Why don’t single client agencies work?

WPP finally gave up on Enfatico, the agency they set up solely to support Dell and have effectively folded it in to C&W.  Enfatico joins a long list of single client agencies to fail.  Why do these agencies fail when, on the surface at least, they offer such obvious benefits to a client?  Before I get in to the reasons why they fail, let me first list the potential benefits of these firms:

1.  These agencies can REALLY get to understand a client’s business

2.  These agencies are not distracted by other clients or new business

3.  These agencies can hire the team that best suits the client’s challenges

4.  These agencies can easily run a single methodology across the globe

5.  These agencies are easy to measure as there’s only one thing to build the measurement around

So with all these benefits why do they fail?  Here are the reasons:

1.  Staff who work at agencies don’t want to just work on one client forever so you are bound to get high turnover at all levels

2.  One of the key advantages of agencies is that they get to bring fresh perspective and insight BECAUSE they work with multiple clients.  In about a year sole client agencies become stale

3.  Sole client agencies are essentially just an in-house team that has been outsourced.  Why bother?

4.  Sole client agencies only work if the budgets are huge.  Otherwise you have staff on the account that are either underutilized or are forced to work on tasks they’re not ideally suited to, to fill their time.

I think it’s a shame these agencies don’t work as I can see the appeal and like to see innovation in our industry.  So far though the cons always seem to outway the pros.  Enfatico RIP.