Peter Levitan & Co.

The New Business of Advertising

Insights

Is Your Agency Going To Wipeout? Stop Being Complacent.

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Advice From An Advertising Agency CEO – Learn How To Ride The Waves

So, how is the agency world doing? Are you guys happy? Worried? Running smart advertising agency business development programs? Have a big new business pipeline? Not?

I recently asked one of my advertising agency owner friends what he thought was going on in the advertising agency world.

Here are his answers and my comments. Note, I changed his name and the mega-agency network his agency is a member of to protect his brand.

Insights from an advertising agency CEO:

I called a couple of my XYZ Network colleagues (the ones I like) to gauge what’s going on with their business (pretending that I’ll be going to the annual meeting, which I won’t be).

Then I was at the ANA’s AIMM (multicultural and inclusive marketing) think tank meeting at P&G and asked people what they’re doing about new business and agency business, in general, this year, how it was going and all of that.

Everybody was BUSY in 2018!

Lots of new business happening, more work than they could manage so their focus veered away from biz dev, most not using biz dev folks or other advisors as they have in the past because they’ve been included on RFPs and or winning organic business. This is from a couple of general market XYZ Network agencies and a mix of agencies at the AIMM meetings (only 100 people in total invited so good opportunities to have these conversations).

However.

There are concerns at the agencies that this won’t last; there is a lot of talk about a recession, or at least a slowdown, coming in the next few months. They are asking themselves, should they hire up or hold off or keep working in the business instead of on the business? So, it’s good, really good now for most of the agencies I talked to but there is also fear about what’s ahead.

Advice for ME from the CEO guy:

A thought for you – why don’t you do a blog about these last 2 years that have been pretty good for agencies and how to prepare now for what might come? Just a thought – I don’t want to pretend I know what’s best, but it was an emotional topic for all.

And, it sure seems that many agencies have forgotten to run their sales program.

My advice for you? Stop advertising agency insanity:

Get back on your advertising agency business development surfboard and find the big wave.

I have counseled agencies, agency clients and on this extensive blog, for six-plus years about a simple fact: your agency is going to get fired (by small project clients and your largest client) and if you haven’t been proactively working on filling your new business pipeline every day you are insane.

Both at Saatchi and my days as an agency owner, I rode the big exciting waves of good new business wins and have felt the pain of that gnarly “your fired” call from the client.

The ONLY solution, that is both a business and an emotional cure, is to have that 24/7 business development program running.

Your Advertising Agency Will Get Fired

Take a read of my recent blog post — Your Agency Will Get Fired  It speaks to the inevitable and offers some help to reduce the pain by bringing new clients in the front door.

 

 

Is Your Advertising Agency Underpaid?

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This post is about the underpaid advertising agency. As in, your advertising agency is probably underpaid – or under managed. Or both. Believe me, they are connected.

To be cute, this post is about the three P’s…

Profit, Process and Podcast.

Don’t forget to scroll down and listen to the podcast. In the meantime…

I recently had the opportunity to meet with Michael Farmer, author of Madison Avenue Manslaughter. Michael’s is a disturbing must-read book on the business of advertising agencies. Michael covers the reasons for the advertising industry going from high profit to low profit. From being paid almost too well (as in the 15% commission on media) to underpaid for its value (as in cost-plus or fixed fees). Mega-point, agencies do not know how to manage SOW — scope of work. I urge you to read the book.

To further one of Michael’s major points, I recently got an email newsletter from him where he discusses the “agency of the future” – a subject I have written about. Michael points out, and titles his email, “The First Step for The Agency of the Future: Become a Well-Run Business”. His point:

Much has been written about the “Agency of the Future.” It is integrated, digital, efficient, agile, analytical, creative and effective. It is adaptive and reflective of clients’ needs. It is completely transformed. It walks on water. However, the Agency of the Future cannot be created unless it first becomes a well-run business that generates the necessary financial resources.

So, Is Your Advertising Agency Underpaid & Undermanaged?

You are undoubtedly underpaid. I am not going to belabor this unfortunate point. However, other than charging correctly for your work (a yikes if I ever heard one), I suggest that many agencies are simply undermanaged.

Or, poorly managed. Or, without a sound process. A process that goes from the master business plan to execution. [Read more…] about Is Your Advertising Agency Underpaid?

You And Your Blog Posts Are Getting Older

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I’ve been thinking lately about the dates on my blog posts. Like when is a blog post perceived as too old? Is there a point when y’all start to think that the posts are getting too gray?

Quick Background

I launched my advertising agency business development blog in 2013.

I now have over 650 blog posts on ad agency biz dev, agency management, presenting and pitching, how to keep clients and, for many, how to sell the agency you built.

The best read are – we are talking thousands of reads – right here:

How To Build An Advertising New Business Program 

How To Name Your Advertising Agency: Part One 

8 Tips For How To Sell Your Agency

The Worst Advertising Agency presentation – Ever 

So, When Is Old Too Old?

The Issues & Opportunities Of Managing Past Blog Posts…

Some of my most important, as in insightful/informational/designed to help your agency, blog posts are over two years old. I wonder how much an ageing blog date impacts a visitor’s sense of relevance.

I have been thinking about writing some CSS code to only keep dates on recent posts, like let’s say posts no older than a year. And dumping the dates on older posts.

Many of my best, as in most informative, blog posts are now well down the loooong list. I can easily change the date of an individual blog post in WordPress’ Settings / General / Date Format. If I do this date-delete, I need to make sure that the post sounds ‘recent’ and does not reference something too far in the past.

This is just something I am wrestling with. It isn’t hard to fix. But, like everything when you are busy… It takes a bit of time.

Good News

This is the kind of stuff I think about so when you hire me to help grow your agency, I’ve thought this through. Good news because many of you should be thinking about getting older.

I know you want to talk to me… go ahead, go here.

 

 

Your Advertising Agency Will Get Fired

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One of the tenets of my business development system is the understanding that your advertising agency will get fired by virtually every one of your project work and AOR clients. This means that you better be out there finding your next set of clients because your current clients will sooner or later walk out the back door.

To get even more painful, we all need to get over the disastrous track record of agencies that wait till they get fired to get fired up about running a new business/sales program. The standard, awful, message is that the agency was too busy working on its current clients to run a solid business development program. You know, the horrible saying… “we are like the shoemaker who can’t make shoes for his kids.”

I’ve written in the past about why advertising agencies get fired – right here. This post expands on that review. But first, here is a key finding I wrote about a couple of years ago:

Why do advertising and digital agencies get hired and fired? A key reason for getting fired (other than the new Marketing Director’s need to look active; and an agency’s failure to keep up with the rapid pace of change) is very often the very same reason clients hire agencies in the first place…

It has a lot to do with interpersonal chemistry according to Darren Woolley of Australia’s TrinityP3, a leading global advertising agency search consultant and client advisor. I love this point: “It’s all about the relationship.”

Why You Will Be Fired & How To Stop It

There has been a bunch of research about the primary reasons that clients fire agencies. While getting fired is somewhat inevitable, I think that agency management must be very cognizant of the reasons and manage their agency and staff accordingly.

The smartest, most aware agencies get fired less frequently. 

Let’s walk through the reasons you will get fired. I’ll be brief because I believe that most of these can be managed down without a huge effort.

It’s Much About KPI’s and Return On Investment

I counsel all of my agency clients that return on investment, the client’s investment in their marketing programs must yield a positive and calculated sales return on every dollar they spend. Obvious, right? That said, it is amazing to see how many advertising agencies cannot calculate ROI based on a client’s KPI’s (Key Performance Indicators). Some agencies do not even ask about key performance metrics. [Read more…] about Your Advertising Agency Will Get Fired

3 Thoughts On Advertising

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Actually 4 Thoughts On Advertising

Here are some thoughts on advertising driven by four recent reads.

What If There Was No Advertising?

Imagine a world where all advertising was erased from the environment. That means no more escalator, or bathroom stall ads; no more behavioral retargeting; movies and tv shows without commercials (oh, that’s Netflix); no outdoor boards on Montana highways, and on. Hard to visualize? Maybe (um not), to help, here is a series of “ads” that have been erased. Check out Jorge Pérez Higuera’s photo series Public Spaces. 

Back to reality.

But, First The Good Old Days & ROI

I am having a drink tonight in my town San Miguel de Allende with Michael Farmer whose book, “Madison Avenue Manslaughter: An Inside View of Fee-Cutting Clients, Profit-Hungry Owners and Declining Ad Agencies” is the most informative and insightful book on the reasons for the demise of the good old days of advertising. Michael covers the advertising world from the high-profit Mad Men days to where we are today (much less-profit). Today’s ad world is strapped by client jitters, the quest for low-cost advertising services and way too many advertising platforms that equal an ever-increasing workload.

I suggest you buy the book and listen to Michael’s interview with Jack Meyer’s on MediaVillage. From the interview:

Jack Meyers: Last week we talked about the deterioration in agency-client relationships — fee cuts, shorter relationships, in-house agencies, etc.  You said that agencies were downsizing and liquidating their capabilities — becoming less capable of helping their clients solve “brand growth problems.”  You predicted that this would lead to financial problems for the holding companies. This did not paint a very optimistic picture of the industry.  Where do you think things are headed?

Michael Farmer:  There’s a difference between where things are probably headed and where they could be headed.  In a funny way, I’m still optimistic about the potential for a turnaround in the industry.  As long as advertisers have performance problems — stagnant brand performance, for instance — there are attractive opportunities for problem-solving partners.  The question today is whether the current leaders of advertising agencies and holding companies will transform their operations and help them become the problem-solvers that their clients need.

We will not return to the good old days of 15% commissions on large TV, print and radio buys. Today we are paid by the hour and seem to need to run Instagram at a 24/7 pace.

However, it does not have to be gloom and doom. As I have written about over the past few years and council my agency clients… we need to, as Michael says, address the core need of our clients and that is sales growth – not mindless Instagram posts. In the case of 2019’s ability to track much of what we do, that means addressing Return On Investment. Yes, you better be creative art directors, media planners and database experts. But, you have to be able to recognize sales opportunities, have the time to find solutions and deliver ROI.

Advertising Is Back! Y’all. I Hope.

From a Business Insider article.

2017 was a trying time for ad agencies, with issues ranging from transparency and brand safety concerns to the looming threat of consulting firms coming to a head last year.

But the prospects for the advertising industry look a lot brighter in 2018, according to new research issued by UBS.

The investment bank surveyed 350 global marketing executives and 500 US CFOs and has predicted that ad agencies will bounce back in 2018, buoyed by a growth of 4-5% in global advertising spend.

The recovery in 2018 will be driven by a number of factors, UBS analysts said, including large advertisers increasing the scope of work with creative agencies and big sporting and political events driving increasing spend on brand media.

This is particularly interesting, as it runs counter to the trend of advertisers doubling down on direct advertising in recent years, where they have prioritized marketing strategies that drive measurable results.

[Read more…] about 3 Thoughts On Advertising