The old expression “nobody gets fired for buying IBM,” is now at play in the marketing arena. In recent weeks several large companies have elected to put their business out to pitch. Their selection criteria would not appear to be based on which ideas will make the biggest difference to the business, or who has the best consultants available to work on their business. Instead their criteria would be appear to be blunt scale and apparent price. Of course this is something of an oxymoron as large agencies typically charge higher hourly rates and typically over charge. In terms of programs these firms tend to offer fairly bland campaigns that are big on planning and short on delivery. Interestingly it is at times like this that firms need the opposite. They need PR people that are creative and who love to get their hands dirty. In short they need results.
So why do big companies take this path? At one level it does make sense. Procurement departments love this kind of deal. For a start they can be seen to centralize a contract and get their hands around the terms in a sensible way (at least it is to them). At the same time, agencies sell the idea of lower cost and better integration. In practice any cost saving tends to translate into worse results. At the same time, the hiring of a large agency tends to result in a more detached agency relationship. Smaller, more agile agencies are full of practitioners that love the craft of PR and will give their all to the task, not just the hours they are obliged to provide within the contract.
Small and mid-sized agencies will likely suffer during the next twelve months as some large companies run for the apparent safety blanket offered by large agencies. In time they will learn what they learned in better economic times – that they need an agency, or agencies that can really engage with their different business units and can make a real difference to their success. Sadly it seems that for now though the smaller agencies will have to sit tight and focus on smaller clients that understand the difference between price and value.
I’m headed to the TED conference today. This is one of those events that challenge you to think about the bigger picture and beyond the immediate horizons of financial quarters or even years. This year, more than ever, the conference will have its work cut out to achieve that. With so many businesses caught up in the immediate economic challenges, I suspect it will be tougher to get the CEOs attending to put aside the pressures of their day job and explore some of the mind bending content TED presenters usually put forward. Of course this may actually be just what some of these people need. It is all too easy for business leaders to get caught up in the immediate challenges they face and to forget about the long term destination. Some will argue that when a ship is sinking the captain should worry more about keeping it afloat than which port they were headed for. I’d agree but I’d also argue that most people’s ships are not sinking; they are simply battling tough conditions. The captains who can remind their crew of the benefits of reaching the destination and who are able to step back and perhaps use the difficult conditions to actually help them reach the destination will be the real winners. I say all of this, not to encourage a round of navel-gazing by business leaders at a time when they do need a firm hand on the tiller but to make sure we also remember that in times of difficulty the importance of having the right destination shouldn’t be ignored. Missions and visions are not the monopoly of good economies after all.