The Death Of The Boondoggle

For those not familiar with the term, a boondoggle is defined as a work or activity that is wasteful or pointless giving the appearance of having value. These come in many forms from drinks out to helicopter skiing, but all are used for one purpose, closing business! If you missed the heyday of the ad networks in the early 2000s, then you probably won’t remember the endless comped nights out and box seat entertainment attendance. This led to deals being closed based on relationships and not the quality of the offering.

This strategy was so prevalent it presented itself in the form of sellers sharing commission with agency buyers. Agencies even considered it an unsaid perk in order to justify below market salaries in return for third party experiences. Over time, and as ad networks were put under the microscope, purse strings tightened, and the sales community prioritized the party for only the biggest clients. This didn’t stop agency buyers demand for gifts and entertainment. One of the most notorious requests coming from a 2013 Zenith Media Supervisor for food to be sent to a downtown bar. This was an effort to fund a going away party for their SVP and their need to celebrate on someone else’s dime.

Agencies went on to implement their own gift policies following the bad press. GroupM going as far as to formalize a policy stating that, “if a gift is greater than $200, pre-approval would be required”. This resulted in tight lips and “offsite brainstorms”. In a world of COVID and remote work, will boondoggles survive? Some have gotten creative in order to maintain relationships. These strategies have included mailing wine and interacting with a virtual sommelier to prepaid credit cards. With the onset of COVID the days of client entertainment will likely be the exception, not the rule, if it exists at all.

As offices become more virtual and junior employees aren’t required to reside in one of the most expensive cities in the world, relying on company expense accounts to afford any resemblance of a social life becomes extinct. This means that the poor performers will be weeded out quickly, if they haven’t already. The industry has been consolidating since 2015 as big tech companies like Apple, Google and Amazon continue to swallow up the competition. This is happening so fast that they have been called by The House to discuss potential monopolies. Since 2015 the number of vendors has continued to decline and the walled gardens have grown by over 162% on average (source: Apple, Facebook, Amazon). A world of economic turmoil will only present further opportunities to buy. To survive, vendors won’t be able to count on bribery, they must invest in talent and differentiated offerings at affordable prices.

As boondoggles, gifts or bribes become a thing of the past, it's unlikely that agencies will supplement salaries due to current challenges in their business model. Over time, agency talent is likely to be absorbed by brands as they look to take more control and transparency of their media investment. Here are a few things you will likely see happen in the near future:

  1. Digital Maturity: The House will continue to question big tech and, the wild west of digital will become more structured.

  2. Quality Over Relationships: While relationships are paramount, they no longer are influenced by bribery leaving partners with quality offerings to advance.

  3. Live Events: The TV Upfronts will become more digital and you will see less traditional selling as the industry shifts to automated audience buying.

2 views0 comments