Conditions for Success

What Agencies Need to Do to Reclaim Their Status in the Business Community

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Phil Johnson
Phil Johnson
How's this for a challenge? People no longer place a premium value on what you do. There is a glut of competitors offering copycat services. The economy has dramatically curtailed spending. Downward pricing pressure is killing profit margins. Pundits and prophets say that your business is either dead or it needs to reinvent itself. Sounds like fun. It also sounds a lot like life in the advertising fast lane. If I was smart, I'd probably run for the hills.

Unfortunately, I like what I do and believe that beyond all the pressures, we play an essential role in the development and growth of the economy. Maybe I'm delusional, but I see tremendous opportunities ahead. Despite the challenges, I see a path for agencies to remain relevant and thrive, even when a lot of indicators are pointing in the opposite direction.

Like anything else in life, you need certain conditions for success, and that's where we need to focus. I've often made the mistake of looking at a piece of business and thinking more about the revenue potential than whether we had the right conditions. To correct my errant ways, I have tried to identify the conditions that an agency needs to earn the respect of clients and the business world.

Some of these conditions exist on the client side, and some exist on the agency side. Some you control, some you don't, but I promise if you optimize your business to meet as many of these as possible, you will overcome the more aggravating problems of the agency business, like becoming obsolete.

To start with the obvious, agencies need to identify companies that make money and are doing well financially. I can't believe the number of agencies (embarrassingly mine included) who have busted their butts to win a piece of business that can't afford to do any work. Or agencies that will make financial concessions to a large, well-known brand because they want the prestige. Clerical workers at Harvard University launched a campaign for better pay with the slogan "We Can't Eat Prestige." Do they know something we don't?

If you want a healthy, profitable relationship, find a client that can articulate a real problem to solve. Signing on with a company that has the vague goal of becoming better known, or that wants more sales, will eventually lead to vague dissatisfaction with the agency.

You will never, ever, be successful with a client that does not provide a clear communication channel from the marketing department to senior management. Some of the most painful moments of my career involved laboring over a campaign with an enthusiastic marketing manager only to discover that the people who make the big decisions could care less. Save yourself from that miserable fate.

Those conditions may rest largely with the client. We also need to create conditions within the agency that answer the simple question: Why should we pay you more than we would pay a couple of creative kids who can build a digital campaign twice as fast as you for half the price?

You may need to search your soul for the answer, and it will be different for every agency. For PJA Advertising, I want the conditions that will help us excel in three areas.

Finding deep, meaningful insights into our client's business that they have not been able to uncover on their own. At the Ad Age Small Agency Conference in July, Brian Martin from Source Martin said that every important agency review is won by the agency with the best insight. Those insights provide the glue that keeps an agency and client together.

Producing great campaigns under adversity. More often than not, clients need work developed with unreasonable terms. They have bosses that place ridiculous demands on them. Sometimes they just don't care about the agency process. Of course, we hate this fact. Yet, the ability to structure an agency that can manage adverse conditions offers a competitive advantage that is hard to replicate.

Providing access to hard-to-reach audiences. The most valuable agency skill today may be the artful blend of media strategy, creative program design and the development of content that leads our clients to the inner sanctum of their target audience. The agency that can guide their client to this destination will be celebrated.

Some people will argue that all that matters is measureable results, or that the agency with the best ideas wins. I assume that all my competitors excel in those areas. In my imagination, I like to picture a client telling their board that they got an excellent return on the money they spent with us, that we solved some thorny marketing problem that had been dogging them for a long time and that we understand the lives of their customers as well as they do. Opinions like that would improve the reputations of agencies everywhere.

ABOUT THE AUTHOR
Phil Johnson is CEO of PJA Advertising & Marketing with offices in Cambridge and San Francisco. Follow Phil on Twitter: @philjohnson
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