Following a recent IPA report on The Future of Account Management, there have been a number of articles questioning the role’s value. Its future is in doubt. The conversation is troubling, and agencies should pay close attention to the underlying concerns.
Many agencies have already cut back on strategists due to the economic crisis. Though we’ve barely emerged from a huge wave of agency layoffs, and in all likelihood are facing another, the hope is that future changes will center on setting agencies up for growth during and post-recovery (Seb Joseph in Digiday). If account managers add value, then that goal is not well-served.
The question is: do account managers add value?
A recent Campaign article cited a two-year-old quote from Procter & Gamble’s Marc Pritchard, saying he wanted creatives to make up “about three-quarters of the staff” at agencies he worked with. He expressed a desire to “strip away anything that doesn’t add to creative output,” leaving everyone else (“the suits,” if you will) somewhat precariously perched. Ever since, Pritchard’s comments have been associated with scrutiny of account managers.
The article goes on to (correctly) point out that P&G has a marketing operation that few, if any, can compare with. Their needs are different from those of most brands. So, while P&G may desire an agency team that is 75% creative, it's not necessarily the best solution for other marketers.
It’s also unclear how many agencies have substantially fewer than 75% creatives on their teams to begin with, and perhaps it doesn't matter. Ironically, many account managers come from creative backgrounds and engage in some creative responsibilities. At some agencies, it’s not a wholly “non-creative” role. Which means that maintaining a creative/non-creative staff ratio of 75/25 is not incongruent with having account managers. Pritchard himself didn't question the quality of account managers. His issue was "there's too many of them. They should be more focused, more senior, and fewer."
Why the attention on account management now?
Pritchard may have thrown non-creative roles into the spotlight, but that wasn’t the impetus. Many agencies have created a problem by using “account management” as a black hole into which they throw miscellaneous expenses. Many of these expenses would never stand up on their own, so they bundle them under account management. Additionally, when there are many account managers on a given account, it can appear redundant. Though those decisions are executed by agency leadership, it is account managers who may suffer for it.
Given the attention in recent years on cutting fat at agencies with bloated legacy models, distrust in the agency-client relationship, and now with the mass layoffs resulting from the economic downturn, there is a perfect storm of factors working against account managers. They make an easy target, but is it well-deserved?
Here’s what I see. There’s a basic sales principle agencies have overlooked:
If someone questions your pricing, you have either not delivered the value or “sold” the value of what they want to cut.
- Account managers, and the agencies they represent, have not done a good job of conveying the value of their role. They are misunderstood. When there are multiple account managers on an account, they haven’t clarified why it's necessary. There is also room for improvement in how account managers deliver optimal value to clients.
- “Marketers believe there are too many suits floating around with overlapping responsibilities, and they see the account management role itself as nebulous and ill-defined.” — IPA Report, via Havas London's Jennifer Black (in Campaign)
I see this as part of a deeper issue that goes beyond account management. Repeatedly, as observed by Jennifer Black, agencies “[fail] to sell their business expertise with the same passion they focus on their creative acumen.” That’s why agencies have lost business to consultancies. And it’s why agencies fail to attract b-school graduates.
Agencies struggle to demonstrate bottom-line business results and to connect their work to clients’ business goals. They don’t speak the same language or enjoy the same respect from C-suite as do consultancies who have mastered agencies’ areas of deficiency. And it shows in the way they negotiate contracts and how they are paid.
With account managers, many of them are woefully unprepared to have the conversations needed at the client level. So when those important conversations occur, they often take a back seat—which affects their reputation and how the client sees them moving forward.
How can account management be used to address gaps in business credibility?
The best account managers juggle many skills and responsibilities, but not all bring the same expertise and education to their role. To be successful, account managers should be well-versed in their agency and their clients' businesses. But as Jennifer Black has noted, the role seems to attract few people with any training or knowledge of business finance. As long as that’s the case, agencies should consider eliminating positions or making immediate changes.
Here’s why: the fact that someone who represents your business can’t talk about business and finance is a big problem. I am not suggesting account managers need a doctorate in economics, but a general understanding of how everyone makes money would be a solid start.
Account managers must speak to clients in terms that are important to them. With words like sales, profits, margins, and market share. And account managers should be able to hold their own and be knowledgeable in business conversations. CEOs and CFOs don’t care about impressions and clicks. Business is won and grown with work that moves the needle on bottom-line business metrics.
If the account manager appears to serve only as a middleman or a mouthpiece for the creative team, they aren’t providing real value to the brand. An effective account manager is an advisor, a source of information for the client. They provide business guidance and are able to discuss and address industry challenges and new technologies. With an account manager like that, agencies can regain their credibility with CEOs and CFOs and start to change arrangements that undervalue their contributions.
What exactly do account managers do?
One of the reasons the role of account manager may seem ambiguous is that it is a spectrum of responsibilities that can vary based on the strengths of the person in the role as well as the needs of the agency, the project, and the client. Here are some of the ways account managers’ role has been described, and the skills commonly associated with the role.
“Focus on maintaining the agency-client relationship by working with the client to develop a business strategy that will fulfill their needs,” (Jami Oetting, in Hubspot).
Have been compared to conductors for their ability to lead multiple stakeholders and coax their best performance in a coordinated effort (by Julian Douglas of VCCP in Campaign, among others).
Skills and capabilities attributed to effective account managers:
- Organizational skills
- Project management
- Understanding the marketplace and factors affecting sales
- Relationship management
- New business development
- Business acumen
- Macro and micro vision
- Growth mindset
“I think the typical answer you’ll hear is that an account director manages the client, but the truth is, the account person manages the business. I think any good account director is really trying to drive their business forward through the most creative vessel possible. They chart the vision and help both the agency and client arc in that direction.” — Chioma Aduba, Executive Account Director at McCann NY, in Adforum
When considering the functions of account managers, it seems strange that there has not been greater effort to hire people with stronger business backgrounds, and that there are not more agency-specific business and finance education programs (which is what Jennifer Black advocates for in her article). That seems to be the future of account management.
How will agencies respond?
Apparently, some agencies feel there is no need for account managers because they’ve built cross-functional teams across creative, strategy, planning, and buying, which incorporate the account manager role. I can see how that could work for some. But how about when it doesn’t?
If the client has an issue, do they need to determine which member of the team is taking the account management role that day or week? Do they blame every member of the team equally? There’s an old saying, “one throat to choke,” which is probably falling into disuse for good reason. The point is, the buck has to stop with someone. Who is going to be accountable if not the account manager?
Account manager roles could benefit from being reimagined with a greater focus on business intelligence. And agencies must use account managers to get better at selling themselves. But it’s a mistake to view the role as disposable. Account managers are the conduit between the client and the agency. Who else will coordinate all of the parties (including creatives) to ensure the projects and campaigns are proceeding as they should, that everything is communicated and nothing falls between the cracks?
Those who believe account management is unnecessary are shortsighted. The conversation is driven by the need for cost reduction, and the approach seems like taking a chainsaw to a job that needs a scalpel.
I suspect many agencies will eliminate account management roles. Unfortunately, they probably won't do it out of forward-thinking to redefine how the agency works. Rather, they will do it as a knee-jerk reaction to a brand’s request. In the current climate, a nudge is all that’s needed for some agency owners to cut an expense and keep a client happy. And I think they’ll come to regret it.
Cutting account management is on track to become one more compromise agencies have made to sabotage their business and the industry (just like giving in to spec creative, budget cuts, procurement, and 120-day payment terms). Hopefully, agencies can create better alternative solutions before that happens.