Pepsico's Brad Jakeman Is Seriously Pissed Off

I’m sure by now you've heard about PepsiCo exec Brad Jakeman’s firebrand presentation at the Association of National Advertising's annual "Masters of Marketing" conference. What's truly ironic is that I heard about it as I walked out the door of a large, multi-national, holding company owned agency 8,478 miles away.

I have one question: Does anyone seriously disagree with anything Brad said ? 

"The agency model that I grew up with largely has not changed today," he said, noting that he has been in the ad industry for 25 years. "Yet agency CEOs are sitting there watching retainers disappear … they are looking at clients being way more promiscuous with their agencies than they ever have." 

Finally,  a leading marketing executive from a colossal consumer brand like Pepsico goes on a truth-telling rant and meets two enormous problems head-on. 

On Innovation: “ Global alignment agency is a dinosaur concept" (more on this in a minute),  "I am really worried that this model is not going to bend — it's going tobreak if we don't really think about how to innovate.”
On Diversity: "I am sick and tired as a client of sitting in agency meetings with a whole bunch of white straight males talking to me about how we are going to sell our brands that are bought 85% by women," he said.

It's not exactly news that ad agencies need to rethink their structural issues and strategic approaches from the bottom up. No disrespect to Brad—but most, if not all the intelligent strategists and executives I know have been saying this since 2004. Once social media came onto the scene, most of us felt like we had a fighting chance at changing the industry from bullshit-driven to data-driven. And by 2008, most of us left and joined Silicon Valley for that reason. The fact is that the once you added more visibility to the practice--there was more opportunity to actually engage consumers and buyers in real, authentic way. To echo Jakeman--the fact that the thirty-second spot is even discussed anymore is ridiculous. The notion that strategy and creative don't sit in the same room is beyond absurd--and the fact global leaders are not cleaning house and hiring more strategically minded people is going to tank the industry.

Ad agency models have been broken for nearly fifteen years. That's not new. Pre-roll ads are useless; I mean can you name the last one you watched and didn't skip over?  Measurement models are completely outdated, yes, and they have been since 2003. The ad industry lacks diversity of intelligence--not just people.  Yes, the phrase digital marketing should be dumped too. Marketing insights need to be woven into the complex overall fabric of how an organization runs--top to bottom. There is a way to succeed if you simply do things with a bit more conscientiousness. 

The Ad Agency world isn't just broken--it's people are bored.  

The critical, creative, and collaborative all hands-on deck dialogue that is mostneeded internally is not happening. Instead, half heard, half-baked ideas are simply being passed onto the client by the people who interface with the client the most and often know the least. Account Planning per se, never mind strategic thinking, has been relegated to order-taking and ass-kissing. A bottom-line drudgery that keeps the client placated and the agency in perpetual creative stasis.  This outdated, outmoded way of doing business guarantees low morale across the board and results in low-to-no return on investment.  

Lack of innovation is directly attributable to a lack of diversity of both people and ideas, internal politics and inertia. 

I am just going to tell you, in no uncertain terms, that there is in fact an insular, political, and unmitigated ambivalence towards innovation in most big agencies.

Silos--which were declared dead in 2005,  are alive and well, and they are filled to the brim with tons of frustrated, over-worked staff. Think corn-starch. Your big agency will send someone to SxSW or blog about social media-but very few will do the work of changing how they think about the business. From an insider's view, it does not appear that anyone actually wishes to embrace organizational innovation as a mandate to grow and succeed—which is exactly what is needed most. That means everyone needs to work together--account, creative, executive, strategy, the janitor. That's right, you are going to have to play nicely with others. That means you might have to spend some time amongst the staff and not in that massive glass-office you sit in. You know, that ironic shrine to the bygone years of creative agency imperialism where you can show off all your Cannes Prizes and you can see people "come and go".  Yawn.  

Brad Jakeman is right. Agencies are in trouble. Big trouble. Especially in Emerging Markets where the consumers are dying for hamburgers, Pepsi and all that good ole' American goodness.  It's time to wake up global execs-because if you don't--the client will. Just listen to Brad preach.  It  is time to get some real clarity of vision about how to change agencies. It is time for people like Brad Jakeman to start hiring people that ensure that agencies deliver on innovation, that change is not just tolerated but celebrated

~

If you are looking for a Managing Director, Chief Strategist, CMO, Chief Digital Officer or you just want to chat, you can email me at louisd@bigthinker.com.  

Louis D. LoPraeste possesses over a decade of consulting experience with a focus on developing sound strategic practices and operational turnaround. He advises a wide range of clients internally on structural problem-solving, team building, work flows and processes. He is a dynamic leader who leverages macroeconomics to understand emerging markets, particularly in providing behavioral consumer insights and analyses. He is also a proficient integrated media and holistic brand specialist proficient in utilizing social listening, and applied analytics. 

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