Peter Levitan & Co.

The New Business of Advertising

Peter

How To Build A Profitable Advertising Agency

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It Has Become More Difficult To Run A Profitable Advertising Agency – Here Is How To Do It

profitable advertising agencyThe marketing communications world started shifting in the 1990s when clients moved advertising agencies from a 15% commission basis to fees; from TV, radio, print, and outdoor to an ever-increasing number of digital media options; a couple of recessions and, well, I’ll stop here. I know this because I grew up in the heady high-profit days and sold my digital agency when it became more difficult to run a profitable advertising agency of any kind.

The Michael Farmer Interview… Michael has advised virtually all of the leading advertising agencies from WPP to Omnicom to you name it to help them grow profits by using smarter agency and staff management. Michael also wrote the book: “Madison Avenue Manslaughter: An inside view of fee-cutting clients, profit-hungry owners and declining ad agencies.” Sir Martin Sorrell wrote the forward.

Over the years, Farmer & Company, the acknowledged expert of Scope Of Work (SOW) management has worked with Ogilvy & Mather, Wonderman Thompson, VMLY&R, The Martin Agency, Saatchi & Saatchi, TBWA, and McKinney to name just a few.

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A Bit Of The Interview.  From 360 Deliverables To 15,000.

The only true metric in an agency is the profit margin. That’s profit margin by client, which agencies have a hard time doing. And then profit margin for an office and then for a global client. In order to do that, they have to use timesheet data to figure out what their costs are. And everyone knows that the timesheet data is at least 30 to 40% incomplete. And they do not measure and document their scopes of work. When I worked with Ogilvy in the 1990s, they had 50 creatives and they were doing about 360 deliverables, 360 ads. It was all original work, TV, radio, and print. Even then it took us seven weeks to figure out how much work they were doing for each client today. I just did work with a similar office of 50 creatives. Today they are doing 15,000 deliverables for clients because of email marketing, social posting, Instagram, Facebook, you name it.

And, 90% of that work is adaptation work as opposed to origination work. The workload has exploded in volume and diminished in individual importance. Each little thing that they do is pretty small and doesn’t have a big impact on the brand. The agency and clients still don’t know how much of it is. I’ve worked with, Ogilvy, Gray, VMLY&R, BBD, you name it. I’ve worked with them all. I don’t know of a single holding company agency that has yet developed a methodology for measuring the amount of work they do so that they can better negotiate fees and resources with our clients.

Note, I think that this interview is so Important for any agency of any size that I will put the entire transcript in a separate post.

Profitable Advertising Agency Links

Madison Avenue Manslaughter – The Book.

Farmer & Company

Go here and sign up to get my free book, “How To Sell An Advertising Agency.”

YO – Hypnotism coming: Remember to subscribe to Advertising Stories. Remember to subscribe to Advertising Stories. Remember…

A nice thing for me… Feedspot has recognized Advertising Stories as being a top 15 advertising podcast.

LONDON Advertising Kicks Ass

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The LONDON Advertising Case Study

London AdvertisingI’ve written a couple of blog posts about the LONDON Advertising self-run and crafted advertising campaign. I’ll put those links below.

My bottom line is that in the cutthroat world of advertising and digital agency business development, a critical goal should be to want to stand out. To be what I call Unignorable. These guys are Unignorable. And famous.

But, before looking at my prior posts, here is the video case study. Yes, that is me inside.

Strange, But True. An Advertising Agency Actually Likes Advertising

The LONDON program is an “interesting” story because, well, most advertising agencies do not advertise themselves. Why? Well, first many advertising and digital agencies do not have a well-crafted business development program (beyond WOM and referrals). Second, I’ll guess here, they might not actually think that “traditional” advertising works. Hey, I’m just guessing here.

Here is what I do know… advertising does work; even after 30 years of the growth of digital marketing, The good old fashioned TV commercial and out-of-home ad/poster/now digital still grab attention and sell. I can say this because I have done it all. And, I admit it. I started to invent digital advertising in 1995.

Earlier LONDON Advertising Blog Posts

Is Your Advertising Agency Famous And Unignorable

Does Your Advertising Agency Advertise Itself?

Want A List of The best Advertising Podcasts? Sure You Do.

How To Sell Your Business

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So You Want To Sell Your Business? Start The Process Early.

Sell your businessI have bought and sold a few advertising, digital, and design businesses. The process is stressful and rewarding. The keys to success are knowing why you are selling (and buying), spending time to build value, building a compelling, market-leading positioning, getting your financials in order, and hiring the right experts that will help you sell your business.

That’s why I interviewed Mark Holdreith of Media Advisory Partners. Mark and his team specialize in delivering M&A services for small and mid-sized marketing services and media companies.

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From Media Advisory Partners:

MAP was founded in 2010 to provide financial advisory services to small and mid-size marketing services, media, and related companies.  From the beginning, we have been committed to Advisory…providing the in-depth, end-to-end support and services required to meet your specific M&A needs.

I have two big pieces of advice; Start the process early. Read my free book, “How To Sell An Advertising Agency. And, How To Buy One.”  There are a couple of links on this page to make that real easy.

Media Advisory Partners

YO – Hypnotism coming: Remember to subscribe to Advertising Stories. Remember to subscribe to Advertising Stories. Remember…

A nice thing for me… Feedspot has recognized Advertising Stories as being a top 15 advertising podcast.

How To Build An In House Agency

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in house agancyThe market vibration is that there is a growing use of the in house agency. To be more specific, this is an in house “advertising agency” since what is brought inside are one or more of what I’ll call “advertising services” that include strategy development; digital marketing; PR; ‘traditional advertising”; media planning, and buying and, most common, high-volume and fast-paced content development.

There are many reasons for a company to bring some or all marketing services inside by creating an in house agency. That said, there is no one size fits all and it ain’t easy folks.

The rather experienced Steven Morvay, he’s held senior positions as both an agency president at Saatchi & Saatchi Direct and senior marketing positions at Borders and HBO, gets both sides of the in house agency equation. Take a listen. This is a smart discussion. Yes, I said that.

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The In House Agency – The Why Do It?

I am going to go deeper into the growth of the in house agency and its efficacy and issues. But for now, here is a revealing chart from the Association Of National Advertisers and eMarketer about the primary benefits of creating the in house agency. Yes, it is often mucho about saving some bucks.

in house agency

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Show Notes.

Steven Morvay on LinkedIn.

YO – Hypnotism coming.

Remember to subscribe to Advertising Stories. Remember to subscribe to Advertising Stories. Remember to subscribe.

A nice thing for me… Feedspot has recognized Advertising Stories as being a top 15 advertising podcast.

A Bit Of Executive Creative Director History

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Executive Creative DirectorIf there is anything that I find a bit off-putting about the dynamic move to digital marketing it is the loss of the BIG IDEA. The love of the big ideas that have been generated by the “traditional” Executive Creative Director….. (“traditional” – yikes, what a shitty & pejorative descriptor).

Worse, that for some digi-geeks, the big idea has gone by way of the dinosaurs. Today we spend much of our time thinking about KPIs, PPC, SEO, SEM, DA, CTR, programmatic, Facebook drek, driving YouTube views, how to hype Instagram posts, and now TikTok (which is still thankfully mostly still about individual creator ideas and productions). OK, I am not going to go too far over the top here. In many cases, ideas still rule, well, some of the time. But, let’s face it, it all got a bit geekyly vs creativityly in the past 20 years.

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When A Executive Creative Director Walked The Earth

Pat Peduto and I worked at Saatchi. He was an Executive Creative Director (and member of the Director’s Guild) and I was the senior account guy. We won creative and a few Gold EFFIES. That is the type of collaboration y’all want. We even discussed it right here at this podcast heard around the world: “A Lost $80 Million Advertising Agency Account That Rocked The Ad World.”

Side note, if you are thinking that I am also a dino, I invented Internet marketing in 1995.

So, finally, if you are wondering who this Pat guy is, imagine a rather successful Executive Creative Director. Here is his history – yes, he came after the dinosaurs. He was ECD on accounts like Burger King, Toyota, AT&T, Nabisco.

I will put his master list of accounts Pat has worked on a bit below.

Show Notes.

Pat’s book… Author of “I Wrote The Book On Advertising”

Member of the Directors Guild & commercial director.

Owner of the agency RocketScience Creative.

YO – Hypnotism coming: Remember to subscribe to Advertising Stories. Remember to subscribe to Advertising Stories.

A nice thing for me… Feedspot has recognized Advertising Stories as being a top 15 advertising podcast.

Ok, The List.

Pat’s clients… ABC Entertainment, Access Fund, A-Cute Derm, Act!vate, Adatom.com, agencyfinder.com, Alaska Distillery, ASM Fund, AT&T, Alka-Seltzer, Almond Joy, AVIS, Bayer Aspirin, Bally Total Fitness, BellSouth, Beneficial, Birds Eye, Burger King, Camel Filters, Canon, Century21, Chelsea Market, Ciroc, Citibank, Clairol Ultress, Club Med, Coca-Cola, Con Edison, Cox Interactive Media, Creative Artisan Brands, Crunch, Cuervo 1800, Delta, Diet Coke, Don Q Rum, Donnelley Directory, E-Z Wider, EasyLink–AT&T, EliasArts, Exxon, Florida Citrus, Frontier Brands, GE Rechargable Batteries, GM Credit Card, Gold Medal Flour, Grand Marnier, IBM–Latin America, Hamm’s Beer, Hanes Hoisery, Hardee’s, Healthy Home Environmental, Hellmann’s, Holiday Inn, homedelivery.com, Honey Graham Bears, ICI Americas, Interview Magazine, Investment Expo, JAL, JetUSA, Joker, Kellogg’s, Kodak films, Kodak Photo CD, Kodak 35mm Cameras, Krystal, Lamaze Publishing, LaMotta’s Tomatta Sauce, Lexus, L’Eggs Sheer Energy, Lipton, L’OREAL, Lucent, IRS, Life Savers, Lufthansa, Luxe Hotels, Manhattan Mortgage, Marriott, McDonald’s, MGD, Miller Beer, Mistic, Molson, Nabisco Cookies, National Car Rental, National Council for Adoption, Navan, New Jersey Online, New York Life, NewsWorks, Nomad Networks, Northcoast Consulting Group, NYC Office for Economic Development, Nikon Cameras, Northwest Airlines, Nucoa Margarine, Olympia Beer, PT-1, Palm Springs International Raceplex, PaineWebber, Parker Brothers, PheasantRun, Pizza Hut, Pleasant Company, Ponds, Portfolio School, Prodigy, Nuprin, Ragu, React.com, Ruffino, Rums of Puerto Rico, Rival Dog Food, SFATA, Sandella’s Cafe, Schick Electric, Skippy, Smirnoff, STP Motor Oil, Stella Show Mangement, Stockgroup.com, T42, TailWinds Distillery, Tampax, TIME, Talbot Hotel, Tommy Hilfiger, Toyota, US Army, US Postal Service, Unisys, United Craft Distillers, UrbanGlass, Virgin Atlantic, Wall Street Journal, Winston, Wrangler, Wendy’s, Wheaties, Woolmark Co, Yoplait.