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June 2, 2016
Why It’s Hard for Agencies to Just Say No
 
Turning down new accounts or client requests has a price

As I’m writing this, McDonald’s is in the midst of a controversial agency review. Apparently, the terms of the proposed compensation agreement would not allow the chosen agency to build in any room for a profit margin into its initial contract. In my interpretation, this means the client would be able to determine precisely, to the penny, that 100% of the payments it makes to the agency goes directly to expenses like labor, creative production, etc.

Now, as a customer, I can’t walk into McDonald’s and demand that I only pay the amount it costs to make a hamburger. It’s an absurd request, much like the account review terms are. Nevertheless, two major holding companies are still vying for the account while a third said, “No, we don’t want your business that badly.”

So what does it take to actually say “no” in the advertising industry? At what point does a new account or client request become unreasonable?

It’s easy to understand where McDonald’s is coming from. They are under tremendous pressure to cut costs (like every publicly traded company) and their brand is so iconic they likely believe agencies should bend over for the privilege of adding the golden arches to their client logo roster.

Deep down, most ad folks would love to tell McDonald’s to take their no-profit account and shove it up their sesame seed buns. But that would take a unified stand among some very big holding companies with egomaniacal leaders. The advertising industry doesn’t collectively agree to anything, let alone anything involving revenue-generating business.

McDonald’s is only a very high-profile example of the dilemma ad agencies, our vendors, and freelancers like myself face constantly: At what point is saying “no” to a piece of business or client request worth the risk?

These days, I sometimes turn down lucrative assignments. It’s never easy but I’ve become better at it. Because I’ve learned there’s an opportunity cost that goes with any assginment I take. A job may pay well but might not be the kind of work that advances my career, or it may simply involve too much time or too many headache-inducing complexities. So I say “no,” buttressed by faith that some other, better assignment will come along to fill the slot of the one I turned down.

However, I’ve also learned that saying “no” too often could mean people stop inquiring about my availability for asking for my help. Ours is a service business even if we do have the ability to pick and choose. In advertising and marketing, there’s always someone willing to do the work other people won’t. Think about it: Has there ever been a client so revolting, mean, miserly, or banal that absolutely no one would ever want its ad account? No.

I remember working at an agency where our CEO didn’t say “no” to anything. He frequently told our clients, “We’ll do whatever you want,” and he wasn’t shy about taking on clients who were running sleazy businesses. He didn’t have any morals but he did have a Mercedes.

Every professional, and every agency, has to determine what’s acceptable or not. There are bills to pay, so often the “let’s just get this done and over with” mentality creeps in. Plus, it’s not always easy to see where the line between unpleasant and unacceptable — or even unethical — is. Advertising and marketing has few rules, and rule breakers are often handsomely rewarded.

So I don’t see agencies taking a collective stand against onerous account reviews, compensation agreements, or work requests. McDonald’s will find a new agency whose leaders will do a happy dance the day it wins the review. Then we’ll see how well the compensation structure, and the new creative work, works.

Is it a good precedent to set? Do I think it will be a long-lasting successful partnership? Will the industry soon finally look out for its own best interests?

Well…I’d say no. And no. And no.

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Since 2002, Dan Goldgeier has been writing the most provocative advertising columns about advertising and marketing -- over 170 of them, covering every related topic you can think of. Now based in Seattle, Dan is a copywriter and ad school graduate who's worked at shops big and small. 


Visit his copywriting websitesee his LinkedIn profile or follow him on Twitter.

And please, buy his book for 99 cents.

 

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