Business and Economy

Managing in a renewing economy (part two)

Agency management can be a challenge as the economy teeters back and forth between recovery and residual crud.  Things feel like they're getting better and according to all the agencies we're talking to -- they are.  But it's not all blue skies yet. I'm not trying to go all Eyeore on you...but let's stay careful. We've developed 25 helpful agency management steps you should consider as you move your agency through these turbulent waters.  Last week, we posted the first 13 steps and here are the final 12. Demonstrate to clients and suppliers that you are thorough, organized and committed to best business practices. Know where the agency's "breakeven" point is, and make sure you include the full salary and benefits of the owners. You'd best know where the worst case and best case scenarios are hidden. Continue to be aggressive and persistent in your Accounts Receivable. Call on all overdue invoices and let AEs help on collections that are coming up on 60 days old. If you have extra space created by a shrinking staff over the past year or so, think about renting the extra space out to a business partner, like your web coder or PR group. Tighten policies that were too casual, and don't get too liberal with your budgets for supplies or services. Keep costs under control. Economic hardship taught you to institute tight financial control over costs. Don't let up. If you are still going to pursue getting mark- ups on outside purchases, make sure they are spelled out in advance. If stated "up front" it rarely is a problem. Check your banking relationship. If you borrowed during these past tough times, go to the bank and review your performance, [...]

Digital only agencies aren’t making the grade

According to the Q2 Pearlfinders Index, which is digital marketing research based on interviews with more than 4,000 marketing executives across all industries --  digital and social media services have become more sought-after disciplines, while consumer PR, though still popular, is becoming less of a consideration. However, agencies that only offer digital services are not getting the nod. Despite shifting their budgets towards digital and social media, 3 in 4 marketers aren’t using exclusively digital agencies for their social or digital needs, and the majority of those don’t foresee using them in the near future, according to June 2012 survey results from RSW/US. In fact, only about 2 in 5 think such agencies can survive, with the remainder believing that digital agencies need to offer more traditional services to maintain their relevancy. In Q2, among the times that marketing decision-makers advised that they were considering a particular service category, digital made up 19% of these demands, up from 13% a year earlier. Similarly, social media was mentioned 17.1% of the time, up from 14.1% in Q2 2011. Consumer PR, at 14%, was the third most-desirable discipline, though it fell from 18.6% a year earlier. Advertising and corporate PR rounded out the top 5 desirable agency disciplines for Q2 according to this digital marketing research, though both fell substantially from the previous quarter. Customer Acquisition the Dominant Marketing Objective In Q2 2012, companies’ primary customer marketing objective was acquisition (93.8%), compared to just 5% focusing on retention and 3.8% on development. A year earlier, 71.3% had focused on acquisition, with retention (17.1%) and development (11.6%) figuring more prominently into the equation. Other Findings: NPD/innovation was the strongest source of opportunity for agencies, accounting for 35% of new business opportunities [...]

Commandments For Running An Advertising Agency

Several years ago I ran across a little ditty by Joe Adams that I've kept around just to re-read and remind myself of what business I'm in. Joe called it his Commandments for Running An Advertising Agency. It's a good reminder to all of us  that it takes is a little common sense, enthusiasm and guts. So, here they are: Thou shalt market from the top down. (Call on the best fit prospects first.) Don't work for bastards - and don't be one. (Pick people you want to work for. Take on ones with great potential. You must like your clients.) Thou shalt learn to speak in numbers. (How much, what will it cost - that is what clients want to hear.) Thou shalt be creative. (Creativity can be learned.  Being creative is believing you are creative.) Eat bran flakes and hire competitive people who like to win for your agency and your clients. Be conspicuous. (You must make your agency stand out. Don't copy your competitors.)  Thou shalt think business. (Clients have business problems. These problems are our opportunities.) Thou shalt be emotional. (Most advertising is boring. They are afraid to be emotional. People don't buy because of facts; they buy for emotional reasons.) Learn to say "No!" Hire people that are smarter than you are. Thou shalt have fun! (Do everything possible to enjoy work. Quit your job if necessary.) These commandments are 20+ years old.  How do you think they hold up in today's world?  I modified two of them.  Can you guess which ones?

The economy is pushing agencies into vendor roles

Earlier this week, we kicked off a conversation about why agencies find themselves relegated to vendor status.  If you remember, we identified 3 causes. The economy -- workforce reductions, budget cuts and overall fear (out of your control) Agencies willingness to behave like a vendor just to get the project (within your control) Agencies hiring "nice" account executives who are order takers rather than smart business people (within your control) In this post, we're going to look at what you can do to work around the economy issue. In the current economic climate, ad and marketing managers on the client side are trying to keep their jobs and cut costs. They're seeing fellow employees being downsized are doing everything they can to make themselves look more indispensable to their bosses. One obvious way for them to do this is to bring a lot of the work they normally farmed out to agencies back  in house. Some marketing managers even go so far as to set up an in-house agency, not knowing or not heeding the fact that no in house agency has ever been proven to save money in the long run. (Don’t waste your time or your breath trying to argue them out of this dumb idea. It's one of those "you have to live it to believe it" deals.) It's tough to deal with someone who is operating from a place of fear but that's where a lot of our clients are right now.  They kept waiting for the economy to go back to normal and now they're realizing that this is the new normal.  Now, every dollar they spend is scrutinized and performance expectations are huge.  Human nature drives them to clutch [...]

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