Lower Cost Does Not Mean Higher Quality in the Ad Industry

If we were on a guided tour of the advertising industry, here are the points of interest that ought to be on every sightseer's list.  1) The Advertisers.  "Lower cost" is their strategy du jour, with reductions in media spend, cuts in agency fees, continued use of cost benchmarks and investments in less expensive internal agencies.  Amazing!  Increased shareholder value -- marketing with the stroke of a pen, crossing out columns of unnecessary figures.  2) The Holding Companies.  Restructuring and cost reduction is their response du jour.  Only the restructuring is new -- they've been reducing costs every year for more than two decades, imposing tough budgets on their agencies, who react to the chronic fee cuts foisted on them by their procurement-led clients.  3) The Media and Creative Agencies.  Downsizing is their annual modus operandi, shedding senior people, leaving themselves with staffs that are significantly more junior and stretched.  Add to this hiring freezes, depressed salaries (see Glassdoor.com) and high employee turnover.  4) The Agency Scopes of Work.  They're not so easy to see since they hardly exist.  In my consulting work, I gather and analyze Scopes of Work to figure out "how much work are agencies doing at the request of their clients."  In 25 years, I've had to reconstruct these SOWs from interviews, incomplete Word documents, PowerPoint slides, e-mail communications and job jackets.  Thus far, we've had to reconstruct 977 Scopes of Work.