The economic power of brands

The economic power of brands

A speech by Mercedes Erra, delivered during the event « Le pouvoir des marques – The power of brands » organized by the French Advertising Agencies Association, at the French Ministry of Finance and Economy, in the presence of the Minister, Bruno Lemaire. July 2, 2019

This event, the power of brands, is this year being held under the sign of innovation, that is to say our ability to change from within (in-novare) and renew ourselves.

So it is our future that we are talking about.

And I am worried.

I am worried about the future of our business, our communication agencies.

Communication agencies, media agencies, digital agencies, PR agencies, are in bad shape. The profitability of our companies has been steadily decreasing since 2007, from 8% in 2007 to 3% in 2015.

By not fully recognizing the importance of our profession, we are killing it, because we are allowing some pretty negative things to happen, every day:

It has become normal for agencies to be asked to compete for global campaign for a very big brand in two weeks, when it took more than six months for consultants to deliver a brand platform on Powerpoint.

It has become normal to take a strategy from an agency and give it as a brief to its competitors without even asking permission.

It has become normal to pitch agencies for nothing, because at the end of the [itch no decision is reached, the pitch is declared null and void, and relaunched the following month with other agencies.

It has become normal for an advertiser to ignore ten years of positive collaboration with its agency just to see if by chance a pitch would shave a couple of points off the fee.

It has become normal to start competitions without following any of the rules, laid down by professional bodies, without compensating the participants.

It has become normal to assign global rights in perpetuity on all types media, which by the way is not legal, but required by many advertisers and their purchasing departments.

Everything become normal, in fact.


Well today I accuse.


We can not. We can not anymore.

We can no longer accept all of the above. We can no longer give away the search for ideas, the design of campaigns, their development.

Our profession will disappear.

And I bet you'll, the advertisers, miss us.

Soon creatives in three-piece suits will come to offer you, the advertisers, bad ideas billed at very expensive rates. You already know what these rates are.

We, the agencies, presented almost 30% fewer campaigns in Cannes this year .

You, the brands, you have a lot to lose, because you owe a lot to those boys in shorts and flip-flops, to the insolent and rebellious girls who populate our agencies, who regularly spend days and nights on a script or a piece of design, and to those places known as advertising agencies, where freedom, and impertinence, still reign.

In our agencies there are two things that are truly irreplaceable:

1, The knowledge, firstly, of human sciences, the analysis and understanding of where the consumer is going, the understanding of the mood on the street, what makes the world move. Data is only exciting when intelligence of analysis, and the force of human intuition make sense of them.

2, A rare ability to find meaning and ideas. This is where you need talent. And talent needs to be respected.

Today to resist ideas being crushed, agencies need respect and money.

Ladies and Gentlemen, owners of brands you need to respect this savoir faire. And pay it a fair price for it. France is a very bad on agency compensation. Americans and English know the value of their agencies. How can the cost of a 6-month consultancy by an American agency for a global brand be worth 5 to 6 times what the French agency would charge for the same brand?

It is certainly not the level of strategic planners that is in question, but the non-recognition of talent.

The tangible difference between a bad ad and a good ad, you well know what it is: good ads multiply results by 12.

This is called the power of the idea. So, it's worth paying a good agency, whose job is to make good advertising, the proper price.

Since 2007, as the workload has increased, our costs have risen more and compensation is declining, degrading the profitability of our profession.

So much so that today agencies are struggling to invest in talent and to recruit at necessary strategic and creative levels.

How to accept that a young graduate of a famous University is paid much less when she or he goes into advertising than in a consulting firm? How to continue to attract the best?

In the game of the degradation of remuneration and quality, you the brands will be worse off, and therefore have no interest in it.

We used to say, when I started in this busines: we have the agency we deserve. This seems to me more and more true.

Your brands and our agencies also need, I dare to say, that your own teams are of a higher level, for our agencies, not to be constantly challenged, and harassed, by marketers who have no experience or real knowledge of our business. Pressure and speed are hurting people both in our agencies and in your companies.

We need, together, to step back, to raise the level of professionalism, from the smallest to the largest agencies, so that our businesses earn a good living. It's vital on both sides, both agency and advertiser, to keep intelligent and talented staff in our business. It's vital for your brands because only strong, powerful, creative ideas can help them exist in an increasingly complex world.

I count eagerly on the business, on the professional bodies, on the AACC, and on the UNION OF BRANDS.

See also