Must be the holidays, because The Reductionist has been finding all sorts of interesting items in his Hanukkah stocking all week long. Okay, they were email flotsam and jetsam, but let’s not split greasy hunks of Santa’s beard over it.

Item #1 was a soggy lump of Hanukkah gefilte fish in the form of a come-on from a leading pitch consultancy: "The CMO To-Do List BEFORE 2022 Agency Reviews." The heart-warming text begins by noting, “The average tenure of an agency relationship is roughly three years. For agencies with multiple agencies that means that at almost any time, there is an agency review being considered…”

Item #2 was a sparkly dreidel of a headline from Ad Age, glittering with the promise of economically frothy fun to come: “Ad industry forecasts predict unprecedented growth in 2022.” 

Color me grinchy, but the juxtaposition of the two punched my irony button big time. A major chunk of growth comes from new business. Winning new business, in many cases, means success in cattle calls. Ergo, the real prediction is for historic levels of turnover with a few agencies gleeful and all the losers left to gnaw on the expanding pile of Darwinian bones.

Of course, truth will out, and glib takes aside, both stories are a bit deeper than that. The first missal featured “improve the way you work with your agencies” services—good for them—as well as hand-raising about their pitch management skills. In similar wise, the trade pub story is mostly about anticipated increases in media spend, not agency profitability.

But there’s an alt side to both points and, sure as someone’s holiday candles are going to ignite a nearby curtain, there’s reason to consider the less than cheery implications in each.

Let’s start with the observation that while agencies may generally hang on by their toenails for 36 whole months, the median duration of a CMO job is now down to 25 months—40 if you want to talk averages.  While it’s tempting to mutter “could there be a connection,” that’s not the main take-away. 

Instead, we need to recognize that continual turnover in relatively short periods means that many brands are unable to develop institutional marketing memory. That’s another way of saying they are flying by the seat of their data dashboards—trapped in the tactical activity of the moment, not the deep strategic understanding it takes to plot a course or, most critically, learn from history.

Meanwhile, the economics of this pace of change aren’t encouraging. Agency CFOs will tell you that there’s generally a 10-to-1 ratio in client acquisition: for every dollar you spend, you need to earn roughly $10 back to break even. Forget making bank in year one—you’re actually going to be deepening the hole by having to invest in the “real work” that comes in launching that first campaign in live fire conditions. Year two might bring a little daylight, although that’s also typically when budgets start shifting.

And then there’s year three, when things should reach a modicum of equilibrium. Except the bloom is well off the blue spruce, and that’s when you get the “we’re changing CMOs” and/or “we’re going into review” call—they’re basically the same thing.

Next up is all that wonderful “bigger media budgets” fanfare. On its face, this is pretty great—not only did 2020 escape being a black hole, but some analysts are thinking we might see up to 25% total growth in the year ahead. Somehow this puts me in mind of Lewis Caroll: “Oh frabjous day! “Callooh! Callay!”

Then this innocent reads deeper and finds out that about 65% of that growth—the percentage of total media now put into pixels—will happen on the digital side of the ledger.  And here there be whales, specifically of the formerly FANG, now MANG, sort, where the bulk of the new money will go.

All of which, ad industry “you didn’t get me a pony” whining aside, doesn’t really make all that big of a difference to most of the advertising-related world. At least not enough to motivate the changes that would break the short-cycle conundrum now plaguing brand CMOS, their teams, and their agencies alike.  Or enough to prompt a realignment in the revenue flow between digital publishers, their agency partners, and the clients.

Still, ‘tis the cliché and maybe this will be a blessed point where mutual challenges and common threats, coupled with a rising tide of media opportunity, will illuminate new options. In truth, there are more than a few signs of that coming from those of us on the smaller, nimble, and, I’d argue, more truly on-mission side who are rewriting the hymnal as we go.

Can’t wait to see what else flutters down my email chimney before the New Year.