The AAF Reinvents the Advertising Agency

Geoffrey Precourt
WARC Online

For advertising agencies, the numbers are daunting:

  • In 2009, 43 percent of all US national advertising will be created in-house.
  • 91 percent of media agencies bypass the services of traditional agencies.
  • Project fees have become the normal state-of-the-art compensation.
  • 75 percent of all agencies feel increased competition.
  • The auto industry, which represented a "huge share of the national marketing spend just a few years ago," has all but fallen off the ad revenue charts. One agency, Publicis, took a $130 million hit with the loss of one client, General Motors.
  • Average agency revenue has decreased six percent, "but some have suffered much worse."

At the 2009 annual meeting of the American Advertising Federation (AAF), Marc Fleishhacker, managing director/senior partner, Ogilvy Consulting, brought a somber note to a "Industry Reinvention" session that featured senior managers from a national advertiser (Pepsi-Cola), a media-buying house (Starcom MediaVest Group) and an agency that's been around, in one form or another, for more than 50 years (Ogilvy & Mather).