BtoB

Agencies find they must create demand for services

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B-to-b ad agencies, which saw a steep dropoff in business over the last two years, are aggressively pursing new accounts with their own advertising, promotional efforts and outreach programs.

Some agencies have diversified their portfolios to include new vertical markets, while others are beefing up development efforts in existing niches.

"We are having to create the demand," said Robyn Sachs, president-CEO of RMR & Associates, a Rockville, Md., agency that has been in business for 18 years.

"We went from our best year ever in 2000 to our worst year ever in 2001," Sachs said. At the time, RMR was heavily loaded with tech clients, and the dot-com crash had a severe impact on the agency’s new business development efforts.

"We got 500 call-ins in 2000 from companies asking for RFPs," Sachs said. "Now we might see five in a year. That is a dramatic difference."

To adjust to the downturn, RMR hired a consultant to help it identify new niches to go after. Among those RMR decided to explore were financial services, health care and real estate.

"We tried to target industries in growth mode as opposed to tech, which we saw as trouble mode," Sachs said.

Once it had identified the new business niches, RMR aggressively pursued them through advertising in trade magazines, permission-based e-mail, telemarketing, client referrals and an offer of a free marketing audit.

The work paid off. RMR has just picked up four new clients across a range of industries: E.J. Krause & Associates, an event organizer; Ravgen, a biotech company; SmithGroup, a Washington architectural firm; and Strategic Business Solutions, a systems integrator.

DCA/DCPR, a Jackson, Tenn., agency, has become more selective about the types of accounts and businesses it pursues.

"About 10 years ago, we ended up with a client that dwarfed our business, which is a scary, dangerous proposition," said Seth Chandler, president of DCA/DCPR. He said the client, which he declined to name, represented 60% of the agency’s business.

"When we did lose them, we almost lost the whole agency," Chandler said.

The agency now focuses on specialty niches, such as packaging equipment and boating. "We have tried to strategically direct our growth, and try not to triple overnight but grow at a rate of 10% to 15% a year," Chandler said. The agency also hired a new business development director in 2003.

Other agencies are putting more resources against existing niches.

HSR Business to Business, Cincinnati, this year beefed up its operations, advertising and self-promotional efforts in the aerospace industry. It opened a new Washington office to pursue aerospace and aviation aggressively and did regular advertising in Aviation Week & Space Technology. It also conducted direct mail marketing around the opening of the Washington office.

Rick Segal, chairman-CEO of HSR, said self-promotion has always been an important part of the agency’s new business efforts.

"The typical agency spends 2% of its gross income on self-promotion," Segal said. "We typically spend 4% to 6% and have spent up to 10%."

Agencies also are using events to network and promote themselves, both as sponsors and resources for speakers.

"The more plugged-in agencies will participate in events, sponsorships and networking with clients," said Elisabeth Estes, director of marketing communications at EzGov, a software company that recently selected O’Keeffe & Co. as its agency of record.

EzGov did not conduct a formal review, instead relying on referrals and networking to identify possible agency partners.

Estes had met SteveO’Keeffe, president of O’Keeffe & Co., through government industry events, and as a result his agency ended up on the short list of finalists.

Other agencies use the Internet as a tool to get new business, including using their own Web sites, newsletters, advertising, white papers and other techniques.

Segal said HSR invests heavily in paid search engine listings, as well as a paid directory listing on AdForum.com.

The agency went through an Internet-driven review in 1999 for an undisclosed company, including an online RFP and exchange of key information.

But Segal said nothing takes the place of face-to-face meetings when discussing new business.

"In agency selection, chemistry is always a very substantial ingredient in the selection process. You just can’t get chemistry without sitting across the table from someone," he said. M

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