A: There are two kinds of client. There's the client whose creative judgment borders on perfect pitch: intuitive, immediate and with an almost reckless certainty. And there's the client whose creative judgment reminds you of painting-by-numbers: plodding, unambitious and wholly devoid of flair.
If the world was a place of light and goodness, where noble prince won fair maiden and commission rates went unchallenged at 17.65 per cent, then the perfect pitch clients would always be right and the painting-by-numbers clients would always be wrong.
I'm sorry to have to tell you this (though at your age you should know it anyway) but the world is not a place of light and goodness and your plodding client is just as likely to be right as anyone else.
The client you describe has been with you for years. The relationship is stable. I infer from all this that his business is good and that he believes that your advertising is making him money. So you should test this startling hypothesis: he is absolutely correct in believing that the advertising he accepts is more effective than the advertising he rejects.
You call it raising the bar. He calls it losing the plot.
Talk all this through with him. Persuade him to use a test market if necessary. You need, somehow, to establish the truth. If the work he prefers comes through with flying colours, you will have learnt an invaluable lesson (at his expense). And if it loses, you all win. And if you don't know how to evaluate the advertising you're running, you shouldn't be running it.
Q: I'd like to put in place a structure that makes sense to my board and rewards my agency's input, which I greatly value. Is there a successful formula for remunerating an agency: fees, commission, success fee or a combination? Can the legal or accountancy professions teach advertising anything on this?
A: I have been hoping for well over a year now that nobody would ask me this question. Let me examine some options.
There is no sensible formula that relies on performance. Performance targets need to be set in advance. An ice-cream manufacturer enjoys a three-month heatwave while his principal competitor withdraws all stocks because of a salmonella scandal; annual sales and profit targets are comfortably exceeded by the second week in June. Why should his agency expect a success fee? (And why should the principal competitor's agency have to fire twenty people?) No-one in the world has yet found an uncontentious way to isolate advertising's discrete contribution; nor will they ever.
Fees, as everybody knows, are not fees at all. A fee is arrived at by first calculating a 15 per cent commission; then reducing it to 9 per cent while claiming the difference to be a saving; and finally re-christening it.
Fees are no more than niggardly commission rates in thin disguise. And standard commission rates are anti-competitive, probably illegal, and encourage sloth and over-manning among suppliers.
You wonder if the legal and accountancy professions can teach advertising anything. Indeed they could; but little that your board would warm to.
Because of corporate law, lawyers and auditors can hold their clients to ransom; agencies can't. And in this important difference, a possible solution lies.
However involuntary their restraint may be, agencies are your only major suppliers to acknowledge their inferior status. If prompted, your board should be grateful for this; and might well wish to express that gratitude in generous manner. Try it, anyway.
- Jeremy Bullmore is a former chairman of J. Walter Thompson and a director of WPP. He also writes a monthly column for Management Today. A compilation of his business advice, Another Bad Day at the Office?, is published by Penguin, priced £5.99. Address your problems to him at campaign@ haynet.com, or Campaign, 174 Hammersmith Rd, London W6 7JP.