It’s just business. Or, is it?

Advertising Age reports on the game of musical chairs that has been taking place over the past 18 months among the top media buying agencies. According to the report, 10 of the top 14 companies in the space have swapped-out their CEO.

This is what comes of living in the real world. It wasn’t always thus for ad agencies. Before the era of leveraged buy-outs made consolidation possible, ad agencies were private companies owned by partners living in places like Connecticut. Now, they are public companies, most of them, and when times get tough the tough re-arrange the deck chairs.

Whither client relationships in all of this? I liked Phil Cowdell’s reported statement to boss Scott Neslund that he would only take-over Mindshare’s North American operations if he could do so as an “old-fashioned client man.” But what does that mean today? Do relationships matter? Matt Seiler at Universal McCann reportedly thinks it’s more complicated than that.

Maybe so, because the clients themselves, perhaps taking their cue from the itinerant nature of things on the agency side, are as prone to sweep the decks by changing one agency for another in costly account reviews.

Is it the business or is it simply business that has the agency world doing so much deck chair re-arranging? Is it the complex realities of the new media world, or the realities of the world, period? What problem is getting fixed by all these changes? Performance problems? In which case it’s being argued that among the top 14 companies in the media planning and buying industry 70% of the leadership was - well – not right for the times.

Really? Recessions have always taken their toll on the advertising and media business. Technology, on the other hand, while disruptive, has done nothing but help. Radio? Television? Very disruptive, but they helped make multi-millionaires out of the leading agency executives of the time.

Adaptation can be brutal. We are a full fifteen years into this Internet thing, however, and the conversation is still about how to make it work, meaning there is no evidence that adaptation is occurring at a faster rate today versus the past. Indeed, the IAB’s report on Internet spending for the first half of this year issued last week with Price Waterhouse Coopers indicates nearly 90% of media spending still occurs on the top 50 web properties.

How complicated is that? But, maybe, that’s the point of so much change at major buying companies. No more skimming the surface of the new media opportunity and hanging around the shallow end. Time to wade deep and really connect with the possibilities – starting at the top.

It which case, maybe the 70% overhaul leads somewhere. But, only if you believe it’s about the business, and not just about business.

Bring back 15% agency commission.

Another conversation over lunch today with a long-time media industry executive who was full of enthusiasm for a  media planning spin-out currently incubating inside his ad agency. He brought with him more data supporting the fact that TV and newspapers get a disproportionate amount of the ad dollars relative to audience penetration. He hopes that his company’s solution will offer more media planning neutrality to repair some of that dis-proportionality and help truly engage consumers. A great idea.

So, I launched into my current riff that media planning, as it stands, can’t afford to be neutral. Fees currently paid to media planning and buying companies cannot sustain deep dives into new media – notably the Internet -  even though it is well-known and documented that that’s where the people are. My friend acknowledges that the costs of buying online are 3x – 5x the costs of buying TV or print. “A page in the Wall Street Journal!” he exclaims, “Cheap to buy. Very profitable.” Is it any wonder to us that newspapers still enjoy a greater share of overall ad dollars than the Internet?

I was impolite enough to ask how his new media enterprise will get paid for its work. “Well,” he said, “Agency commission, of course, is dead. We work on hourly rates.”

Rats. This is our problem. Fees and hourly rates. It means new media is not cost effective to plan and buy. There’s too much of it. The consequence is that traditional media forms such as TV and newspapers continue to enjoy allocations that exceed their value in today’s multi-layered information marketplace. The consequence is also that online display advertising continues to huddle around a handful of larger, branded properties – something like 70% of ad dollars on the top 10 web properties is still the reported norm. There is not the financial incentive or capacity to venture deeper: We know the oil is there, but we can’t afford to drill for it.

We can fix the problem by spending more online and leveraging existing cost structures. This should be our first choice. But while I, personally, don’t think it’s fraught with too much peril, clients may disagree who want POVs and appropriate metrics assigned to every new possibility. Alternatively, we can fix agency comp.

“What do you suggest,” my friend asked?

“A return to 15% agency commission,” I answered. Let’s face it, the oil-drillers online are getting paid substantially higher rates than 15% arbitraging – i.e. planning and buying – media budgets. And, it’s not transparent. Restoring agency commission in a new media world restores an important degree of accountability in a process that is currently rewarding older, shrinking media platforms, and undermining growing media platforms.

“Good luck,” said my friend, in a tone that meant, “That’ll be the day.”

Yes, well, but the alternative is to side with those who say the days of ad agencies are over; That they are relics of an old media age along with old media. So, is this why media continues to be allocated disproportionately as it is? Because agencies are protecting newspapers? Or TV? Twenty-five year-old media planners who don’t know much of life before Yahoo!, and grew-up on Facebook and MySpace? Really?

No. I don’t think so. Fix comp.

Who’s for fighting?

I spent two and a half days at the 4As Media Conference in New Orleans and I’m trying to think how to summarize the event. For help I’ve wandered over to AdAge.com and checked the other usual industry news sources and, well, there’s nothing much being said. MediaPost has a report about the Social Networking panel. Jonah Bloom, Editor of Ad Age, wraps-up with a 3 minute Ad Age video that reports everyone who attended the Media Conference was anxious. The pervasive mood of the place was gloomy. Business is tough.

The mood came across while I was there. But, I’m trying to think of what happened at the event that tells me what, as an industry, we’re working on now that it’s over. No one seems to have much to say about that today.

What are we working on? Nothing about that anywhere, including the 4A’s web site, where I could find nary a scratch on the conference. The event itself has been purged from the list of events. It’s like it didn’t happen. If you dig around you can find a summary of last year’s conference, so perhaps this year’s summary is on its way.

I recall that Marc Goldstein, North American CEO of GroupM, told attendees that we must have hope. And, beyond that, he said we must take stock in our creative energy and ability to solve customers problems in new and important ways. He gave three pretty good examples of the sort of creative power he was talking about. Marc was clear, though, there are no easy answers and – worse – there is no one right now likely to lead us out of our problems. The advertising world does not have its version of Barack Obama to tell us, Yes We Can. Still, he points out, we must.

The wrap-up to the session on Friday featured a panel of principals from four leading media buying companies. Maria Luisa Francoli, global CEO of MPG, Irwin Gottlieb, global CEO of GroupM, Page Thompson, North American CEO of Omnicom and Jerry Buhlman, CEO of Aegis came on last to deliver the unvarnished view from the top. As it turns out, the unvarnished view from the top looks like it does from the bottom - i.e. more for less is required. More accountability, more measure-ability, more affordability. The view hasn’t really changed much since the economy was growing hand over wallet. Row harder. The Procurement Officer wants to go water skiing.

So, now what? Who was it that said we must endeavour to persevere? It wasn’t someone with a business plan. Media planners and buyers have been endeavouring furiously, nights and weekends, with tighter deadlines, less access to the strategic and creative vision of their clients and thanks to cable, satellite and the Internet more access to more media choices more beneficial to their customers than ever before. Under the circumstances, greater perseverance will lead them, and us, no where.

Only citizenry besieged by rockets from the sky can be called upon to persevere and, then, only if they know that someone, somewhere is fighting for them. And I don’t know…it’s awfully quiet out there.

Who’s for fighting?

I Love You, Man.

As reported by both Advertising Age and The Wall Street Journal today, Bob Lachky, Chief Creative Officer of Anheuser-Busch is leaving the company after 20 years. Mr. Lachky was the person behind many celebrated Anheuser-Busch campaigns, including “Wassup?!“, the Budweiser Frogs and the “I love you, Man” commercials.

Mr. Lachky’s commercials, created in partnership with long-time agency DDB, won numerous awards and wove themselves into our culture. Before the term ”social network” was popularized by the Internet, his commercials were creating social networks around water coolers – social networks that then got together after work for a beer.

Watching these commercials again on You Tube this afternoon all my thoughts were about the risks that Bob Lachky took with the Anheuser-Busch brand messages. I watched “Wassup?!” and thought, “How did he get to ’yes’ with that?” The frog’s? I can clearly remember my reaction the first time I saw the frogs commercial; it was, “Huh?” They grew on me. Looking at them today, I love them. But, it is interesting to note that both Ad Age and The Journal essentially summarized the career and success Mr. Lachky had at Anheuser-Busch with a quote from him at the end, as follows: “I was fired more times than Billy Martin.”

You see, in the creative business risk is everything. Great creative does not emerge risk free. That is why Ad Age and The Wall Street Journal summarized Bob Lachky’s career as they did, in my estimation, because intuitively it is known that what made Mr. Lachky great were the risks he took, risks that nearly cost him his job as many times as Billy Martin (who was fired five times).

Now, let’s talk about media as the “new creative,” a popular term today. How much media risk takes place in the world today? Executional risk such as video and widgets and layer ads doesn’t count. That’s creative. Not media. I’m talking about planning risk: TV v. Internet. Satellite Radio v. Broadcast. Branded Content v. the Long tail. Actions attributable to less than 1% of an audience v. Impressions attributable to 99% of an audience. What’s our gut about media value? What bets have we made on it? Who’s bet their job on a media instinct?

Advertising.com, before it disappeared inside Platform A, used to talk about “risk free” advertising. No surprise – and very much to the point being made here – they got big. But what has it done for us online all this talk about risk free and results? Reading Randall Rothenberg’s exceptional piece on Interactive Creativity (featured on this blog yesterday), the answer is not much. As the new creative, media is simply failing  to inspire those who would take their cue from it in order to develop messages that move people and brands online.

We have to kiss some frogs here. We have to take some chances and say “I love you, Man.”

Really. I love you, Man.