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Why Agencies Are More Like Baseball Managers?

Why Agencies Are More Like Baseball Managers?

Jan 21 2014, 2:10pm CST | by

Masayoshi Son, Asia’s top Internet venture capitalist, is a Japanese businessman and the founder and current chief executive officer of SoftBank. According to Forbes magazine, his net worth is $9.1...

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26 weeks ago

Why Agencies Are More Like Baseball Managers?

Jan 21 2014, 2:10pm CST | by

Masayoshi Son, Asia’s top Internet venture capitalist, is a Japanese businessman and the founder and current chief executive officer of SoftBank. According to Forbes magazine, his net worth is $9.1 billion as of 2013 and he is the second richest man in Japan (and #45 on Forbes’ Powerful People list). Son is a brilliant thinker who once stated that he has a 300-year business plan for SoftBank.

Son, who  owns Vodafone Japan, has been on a buying spree in the past year, including the acquisition of more than 80% of Sprint for some $22 billion and appointing himself Chairman.

Within days of taking over the company, he reviewed its operations. He learned that the advertising at Sprint was not cost-effective. This made him, by is own admission, quite angry. Sprint spends a large amount of money on advertising every year, but its effects have been almost negligible. He immediately directed the Sprint executives to terminate all existing contracts with the company’s advertising agencies and start from scratch on advertising, with new agencies.

Agencies, like baseball managers, are hired to get fired. But the swiftness of this dismissal was particularly unusual. The act was harsh, and embarrassing. However, whether you agree with Son’s conduct or not, one has to respect his rationale for wanting a change. Agencies get hired to sell their clients’ products and services. When that doesn’t happen, and especially when a client spends large amounts of money on advertising, change is often called for.

No less an authority than David Ogilvy, who pronounced the dictum, “We sell. Or else,” would agree.

Client-Agency relationships used to last decades. Now they fray within a few years. We are moving toward a much more transactional state of relationships. The tyranny of the stock market and the pressure from the marketplace often dictate a new, short-lived state of mind. If they don’t produce immediate results, agencies can find themselves out in the cold in a quarter or two.

In fact, there is no longer something like a “safe” relationship. Agencies are now in a perpetual new business mode with their existing clients, fighting to earn approval daily, as every client becomes an “at risk” client. The C-Suite is more vigilant about advertising ROI than they’ve ever been, and that underscores how relationships are being evaluated.

The relationship used to be evaluated annually or quarterly. Now, due to technology, sales data allows marketers to assess customer acquisition and business results on a daily basis. In essence, Advertising became a retail business, if not in approach or philosophy, then as to how it can be judged and measured. Agencies are reviewed every 24 hours.

That is one of the less welcomed side effects of data – it makes advertising, and relationships, more short-term.

Agencies that can adapt to this new reality will thrive. Those that would continue to wait for the annual review to hear how they are doing, will be annihilated.

Sprint and its agencies have gotten used to not winning. It has been perpetually stuck in third or fourth place in the U.S. telecommunications market.

There is a need for a change in mindset, and bringing on new agencies with fresh thinking and a more confident attitude that are willing to push the envelope may be just what it must do to compete effectively with bigger companies. Sprint needs to start thinking like a leader – to become a leader.

Avi Dan  is the founder of Avidan  Strategies , a marketing consulting firm that specializes in business and marketing advice, managing agency search and compensation, and advertising strategy. Before founding the firm he spent 30 years in senior management and board positions with top global ad agencies.

Source: Forbes Business

 
Update
10

6 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

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KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Rakyat was told today ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
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6 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

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KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was b ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

6 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

Federal Aviation Administration Bans All US Flights To Israel
KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by the ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

6 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Datuk ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

6 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

INDIA-CHINA-DIPLOMACY-TRADE
PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in th ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

6 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

Government Weekly Cabinet Meeting
KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 milli ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

6 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri Mustapa Moha ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

6 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

Iskandar Johor Open - Previews
JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an allo ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

6 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

EurAsia Cup presented by DRB-HICOM - Day One
PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Baza ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara Damansara Skyway (Kidex) t ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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