The problem with ginormous advertising networks

I don't begrudge Sir Martin Sorrell for being wealthy or successful. He works really hard, he's smart and he's certainly built a bigger company than the rest of us have built. That said, his compensation is a sign of the bigger problems in advertising.

The issue is that the bulk of money clients pay is going to executives who never touch your business or help you increase your sales. There are layers of people making lots of money at the top, which means less money for the strategic and creative talent you're actually paying for. And since there is less money for them (no bonuses or raises has become the norm), those talented people are leaving to go to Facebook, Google, etc. Or leaving to start their own thing.

For a while, at least, big agencies will still do well. Why? Because most clients don't want to get fired. (Which is totally understandable.) To hire a huge name brand agency is job security. It's the old "Nobody got fired for hiring IBM." The minute a marketing exec hires a smaller, specialty agency, they are taking a chance and putting their job on the line. So most clients still go with the safe, name brand agencies.

At the end of the day though, it all comes down to the individual talent that's going to be overseeing your business. The truth is often that you get better, more senior, talent at a smaller shop. And since it's less corporate and more personal, they have more of a vested interest in your success. Instead of trying to juggle politics, procurement people, and a multitude of clients, they actually focus on the work. And don't have to tip the boss upstairs $66 million at the end of the year.

#SirMartin #sorrell #holdingcompanies #advertising

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