Inside Look: An Advertising Agency Search Consultant

An Inside Look At The World Of An Advertising Agency Search Consultant

screen-shot-2016-11-17-at-8-48-13-amThis interview is all about the world of an advertising agency search consultant and how your firm might get on their radar. To understand this world, I interviewed leading consultant Russel Wholwerth of External View Consulting Group. The interview is in my book, The Levitan Pitch. Buy This Book. Win More Pitches. Sales message coming… buy the book at the top of this page. I’ve sold lots to your competitors. By the way, I know for a fact that everyone that has read this book is now much better looking, smarter, richer and thinner.

Go Forth

If you think that your agency isn’t ready for the primetime of being vetted by an agency search consultant, here are a couple of Russel’s insights that are s applicable to even a two-person shop – tone-deaf is not a good thing:

PL: Conversely, are there any standard presentation blunders that agencies make — over and over?

Russel: Agencies can often appear tone-deaf to the client’s needs. These agencies tend to be intoxicated with their own attributes like the number of offices they have around the world.

Here is one more BIG insight:

Russel: We get at least 20 to 30 inquiries from agencies every week. Most agencies act as if they have no clue how we operate or that they will need to really stand out to generate interest.

Imagine, this is how some agencies run their business. Read on…

External View Consulting GroupRussel Wholwerth is the owner of External View Consulting Group. He has been advising companies around the world on all aspects of marketing agency supplier management for 15 years. He is a serial entrepreneur who was an owner of Select Resources, a founding partner of Ark Advisors, and the founder of External View. All three have conducted thousands of national and international agency searches. just some of russel’s advertising clients are in the graphic at the left.

PL: What are the primary benefits that you offer your clients?

Russel: We provide intimate knowledge of a wide range of marketing resources. Beyond just knowing who the agencies are, we visit several hundred agencies a year, so we have a pretty in-depth knowledge of many agencies.

We have over 15 years’ experience running agency searches, so we can advise on the most appropriate way to run a search. One size does not fit all. Therefore having this depth of experience and starting from a position of independence are major benefits.

PL: Since agency compensation is such a hot topic, can you tell me how agency search consultants are remunerated? Is there a standard fee?

Russel: I can’t talk about how other consultants are compensated – and I would be careful not to generalize because I think there is a broad spectrum of methodologies. I will focus on how we determine our fees. We have fee ranges for searches, which are predicated on the anticipated number of man-hours it takes to complete the job. International searches take a lot longer to complete and often have significant travel requirements, and they are not priced the same as domestic searches.

I have heard that some consultants charge a back-end fee to the winning agency. We work for clients – not agencies – so we would not do this.

I also think you have to factor in the large number of consultants who charge agencies some type of fee. They charge clients less for searches since the agency fees are subsidizing the cost of the search.

PL: Do you have an optimal agency search system? Do you always do an RFI, then an RFP, and finally chemistry meetings that lead to the selection of a shortlist?

Russel: There are many different types of searches: you can’t do the same process for a media search as you would a search for an events marketing agency.

We have an approach, but not a process. Each project is different, and we build the process to meet the unique needs of each client. You have to perform some level of diligence, and that can take many forms. Chemistry is a critically important part of sourcing professional services firms. To us, the question is what level of diligence needs to be done, and what is the metric by which the agencies will be judged? The more senior the client, the more creative our approach to the search.

PL: How long does the selection process usually take?

Russel: The typical domestic search takes about 12 weeks.

PL: What percentage of your searches now include procurement?

Russel: For us, about 75% of searches involve procurement. In some cases, we are hired directly by procurement. In other cases, they are an observer until we get into the RFP stage.

Are You On The List?

PL: How do you build your database of agencies? For example, you recently completed a pitch for the Panda Express account that was awarded to Omaha’s Bailey Lauerman. How did you find an agency in Nebraska?

Russel: We have over 9,000 agencies in our database, and we subscribe to several other services that provide us with agency names. We ask that agencies register on our web site.

PL: I assume that you get a lot of incoming from agencies. How could a small to mid-sized agency get your attention? What attributes should they have before they bother making contact?

Russel: We get at least 20 to 30 inquiries from agencies every week. Most agencies act as if they have no clue how we operate or that they will need to really stand out to generate interest.

Great work will always get our attention. Also, agencies that are off the standard deviation curve excite us. Too many agencies sound and look alike.

PL: Are awards important to your clients? Bailey Laureman won Ad Age’s 2013 national Small Agency of The Year. Is this type of industry recognition important to clients?

Russel: Awards are important in that they provide external third-party validation. However, not all awards are equal. Awards that measure effectiveness and creativity are more highly valued, as are international awards due to the level of competition. Many clients are reluctant to hire an agency they have never heard of, so this external validation is useful.

Furthermore, awards are a way for agencies to get on the map. We pride ourselves on being one step ahead of the formal recognition by being aware of these agencies before they are on the radar screen.

PL: Do your clients usually ask for spec creative? If so, how often does that work eventually get used?

Russel: The majority of clients desire spec creative. In some cases, when a company needs a new campaign, spec creative is justified. For most clients, spec creative is the metric that decides the winning agency.

We have observed over the last 15 years that the agency that wins a spec creative contest is not necessarily the agency for the long haul. In other words, spec creative is not necessarily a good measuring stick for determining the most appropriate agency. Spec creative sometimes get used, but most of it ends up on the cutting room floor.

PL: Many agencies tell me that they do not know what other agencies are in the pitch. What is the point of this cone of silence?

Russel: We usually try to keep the initial long list confidential for political reasons. For a popular brand search that gets in the press, it is not uncommon for us to receive inquiries from hundreds of agencies (of which most are appropriate). Publishing a long list of agencies in that case just gives these agencies another reason to demand to be included in the process, because so-and-so is in the pitch. We always disclose the agencies at some point in the process.

Agencies need to understand that most agency searches are not government tenders in which there is an obligation to the public to disclose all aspects of the process and all bidders. This is a private-sector procurement process, and there is absolutely no obligation to make any aspect of the pitch public.

Let me throw the question back at you. Why do agencies need to know who is in the pitch? Will they pitch differently? Will they pitch harder?

PL: I think that once the client selects the short list, they should share it with the finalist agencies. This information helps the agencies to do at least two things. First, it provides a way for the agencies to make one final determination if they should go through the grueling effort of pitching the account. Second, this competitive intelligence might help the agencies to hone their point of view and ensure that they craft a unique, and competitive story. This should benefit the client.

Russel: We always disclose who will be in the finals as well as the role and title of each client attendee.

PL: Some agencies spend tens and even hundreds of thousands of dollars on pitches. Is this crazy, or is it what it takes to win?

Russel: Beyond organic growth, pitching is a way to grow an agency. The new business win rate is also a critical indicator of agency health and vitality.

I suppose an agency owner could be delusional and wait around for prospects to inquire if the agency would handle their account. Or, they could invest in a new business program. Agencies that do not win any new business are often dying agencies, so I think it is crazy not to invest in your future.

Good agency financial managers will realize there is an ROI associated with new business, and they will decide what the appropriate level of investment should be to increase agency billings by $X million.

PL: I’d imagine that by the time you get to a short list, any one of the agencies could do great work for the client. What have been the presentation factors that have helped you make the final decision?

Russel; In many cases, it comes down to proving that they are good listeners who are focused on the client’s key issues and requirements. Agencies should concentrate on demonstrating their understanding of the client’s business, and category, and come to the presentation with great ideas.

PL: Conversely, are there any standard presentation blunders that agencies make — over and over?

Russel: Agencies can often appear tone-deaf to the client’s needs. These agencies tend to be intoxicated with their own attributes like the number of offices they have around the world.

PL: What makes a great leave behind? Does having an expensive “creative” leave behind make a difference?

Russel: The leave behind should be a record of the presentation and provide information that the client can refer to in their deliberations. I am not a fan of crazy boxes. Many leave behinds today are digital and use custom landing pages and simple USB drives.

PL: Final question. You’ve mentioned that many pitches use an antiquated approach based on the world of 1980’s TV advertising. Given today’s complex media and multi-platform marketing environment, what decision-making metrics and values should clients be looking for?

Russel: Media today is much more complex than in the TV days, and agencies should look like collaborators who can work in teams. They should look like they can move on a dime and be able to discuss how they create fast-paced social media programs. Case histories are especially important here.

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Here is an interview that Mitch did with me about my pitch book. 

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