Returning from a short break it seems from reading the various reports on the Omnicom win of McDonald\u2019s in the USA that a recalibration of the agency\/client business model has snuck up on us.<\/p>\n
There is a certain irony in the fact that even though industry commentators have for years been calling for a re-imagining of the business relationship between agency and client, as soon as someone does something about it the ink is barely dry on the contract before many of these self-same commentators are rubbishing the main planks of the arrangement.<\/p>\n
Of course it is true that no-one outside McDonald\u2019s, Omnicom and Flock Associates (the consultancy who worked on putting the deal together) can possibly know the details of the deal.<\/p>\n
But naturally that doesn\u2019t stop us smart-alecs pontificating on why this is either a deal that points the way to a sunlit future, or takes us back to the workhouse with agencies failing to turn a fair profit for the brilliant work they do.<\/p>\n
For those of you who\u2019ve missed this story due to being either on another planet, or (like me) in Devon the bare facts are that McDonald\u2019s in the US has hired Omnicom in place of Leo Burnett; that Omnicom will set up a dedicated agency shaped to meet McDonald\u2019s needs; and that the agency\u2019s compensation will be based on a mix of fee (to cover basic costs) and performance-related bonus (to cover profit).<\/p>\n
The unusual bit comes from the bonus being linked directly not to some advertising metric but very specifically to McDonald\u2019s business results.<\/p>\n
The critics say that dedicated single-client agencies \u2018don\u2019t work\u2019 (top talent isn\u2019t attracted to this sort of arrangement); and that working for \u2018zero profit\u2019 is a backward step and unfair.<\/p>\n
Saying the single-client-agency approach doesn\u2019t work is reminiscent of the argument that was always advanced about Procter and Gamble \u2013 allegedly no-one talented wanted to work on the business because the work was formulaic (code for \u2018they know what works\u2019); and the media negotiations were done in house (code for \u2018we can\u2019t get away with deals designed to benefit us\u2019).<\/p>\n
Although P&G uses multi-client agencies they have always been a proponent of the agency-within-an-agency approach. They stand as a shining example of a client that has always put their money where their mouth is and who have always seen advertising as a key element in building their business.<\/p>\n
Somehow despite \u2018no-one talented\u2019 wanting anything to do with their brands, advertising over the years has worked for them.<\/p>\n
It was a rubbish argument then; and it’s a rubbish argument now.<\/p>\n
So what might possibly be good about the McDeal? To begin with we all know that the whole industry remains in a state of flux.<\/p>\n
I think if I was a client in these fast-changing times I would pick a partner with the size to create a team around my particular needs, and the flexibility to refine it as technology and the market evolves.<\/p>\n
As to performance-based profits, this is hardly a new idea although the link to business metrics is rare.<\/p>\n
Yes, there is always the counter that the client can ruin what the agency is convinced is a brilliant campaign idea thus in their eyes decimating future sales and destroying the agency\u2019s profit, but surely a partnership is all about agreeing common goals and working through these tactical issues to arrive at a strategically sound place?<\/p>\n
Speaking as an outsider with zero access to the facts I think both McDonald\u2019s and Omnicom (and Flock) should be congratulated. I think they\u2019ve seen the future \u2013 now we\u2019ll see how it works.<\/p>\n
It also seems to me that the key thought behind this win is Omnicom\u2019s preparedness to listen to the prospect\u2019s needs and to build a solution around them.<\/p>\n
Which is different from listening with half-an-ear to the prospect and then selling them an off-the-shelf solution, however well wrapped that might be in bespoke packaging.<\/p>\n","protected":false},"excerpt":{"rendered":"
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