Your Responsibility as an Agency Owner

The largest independent ad agency in the country, The Richards Group, just essentially committed ritual suicide with a poorly chosen phrase. AdWeek has the story if you want details, but the thumbnail sketch is that agency founder Stan Richards called a proposed ad campaign for Motel 6 "too Black," and implied that the hotel chain's customers were white supremacists. According to this New York Times story, the comments also cost them another major client, Home Depot.

The Richards Group Founder, Stan Richards

As someone who is trying to offer their services in the marketing and advertising industry, all I can say is "Yikes!"

Mr. Richards attempted some damage control, by explaining that these were poorly chosen words to critique the lack of representation of other underserved populations in the campaign. While this may be true, it does seem a little hollow and desperate. We can all acknowledge that what he said was stupid, and demonstrated the sort of casual language that reinforces negative attitudes.

This leads me to my whole point, namely your responsibility as an agency owner and the unintended consequences of poor communications skills. As I mentioned at the beginning, The Richards Group is one of the largest independent agencies in the world. A lot of ad agencies are all now part of one conglomerate or another, limiting choice as a consumer of those services. Huge companies like Omnicom control the majority of the industry, so independent agencies are struggling to compete. Just like the media where 6 companies control the majority of the media (Wikipedia), about 5 companies own a vast majority of the ad agencies.

The Richards group lost 2 clients that total over half a billion in ad budget. That means a loss of millions in revenue from those clients, and a long fight to keep the rest of their clients from jumping ship too. This may end up with the agency closing its doors, or being absorbed into one of the giant agency conglomerates. Even if that happens, a lot of people will lose their jobs to redundancy. Any business owner has a responsibility to their employees to at least not throw away their livelihoods with an offhand remark. I hope everyone affected by this manages to land on their feet.

Another industry that may take a hit from this is radio. Both Home Depot and Motel 6 are heavy radio ad buyers, with Home Depot often occupying the top spot in radio ad spending. Whatever agency that takes over these two clients may convince them to rework their media mix, taking some appreciable portion on those ad revenues online. Radio is already struggling thanks to it's decline in quality lead by the large companies like iHeart. This may be another nail in the coffin containing locally programmed radio.

If you are the owner of any sized advertising or marketing agency take note that at the heart of this, even if you accept Mr. Richards' backpedaling explanation, it still shows a certain level of tone-deafness and lack of communications skill. He could have very easily explained that he wanted other underserved communities represented better and it would have been celebrated. The ultimate responsibility of the owner of a company that communicates for a living is to at least stop and think before you open your mouth. To me, the whole incident is another example of bad copywriting, this time with dire results.