An Advertising Agency Business Plan Thought Starter.
Ten years ago I was the owner and CEO of Citrus, a Portland and Bend Oregon advertising and digital agency. Just so you get the picture, our clients included AOR work for Nike; the Montana Lottery; Harrah’s; Providence Health & Services (5 states), and lots more. As you will see below, I knew that we needed to change our approach to the business. We needed a new advertising agency business plan. A radical shift from what was starting to look like a way too traditional advertising agency business model. My team and I looked at different approaches and ultimately, I determined that I (that means me) did not want to make the required revisions. At that point, I decided to craft the agency for sale. I wrote about how I sold the agency in my 57-page PDF, “How To Sell An Advertising Agency.” Links to it are on this page.
2020. Is It Time For You To Invent A New Business Plan?
I talk to lots of advertising agencies. Many are looking very hard at how to reinvent their agency. This is driven by ongoing factors like waves of recessions; clients asking for more and more for less money; lower profits; unhappy and overworked staff and, of course, the results of the pandemic. I talked yesterday with a New York agency buddy that is shutting down his office, asking his landlord for rent concessions, and will go full-time virtual. He is not alone. Again, in many cases, the need for a new business plan is being forced on agency leaders. Being forced is OK. Not changing is not OK.
Back to my past as one model for the future.
10/12/10: Twas Time For A New Business Plan
Before I sold my Portland agency, I spent some time thinking through what a new, an evolutionary, a smarter, competitive, and higher profit advertising agency business plan might look like. Simply put, how could we make more money? This is what I was thinking a few years ago.
I think that my thought process at that time might help you think hard about your agency’s business plan.
A bit of background. Citrus was a successful Northwest agency. We had offices in Portland and Bend, Oregon. Our clients included Nike (we were an AOR agency for major league baseball and college sports); Oregon State Football, Harrah’s Las Vegas; Wildhorse (a large Oregon casino); the Montana Lottery; LegalZoom; a couple of major west coast banks and Providence Health and Services (a multi-state hospital and healthcare company) and a range of leisure accounts.
I bought the majority share of Oregon’s full-service advertising agency Ralston Group in 2002. I had just left being CEO of ActiveBuddy, a serious natural language company that proceeded Siri and Alexa. It was time for me to get out of New York and get some fresh air. Over the course of the next 8 years, we bought Portland’s Citrus, renamed the agency, and grew our account base across the USA.
However, by 2008, after the horrible recession, clients driving down profits, the increase of workload from digital and social media, the increasing cost of running a marketing company (ala healthcare costs), I decided that we had to either reinvent the agency or I’d move on.
The Birth Of “Portland”
Ok, what should we do? I needed to reinvent the agency via a new advertising agency business plan to be more competitive; leaner; more nimble; lower cost; and NEW. As in, new and improved to get the attention of more of the high-profit clients we wanted.
Here is the document, the 2010 think-piece that I used to help guide me. I hope you find it, um, maybe inspiring.
My 2010 Plan – A New Agency Model: Food-For-Thought For Your Agency
Citrus needs to change.
The agency industry (especially full-service agencies) knows it must explore new business models. The old 15% commission + 16.5% mark-up is so long gone. Plus, we know that finding a way for clients to pay up for “big ideas” is difficult.
Within this context, clients are confronted by fast-paced changes, are skittish and are understaffed. Media options have grown exponentially, clients are asking for program metrics, they need smart digital solutions, can’t figure out how to manage integration and do not fully understand social marketing. They still want big ideas but want all of this for less. All of this is compounded by the view that “agencies” are costly and inefficient. Many prospects don’t even want to take our calls.
To further compound the issues, a sea of agency industry sameness and lack of clear brand and service differentiation confronts us. It is very difficult for small full-service agencies to stand out from the crowd. Defining a unique and focused agency brand for a non-specialist agency isn’t easy.
Citrus shares these issues and at present does not have a clear and compelling brand story. We have our “Move” positioning but we need to express this beyond just words.
There must be a new way.
An idea…Move To Small + Smart.
In my mind, a Small + Smart Citrus is the smartest customized agency in the world.