After launching Mothers of Invention in 1989, I began paying a lot of attention to badvertising -- advertising that was, to put it mildly, strikingly bad. In my heart of hearts, I knew we could do better stuff, so I did what seemed perfectly logical at the time: I contacted the misguided clients to talk about going from awful to awesome.
I was tactful, respectful ... and unsuccessful. Twenty years later, we've worked with over a hundred clients, but I don't recall any that came in through a "Your ad sucks!"-type effort. We largely abandoned the approach many moons ago.
Question for agency people: Have you tried that sort of thing, and if so, how did it go?