Marketing Lowdown: Choosing an Ad Agency
August 08, 2008
Why do you need an advertising agency? And how do you go about selecting the right one for your business?
By Robert Grede
An ad agency marks up everything they produce as much as 20%, charges 15% commission on media and doesn't know nearly as much about your product or industry as you do. Who needs them?
You do.
Firstly, an agency takes the burden of the production process off your hands and makes sure everything is done right. Agencies charge for production because they earn it. You may know how to contact a good illustrator, specify typefaces, or even judge a printer's capabilities. But it's not likely you know how to do all of these things.
Secondly, you generally pay the same price for media whether you use an agency or not. So, why not let a professional do it for you?
Lastly, the pros at ad agencies are functionally specific. Your lawyer or your accountant will never know your industry as well as you do. They know law and accounting. Likewise, your ad agency knows advertising and how best to apply it to your business.
Delegate It
There are three ways to delegate the advertising function:
1. The full service agency is ideal if you need full service. This includes market research, media planning and buying, creative concepts, copywriting, layout, public relations, direct marketing, sales promotion and online services. The big full service agencies generate some of the best creative ideas in the world. Their advice and counsel could be worth every penny you pay for it.
Unfortunately, big agencies like to work for big clients. Their best people work on accounts that generate lots of income. They may do great work on full-page ads in Sports Illustrated, but a quarter page in Control Engineering is just not their cup of gin. So, your account may get sloughed off to the new kid. You may like the sound of saying your agency is McCann-Erickson, but the benefit often ends there.
If you need a full service agency, go for one that suits your size, one that will work closely with you and get to know your company’s marketing and sales needs. They can serve as a source of experience and advertising wisdom. In effect, you pay for their talent, not agency overhead.
Then again, if you don't need all the services of a full service agency, you shouldn't pay for it…
2. Instead, use a boutique agency. That way, you don't pay the overhead for services you don't use. You pay only for the services you need: It's an "a la carte" approach that often works well for smaller businesses.
A boutique agency specializes in one or two functions. For example, you have a dynamite ad that ran in your local paper and generated lots of sales. Now you want to expand to other markets. You may only need a media buying service to plan and buy the most efficient newspapers in your chosen markets. Or, your industry has only one trade magazine that is read by everyone, and you want to continue advertising in it exclusively. You may only need a creative boutique to design and execute a few innovative ads that will pull in customers.
Look for a small, personalized operation headed by one or two pros, experienced advertising professionals who work on each account themselves.
3. The third option is the independent consultant. These are usually single-person operations. Their overhead is low, and you can count on their close attention. The independent consultant frequently works with a loose affiliation of similar one-man (or -woman) operations to provide a complete range of services.
Sometimes, however, they can lack depth of knowledge in more than one or two functions. And they may try to do too much, rather than calling upon others with more expertise. But if you find one with the right combination of skills, one who's demeanor and temperament are compatible with yours, an independent consultant may be the most efficient use of your promotion dollars.
Who You Don't Know
Too often, clients choose agencies based upon who they know. In fact, many agencies encourage their account managers to spend a certain amount of time on the golf course wooing new business. But while your golfing buddy may be a great guy, his agency's ideas about advertising may not mesh with yours.
Friendship and trust are important in your agency relationship. But don't choose your agency solely upon that basis. You may end up paying for it in the end. And friends shouldn't make friends pay for the relationship. Who you don't know may be a better choice than who you do.
The Selection Process
• Before selecting your advertising firm or independent consultant, ask to see some of their best work. While you cannot expect them to be familiar with your specific product or service, look for familiarity with your industry category. For example, you can't necessarily expect them to understand manufacturing and distribution of semi-circular widgets made of vacuum-molded high-impact titanium plastic. Rather, do they understand the small manufacturing business?
• When viewing their presentation, don't be fooled by "glamour." Some operations are run by ambitious types who are on the make for the big time. They regard your small account as no account, merely a meal ticket until something better comes along.
The work they produce for you is smart-looking, flashy and generally sells them, but rarely you. It lends itself well to full-pages of four-color formats, when what you need may only be a quarter-page of black-and-white. Their demeanor is captivating, enthusiastic, and winning. They will go far in this world. Just make sure it's not at your expense.
It's far better to go for a "total approach" concept. Not one-shot flashy ads. An agency or consultant that can develop a series of ads, brochures or collateral pieces around a common theme will likely build a consistent image for you, too.
S&MM online columnist Robert Grede, author of "Naked Marketing: The Bare Essentials" (Prentice Hall), speaks on marketing and entrepreneurial management at universities, corporate venues, and street corners. Learn more at www.TheGredeCompany.com.
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