Small Agency Conference and Awards

If I knew then what I know now ... I'd specialize from the start

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In this occasional series, Ad Age asked small agency chiefs what they would do differently if starting their shops today.

Almost every agency starts out the same way: small in size, but with gargantuan goals. We begin with small clients, but want larger ones. We hire small staffs in a small building with hopes of managing hundreds of creative thinkers spread over offices in three cities.

1x1 Michael Pavone is the president and CEO of Pavone Marketing Group
1x1 Michael Pavone is the president and CEO of Pavone Marketing Group Credit: Pavone Marketing Group

We want big budgets, big campaigns, and big awards.

To achieve those pipe dreams, at least initially, we take every piece of business that comes our way. And to do that, we try to be everything to everyone. Banking and healthcare? Check. Fashion, pharmaceuticals, and wine & spirits? You got it. B2B, B2C, and B2B-and-sometimes-C? Bring it on.

That's what I did, and it took about 15 years to realize something I wish I had known sooner: It doesn't work.

Actually, it works if you don't mind being a small to medium-sized agency forever competing for small to medium-sized clients. But if you want to get bigger, if you want those offices in three cities and a client roster with names that make other big agencies drool, you need to specialize. Find a category you're passionate about, push your chips across the table, and go all in.

That's what Pavone Marketing Group did in 2007 when it created Varsity, which focuses solely on seniors and retirement living, and again in 2014 with Quench, an agency that specializes in food and beverage marketing.

A decade after the vertical shift, and both agencies are thriving, with the latter -- Quench -- landing those national, blue chip clients (like Labatt, StarKist and SunMaid) and opening new offices in Philadelphia and Chicago in just the past three years.

A vertical focus also allows an agency to provide the type of deep-diving strategy clients are willing to pay for. The added service means a more profitable agency and clients that want you to be profitable, because any client that doesn't want you to make a profit isn't the right client for you. No amount of awards can make that true.

How and why the specialization strategy works is simple. Clients want an agency that does great work, but they also want an agency with experience in their category, and that's what a specialist agency offers.

A specialist agency talks the talk and walks the walk.

A specialist agency has connections. (Deep ones.)

A specialist agency doesn't just know the trends in its industry, it identifies them and becomes a mouthpiece for them.

A specialist agency provides five laser-focused case studies in an RFP while a larger, all-things-to-everyone agency struggles to find more than one. Throw in some smart strategy and creative -- because your team knows the category inside and out -- and guess which agency wins that pitch 90 percent of the time?

Trust me, it's not easy to go vertical and the success won't happen overnight. It takes time, effort and a lot of speaking engagements at retirement living conferences and specialty food trade shows, but it will happen eventually. And when it does, you'll find yourself on a plane to Chicago to survey new offices in the West Loop.

Michael Pavone is the president and CEO of Pavone Marketing Group

Want to hear more advice about how your small agency can not just survive but thrive? Be sure to sign up for our Small Agency Conference July 17 and 18 in Marina del Rey, California. Tickets and information are available here.

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