BtoB

It's so good to be understood

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Our exclusive survey shows marketers value industry knowledge and chemistry over creativity in choosing an agency

B-to-b marketers are seeking ad agency partners that understand the client's business, have good chemistry and can produce results, according to a BtoB survey and interviews with marketers.

More than one-third (36.5%) of b-to-b marketers plan to conduct an ad agency search in 2007, according to a BtoB survey of 209 marketers conducted online during the last two weeks of December and the first week of January.

Currently, 16.4% of marketers are involved in a search for a new agency, the survey found.

Of those that are considering switching agencies, the top reasons cited were "current agency is not producing results" (29.9%), "change in strategic direction on the client side" (13.9%) and cost cutting (13.4%).

BtoB also asked marketers to name their No. 1 criterion in selecting an ad agency partner, in current or past searches.

The overwhelming response was understanding the client's business (cited by 64.7% of respondents), followed by good chemistry with the agency (17.9%) and outstanding creative (15.0%). Only 2.4% of marketers said price was the No. 1 criterion in selecting an agency partner.

B-to-b marketers that have conducted ad agency reviews in the past year agree it's critical that a potential agency partner understand their business and the b-to-b environment overall.

USG Corp., a Chicago-based building products company, began a search for a new ad agency last spring. The previous agency was Noble BBDS, Springfield, Mo.

"We really wanted someone who is grounded in b-to-b work and understands the b-to-b environment, including complicated distribution channels," said Linda McGovern, director of marketing communications and brand strategy at USG.

USG manufactures gypsum wallboard, ceiling tiles, joint compound and other building materials. It sells through distributors, its L&W Supply subsidiary and retail stores.

In addition to understanding its business and supply chain issues, USG was looking for an agency with out-of-the-box thinking, good chemistry with USG's people and a Chicago presence.

After starting out with 20 agency prospects, USG selected HSR Business to Business, a Cincinnati-based agency that opened a Chicago office in 2004.

"They really did their homework and took time to talk to our customers—dealers, architects, contractors, etc.—to understand the voice of the customer," McGovern said.

"They demonstrated a great ability to think strategically, such as telling us how many buckets of dust control product we'd have to sell to each customer segment through various distribution channels to get a return."

Nortel Networks, a telecommunications company based in Toronto, also conducted an agency search last year following the hiring of new CMO Lauren Flaherty. Its previous agency was the Richards Group, Dallas.

Global scale sought

"One of our first [search criteria] was global scale," Flaherty said. "We're a global company, so we wanted to make sure the agency had very strong global marketing capabilities and the ability to activate resources in emerging market opportunities."

Another important consideration was what Flaherty calls "21st century marketing capabilities."

"The tools of the trade have really changed in the marketing community," she said. "We were looking for an agency partner with strong resources in the digital and media space—someone with capabilities in video, blogs, podcasts, etc."

Other criteria included a high-tech roster of clients, strong creative execution and exceptional account management capabilities.

Nortel selected McCann Worldgroup, San Francisco, for its global advertising account in November.

"They have a very strong list of clients in the high-tech space (Microsoft Corp., Intel Corp., Hewlett-Packard Co. and Verizon), they understand the challenges of high-tech and they are energized by it," Flaherty said.

Diebold, a Canton, Ohio-based manufacturer of ATM machines and other self-service technologies, also wanted to work with an agency partner that had more b-to-b expertise. It previously worked with two agencies, Dix & Eaton and Marcus Thomas, both in Cleveland.

"We were looking for somebody a little more focused in b-to-b," said Paul Magee, director of industry communications and strategic design at Diebold. "Neither of the agencies we had was exclusively b-to-b."

Diebold began an agency search at the end of 2005 and selected Slack Barshinger, Chicago, as its integrated marketing agency of record in March.

"They really stood out in the final presentation," Magee said. "They showed a lot of consideration for the constraints placed on them."

Magee said he appreciated Slack Barshinger's fresh approach in questioning some of the ways in which Diebold had previously marketed its products and services.

"Historically, we have been a print media organization," he said. "They said, 'Are you guys stuck with the idea of print media?' You have to be able to question the norm."

While industry expertise is a key consideration for most marketers, some say it's not as important as other factors, such as creativity and working within a budget.

Agency assisted launch

Bacou-Dalloz, a Paris-based manufacturer of fire protective gear, began an agency search last year to help launch a new product—a self-contained breathing apparatus for firefighters.

The company, with U.S. headquarters in Smithfield, R.I., had used various agencies for different product and brand introductions over the years. It was looking for an agency partner with strong strategic focus, creativity and good chemistry, said Jerry McGurkin, senior VP-respiratory group at Bacou-Dalloz.

"Industry knowledge wasn't that high on our list," McGurkin said. The company selected PJA Advertising & Marketing, Cambridge, Mass.

"They really demonstrated creative strategy that fit within our target budget," said McGurkin, pointing to a $2 million marketing budget for the product launch.

"They also showed strong strategic capabilities."

BtoB's survey found that just over half (50.5%) of marketers use one ad agency, while 44.2% use up to three agencies and 5.3% use more than three.

Also, 57.2% of marketers use the same agency for online and offline work, while 42.8% use different agencies.

BtoB asked marketers to rate their relationship with their lead ad agency. It found that 23.6% of marketers are "extremely satisfied" with their lead agency; 52.9% are "satisfied"; 19.7% are "somewhat dissatisfied"; and 3.8% are "extremely dissatisfied" with their agency.

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