Should agencies cast aside their pursuit of huge growth?

There’s an article on LinkedIn that I’ve not been able to get out of my mind, Why agencies need to focus on client value and not shareholder value by Ian Cassidy. It is an article fresh from the Cannes show. While Ian is talking about the marketing agency world, the article is relevant to digital agencies.

Here are the bits that upset me:

“Bigger is no longer better, and agencies that prioritise shareholder value over client value will continue to merge, reduce and ultimately be as extinct as the prehistoric practices they still abide by.” 

It has always been thus. The increasing shareholder value game is the American Dream. Theoretically, the quickest way to increase the value of your agency is to merge: the multiplier goes up and your overheads go down creating a more profitable outfit – a double whammy! Like it or not, unbridled profit is why so many agency owners aggressively grow their agencies. Not all, but some.

“Nothing sums this up better than on stage at Cannes when Publicis’ Global Creative Director, Nick Law straight out called Accenture Interactive’s work shit on stage to Accenture’s MD, Anatoly Roytman. His response, ‘Come visit me on my yacht to talk about it.’”

Jeepers creepers. The audacity. The implication is that Accenture’s MD doesn’t care about the quality of his agency’s work when it has created unbridled wealth.

Should we be appalled at the incredible financial success?

I was taught at business school that year-on-year growth in shareholder value is the sole measure of business performance. That is exactly what has been achieved here but that doesn’t make it right. Or does it?

So many questions…

Surely this ‘success’ should be celebrated and not reviled?

Should agencies prioritise shareholder value over client value (like the banks)?

Will focusing on creating greater client value be more sustainable and profitable for the agency in the long run?

Should agencies cast aside their pursuit of huge growth?