Peter Levitan & Co.
The New Business of Advertising
I’ve written about the potential of chatbots as an advertising agency revenue and new business source. Read about it here on HubSpot and here on my blog.
If you have any reason to think that chatbots are NOT going to be a major part of the digital world & your marketing, listen to the leaders of Facebook, Microsoft and Google on what they are up to.
Check out my article
My article offers three big takeaways (I mean immediately actionable takeaways) for your ad agency and its new business program:
On the subject of reach… after only a couple of hours, my post was shared lots. See….
Last point. Here is the video ActiveBuddy made 14 years ago to launch our company. You’ll see that I thought bots were a big fucking idea then. I still do.
Are you overwhelmed with AI Information? Of freakin course. Here are five sources for new AI information that I use to stay ahead of the daily barrage of AI news. I devote about 10 to 15 minutes a day—max to learning and keeping up.
Since the last thing you need is too much information, here is a short list.
Marketing Intelligence Institute: From Paul Roetzer (super smart marketer for eons) on how to use AI in marketing and advertising. Read it, attend their seminars, and listen to their “Artificial Intelligence Show” podcast. Do it!
Decode: A daily news and info resource. Decode “unlocks exclusive access to Decode’s ultimate AI tool book, with 500+ verified, vetted, and powerful tools across 40+ categories.” Includes AI tutorials, lists of what’s new, etc. A smart one.
Superhuman: Yes, more info and news. Their words — “Learn how to leverage AI to boost your productivity and accelerate your career. Join the world’s biggest AI newsletter with 650,000+ readers from companies like Apple, Amazon, Google, Meta, Microsoft and more.”
AI Tool Report: Yes…. More… “Learn AI in 5 minutes a day. We’ll teach you how to save time and earn more with AI. Join 500,000+ free daily readers from Tesla, Apple, A16z, Meta, & more.”
Matt Wolfe: A rather beyond decent YouTube channel dedicated to AI.
Remember elevators? You know, those things we rode multiple times a day to get to and from an office or hotel room? The fleeting elevator ride spawned the idea that we need a way to describe ourselves or our company in 30 seconds or less – what we call an elevator pitch. This 30-second or less exercise is very useful since in our very attention-deficit world, our world where so many of us do the same thing and can sound very much alike (“hi, we are a creative advertising agency”, yada…). You get the idea.
One of my ad agency clients asked me to help her quickly and succinctly describe herself for her appearance on an upcoming online seminar. By coincidence, I received an invite to a SharpSpring event and noted how a bunch of advertising agency and marketing thinker and influencer types described themselves. I noted their self-descriptions as food for thought. Food for elevator pitch thought. Just for the hell of it, here are ways that very successful marketing thinkers describe themselves.
Hype-free digital marketing and customer service strategist.
Recognized as a top 100 entrepreneur under the age of 30 by President Obama.
Leading authority on positioning and reinventing in the creative and digital space.
Internationally recognized speaker & contributor to Ad Age’s Small Agency Diary.
Ranked one of LinkedIn’s Top Ten Voices in Marketing for four years in a row.
Works with 250+ agencies every year. Latest bestseller – Sell With Authority.
NYT bestselling author of nine books and counting.
Named among the 30 best young tech entrepreneurs under 30 by Business Week.
Host of the smart agency master class podcast. The number one digital marketing agency owner podcast.
Content marketing guru featured in NYT, Mashable and search engine land.
Agency business expert keynote speaker author and virtual event trainer.
Author of 19 international bestsellers, and one of the most popular bloggers in the world.
Digital marketing pioneer, Wall Street Journal bestselling author and tiny house owner.
Bestselling author and host of award-winning YouTube series.
I’ve had deep conversations with hundreds of advertising agency management leaders on how to manage and grow their agencies — full-service, specialists, digital, and PR. I am about to condense these down to 22 core lessons.
I feel the need to have you visit The Big Advertising Resource List. Now or after you read my 22 insights = grow your agency ideas. i include some AI resources that can help you streamline your in and outbound content and BIG ideas.
I’ve been working in the advertising, digital, and Internet startup worlds since the end of the Mad Men era. My global and regional clients and new business wins include J&J, Intel, Nabisco, Northwest Airlines, and Nike. I’ve built websites and digital programs for Microsoft, Nabisco, Honda, LegalZoom and more. I founded, invented, and ran the best-read online news website and invented industry-leading marketing bots.
I’ve made hundreds of business decisions. Some were brilliant and some were “learning experiences.” I’ve decided to share my top 22 business-building and management lessons with you. No, I am not so crazy to think that these will instantly make your advertising agency the next Droga 5. But I do know that most of these lessons represent best practices that, if followed, can help make you more successful. That means being richer and happier.
The path that got me here included sixteen years at Saatchi & Saatchi Advertising Worldwide as Business Development Director North America, General Manager of the Minneapolis office, European Director in London, and Management Director in New York. I left advertising for seven years to be CEO and founder of two Internet publishing and technology startups. One, NJ.com, was a major online newspaper that was larger than the NYT for a couple of years. Microsoft bought the other company that created technology that allowed people to have meaningful ‘human’ conversations with a computer (pre-SIRI). If you were online in the early 2000s, you might have talked with our SmarterChild bot on instant messaging platforms. Over 20 million people did.
After my digital sojourn, I moved from New York to Oregon in 2002 to buy the advertising agency RalstonGroup. In the ten years that I ran the 2-office agency, we bought the sports marketing agency Citrus, took their name, and added clients like Dr. Martens, Legalzoom, Montana Lottery, Nike’s college and Major League Baseball AOR accounts, university accounts, and the U.N.
I sold Citrus in 20013 and write about that sale and the other buys and sells I’ve done, plus how to add value to your agency in the PDF book you can get by signing up for my newsletter or just ask me via email – peter@peterlevitan.com.
By the way, I now run an agency consultation business. Hopefully, that’s why you are here on my website. I help agencies find their positioning sweet spot and build action-oriented business development plans that create significant market differentiation and make the agencies Unignorable. My experience as a consultant and the opportunity to look under the hood of many agencies has confirmed that the following ideas can help add value to most, if not all, agencies.
I offer my advertising agency management thinking as advice. There are many types of agencies and not every pearl of wisdom will work for every agency. However, there are some basics that I think you should listen to and modify accordingly. I know this because I have done planning with two-person agencies up to the holding company level.
OK – GO
1
Have a two-year agency business plan. You’d be surprised how many agencies do not have even a basic business plan – like knowing how they make money. My agency’s plan helped us grow the agency’s valuation through an acquisition, open a second office, pitch and add Nike AOR business (which helped us gain even more desirable clients) and develop a focused; high-energy; 24/7 new business program based on direct marketing and social media. —- Note to the 45+ crowd. The plan also acted as a framework to begin to position the agency for an eventual sale.
2
Create an agency brand positioning that differentiates your agency from the other 4,000 agencies out there. I know, I know, you’ve heard this one before. But, having a viable agency brand positioning is critical. More importantly, have a powerful & unignorable brand positioning — in reality, it’s really a sales proposition. One that actively attracts and stimulates interest from the right new clients. Here is the most critical thing I learned in my own agency’s positioning development process: Just trying to find yet another new way to say “digital” or “full-service” agency isn’t good enough. It’s really difficult for any agency to find a brand new way to enunciate the same old and generally non-competitive pitch like “full-service.” Some potential clients might want full-service but find a way to say it with style. Note I have a great example from a London agency that runs global Fortune 500 campaigns out of one office.
Maybe you should go even further. Given the rapid pace of change in our industry, it might be time to think through some agency of the future scenarios and business models that will more effectively get you to a truly distinctive and compelling sales proposition that lasts more than six months. Double-digit growth areas like mobile or video marketing might be smart places to start.
3
You are a business first. Control all costs. This sounds obvious, but it is critical in an increasingly low-margin service business like advertising. My metric was that every dollar I paid to someone else was a dollar I couldn’t hand to my kids.
4
Stare at your financial numbers – often. We, advertising people, are visual types so Citrus used dashboards as a graphical agency management tool. We had detailed monthly financial dashboards tied to our P&L, balance sheet, accounts receivables, and owner compensation (this one tended to focus our business decisions.) We also used a real-time agency SWOT assessment for all major agency decisions like mergers and acquisitions, go-no on RFPs and to help manage existing accounts and staff.
5
Be concerned if any single client accounts for more than 25% of your revenues. When we added two Nike AOR assignments, I got nervous in addition to elated and accelerated our new business outreach to add other accounts. Give me a shout and I’ll tell you how we added Harrah’s Casinos during that effort.
6
Learn how to say no to clients and prospects who want too much free or low-cost brainpower. Your brains, ideas, and pixels are all you have to sell. Charge like a lawyer or even SEO specialists that charge like lawyers. It is time for our industry to exhibit some self-control. If you have to give too much away for free, it might be time to examine the value of what you are selling and the mindset of your client or prospect.
Also, say no to the wrong RFPs and pitches.
7
Think about an alternative to the notion that brainpower and creativity are all you have to sell. Take some of that brainpower to find out how to create a product or service of your own that can easily be replicated and sold over and over. Create or buy some Intellectual Property. This can be done and does not require scientists from SpaceX. Think like a “start-up,” and hey, “let’s build some IP” can sound like an obvious panacea. However, there is gold in them thar hills that do not require moon landings. There are agencies teaming up with brewers to create new craft beer brands, agencies moving into valuable yet fast and cheap research and agencies like Wieden+Kennedy and RGA becoming start-up incubators. I asked W+K why they are doing this. The answer… they are investing their brains and experience to make more money in a world that Mad Men couldn’t have conceived. If you need seed money for a new venture, try crowdfunding.
Think big like the kid down the street. I bet your team could build one of the more effective Kickstarter sites.
8
Hire only exceptional people – that’s what Google does so why not you? Do not rush to fill an open position. You will pay in the long run. You can train people but you cannot increase their IQ. Once on the team, make sure to keep all employees are firmly in the loop via scheduled agency meetings and email agency updates. It takes more than a foosball table to build a business-building culture. CEOs need to talk it up. I have always subscribed to Tom Peter’s management concept of MBWA. Look it up.
9
Reward only your best employees. You don’t owe anyone anything. There is no question that an exceptional employee is as valuable as two marginal people. Does this sound harsh? This approach beats not having investment capital for growth or having to go out of business because you were a bit too magnanimous.
10
Miscast or problem employees should be dealt with earlier than later. Gary Vaynerchuk has fired the “wrong” hires within their first two weeks.
11
Grow your digital assets faster. Bring on more technologists (FTE or freelance) to leapfrog even early adopter digital agencies. Pick a growth area. It’s not too late to become the smartest TikTok agency (no one is yet.) Not even the big boys have TikTok figured out. However, it may be too late to be known as the best “social media agency” given the vast sea of social experts. One more digital point, and I know that you know this — digital agencies have a higher multiple than full-service agencies. If you want to sell in the next three years, you best add MORE valuable digital skill sets.
12
Please provide exceptional client service. All AE’s must know how to think like a client in order to anticipate client needs and address any potential issues before they materialize and metastasize. Consider sending your AE’s to an AE class where they learn advertising agency management, customer care, how to intelligently upsell clients, how to retain clients, and how to charm. The worst call I could ever imagine is a client telling me that our account service sucked. It’s just too easy to fix. Fixing creativity is much harder.
13
Process rules. Create an agency work process that is dedicated to profitability. Manage your scope of work promises. Then stick with it. The ever-elastic creative process must be tamed. Agencies that do not manage scope of work die. If you need a work process template ask me and I’ll shoot you one. [Read more…] about Advertising Agency Management 101