For What It's Worth -- One Agency's Plan for 2009
To Emerge Victorious, We'll Continue to Adapt
Phil Johnson |
Sitting in my office on Jan. 2, I can't tell one way or another which way this year is going to go -- up, down or sideways. Today, we've got a decent pipeline, and there are two teams working on new-business pitches this month. That's no guarantee, but even one win puts us on a nice trajectory. Experience has taught me that as long as the phone keeps ringing, we're good.
I've been expecting to see more budget cuts from current clients, but so far any cuts have been modest. On the flip side, we're seeing some excellent media deals that have allowed us to design ambitious programs with smaller budgets. Our director of planning, Hugh Kennedy, wrote about some of these media opportunities on his blog, The Complex Brand. One factor that may work in our favor this year is that two of our biggest markets are technology and life sciences. While the recession affects everybody, these sectors have held up better than retail and financial services.
I'm most optimistic about initiatives that have nothing to do with the economy. For one, I promoted my trusted partner, Mike O'Toole, to president of the agency. He's played a huge role in our success to date, and I think he can lead us through our next round of evolution and growth. A lot of people ask me if I'm retiring, or slowing down. Hell no. This is about building our management team and letting the best people shape our future. Mike and I spent six months looking at every agency function and assigning responsibilities. At the top of my list, I've got several client relationships, agency marketing, finances and strategic planning. Mike's got everything else.
We're going to continue to add staff in key areas. Personally, I think it's hard to recruit great people in good times or bad, but recently we managed to land a couple of people that we really wanted. A new director of media, who has spent the last five years developing programs for emerging channels, just joined our San Francisco office. We were also able to recruit an interactive designer whose work we've admired for the past year. I believe A-plus talent will get you through almost anything.
A big ambition is to provide more training for the entire agency. Not surprisingly, there's a real hunger for knowledge about social media. We've got pockets of expertise, and a group of people that are actively using and experimenting with social networks. (You can follow me on Twitter at philjohnson.) But I'd like everybody in the office to increase their fluency and most importantly participate in the action. We'll also be lining up guest speakers and lunchtime seminars throughout the year.
More than ever before, this will be a year for refining operations. We're going to look at every process and behavior in the agency and weed out any habits that slow us down, add unnecessary expense or stifle creativity. I'm betting that victory will go to agencies that can be adaptable, quick on their feet, and able to dream up imaginative marketing programs for the full continuum of budgets. I'm hoping to be one of those agencies.
I wish all of you great success and personal satisfaction in the coming year. May all of your hard work and talents be rewarded, all of your opinions be heard, and all of your best ideas see the light of day.
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This bit says it all: I'm betting that victory will go to agencies that can be adaptable, quick on their feet, and able to dream up imaginative marketing programs for the full continuum of budgets." Amen, brother.
A large amount of industry's best work and new business wins will come from lean, well run, professional, smaller agencies in 2009.
David Wiggs
www.marketinghitch.com
I always enjoy reading your post but forgive me for being somewhat skeptical here. I don't see a plan. I see some adjustments possibly but no real plan of action for the year. In a tough market the two primary ways agencies acquire new business, networking and referrals, tend to dry up. For this year, to have a good start for new business, agencies should focus on their point of difference, an appealing position to their best target audience. Its not rocket science and nothing we're unfamiliar with. We do these things for clients every day, but when it comes to our own agency we are our own worst clients. To be successful this year, agencies should put into practice what they preach and use the tools they recommend their clients use, especially new media.
Please let me know if we can arrange a call about 'social media.' We've gained quite a bit of knowledge since we opened the doors in '99. I'm also very interested in learning more about your agency. My email: rduquette@neighborhoodamerica.com
Best,
Ron Duquette
This statement sums up what I have seen as well. Doom and Gloom is more like Stagnation and Murk.
Good luck in 2009 to everyone!
http://admaven.blogspot.com
I both agree and disagree with each of you. Current agency CMOs and Business Development executives need to embrace both traditional avenues of business development like cold calling, direct marketing, etc, along with utilizing new and social media to extend your agency brand. If you're not doing both, you're limiting your agency's ability in its business efforts dramatically.
We here at PJA are embracing all of these channels, and each has provided success in winning new business for our agency. In fact, we landed a recent client through a social media outreach earlier in 2008 on LinkedIn. We also have three of our executives blogging, a Twitter feed for our agency, a Facebook page as well as team members speaking on panels, agency folks providing editorial comments to the media, we have direct marketing efforts, e-mail campaigns, eNewsletters, and it doesn't end there. Every channel of outreach is important.
William, I adamantly agree with you that cultivating relationships before a pitch takes place is probably one of the single most important items that needs to happen. Michael, I can't agree with you less, this coming from one of your personal blog postings (yes I read it), that the cold call is dead, but hey, everyone has their own opinion. And yes, Phil and PJA have a strategic plan in place, I know, I have quite a number of objectives to fulfill in that time for our team.
I should have made my point with more clarity. Most small-to midsize ad agencies that I know of obtain new business through networking and referrals. I'm not saying that is the right way to do it at all. It is a poor way to try and obtain new business. In a down market, referrals and networking tend to dry up. Agencies then want to give attention to their new business pipeline. It's difficult to build new business without a consistent new business program. Also agencies hamper their new business initiatives because they sound,look and act like all other agencies. They say they are creative, strategic, integrated, have great chemistry and are fun to work with but that's what every agency generally says. In 12 years directing new business for ad agencies and utilizing cold calling, I can tell you that it is not the best, most efficient way for new business opportunities. I have found that social media is a great tool that compels agencies to develop a new business program in the right way. Leading with benefits instead of capabilities and stop being a generalist agency and specialize. You can't be appealing to everyone any better than you can build awareness with every company. People want to work with people that they like, people that they know, people that they trust. Social media is a great new business tool that accomplishes that. Cold calling to complete strangers is a numbers game. Making the right call, to the right person at the right time. My experience with social media, your best target audience, that matches with the core strengths of your agency has an opportunity to check you out, kick the tires, look under the hood, check out the upholstery ... when they are ready they will initiate the call. When they call the conversation is much further down the road than a cold call. They are ready for a meeting or even a proposal. I can tell you from personal experience that this method is much more effective and efficient than cold calling.
Michael Gass
www.fuelingnewbusiness.com
Bottom line and it's never changed in my opinion, this is a relationship business, plain and simple.
David Wiggs
www.marketinghitch.com
With a proper new business plan in place your agency can concentrate on all those other aspects of business, including refining operations, training, etc. I wish you a happy and prosperous 2009.
Buying business by buying competitors' talent has always worked against me. While I haven't tried it myself, once as an-employee I was none-the-less recruited by a larger agency who was working on the same accounts I was - their business grew when I joined them, as did my billings for them.
The best way to get new business is to buy it by hiring key account people or strategic creatives, or an entire business team, and with them moving business from competitors.
Then, writing up the employment contract, make sure it is contingent upon the business they bring along with them. Knowing the billings they have established, assuming all things are equal, meet demands and grow your business by hiring key people that can bring accounts into your fold.
As I said, I never did it. I did once hired a Land O'Lakes Director of Promotion, who talked about bringing $4MM of business with him - a fourfold billing increase for our agency-on-that-account. I made the contract as I stated, that salary and terms are based upon billings. Advertising is a service business and we make money by selling our time -- and our ability to pay is based upon the amount we bill.
The week after I hired him, the LOL VP Adv called me in and said this: Daryl, we are going to have to have a cooling off period between our businesses. We at LOL can't have our directors recruited and getting six figure salaries, Volvos and offices filled with rosewood furniture. It would set a bad precedent. We lost the $1MM we had been getting. After a year I had to let him go.
But I have watched as millions in billings walked out the door with a key employee-recruited-or-starting-their-own-shop. Even those who had a share of the business and several who I paid more then myself. They believed the grass was greener.
So I would recommend buying business away from competitors by hiring their key employees. It worked well against me.
I've also seen agencies pool together and go after larger accounts, touting their talent and experience in business areas to beat out competitors. During my years of building business every account save one, was taken from another agency. The one was Pillsbury Microwave, but they said others were considered but we won the prize, I guess by being there.
I was fortunate to have had long-term representation with accounts by constantly reinventing ourselves and the brands we worked with. But that said, I lost accounts because I lost key personnel. It's-a-war-out-there.
Steven
www.stevenstark.net
"As I said, I never did it. I did once hired a Land O'Lakes Director of Promotion, who talked about bringing $4MM of business with him - a fourfold billing increase for our agency-on-that-account. I made the contract as I stated, that salary and terms are based upon billings. Advertising is a service business and we make money by selling our time -- and our ability to pay is based upon the amount we bill."
"I did once (comma should be here) hired a Land O'Lakes Director of Promotion, who (...)." The missing comma was after 'I did once,' - albeit the hire was from the client side, I still regretted it. So that was contrition. I admit trying to buy business, but it backfired on me.
Most agency people I know are caviler about hiring talent away from competitors - but it none the less can still be an effective way to grow business in tight-times. Another way is merger and/or buying a smaller, same-size, or even larger agency for their business - it is happening every day: so why not you?
That's what I mean by 'cavalier.' Free and easy with what is in fact the crux of the matter: shrinking business/billings and the only way to counter it, building business: yours and your clients.
The gloom and doom talk in the small agency blog has been that of survival. Obviously new business is the cure. My career observation is that my gain has always been someone else's pain. And this blurb's specific point is buying it works for some. My experience has been that my billings doubled and tripled during recessions.
One way or another, advertising is about displacing someone else. The guys who can take business away from others is the guy that wins, be he agency employee or owner. Instead of dancing around a simple truth, someone should address it: why do people lose business?
We all know that billings are shrinking as marketers respond to the economy - what are the ways to counter this trend? I was merely offering a suggestion as concisely as possible while still being understood.
I know that my success during recessions was my agency's ability to make a ROI on marketing dollars expended by my clients - which attracted more clients to the agency. In this case less was literally more. As competitors within the food industry watched as certain brands grew despite recession, they found us. My secret was to stop trying to advertise but instead to recognize the huge chunk of the marketing budget going to trade promotion: so I stopped fighting it and joined it, but with one difference - I added branding to the equation where promotional dollars are no longer lost without a strategic category gain.
I was commenting on your plan. Your plan does not discuss the client's real concern: growing in recession. I know of no client who says they want to just maintain the ground they have. Aggressive marketing and promotion, not cutting back, easily beat the timid in this sort of market. Products and services in all markets and categories are being shaken-up now. Finding what resonates with consumers in an economic downturn to get them to buy your brand is the challenge - and then having the marketing dollars to do it.
Your approach leaves much to be desired. Treading water in a typhoon is a good way to drown. Everyone needs a buoy they can ride this one out, but the best and only strategy is to respond to client needs and develop strategies for them that affect their sales, volume and profits. I didn't hear that from, ever.
Acquiring business and talent that can impact your billings is one way to do it. Merging is another. The best is to affect your client's bottom line and use what you've learned to attract new business. Developing strategies to make your clients big winners in down times is another.
Or, another way to say it: buy business; use strategic branding with more effective promotion that consumers buy into.
beyong the next win. As we tell our clients, look to be relevant to your customers and look to offer a differentiated product offering. Execution has become mostly a commoditized exercise and not one has highly prized as agencies think. I have spent my career as an agency executive as well as a senior manager of marketing on the client side and I can tell you that agencies continue to focus most of their efforts on the wrong areas of importance to clients. This is particularly true of the large publicly traded agency groups whom as such are focused on maximizing share holder value at the expense of offering quality advice to clients. Smart, experienced and accomplished senior level strategic thinkers are hard to find at big shops because they are expensive. This is where the smaller agencies have a competitive advantage. By approaching clients as solvers of marketing problems rather than ad creaters and placers, small shops can and will achieve a higher value-added relationship to client management. Clients' internal needs require help in the form of analysis, strategy, brand planning and channel neutral advice. Its more of a McKinsey approach and pays much better than the traditional agency fee structure. We at Brand Idiomatics,
a brand marketing strategy and planning shop, work with smaller agencies and clients to bring very experienced talent to bear on complex problems on an as needed basis. It has been very beneficial to our clients and helped them establish a point of difference. If interested check us out at www.brandidiomatics.com.
Lets grab a cup of coffee. Its on me.