By The Minneapolis Egotist / /
Observations from a mostly retired but still fully functioning advertising mind
In the Washington Irving story, Rip Van Winkle, ol’ Rip goes to sleep after imbibing a powerful alcoholic beverage, only to awaken 20 years later to find the world changed beyond recognition.
I just had an eerily similar experience. I was asleep, so to speak, not for 20 years, but for three years. My slumber was also liquor-induced. You see, I left the ad agency business in 2020 to start Back Nine Beverages, makers of Doogie McShank’s. I awakened last week to read the Business Journal‘s latest ranking of the Top “Ad Agencies” in Minneapolis. My reaction was, “Where the hell am I?”
I don’t mean that as an insult. It’s just, well, I hardly recognized any of the names of the agencies listed. To be fair, they’ve probably never heard of my old agency, Gabriel deGrood Bendt, or maybe even the agency we merged with, Modern Climate. The times, they are a changin’, fast. But still, I wondered, what happened to Fallon, Colle McVoy and Carmichael Lynch? How could the agency landscape have changed that dramatically in just three short years?
I went onto the websites of a few of these “Top Agencies,” wanting to know what their secret sauce is. After all, their revenue numbers are eye popping—$80 million, $74 million, $47 million. I dug around their sites, but I couldn’t find much evidence of what it is they make— other than gobs of money.
So, are these companies really “ad agencies”? And what does that term even mean anymore?
Ad agencies—or the ad agencies I’ve always known and the world has always known for over a century—are companies in the business of making and placing ads. Ya know, artfully crafted words and/or pictures in myriad media forms that make you take notice and remember the brand they’re associated with long after being exposed to them. The top agency did have a few examples of ads they created for clients like Gutter Helmet. But, how do you make $80 million doing that? I later learned this firm generates most of its revenue from buying media. But then why call yourself an ad agency?
For as long as I was in the ad business (32 years to be exact), there existed media buying agencies, direct response firms, sales promotion companies, trade show firms, etc., and those are exactly the terms they used to describe themselves. The moniker “ad agency” was reserved for, ya know, ad agencies.
I get that “the lines have blurred” and that ads take many new forms that didn’t exist before. But, if you ask Jane or John Q Public to explain what an ad is, I’m pretty sure they’re going to describe something resembling a short video, or a poster.
Again, does it matter? Maybe not. Unless you’re a really successful ad agency, as opposed to an “ad agency,” and your firm didn’t make the list, and so companies might not be inclined to hire you because you’re not “legit.”
None of this is to suggest these firms don’t provide valuable services to their clients. Obviously, they do, or that top agency wouldn’t be taking in $80 million a year. Incidentally, the Business Journal ranking states this excludes pass-through income, such as media costs or production, so we’re talking pure revenue. According to LinkedIn, that same agency has 59 employees. That’s an impressive $1.36 million per employee! (I’d be asking for a raise if I worked there.)
— Doug deGrood