Agencies have backbone. Who knew?

Resigning an account stirs a tempest in a coffeepot.

Last week Wieden & Kennedy resigned the Starbucks account. Dan Wieden graciously limited his public comments to "There are times when it just makes sense to part ways with a client. In this case, this seems to be the best decision for both parties." But off-the-record comments from people inside Starbucks and Wieden & Kennedy – and from heads of several former Starbucks agencies – make it clear that the mellow-seeming merchant of coffee and ambiance engaged in persistent agency abuse.

Why did the fact that an agency walked away from a high profile client cause so much buzz in the industry?

Maybe because a lot of agencies' backbones make jellyfish seem positively vertebrate by comparison.

It's strange that an industry whose only real asset is intellectual capital permits a very small minority of malignant clients to run roughshod over the people who create value for both the agency and advertiser.

Strange but not surprising. When a BrainPosse principal ran the creative department at a Saatchi & Saatchi agency, the agency's largest client was an abusive bully. One day a copywriter who'd just been raked over the coals by the tyrannical (and not very knowledgeable) client came into our guy's office and said that the agency should resign the account. "You're probably right," was the reply. "But do you realize that your job would be eliminated if we do?"

And that's the crux of the matter. Agencies knuckle under to those few abusive clients because they become dependent on the revenue the bad clients generate.

In our guy's case, the client represented almost 20% of the agency's revenue, and resigning the business would mean that a lot of people would be laid off.

Fortunately, there was an alternative. The agency called a meeting of key staff members and explained that there would be a hiring freeze as new accounts came in. Everyone would have to pull extra duty and work longer hours to handle the additional work so the agency could eventually afford to dump the bad account without layoffs. In less than a year the agency's growth equaled the revenues of the abusive client, the bully was resigned, staff were reassigned and everyone went back to a typical 60-hour week.

Amazingly, the bully was surprised to be shown the door.

But perhaps not so amazingly. After all, all those agency heads who shared horror stories about Starbucks didn't resign the business. They lost it. One, Goodby Silverstein, actually accepted the account again after enduring one unsuccessful stint with the client, only to be fired again.

It's very rare for an agency to resign bad business. Cramer-Krasselt did it in 2007 when they walked away from the Career Builder business.

Career Builder put their account into review because their commercials didn't make it into the top 10 in USA Today's "most liked" rankings of Super Bowl spots – even though Cramer-Krasselt helped rocket the brand past Monster to dominance in the job board category. Cramer-Krasselt had the self-respect to resign the account as soon as the review was announced.

Not much later, Wal-Mart got a new Chief Marketing Officer who thought the retailer needed an edgier campaign – despite the fact that GSD&M's "Smiley Face" campaign helped take Wal-Mart from $11 billion to $312 billion in revenues. After a disastrous process that saw DraftFCB hired and fired (and the CMO ousted acrimoniously), GSD&M was invited to join in a new pitch for the Wal-Mart account. Once again, self-respect prompted the agency to bow out.

It's hard to come up with more examples. Agencies resign accounts to pursue bigger clients in the same industry, something which seems ethically questionable to us. Goodby Silverstein resigned the Discover Card account to pitch Visa, which spends almost four times as much on marketing communications. (They didn't get Visa, so they were out $80 million in billings.)

Rarely, agencies resign when they fail to deliver. Crispin, Porter & Bogusky had the grace to resign the Miller Lite business after doing unsuccessful work for the account. A very honorable way to deal with the fact that their work didn't help the brand.

And, of course agencies often resign publicly when they're about to be fired.

But agencies with the courage to say "We're not going to take that crap. We quit" are a rare breed.

We're very fortunate. BrainPosse's clients are professional and nice, and we like working with them. We've dodged a few bullets by declining the opportunity to work for several clients because of perceived difficulties.

That selectivity is an advantage of the virtual agency model, which has minimal overhead. But what's an agency with a lot of overhead and a big payroll to do?

Start with these five things to avoid in present or prospective clients:

Unlawful. Run, don't walk, to the exit if a client pressures you to break the law. False advertising, illegal lottery promotions, theft of intellectual property (copyright violations), rigged bills (to defraud one party to a joint agreement, such as a merchant swindling a manufacturer on a cooperative ad deal) and kickbacks are all crimes. Agency people could actually go to jail for doing them. And, of course, it's wrong.

Unethical. All of the above, plus stuff like plagiarism, deception (legal, but not really true claims) and expecting the agency to violate the confidentiality of other (or former) clients.

Unprofessional. Pressuring an agency to do shabby work or hire less-than-professional people is foolish for a client. But it can be deadly for an agency which gives in to that pressure. It damages the staff's sense of self respect and professionalism, it can be a serious impediment to bringing in new business and it destroys the agency's professional integrity.

Unreasonable. Every business has occasional crisis needs. But clients who consistently expect a creative team to work over the weekend because the ad manager always forgets to request a project with enough lead time don't keep creative teams for long. (Unless their business has been relegated to less-able members of an agency team who are desperate to hold onto a job.) Demanding 50% share of market with 20% share of voice puts the agency under pressure to circumvent the basic laws of marketing physics. It's not going to happen. Clients who demand excellence are to be treasured. But those who run roughshod over the agency – or the realities of marketing communications – are simply an unproductive liability.

Unprofitable. We're not aware of any agencies that operate as not-for-profit public service organizations. A client who expects an agency to handle her or his account at a loss can only work with very stupid – or very desperate – agencies. And the client will work with a never-ending series of them, as they go broke in turn.

Does that mean agencies should resign clients with any of those five problems?

Two out of five times, yes. There's no reason – and no excuse – to deal with clients who want their agency to do anything unlawful or unethical. First, it's simply not right. And second, you could end up in jail or with a serious case of self-loathing.

Unprofessional is a grey area. Clients who think they know how a job should be done may actually know. Or not. It's worth a look. The client may have found a great talent you might want to get to know, or may be pushing a cousin's brother-in-law's talentless kid onto the agency. A conversation is probably in order before making that decision.

Unreasonable clients may not be aware of the difficulties their demands are causing or the realities that make their requests difficult or impossible to fulfill. Once again, a conversation or two can determine whether the problem is not knowing or not caring. In the first case, help the client understand. In the second, walk away.

Unprofitable clients are simple. Open the books. If they don't want the agency to make money, there's no hope. But if their demands come from their own company's budget pressures, it should be possible to design a system to provide service affordably and not go broke doing it.

Most client-agency relationships are sound, mutually beneficial and functional. Those that aren't should be fixed or terminated. If not, they can rot agencies from the inside as good people become disheartened.

Of course it works both ways. See our earlier article, How to hire – and when to fire – your agency to get the other side of the story.


  1. Anonymous says

    Just saw where Starbucks is directly related to economic downfall.