State of the Agency
Some interesting stats on this infographic created by Levelwing.com. They tell quite a story. How close to your story is it?
Agency owners need to trust their gut
I talk to advertising agency owners all day long. We talk about staffing issues, new business challenges and the angst that comes with clients. My job is to listen, ask good questions and try to help the agency owner sort things out and plan next steps. Truth be told -- it's an easy job. Because in most cases, the owner already knows the answer. But they don't want it to be right. Agency owners need to stop ignoring that nagging feeling. Agency owners need to trust their gut. Do you think one of your employees is poaching clients and getting ready to start their own agency? They probably are. Are you worried that your new business efforts are too haphazard? They probably are. Concerned that your best client is about to fire you. Yup, it's coming. After almost 20 years of owning my own agency, I think it takes a unique breed to choose that path. I think you have to possess a healthy ego, a sales mentality and you have to be an eternal optimist. You need to see the possibilities and the up side that's right around the corner. But that can do, things will be good attitude can also blind an agency owner to the truth. Especially if it is a truth you don't want to face. So let me ask you this -- has your gut been nagging at you about something lately? Do you find yourself worrying about the same thing over and over? I think it's time to pay attention. Odds are, whatever you're thinking (good or bad) is right on the money. You've earned that gut instinct through decades of doing business. Don't dismiss it or ignore [...]
How to make time to work on the business
Every agency owner knows that they need to devote more time and attention to their business but they're so busy helping clients with THEIR business, it's tough to carve out the time to take care of your own. Any time I chat with an agency owner, they admit they struggle with the same issue -- how to make time to work on the business. Agency owners need strategic planning tips in order to make time to work on their businesses. Every agency owner knows the way to more profits, more success and ultimately, more satisfaction is to invest the time to not only serve your clients but to work ON your business. To think strategically about how to improve what's already working, fix what's not and plan for the next zig or zag you need to make. But, as I meet with agency owners from all over North America -- I find that most of them really struggle with this. Are you wondering how to make time to work on your business? Here are five strategic planning tips that will get you focused on YOUR business and not everyone else’s. Re-think your relationship with email: Email is like crack cocaine for most agency owners. Between their laptops, tablets and smart phones, they are checking email several times an hour, feeling this burning sense of urgency to answer within seconds of receiving the latest. If you want to find time to work on the business, you'll need to tame your email addiction. Here's the reality. If a client or staff members needs you, they will probably send an email first. But if they don't get a quick reply -- what do you think they'll do next? Right [...]
How Much Money do Marketing Agencies Make?
How much money do marketing agencies make? Learning how to move your advertising agency to value based pricing means you’ll need to talk a little differently to both your internal staff and your clients. It’s going to take some effort and time to make the shift. Earlier I talked about why value pricing should matter to agencies and how you can help clients understand the value of it. Agencies that have made the leap offer these words of advice: It’s easier to move prospects and new clients to value pricing, so start there. Once you help clients understand how it works to their advantage, they’ll be ready to try it. Be prepared – you will undervalue yourself in the beginning. You’ll get better at it. Not only is it better externally, but your staff will get a boost from being paid what their work is worth, rather than an hourly rate. It begins to change the way clients view the agency. It takes us out of the procurement realm and makes us more of a consultant/partner. This takes time. It took us over two years to completely make the shift. But it was worth the effort. Use your value based pricing position as a way to sell against other agencies. Create a page on your website or in your RFP deck that explains why hourly pricing is to the client's disadvantage. (see my blog post from earlier this week for some of the reasons). Explain that you decided to move your advertising agency to value pricing because of these disadvantages. With new clients -- simply change the way you price projects or programs. Rather than breaking down the project by job functions or number of [...]
Value Pricing Strategy for Advertising Agencies – It’s Time
Value pricing strategy for advertising agencies? Yes -- the time has come. At several of our AMR network meetings, we've had Ron Baker, author of Implementing Value Pricing come speak. Agency owners are fired up after being exposed to Ron's ideas and leave, ready to either start or continue their transition to value pricing. The billable hour was introduced by a law firm back in 1919. So were locomotives, dial telephones and prohibition. Trains and phones have certainly evolved thanks to changes in both society and technology, and prohibition was such a bad idea, it went away entirely. And yet the billable hour remains. One could argue that in many agencies, it's evolved and now we talk about a blended rate or a modified compensation model. But by and large, most agencies still bill their clients by the hour. And it's time for it to go the way of prohibition. Away. The argument has raged on for years. Agency leaders and clients both know that every agency hour is not spent in the same way or worth the same amount of money. In hour one, an account executive comes up with the strategy that will propel the client into market domination and in hour two, the same account executive writes a memo, reflecting back the action steps identified on a recent phone call. Same professional. Same client. But hardly the same work or the same value. Our industry is slowly coming around to the idea that an hour is not like any other hour and we need to start selling our value, not our time. Here are some of the more recent events that suggest we're heading in the right direction: Coca-Cola has innovated a [...]
How many hours should ad agency employees work?
How do you track billable time in an agency, and how many hours should ad agency employees work? This is a question that comes up all the time in my work with agencies. The expectation in terms of a work week ranges from 37.5 hours a week to 50 hours a week although most agencies will say 40 in terms of hours worked in a week. So that gives us a range from 1950 hours a year to 2600 hours a year with most people citing the 2080 hours a year number (40 hours/week). But given an average of 3 weeks of time off (vacation and sick) and 10 work holidays (which translates to 5 weeks off) that gets you down to 1762.50 (37.5) to 2,350 as a range with 1880 hours a year being the 40 hour work week average. So when you think about how you're going to track billable time, the rule of thumb is that no employee can be billable 100%. So here’s the best practices expectations by job function: Project Managers/Production Managers — 80% which is 1,504 hours at the 1880 hours in a year model Sr. Account Staff who have more admin/new business responsibilities — 70% which is 1,316 at the 1,880 hours in a year model Account Executives (jr and mid range) -- 80% which is 1,504 at the 1,880 hours in a year model Creatives (writers and art directors) -- 75% which is 1,410 at the 1,880 hours in a year model Media — 90% which is 1,692 at the 1,880 hours in a year model And then you have your admin folks, who if you can get 25% billable time from — that’s great. The [...]
Results from the small and medium advertising agency survey on salaries and benefits
For the past 12 years, Agency Management Roundtable has conducted an annual salary and benefits survey looking at the trends in small and medium sized agencies. The survey results report allow agency owners to compare their salaries by position with how the rest of the country's salaries. The results are also presented by agency size and region. For the first time in several years, salaries seem to be on the rise, albeit a modest one. We’d seen flat or declining salaries over the past several surveys. This and several other indicators in the report seem to suggest that the recession’s toll on agencies is beginning to recede. A new trend appeared in this edition of the AMR Salary Survey as well. More agencies (18%) do not have an in-house copywriter. As freelancing and contract labor options become easier and more plentiful, it will be interesting to see how this trend evolves. It seems to fly in the face of all the Content Marketing push that is being driven by social networks and the rush to digital marketing spaces. Agencies, like all small businesses, are clearly struggling to offer their employees healthcare coverage. Over 90% of agencies surveyed offered their employees some form of health insurance and contribute to the costs at some level The 2012 AMR Salary & Benefits Survey Report is available for purchase at $99 The 2012 survey of advertising agencies’ employee compensation was conducted by the consulting firm, Agency Management Roundtable (AMR). The firm is the only consulting group that focuses on marketing communication agencies employing fewer than 50 people. Over the past twenty years, AMR has worked with several hundred advertising agencies, public relations firms, graphic design companies and new interactive [...]
Project Management Tools for Advertising & Marcom/PR Agencies
Looking for ad agency project management software? You're not alone. I don't think there is an agency on the planet that doesn't struggle with managing dozens if not hundreds of projects on a given day. So many details, so many cooks in the kitchen and so many consequences if a single detail gets lost, misunderstood or forgotten. There's good news and not so good news and downright bad news on the project management software front. The good news is -- there are lots of excellent software choices out there at all price points. The not so good news is -- no one software is the magic bullet and does it all. You're going to have to make some compromises. The bad news is -- the garbage in, garbage out rule is as true today as it was 20 years ago. These project management software systems could be great for your agency, but if you and your team don't use them regularly, well and with discipline -- you will end up walking away frustrated. While I am sure this list is not exhaustive, here's a good sampling of the most commonly used project management tools for agencies. Click on any of the names to check out their website. Some on the list are specifically for project management. Others will let you do time sheets and there are even some that are project management and full-on accounting altogether. One of the newer entries, Zerys is mostly a custom content management system but also includes project management functionality. So there's a little something for everyone. 10,000 Feet Advantage AgileZen Basecamp BizPad Copper CurrentTrack FunctionFox Function Point Intervals Paprika Project Manager Robohead eSilent Partner Traffic Vertabase Workamajig WorkZone Zerys [...]
