Retainers Stink: It’s Time for the Wine Industry to Change the Old Ad Agency Paradigm

In the middle of a recession, buyers with cash have enormous power. It’s no wonder that vendors of advertising and marketing services target their pitches toward wineries, wine bars and wine shops that have either backers or profits, or both. Those in the wine industry rightfully seek to protect their resources - in this case, their marketing budgets. That’s frustrating to providers of advertising and other marketing promotion services. But it is long past time for a significant shift in the ad agency paradigm.

It’s not only wineries who are rethinking how to squeeze the most out of their marketing budgets. I talked to the Director of Group Sales for Kimpton Hotels on a flight to Chicago recently. He is fed up with his agency and their insistence on hefty monthly retainers, billed automatically without a report on progress toward marketing goals.

He’s not the only one who is annoyed with the old ad/promotion agency paradigm of retainers.

When I was starting my marketing career, I worked in PR for a big ad agency in Boston. At the end of every month, usually around the 24th, our group director would cast his eyes over the billables to date. If they were too low to justify the retainer, the command went out to, well, um, churn the account… not in so many words, of course, but the end result was slap-dash quick-and-dirty projects that filled the timesheet.

I learned from this. I learned it stank. It sure wasn’t consonant with my Midwestern farm girl ethics. And this is the great danger of one of the elements of that old ad/promo agency paradigm, the retainer.

So here is what I think is right for today’s recession-benighted budgets. Ask your agency to move toward more transparency in their advertising and marketing proposals. Have them put together project-based programs that work toward your goals. Each project has a budget, and it is billed 1/3, 1/3, 1/3 at beginning-middle-end. Insist on monthly progress reports for each project, even if the report is just a “we are working on the press list, we have contacted major bloggers, we have a few initial design concepts.” And be prepared to give your agency at least 30 minutes a month to discuss the report.

Is there a downside in this approach? You bet. Some agencies, used to the easy buck, will refuse to play. ( Why should they? They’re playing with your money.) Some marketing departments won’t like the peaks-and-valley billings that this project-oriented approach sometimes creates.

There are other stinky parts of the way advertising and marketing services work, too. Recently I’ve heard rumors of a marketing group who charged a $5000 monthly retainer to a wine industry supplier company, more as a guarantee that no other clients in that segment would be served by that marketing group, than for the creation and execution of a legitimate marketing programs.

Shameful.

Over the next few weeks, I’ll share some other ideas and war stories from the marketing battlefields with you. In the meantime, post comments with your own pet peeves, ad/promo horror stories, or just the inevitable don’t-rock-the-boat. And post comments on the warm fuzzy stuff too. Hopefully we will all learn from one another on how to get more bang for our marketing buck. A bottoming-out economy can bring some important changes. Let’s hear more about what some of those changes should be.