Why Agency-Client Divorce Rates Are Soaring

Give It to Me Now or Else

There is a rare breed of client out there in 2007: the one that commits to an agency through thick and thin. Look around. Read the recent articles in Advertising Age, The Wall Street Journal and others. The trend is disturbing. Agency-client relationships are shortening, averaging two years now. They're becoming project-based; retainers are being questioned and results constantly scrutinized.


Marc Brownstein
I just read that Kraft left JWT after 80 years. That's an amazing run. And extremely rare. The fact that they left now is really the story, however. It's a symptom of a shift in approach by today's marketers at client companies. When I look at my own agency, it's no different. We used to get and keep clients for many years, even decades. Now I look at my client roster and see only half are on retainer. And keeping them on retainer, and at my agency, is a daily challenge. More so than just a few years ago.

In fact, a current client of nine years just put us in review. Why? New marketing director on board, with friends at another shop. Sound familiar? (For the record, we're not re-pitching. Hell no. Great brand, mostly great people. But a no-win situation. Fortunately, we have plenty of new-business leads now, and will focus our valuable time on winning new relationships.)

Nevertheless, the short marriages between agency and clients are a problem. It's harder to get paid for strategic thinking. You have to repeatedly justify the talented team you put on the client's brand because clients constantly question fees. And when agencies want to measure ROI, getting alignment on the metrics is just a ton of fun. What we all got into the business for.

What's going on?

Some say it's pressure on marketing directors to perform. I won't argue that, but I think it's also something else. I think it's the environment in which we do business. We now operate at the speed of the internet, with fast, impersonal transactions. It's a give-it-to-me-now-or-I'm-going-elsewhere-to-get-it world. That mentality has seeped its way into our industry. You can take a client out for a round of golf to build the relationship. But if he doesn't get results on the promotion next week, he'll thank you for the 18 holes and take his business elsewhere. Nothing personal.

What that does is put agencies in a very insecure place. We never really know how long a client relationship will last even if we believe we are performing well. And the number of pitches goes up -- you have to replace the recently-departed client, as well as the recently-completed project. Exhausting!

My advice is to covet the good clients still left. Spoil them with thinking and service.

And for the project clients? Take them on if they're going to make your agency better creatively or financially, or give you experience in a new category.

But don't waste your time on the golf course. Save that for your family and friends.

by Marc Brownstein on 04.18.07 @ 01:46 PM