Small Ad Agencies Bigger Isn’t Always Better
Why a small ad agency may be just what you need.
Trying to decide whether you need the services of a big ad agency? Here are a few things to consider, before you hand over your marketing plan (and budget) for the coming year.
Big ad agencies are great. In their own little way. They take care of big budget projects, in a big way. But smaller jobs, like sell sheets, brochures, buck slips and direct mail? Forget it. You’re going to wait. And wait. And wait. On the other hand, a small agency has the time to give your business the one-on-one attention it needs. Thanks to lower overheads, a small agency it also much more flexible when it comes to both pricing and I-need-it-by-end-of-day timing.
Big agencies are renowned for two things: big egos and big bureaucracies. The Creative Director and Senior Account Manager who pitched your business? Odds are they’re off pitching another new business account somewhere and you’ll end up working with juniors. Or trainees. When you work with a small agency, you work directly with the President and Senior Creative talent. People with the experience and knowledge necessary to help you actually sell more and raise brand visibility.
Big agencies have a lot of layers. And mouths to feed. This means that unless you have a big advertising budget they can’t afford to service your account profitably. Conversely, a small agency will service the heck out of you. Even in the evenings, if need be. Without having to deal with all big agency politics, a small agency is free to focus on the task at hand – building your business and profitability.
Big agencies move painfully slowly. A small one moves at lightening speed. Without multiple approval layers to contend with, projects get executed efficiently and quickly. What’s more, without the typical agency divide between “creative” and “suits”, a small agency can be much more imaginative when it comes to both executional tactics and how to stretch your advertising dollar.
Small agency or big agency? I’d go with small. You still get big ideas. Just without the big, big price tag.
Dean Campbell, President, Catalyst Advertising
Small Ad Agency – www.catalystads.ca
Tips to Help Top Marketers Get Up and Fight in the Face of Failure
Here’s a true story to shine a light on what can happen to top marketers in the face of failure. Details have been changed to protect the innocent.
The Alpha Company has recently brought in a new marketing department head to drive revenues. Three months ago, company leaders sought outside counsel to reduce the marketing budget by 25% to compensate for downward trending revenues. Advisors said the lower budget could work if several marginal programs were cut and all remaining dollars were focused on the most important market segments.
Upon arrival, the marketing leader is confronted with entrenched programs and people resistant to change. To new eyes, it is hard to spot the sacred cows because the organization does a poor job of tracking results. Another department head served as interim marketing leader and is not at all happy to lose the responsibility. Rather than help the new person sort things out, he makes it his job to alert the CEO about missteps the new marketing leader makes. This, in turn, makes the new marketing leader less willing to take risks. As a result, the 25% cut in the marketing budget is across the board, and the programs that can most likely improve financial results are rendered 25% less effective. Revenues decline fast. New marketing leader is under tremendous pressure just two months into her new job.
Everyone who has been in marketing for any length of time has faced failure. Success and failure are close companions. Smart companies realize this and encourage a certain amount of marketing experimentation. Test markets are just that — a way to try bold new things. The best marketing people are aggressive by nature and willing to stand up to corporate pressures that would eliminate risk and good ideas.
What marks exceptional people and organizations is not whether they can avoid failure, but how they tackle it when it comes. Like our new marketing leader, you may also face a really tough situation. Here are some ways to get back on track from someone who has faced the possibility of serious failure a few times.
Pick Yourself Up. Our tendency is to focus on consequences at the point we are confronting truly difficult circumstances. Focus on what you would do if fear wasn’t standing in your way. Fear clouds judgment and suppresses creativity required to solve the problem.
Change Course. The one great thing about failure is that it has a stopping point. No organization will sit still for long when confronted with big problems. In an odd sort of way, failure opens doors that success seldom does. Management is more willing to change course and try new things. People who are obstructionist tend to stand out more and are easier to sweep aside. At the failure point, there is more risk in maintaining the status quo than in doing bold things. This is when true leaders emerge.
Assess Available Resources. The new marketing leader in our story has a big challenge to drive revenue with a small remaining budget. Her first order of business is to assess what is left and to reprioritize everything. This should then be compared with a strong plan of action to change the outcome by having the courage to make tough calls.
Let Truth Be the Guide. Marketing failures are often due to inadequate budgets in the first place. In today’s cost-saving business environment, marketing department budgets are easy trim targets. When goals are being met, it is easy to take a don’t-rock-the-boat attitude when fighting for resources. At point of failure though, an honest assessment of required resources is vital to reverse the failure. In our story, new marketing leader has little to risk and much to gain by demanding more money.
Involve the Whole Team. At failure point, many people tend to hide the facts from the very people who can change the outcomes. Resist the tendency. This is the time to gather the team and lay truth on the line. Rather than increase fear, this move actually disperses anxiety. Everyone knows things are not going as planned and shares concern about consequences. Give your team members a chance to shape the solution with their own great ideas. Most important of all, believe in yourself and stick to the job until the problem is solved.
Bill Fritsch is president of Hydrogen Advertising, an award-winning, Seattle-based advertising agency emphasizing superb ideas efficiently produced. Reach him at 206-389-9500, ext. 224 or email bill@hydrogenadvertising.com. For more information, visit http://www.hydrogenadvertising.com.
Financial Gain is a Consequence of Stellar Performance
In today’s business world, the pressure for financial performance has created a supercharged atmosphere in which the only goal seems to be to make as much cash as fast as possible. Few industries have changed under this pressure as much as the advertising industry.
Industry professionals are caught in a crossfire between clients who demand ever increasing return on investment (which generally means lower price) and their own managers who seek ever escalating revenues. Today fewer people are doing more work than ever before and earning less. The resulting pressure has taken a lot of the fun out of a business that was traditionally focused on delivering big ideas and powerful solutions.
The problem has been exacerbated over the last fifteen years as the ad agency business has gone public. Estimates vary, yet most agree that over
No Guts, No Glory – The Importance of Reaching Toward Big Goals
If you want to drive your organization to a higher level of success, here’s a word of advice: set some ambitious goals. No one ever unlocked the leadership capabilities, creativity and passion of their employees by asking for modest gains. Unfortunately in our “prove-it-before-you-do-it” ROI world, some organizations limit risk-taking and inadvertently penalize those who consistently think outside the box. The result is an organization as demoralized as it is bored.
In advertising, this propensity can be deadly. The best advertising people thrive on risk-taking because that’s where the big breakthroughs live. And breakthrough advertising helps build brands and profits. When the pressure to limit risk and drive down costs is overwhelming, it shows in safe, lackluster work.
Lou Tice, personal coach extraordinaire, reminded Seattle’s downtown Rotary last month that setting unrealistic, audacious goals actually increases the likelihood that the goal will be achieved. This may sound counterintuitive, but it’s actually good common sense. Those who set small goals never stretch and grow. So sacred cows thrive, people stay in their comfort zones, the quality of their work suffers, and they influence others to underachieve. Conversely, when people set outlandish goals, the only way they can achieve them is by changing the way things are done, moving into a new zone where innovation can flourish, and turning sacred cows into hamburger.
One of the most dramatic examples of the benefits of setting big goals can be found right here in Seattle. Several years ago, City Librarian Deborah Jacobs and Executive Director of the Seattle Public Library Foundation Terry Collings decided to dream big. In what became the “Libraries for All” initiative, her team set about rebuilding the entire public library system here in Seattle. Not content with providing a much-needed facelift to the facilities, they wanted to show the world that Seattle was serious about opening our doors to anyone who was hungry for information. Reaching this goal required better facilities, more resources for books and programs, and innovative thinking about the role of the library in the digital age.
An amazing thing happened. Their goal was so breathtaking, and the leadership so resolute about achieving it, that momentum started to build. In 1998 Seattle voters approved a $196.4 million bond measure, the largest library bond measure in American history. This funded construction of the new library buildings. Private support flowed into the foundation as momentum built and this provided much needed support to buy books and expand programs. As an icon of this bold, new initiative, the foundation hired the controversial Dutch architect, Rem Kulhaus, to design what has since become the new Central Library, a building universally lauded for both its architectural merit and for bringing the library into the 21st century.
When the Central Library opened, The New York Times architectural critic wrote: “At a dark hour, Seattle’s new Central Library is a blazing chandelier to swing your dreams upon. If an American city can erect a civic project as brave as this one, the sun hasn’t set on the West. In more than 30 years of writing about architecture, this is the most exciting new building it has been my honor to review. I could go on piling up superlatives like cars in a multiple collision, but take my word: there’s going to be a whole lot of rubbernecking going on.”
Today, every single community library in the Seattle system is being renovated or rebuilt.
And I’m sure it’s no coincidence that in 2005 we were named the “most literate city in America” by an annual Central Connecticut State University study.
Most people involved in this monumental accomplishment consider it a career-crowning achievement. It started as a goal that seemed too big to achieve, but teamwork, tenacity and out-of-the-box thinking brought this bold idea to its unabashed triumph.
With its unrelenting focus on ROI, corporate America may be crushing the kind of innovation that built our new Central Library. And what is particularly ironic is that bold action often provides a better ROI in the long term than a so-called safer approach. That’s why it’s incumbent upon those of us in advertising and marketing to make the case for risk-taking. We need to push back on the money people and request budgets that allow for innovation, and even the occasional failure. The more conservative, risk-averse philosophy may look sensible, but an approach that guarantees conventional thinking, bland solutions, and modest returns is far from it.
Bill Fritsch is president of Hydrogen Advertising, an award-winning, Seattle-based advertising agency emphasizing superb ideas efficiently produced. Reach him at 206-389-9500, ext. 224 or email bill@hydrogenadvertising.com. For more information, visit http://www.hydrogenadvertising.com.
Waste Not, Want Not – Tough Talk About Direct Mail
Those of us in advertising and marketing collectively have the power to move entire markets. And with all power comes responsibility. One area that needs our industry scrutiny is the overuse of direct mail and the resulting waste of precious natural resources.
As I write my bills every two weeks, I fill two wastebaskets with unwanted solicitations, mostly from financial companies. Two factors are contributing to growth in the unwanted stuff in our mailboxes. The nationwide do-not-call list is growing by tens of thousands of households per month, and massive dollars are being redirected from telemarketing into more and more direct mail. At the same time, changes in bankruptcy law have reduced risk to the credit card companies and increased the volume of solicitations to consumers. The result is a growing flow of junk in our mailboxes that wastes our time and natural resources.
Like most people, I hated the barrage of evening phone calls from roofing companies, finance firms, charities, window cleaners, and publishers. (I often wondered if the advertisers who used this technique gave any thought to the damage this technique did to their brand names.) As annoying as the telephone calls were, the growing avalanche of direct mail is starting to worry me even more. As responsible citizens on planet Earth, do we really want to use our resources in this way? And as marketers, do we have a responsibility to carefully marshal our resources and to judiciously use each channel of communication to its best advantage? Shouldn’t we leave as little waste as possible?
Don’t get me wrong. I am not against the use of direct mail. Used appropriately, it can be a powerful tool. It is just plain awful marketing that bugs me, and this leads to incredible waste of our most precious natural resources.
As I write this article, I am preparing for a meeting with a small national manufacturing company that is looking for new advertising counsel. They just completed a very large national direct mail program to support sales leads for their dealership network with disastrous results. The program cost $250,000 and netted 250 leads and 30 new customers. This means that inquiries cost $1,000 each, and customers cost $8,333 each. The company makes about $600 in profit per customer and needs to be finding them for less than $300. Oops. Even taking out one-time creative development costs from the equation, each new customer cost over $4000. Clearly, this was a flop.
What is sad about this is that any professional in our business would have looked at the initial strategy and predicted failure. This was a case where direct mail was not appropriate for accomplishing the goals. There was no mailing list available that was targeted enough to warrant the very high per-contact cost of direct mail.
The advertiser was a victim of his own misconception of the power of direct mail. Before the tactic of direct mail was chosen, this advertiser should have evaluated all possible channels of communication available to him. This was a case where a combination of targeted national cable combined with a really strong dealer referral program on the Web site most likely would have yielded the results needed for the same test budget. And the advertiser wouldn’t have sacrificed a single tree in the process.
Direct mail has been oversold as a marketing tool, and it is time to start thinking about being far more judicious when we choose this medium. With the emerging Internet and the newly found television interactivity, direct marketers have better, more socially responsible ways to meet their goals. Those of us who make choices every day in the use of media channels should be more thoughtful about the impact our choices will make on future generations.
With all this, I am not too worried about the current glut of junk mail continuing. There is sort of advertising eco-system in place that will slow the process in a few years. The more people sign up for the do-not-call list, the more calls that will go to those who haven’t yet signed up. This will increase their unhappiness. This will increase the rate of sign-up for the do-not-call list. This will increase the amount spent on direct mail which will further fill our mailboxes. The more filled our mailboxes become, the more diluted the response rates and the harder it will be to make mail pencil out. So ultimately mail volume will drop.
Let’s help it along by only choosing this medium after a careful evaluation of all alternatives.
Bill Fritsch is president of Hydrogen Advertising, an award-winning, Seattle-based advertising agency emphasizing superb ideas efficiently produced. Reach him at 206-389-950o, ext. 24 or email bill@hydrogenadvertising.com. For more information, visit http://www.hydrogenadvertising.com.
Advertising Is Dead. Long Live PR
Although I still believe there is a place for advertising as a brand maintenance or brand affirmation tool, I am convinced that to build a brand today, you need PR. At one time advertising did build brands. But this was in a simpler America. That America, sadly, is no more.
I’ve been re-reading The Fall Of Advertising & The Rise Of PR, by Al and Laura Ries, and it is their book that has moved me from suspicion of advertising’s demise as a brand-builder to conviction.
As the Ries’ say, “Publicity is the nail, advertising is the hammer.” What does this mean? It means that your PR effort helps make your message believable so that your advertising will have credibility when it hits.
Typically, companies want to hit the market hard and make a lot of noise. Advertising allows you to launch quickly, control the message, and have your message in as many media as you have the money for. However, that does not mean your message will be believed. The louder advertisers yell, the less likely I am to believe them. How about you?
PR takes time and does not necessarily work on your schedule. Planting new ideas or changing minds is a slow process. When your PR program rolls out over a longer period of time, prospects have time to adjust their attitudes. Brands that take this approach are longer lasting, too.
Chevrolet, for years the number one auto brand, was still number one in ad spending in 2001. It spent $819 million dollars – 39 percent more than Ford spent. That year, Ford outsoldevrolet by 33 percent. Since 1997, Chevrolet has outspent and undersold Ford. Chevrolet spends $314 per vehicle and Ford spends $170 per vehicle. Do you think advertising is working for Chevrolet?
Kmart, embroiled in financial difficulty for years, had revenues of $37 billion and spent $542 million on US advertising in 2001. Wal-Mart spent $498 million and garnered four times the revenue: $159 billion split between its Wal-Mart and Sam’s Club stores. The average Wal-Mart store does $46 million in sales each year while its Sam’s Club average store sells $56 million. Sam’s Club does almost no advertising.
Those are old brands, you’re saying. What about some newer brands, Harry?
OK, let’s look at Pets.com. Remember the dog sock puppet that starred in their commercials? It won awards, but not sales. In six months Pets.com had $22 million in revenues and spent four times that much on advertising. Off-base advertising creativity at work.
The Body Shop was built totally by publicity. No advertising at all. Starbucks, until recently, did virtually no advertising. It has built a brand through good PR efforts. Starbucks’ annual sales are around $1.3 billion, while advertising expenditures over 10 years, have totaled less than $10 million.
Finally, what advertising agency do you know that has built its brand with ads? Things that make you go “hmm.”
Harry Hoover is managing principal of Hoover ink PR, http://www.hoover-ink.com. He has 26 years of experience in crafting and delivering bottom line messages that ensure success for serious businesses like Brent Dees Financial Planning, Duke Energy, Levolor, New World Mortgage, North Carolina Tourism, VELUX and Verbatim.
Do I Need An Advertising Agency
Many small to medium size businesses struggle with this dilema. They may have even had an agency before. They liked the new ads that are done in a professional manner. And, they loved pushing salespeople off on thier agency. But, the owners simply want to keep more control of their business, including the marketing. The fact is, business owners write the checks and most are quite frugal. They see all the money that goes into an agency. And it’s not just the 15% commission from their media buys. They also gey billed for copywriting fees, creative fees, production fees…Well the list goes on and on. So, yes they need an agency, but they don’t want someone else spending their hard earned dollars.
However, there is a new approach at Pique Creative in Greenville, SC. Each person has 20-30 years of experience from large agencies, but now are a team of freelance artists, copywriters, media buyers, etc. It’s advertising a la carte! Just choose the advertising help you need. They even give rebates (from their media buys) back to their clients to use for creative fees. Or, if you don’t need media buys, you can just use thier creative services from all over the USA. Print ads can be purchased for newspapers, magazines, collateral, etc. Pique Creative will produce professional print campaigns and
e-mail PDF copies of their ads to you. The ads can be e-mailed back and forth until final approval. Then, payments can be made using PayPal.
Thus, you can have control of your marketing dollars and still have a well designed professional look for your company. Your ads will have that ad agency appearance, but at much more reasonable rates!
And, they will be designed for your target audience!
Please visit their web site: www.wholesaleinserts.com
Andy Anderson is a partner in Pique Creative, with over 20 years of advertising experience. He also owns Wholesale Inserts, a print shop for low cost, high quality newspaper inserts, brochures and direct mail. Please visit that web site at: www.wholesaleinserts.com
Let’s Reinvent the RFP Process to Work Better for All
If companies used the same process to hire chief marketing officers that they use when selecting advertising agencies, the wheels of commerce would grind to a halt. Imagine a CEO saying “We need a new marketing vice president. Call purchasing.” This is happening in corporate America as the advertising business is seen as a commodity entrusted to the lowest possible bidder.
Gone are the days when advertising agencies were selected on chemistry, powerful ideas, and personal insights that translate into industry defining work.
Today, among the last considerations are chemistry and quality of interaction between agency teams and client. Many clients are dictating price, service terms, and advertising strategy in a take-it-or-leave-it approach that leaves agencies scratching their heads.
“Advertising purchase decisions are often handled by corporate purchasing agents. The process is becoming ritualized around return on investment,” says Jim Copacino, founder of Copacino+Fujikado. “I don’t see this changing soon. The only way that agencies can combat this is to focus on creativity and their ability to demonstrate that powerful ideas can change consumer behavior.”
That’s tough to do when more advertising reviews often keep contact with agency people to a minimum. Good matches between clients and agencies used to be made by with a healthy dose of interaction between parties looking for the right talent match, expertise and fit. Agencies inspired to invest in learning a client’s business were greeted with an open door. Clients would form an opinion of an agency by the quality of the questions asked and the thoroughness used in investigating the opportunity.
Today’s politically correct advertising review process deemphasizes interaction. For example, my recent request for an input meeting with a potential client was met with this voicemail reply: “Send me your questions in writing, and we will respond via email to all the agencies. It would be an unfair advantage if we were to answer your questions in person.”
The process isn’t about being fair. It is about finding the firm best suited for the job.
If companies hired marketing leaders the way many select agencies today, hiring mistakes would be rampant. Several candidates would be expected to write complete marketing plans without any interaction with the company or its people. Research wouldn’t be shared. Budgets would be kept secret. Each candidate’s first meeting would be in front of several people where they would be expected to present their plan. Chemistry would be inferred from how the candidates present to a group.
Hiring success is not about skills alone. Attitude, chemistry, leadership skills, personality, building bridges between departments, personal charisma, and personal interest in the product or category are what matter most. This is why companies invest so much management time getting to know their top candidates and finding out what makes them tick.
When the right ad agency joins your team, revenues can escalate and market share can advance. To make the right choice, invest time and effort to narrow the list of candidates to appropriate finalists. Then, invest more time to get to know them in a way that will help you predict what it will be like to work with them over the long haul. Resist all temptation to make the review process an arm’s length transaction. Rather, develop a three-tier process that:
1) Allows you to look at many agency portfolios. The more the merrier. You will be surprised by what you see, and this will help you to develop a quality list of semi-finalists. And, by all means, don’t require submission of 100-page capabilities statements and financial details at this stage. Chances are the best agencies will decline participation. That won’t serve the process of finding superior talent to get the job done.
2) Provides opportunities for semi-finalists to present their capabilities. This should be an open process, inviting each agency to interact with you as they see fit. This will tell you a lot about working with each.
3) Narrows the field to no more than two or three of the most qualified firms. These are the firms that will invest their time, creativity, and resources into demonstrating that they are best for you. Part of the evaluation process should be to rate the way they gather information and how capable they are in gaining insight into your markets. Most of all, let the process be a bit messy. It will tell you a lot.
If clients and agencies alike would follow this process, we’d all be in a better position to do the best work of our lives, and what could be better than that?
If this column hits a collective nerve, let’s continue the conversation by phone or e-mail and possibly organize a seminar or webinar with industry leaders on the RFP topic for a later date.
Bill Fritsch is president of Hydrogen Advertising, an award-winning, Seattle-based advertising agency emphasizing superb ideas efficiently produced. Reach him at 206-389-9500, ext. 224 or email bill@hydrogenadvertising.com. For more information, visit http://www.hydrogenadvertising.com.