Bentley College Marketing- Honors

This blog is for MK 402-H01 and the greater Bentley College population.

Sunday, April 09, 2006

For Shame? Henderson Advertising 1946-2006

Based on postings from the BrandBuilder blog by Olivier Blanchard

Two of Blanchard’s recent posts have dealt with significant news this week in the Advertising world: the fall of Henderson Advertising of Greenville, SC. On Monday, April 3rd, Henderson closed its doors, liquidated its assets, put its employees out of work and left its clients wondering what to do with their business. This once great agency was the first outside New York and Chicago to be named “Agency of the Year” by Advertising Age magazine. In this posting Blanchard speculates on why Anderson failed after 60 years of greatness.

Basically, Blanchard believes that the ‘big agency model’ is the reason for this failure. Bigger is not better in the case of many ad agencies. Size kills agencies for the following reasons:

  • Client erosion: Large firms place distance (more layers and walls) between the agency’s core talent and its clients.
  • Bulimic’ staffing model: Agencies hire and fire en masse to match the project workload demands of clients. Clients get sub par treatment when they are paired with account executives focused on holding their jobs instead of providing the best possible services.
  • Decreased relevance: The ‘bulimic’ staffing above devalues an agency to its client. The ‘revolving door’ staffing policy creates poor agency-client relationships, and eventually the client begins to spend their dollars in other areas, failing to see the importance of the agency.

Henderson is the only the first of many casualties anticipated over the next decade of the ‘big agency’ model for all of these reasons.

This posting is marketing-related because it discusses the future of advertising agencies. Blanchard says it well with, “Advertising is changing, and by this, I don’t mean the medium itself. What I’m talking about is the Advertising infrastructure. The framework of the industry.” He discusses why the ‘big agency’ model is failing and alerts agencies to this change.

Blanchard’s article informs marketing in that it articulates the specific reasons for the failure of these agencies. By discussing the issues that have developed Blanchard urges agencies to reflect on their own practices and clients. This posting is a warning to all agencies that says “Change or Fail.” Additionally, he gives agencies perspective on the issues from the client side as he has experienced them in his career. He shows agencies specific reasons why their clients are dissatisfied and attributes it to something measurable that can be altered to fix these problems. Essentially, he gives agencies a warning and a few tools to consider using (decreasing size and turnover of workforce and increasing quality) in fixing the problems that could lead to their demise if ignored.

This article has serious relevance to me. I am currently interning at a large advertising agency and will most likely be staying in the field upon graduation. The agency has a few glaring client relation issues. These problems were so apparent that I chose to explore them further in a paper for one of my classes in which I am trying to determine the roots of these problems and come up with possible useful solutions. This posting does exactly that and I will add it to my research.

Also, Blanchard’s article adds another dimension to the criteria that I will use to evaluate a potential agency employer when searching for work in the next year. While salary and company culture are important to a job, they are no good if the agency doesn’t exist in five or ten years. Looking out for the ‘big agency’ model and the problems that are associated with it could be a good indicator of job security and is something I will definitely consider when finding work.

A critique on this article: It would be useful to include more examples of agencies that are in similar situations as Henderson Advertising. I see these issues first hand at my internship and do strongly believe that they are accurate and do exist. The article would be even more verifiable if examples were added. I do think I read that such examples would be explored in postings over the next few weeks. If this is the case, I definitely look forward to reading them.

39 Comments:

Blogger Olivier Blanchard said...

Your last suggestion is a very good one. Sounds like a great research project. (Hint. Hint.)

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Blogger John Cass said...

what a brave post, especially if you are still interning at the agency. Did you sign a confidentiality form with the agency? If so I'd be careful about what you write in a public forum like this blog.

But interesting discussion.

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