With the recent shuttering of KSL Media many have been suggesting that this is the end times for independent agencies. Nothing can be further from the truth. According to all the news reports, KSL Media was undone by its owners’ mismanagement and financial improprieties. My opinion is that KSL Media was never anything more than a traditional media buying shop who favored non-disclosure buying, lucky to survive as long as they had. They had some smart people there through the years, but many were chased away or pushed out because the owners were greedy and did not want their egos challenged. They began a downward spiral of business losses and the owners, having nothing to sell, decided to extract as much cash as they could. The side story here is that when you push out the talent that can help you rebound from business losses you do nothing but accelerate your demise.
Unethical behavior and financial improprieties happen at large public companies too. How soon we forget that IPG settled with the SEC only five years ago for accounting fraud and misreporting income resulting in a penalty of $12 million, chicken scratch when compared to the hundreds of millions of dollars that were improperly reported as revenue and the impact it had on employees and investors. The IPG mis-statements date back as far as 1997 and went on for as long as eight years. During this time IPG acquired other companies, including True North–for whom I worked, using IPG stock. Basically acquisitions were made under false financial pretenses. Many TN stockholders and employees got hurt and IPG’s stock suffered for many years because of this. Public companies are as likely to commit fraud as private companies. Companies are only as good and ethical as the people who run them and the quality of the personnel who work there. The only difference between KSL and IPG was that IPG could survive the hit and KSL could not.
We need independent agencies now more than ever. Large multinational agencies have a place in the world, but so do the smaller independents. Today’s small independents challenge the public companies to keep adapting and later become the acquisition targets needed to boost revenue as their established holdings get stale.
Diary Of A Media Man 