosters. “[They] may be pretty confident making that determination without going through a whole RFP review process,” said Tom Finneran, evp at the American Association of Advertising Agencies who serves as a liaison to several of the group’s new-business committees.

Though Wendy’s CMO Ian Rowden met with several agencies before shifting his company’s $400 million account in January to Saatchi & Saatchi and Kirshenbaum Bond + Partners, he said he wasn’t keen on full-blown reviews: “I’ve not found pitches to be the most healthy way for clients and agencies to engage. You end up in a situation where there’s much more promised than is able to be delivered.”

Cleve Langton, director of business development worldwide at Omnicom’s DDB, said that although the steady trickle of quick account shifts forces him to be more analytical (“It’s as much us analyzing [potential clients], as them analyzing us”), the overall new business game remains the same

“It just changes the style,” he said. “It’s still a matter of cultural fit and, ‘Does my agency partner get my situation?’ . . . That fundamental hasn’t changed a whit.” —with Andrew MCMains, Kathleen Sampey and Gregory Solman