Ad agencies douse their creative spark

Charities, museums, crockery companies and fashion brands with small ad budgets are facing an uphill struggle. They are finding it harder than ever to hire and retain the services of top creative ad agencies.

As consolidation sweeps through the ad industry, putting more agencies under the banners of the big networks, agencies are becoming reluctant to take on clients with small budgets.

Low-spending, off-beat advertisers were once seen as an opportunity for agencies to produce experimental creative work, and to allow creative departments to test their mettle. But they are now being left out in the cold as an obsession with bottom line profits grips the ad world.

Last month, TBWA/London parted company with Tate after three years working on the account. In that time the agency created an award-winning poster campaign for the gallery, but awards, it seems, are not sufficient incentive for an agency to keep on small clients.

Ad agencies are becoming more commercially driven about they way they look at client opportunities, and are turning away clients they would have wanted a few years ago because agency bosses find it hard to justify on the books.

“In general, this is an issue for us as we grow,” says Neil Christie, chief operating officer of TBWA/London.

TBWA/London has what seems like an unusually long tail of small budget clients after going through three mergers.

Although Christie stresses that the company is not about to resign any of its small accounts, it will, he says, have to think long and hard about future selection decisions. “This size of business can take up as much time as any of our big budget clients,” he adds.

Martin Jones, managing director of the AAR, says he has noticed a change in attitude recently. “I see people turning down pitches all the time,” he says. “And often its because someone is on holiday and they are not prepared to call their staff back. This is an agency saying ‘my staff are very valuable to me’, and they are not prepared to risk losing them over small bits of business.”

Jones says that agencies are more often than not judging whether to pitch for a bit of new business on its commercial viability, and not on whether it will be an opportunity to make great creative work.

Sven Olsen, managing director of Banks Hoggins O’Shea.fcb, disagrees, and says that his agency still judges whether to take on new business not just on money but also if the work creates an opportunity for an intellectual challenge, or if his agency can do good creative. “If we can match two of those three, then we will take on the business, but money isn’t the be-all and end-all,” he adds.

The demise of the small-budget clients can be blamed in part on the consolidation on a global scale among advertising agencies. As these agencies pick up multi-million pound accounts from global corporations, a small one or two million pound budget seems a lot smaller on the global scale of things.

Agencies also point the finger at the dot-com gold rush that took new business departments by surprise at the end of last year and the earlier part of this year as being partly to blame for focusing on large commercial pieces of new business.

Many applaud the fact that ad agencies are becoming more commercially minded – it gives them greater credibility with their clients. But agencies have a dual role – not only to make money for investors on Wall Street or in the City, but also to show clients that the use of creative ideas is the key to making brands famous. If creatives lose the opportunity to come up with radical work for small clients, the risk becoming stale, and this can feed through to the work they do for more established advertisers.