The Ad Agency’s Unaccountable Structure

Existing clients Letamp8217s consider the case of existing agency clients They fall into two buckets 1 single office clients managed by local GADs Group Account Directorsamp160and 2 multioffice global clients managed by ECDs Executive Client Directorsamp160who have local GADs on their extended teams to oversee local operationsSingle office clients A GAD is the point person for a single office client planningagreeing on Scopes of Work SOWs and feesamp160and organizing the delivery of strategies and creative executions that ought to enhance client brand performance The GAD reports to an Office Head the Office Head reports to a Regional Headamp160and the Regional Head reports to the agency CEO There should to be a straight line of accountability from the GAD to the CEOamp160with management reviews providing a flow of information that answers questions like amp8220What kind of work are we doing for this client How much work Is it the right work for the brand problems What level of fees are we receiving Are the fees adequate to cover the required resources Is the account profitable What are our ambitions for this client in the future What must we do to fix feeworkload problemsamp8221As any GAD can tell you this line of accountability is pure fiction First the GAD was probably not instrumental in setting up the client amp160others were involved like the New Business Director the Office Head the Creative Director the Planning Director and the Chief Financial Officer The GAD took over to amp8220manage the clientamp8221 not to fix it no matter how well or badly it was set up Second the GAD does not really report to the Office Head or in fact to anyone The GADamp8217s management of clients is not reviewed in any formal way The GAD has sole discretion to manage the client any way heshe wishesamp160and to agree to any Scope of Work or fee level This is possible because SOWs are not measured tracked or reviewed SOWs are invisible to agency management The only client measures are fees timesheet costs unreliable and outofpocket expenses Neither Office Heads nor Regional Executives have any visibility into local client operationsamp160and CEOs are even further removed There is no chain of accountability that makes the GADamp8217s client management practices visible to managementIf a GADamp8217s client has low fees but an extensive SOW which is most often the case then the client will be starved of resources so that profits can be madeamp160and people will be stretched to carry out the work This outcome is not measured though since there are no reliable workload or productivity measures The GAD will not be held accountable for an overstretched client situationamp160or responsible for developing a corrective plan There is no one who will require the GAD to do so especially if the client is amp8220profitableamp8221 The problems will only intensify over timeGlobal client Multiply the local client problems by twentyfold or soamp160and you have something approximating the global client Technically the GAD reports to a global client ECD and to the local Office Head at the same time but this is not how it works The GAD takes direction from the ECD on SOW and fee issues amp160receiving an allocation of amp8220what is possibleamp8221 which is usually too much work for too little fee Here the ECD ought to be accountable for the level of the global fees and the sum of all the SOWs but this is hardly the case The fee might have been agreed at a holding company or agency level at some point in the past The SOWs are developed locally and invisibly rather than globally The misalignments among fees SOWs and resources are amplifiedECDs are more visible to agency CEOs and CFOs than are local GADs but that does not make them more accountable The only uniform measure is global client profit margin which is adjusted by restricting global resources whatever and wherever the SOWs may beApart from the GADs and ECDs agencies have many other executives Regional and Global Creative Directors Regional and Global Strategic Planners New Business Executives Finance Officers Operational Executives Client Service Directors Digital Executives Media Specialists Project Managers Production Executives HR Executivesamp160and many others They contribute enormously to organizational complexity and dilute the possibility of creating client management accountability Many of them exist to amp8220upgrade the quality of agency practicesamp8221 but left out of this is the management of client fees workloads and agency resourcesThe global agencies need to streamline their structures cutting 3040 out of their management structuresamp160and replacing management complexity with relevant information and strong client management processes to enhance accountability for client management purposesIn the end overstretched agency people and underperforming clients will benefit from agency organizational simplification and enhancements in client management accountabilityBig agencies clearly need more Peter Drucker and less Bill Bernbach for the management of their clients today Agency CEOs need to step up to this challenge with some urgencyCartoon Credit John Oamp8217Brien The New Yorker The Cartoon Bank With permissionClick the social buttons above or below to share this story with your friends and colleaguesThe opinions and points of view expressed in this article are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated bloggers

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The Ad Agency’s Unaccountable Structure

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Michael Farmer

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The Ad Agency’s Unaccountable Structure

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