Millennials will soon take over as the leaders of the workforce, and we need to be ready for their preferences. They are used to more advanced technology than we had at their age, and their access to social media and other communication platforms during the Great Recession means they think of things like money and value in a much different way than generations before. My agency also recently surveyed 1,000 agency employees to learn more about this generation’s mindset. I draw upon my own experiences, our research, and other sources to help agency owners understand how to manage millennials. Create True Transparency: To millennials, real transparency means increased context fueled by the desire to engage and connect with those around you. So next time, tell your millennial employees what could be improved or how their efforts have helped the business grow. And don’t be afraid to be honest about why a competing agency might have won that valuable client (and what the team can do collectively to get better). Get to know your millennial team members as people, not just as employees. Ask about their interests outside of work, and inquire about their weekends on Monday mornings. These little connections can add up. Help Them See How They Fit Into Your Agency: Millennials have a lot of options in front of them, causing a struggle to make important decisions about their future, further leading to confusion about their identity and purpose. Social media platforms like Instagram and Twitter nurture this; younger generations always have someone to compare themselves too. Millennials are accused of being “job hoppers” because they always see greener grass on the other side. With all this in mind, leverage the compassionate side [...]

When digital was a novel offering, we saw agencies with that narrow focus receive extravagant valuations.  Today, digital expertise has become a given rather than a point of differentiation. I heard the comment at an AMI event that basic online digital services are part of the “table stakes” that every agency must put up in order to be seriously considered by a prospective new client, or by a current client for some types of projects.  That is consistent with my experience. Most agencies have it in-house and the others outsource it. But it’s a very rare agency today that just doesn’t offer digital services. So, how do advertising agencies charge for services? Agency values continue to be simply defined as a semi-subjective combination of profitability, size, the client list and the services the agency routinely provides. There are plenty of other factors that influence the final number but we always start with these. So, what about the seller’s goals?  Many agency owners begin down the path of selling their agency only to quickly retreat once they are shown the valuation and what they can hope to get as a purchase price/package A very important aspect of the transaction is the actual structure of the deal. How, how much, and when are you going to get paid?  In many cases, the sales price doesn’t matter as much as when are you going to get paid. First of all, how much cash are you going to receive at closing?  What can you expect? And, how negotiable is it? Managing Your Margin Let’s assume that your agency is profitable, with a respectable margin.  Say that the net margin is 15%. (Note: net margin is the percentage of revenue [...]