Why Can’t We Talk About “Profitability”?.

Marcomms profit profitability

Before we get to the subject of profitability for marcomms companies do this for me:

Picture an oak paneled boardroom in the early ‘80s,

an assembly of suits in suits, media and creatives in casual corduroy & denim,

Forrest Mars Jnr.  in dark double breasted, and wife in high fashion fur seated at one end.

The Account Director on the Mars pet food account is addressing the Harvard Graphics presentation on the big screen (remember Harvard Graphics?).

All you can hear is the hum of the projector fan and the mono tonal drone of the AD. The presentation is colourful with plenty of graphics as is de rigueur for such presentations, but a bit boring. The AD deftly highlights the budget row with his newly acquired laser pointer.

Suddenly Forest Mars Jnr. Leaps to his feet, his chair careening backwards on it’s castors and crashing loudly into the one glass wall, one hand explodes out of his pants pocket and spays the boardroom table with coins, one bounces off the projector and neatly clocks the CD in the left eye, he goes down moaning and clutching his face.

Mr Mars yells: “Go on, take all of my money, take it all, take it all…….”

I was told that story early in the 1980’s when I worked at DMB&B in Melbourne Australia on the Mars pet food account. The story may be apocryphal and if not true or accurate I apologise to Mr. Mars, his family and heirs.

True or not it has stuck with me and I often go back to it when my thoughts turn to why it is not fashionable to refer to “profit” in our chosen domain.  I suspect largely it is because “profitability” is viewed as being “unseemly” if not “dirty”.

To many,  Advertising /Marketing is viewed as a higher calling than most and must not be demeaned by such a lowly concept as “profitability”.

Unfortunately, many clients feel the need to scrape every last percentage point off any compensation for work done. Auditing firms wade through the books of the agencies looking for any excuse to cut even further, the compensation base. Legislators close loopholes that may have allowed that little extra on the side.  It is a never ending squeeze.

Given the situation it may be worthwhile evaluating why we do what we do in this particular chosen avenue of endeavor?

Is it to make good ads?

To sell more product?

To be recognised by our peers?

To exercise our particular set of skills?

To satisfy our interests?

To indulge our passion?

To create something of value?

To create a legacy?

To have an interesting and challenging career?

To earn a good living?

Maybe all or only some of the above, but if our endeavors do not result in income exceeding outgoings we will eventually and inevitably be unable to continue in that endeavor.

Income exceeding outgoings results in “profit”.

Even if profitability is not the motivation it should still be the end game because it is that profitability that allows the other reasons to be realised.

We owe it to ourselves, our colleagues, our partners and most importantly, our clients, to make a profit. It is very much in their interest that profitability is achieved so the relationship flourishes.

So profit is not a dirty word and we should not be reticent to talk about it.

After over 30 years in the business both working for and with literally hundreds of agencies of all complexions I have come to the realisation that I actually know a lot about how agencies can better manage their profitability so I am co-authoring with a long time friend and one time boss Stan Bennett,  an eBook on the subject. If you would like an advance copy drop me a line at mduncan@tss.com.au.