Holiday frolics // Flexigate
The recent collapse of the world’s oldest travel company Thomas Cook resurfaces some old media issues, writes Bob Wootton. Plus: can you build a career by working flexibly?
UK agencies are principal to the deals they strike for their clients. If the client folds, the agency is left holding any forward commitments within the cancellation window of the media booked. In some cases, these can be several months and therefore involve a lot of money.
Agencies have typically long taken out insurance to offset these risks or demand upfront payment from clients deemed too risky/unstable.
Here, we must pity content production startup Gaggle. It had committed to and was literally about to fly to its first shoot for the founding client it had only just won - Thomas Cook. No insurance was in place – not unusual – nor had the usual 50% of production costs been billed upfront, both as a 'show of goodwill' and because there probably hadn’t been time. It might not recover from this early blow.
Meanwhile media agency Dentsu Aegis responded with bluster and swagger, claiming last week that the "impact on our business and people will be minimal”. Really?
Media buying muscularity became the backbone of agency pitches years ago. It remains dominant, and price ‘racks’ like Ebiquity’s the yardstick. Shortsighted, regrettable perhaps, but not surprising. Clients, especially procurement folk, like measurement and hard price is much easier to benchmark than quality, let alone effect.
Big media buyers’ arrangements with the major media owners became as much defensive as aggressive. They not only have specified prices but access to prime spots and space in return for volume and/or share commitments. They also allowed for a proportion of funds to be committed inside normal advance booking windows.
Perhaps these days they also allow for a degree of default? If not, the agency must negotiate the debt.
You’d think it unwise for a media owner to hold a media agency to such a debt for fear of being planned off future schedules. But the media and agencies have consolidated to the point where they all need each other so the boot isn’t really on either foot. And such movement of monies can screw volume and share deals…
No accusation of illegality, but Thomas Cook’s senior management had been bolstering its results for years and had brittle written all over it. Those with longer memories will recall its supplier roster being asked to rebate millions to pimp its figures.
But the company’s line marketers facing the agencies (and now facing unemployment) couldn’t be fully apprised of the circumstances. Nor could the board suddenly start authorising upfront payments or pulling forward commitments. Both would have been clear signals of further implosion of a business already in a shitstorm.
Despite the risks, UK agencies cling to remaining principal, whereas in many other countries they act as true agent-advisors and their clients are liable for debts. But it will still take more than this collapse to provoke any change.
The leak of an internal memo on flexible working and an empty office on Fridays put Starcom on the grill, but they’re far from alone.
Since today’s margins make it difficult to staff and remunerate adequately, wellbeing has become a vital tool in attracting and keeping key talent.
Juggling impossible house prices, childcare, an education system postcode lottery and their kids’ wellbeing, many are now settling a long commute from their work and are understandably very attracted to flexible working, typically from home.
For businesses, mobile tech means everybody’s ‘always on’ and designing space for less than a full complement saves on high office rents.
For the last three years of my full-time working life, I chose sometimes to work from home. I never sought permission and nobody pushed back. At first it was infrequent, most likely some heavy reading or writing, but over time it became almost weekly.
Of course, I hadn’t done fixed hours for years. That’s not how our industry works. Events, courses, entertaining and socialising are fundamental to its operation. My jobs involved many evenings and some weekends, so there was plenty of the very give and take implicit in successful flexible working.
Sometimes my employer got an excellent deal - an early start and late finish with no commute can enable a solid fifteen-hour day. Other days, they were paying for me to read the trade press at best and more likely practice for a forthcoming gig or mow the lawn. If I was even at home…
Working thus with increasing regularity also helped me transition from a lifetime working in offices to part-time portfolio self-employment.
Most will choose to extend their weekends and most businesses’ rhythms drive towards empty office Fridays. (I’ve seen tumbleweed at many clients’ offices on Fridays too as many choose it to visit their agencies - at least for the morning).
But few can truly resist the temptations of their homes and work straight through as the flexi-myth suggests.
And there’s the rub. In an office you can keep some kind of eye on people and there is peer pressure. They could be surfing the web all day, but in these open plan times, managers or colleagues will notice and call it.
When they’re ‘working from home’ they could be doing anything. Anywhere. I know. I was.
Policing things on Skype or FaceTime isn’t a good use of seniors’ time. In our industry people rise because they’re good practitioners more than good managers, which (some) tend to learn later.
And I haven’t even mentioned the benign collisions of minds and ideas that happen when people interact in the same physical place and are vital to our work but are greatly hampered if peoples’ presences don’t overlap…
…or the fact that we’re a service industry and usually have to be present to serve.
Paradoxically, although it’s easier to manage flexibility with highly structured and therefore accountable jobs, it actually works better for less structured roles, like creatives.
It’s a fraught issue for which there is no single right answer, but I wonder how many who really run our business built their careers via flexible working? I’d wager most were serious presenteeists. As was I - and would still be if I was at that point in my career.