Are legendary client-agency relationships in trouble?

Pepsi is on a revamp mode. It involves a packaging, merchandising and marketing overhaul of its soft drinks business. But it’s agency partner for 50 years, BBDO may play a reduced role in this process. BBDO, as we are all aware, is closely linked with Pepsi’s success globally. One of BBDO’s great creative minds Phil Dusenberry (former Chairman of BBDO North America) worked closely on Pepsi. When Phil passed away, Roger Enrico, former Chairman and CEO of PepsiCo and the client with whom Phil worked the longest, acknowledged ‘the advertising he did for our brands helped make them icons of popular culture and added significantly to the growth of the PepsiCo enterprise’. As an outsider it feels odd that a partner who has contributed so greatly to a brand’s success, is being sidelined (at least it appears so) for such an important project. It calls into question one of industry’s legendary client-agency relationships. While the article talks of a decline in Pepsi’s sales and recent lackluster creative, I am not aware of the details of the reasons-why behind this move.

As an aside, Brand New gives more details about the new Pepsi logo: the brand’s blue and red globe trademark will become a series of “smiles,” with the central white band arcing at different angles depending on the product. Pepsi, Diet Pepsi and Pepsi Max will use all lower-case fonts for name brands. Created by Arnell Group, the project involves revamping the Mountain Dew logo as well.

On the back of this, comes this article about Levi’s hunting for another agency in US, to replace BBH with whom they have been working since 2001. Though this relationship is not as old as the BBDO-Pepsi one, it is equally surprising given the quality of work done by BBH on Levi’s.

Why do long term relationships falter? The most common reason is of course, a change at the client’s end in Marketing personnel. A new CMO usually means a pitch. And since the Brand Managers want to include ‘sexy stuff’ on their CV – every bit of new activity during their stint helps. There was a time when the CEO of the client company personally engaged the CEO of the agency on advertising issues. That was the ideal situation. Given the current hierarchies and complex structures that is no longer possible, always.

Agencies almost always have a favourite client and usually the best work in the agency happens for that client. Achieving “client of choice” status can result in marketers’ agencies upping their commitment by as much as 28%, according to the results of a mammoth data-mining study conducted by London, UK-based APRAIS. According to them, in the UK, regular winners of the IPA Effectiveness Awards have all had long relationships with their agencies. But when day-to-day activities are poorly executed and creative is off strategy or mediocre, the entire relationship comes into question, irrespective of an illustrious past.

I guess no client-agency relationship can be taken for granted, especially during an economic downturn. Flagging fortunes of the brand in trying times is usually linked to the creative output (unfortunately). The secret behind some of the lasting client-agency relationships in India & abroad is perhaps the ‘institutionalizing the relationship‘ at the senior most level. That calls for a passion and understanding of the brand at the top most level and creation of a personal relationship between the client-ageny senior management. When I mean personal relationships, I don’t necessarily mean the ‘golf-playing, networking’ kind of relationship only. The CEO/CMO of the client company should see a genuine value-add from the agency top management – consistently. And that is dependent on continuity at the agency top level. Agencies that have stability at the top level and practice ‘promotions from within’ are usually good at maintaining relationships.