The short answer
Relationships between advertising agencies and clients are getting briefer.
National Post, August 12, 2002
Ad agencies, public relations firms and their clients are behaving like single people did in the 1970s. They want something brief, mutually agreeable and satisfying. But fewer seek commitment, and nobody wants to get married.
The explanation for the trend depends on who’s doing the explaining. But most seem to agree there’s more short-term work available, usually in connection with a particular narrowly focused project, and less long-term, retainer work.
It’s the same work, many say, but handled more on an as-needed basis that requires specific expertise or experience.
“It’s increasing,” said Beverley Hammond, president of PR firm Veritas Communications. “Our agency is about 90 percent project-based, versus 10 percent retainer-based. That’s reflective of a couple of things: the economic landscape, and clients need budgetary flexibility.”
Shorter horizons demand faster results. Fiscal concerns run to the end of the quarter rather than the end of the year. Clients don’t want to commit to anything long-term because there’s so little encouraging economic news.
Paying for short projects keeps the accountants happy; there’s a direct correlation between the checks and the work they pay for. The shorter a project, the fewer unknown variables there are.
“Longer-term retainer-based situations really don’t exist anymore,” Ms. Hammond said. “We can’t rely on something for three years. But it’s easier for cash-flow and accounting for us as well as for clients, and for both of our budgets.”
Terry Johnson’s advertising agency, Allard.Johnson Communications, has been working on a per-project basis for many clients — which include such companies as Royal Bank and Wal-Mart — for years. Lately, he finds more of his competitors are working that way, too.
“The approach hasn’t been common. But we don’t have a lot of client turnover, even though we work on a project basis,” he said. You have to prove your worth over and over again, but that can work to your advantage. “Most of our clients are with us an average of five or six years, even though we’re working on a project basis.”
The ad business is not growing rapidly in Canada. And fewer companies with U.S. head offices maintain big marketing staffs.
Decisions about Canadian marketing plans are more likely to be made in Los Angeles or Pittsburgh or Bentonville, Ark. But once made, they have to be executed by Canadians the decision-makers will likely hire as they’re needed.
Project-based work means more flexibility for clients, too. If you don’t like the work your agency is doing, short-term projects allow you to audition other outfits you think might offer a better fit without having to go through a review.
“There is a shorter time horizon,” said Doug Checkeris, managing partner at The Media Company. “People are pressed for time, short-staffed, and don’t want to do the big agency review because it will be a circus.”
Farm out a project. If it doesn’t work, it’s been a relatively cheap learning experience. If it does, maybe you’ve found a new agency.
Shorter-term projects lower financial risk for clients, and mean opportunity for smaller shops.
“We get to work on accounts that were closed to us,” said Mary Donohue, creative director at Communicor Public Relations. “It gives us the opportunity to really shine in areas where we know what we’re doing. It’s a chance to develop a relationship, and every one of the clients I’ve done project work for has called me back.”
The change means bigger shops have to be more flexible. If clients want project-based work, you have to be able to offer that option.
“It depends on the sector,” said Linda Smith, Fleishman Hillard Canada executive vice-president. “Financial communications tends to be transactional, tied to an acquisition or and IPO or a divestiture. Marketing communications, technology, it’s both. This is the time of year when we’re finding out. Clients are trying to work out how they want to work this coming fiscal year and what their budgets are.”
Demographics also play a part in the shift to project work.
“Maybe it’s also a generational thing,” The Media Company’s Mr. Checkeris said, describing himself as a Baby Boomer. “More people of my age want to work in a different way. That’s the other side of the equation — the supply.” Cost-conscious agencies want to run leaner, with smaller staffs. Senior advertising executives still want to work — just not at the office and not every day. So they work as hired guns on short-term projects without the managerial wrangling.
Is this change permanent?
“Nothing’s ever permanent,” Ms. Donohue said. “We’re in a fluid economy. I hope to see more of a marriage between marketing and public relations so that as teams we can solve the client’s problems.”