Madison Avenue Manslaughter: An Inside View of Fee-Cutting Clients, Profit-Hungry Owners and Declining Ad Agencies

Madison Avenue Manslaughter: An Inside View of Fee-Cutting Clients, Profit-Hungry Owners and Declining Ad Agencies

by Michael Farmer

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Overview

The advertising industry has reached a critical and dangerous point in its development – agencies destroy themselves by doing increased work for declining fees. So what are the logical consequences of the failure to act? Growing workloads and declining fees have created a "recipe for disaster." For the first time, Michael Farmer offers a solution to avoid this seemingly inevitable disaster. This book offers the world’s first effective definition of "the real agency problem." Once the problem is understood, the author offers corrective solutions. Now in its third edition, Madison Avenue Manslaughter has been updated to include industry developments from 2017-2018, plus new material and chapters. This book is a call to action for the 21st century breed of "mad men," which outlines the industry problems and encourages agencies and their clients to take management actions to keep this disaster at bay. These actions form the basis of a strategic response by agency CEOs as well as corporate chief marketing officers.


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Product Details

ISBN-13: 9781912555123
Publisher: LID Publishing
Publication date: 02/26/2019
Edition description: Reprint
Pages: 288
Sales rank: 1,089,679
Product dimensions: 5.40(w) x 8.40(h) x 0.80(d)

About the Author

Prior to founding Farmer & Company in 1992, Michael Farmer was a strategy consultant with the Boston Consulting Group and director of Bain & Company. He headed Bain’s Munich, Paris, and London offices during Bain’s decade of European expansion in the 1980s.

Read an Excerpt

The post-World War II growth of advertising agencies is one of the world’s great business success stories. Television advertising became a dominant force, and ad agencies were paid via 15% media commissions. The high status and profitability of ad agencies during this period allowed agencies to expand globally, manage themselves loosely and go public in the 60s and 70s.

Ad agencies were subsequently acquired by marketing communications holding companies, and the holding companies themselves grew and showed a track record of increased profits as they continued to acquire agencies and generate bottom-line growth by reducing agency costs. By 1990, their agencies were “at the top of their game,” buoyed by inflating media prices that boosted commission income, and their profitable record of success locked in their vision of what they needed to do to stay successful — keep on focusing on creativity and client service.

Table of Contents

Foreword Sir Martin Sorrell, Executive Chairman, S4 Capital xiii

Executive Summary xvi

Acknowledgments xx

Introduction To The Third Edition 1

Section I History: The Wheel Of Fortune 9

Chapter 1 Remuneration 12

Chapter 2 The Golden Age 18

Chapter 3 The Holding Companies 28

Chapter 4 Sir Martin Sorrell: Reflections 43

Chapter 5 Mixed Outcomes: 1973-1990 54

Chapter 6 Shareholder Value: 1990 and Onwards 65

Chapter 7 The Rise of the Management Consultants 75

Chapter 8 Media Expansion, Media Fragmentation and the Balkanization of the Industry 85

Chapter 9 Media Agency Manslaughter: The Media Rebate Backlash 94

Section II Consequences 106

Chapter 10 The Cassandra Agency (New York): Implementing a Scope of Work Diagnostic and Review 110

Chapter 11 The Undermanaged Advertising Agency 139

Chapter 12 The Results-Focused Agency 156

Chapter 13 Measurement of Scopes of Work 170

Chapter 14 Production, Client Service and Strategic Planning Resources 186

Chapter 15 Managing Scopes of Work and Preparing Client Resource Plans 194

Chapter 16 Transforming the Agency 208

Appendix A XLS Limited, The Marketing Communications Holding Company: A Business Case 222

Appendix B Icarus Advertising Agency New York Inc.: A Business Case 234

Appendix C Scope of Work Deliverables: Definitions 251

References 254

Endnotes 256

An Introduction to Michael Farmer 264

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