The Right Process = Advertising Agency Profitability
Warning: While not as sexy as a new Instagram video plan, this in-depth 3,500-word post is all about advertising agency profitability.
OK, OK, as an ex-agency CEO, I will admit that profitability is rather sexy. Sexier, that is, than Instagram.
By the way, if this post is too long for your online perusal, I’ll send you a PDF version. Just email me at peter@peterlevitan.com
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A bit of background. When I worked at Saatchi & Saatchi one of the accounts I ran was Northwest Airlines. At that time, a time when airlines spent big bucks, their media budget was $60 million per year. At the standard 15% commission, we generated $9 million in agency revenues. $9 million! Ah, the good old days. Days when an agency minted bucks even if some of our processes were a bit wanky. That isn’t the case anymore.
Today, process: the art and science of managing client relations, agency staff, expenditures and time, is critical to your growing profitability.
A Wonderful Process Plan
I have a Texas advertising agency client that isn’t anywhere near as profitable as they should be. Their problem isn’t having the right clients or clients that want great work, or clients that spend money. Their problem is not having the right workflow process to ensure that these clients are profitable.
And, worse, because the agency appears to be always overworked, they don’t have the time or energy to run a smart and consistent new business program. A 24/7 program.
I built this client process plan for them and thought, why not share it? To protect the innocent, this full-service ad agency has been renamed… Wonderful Advertising. I think that these general principles and actions can be applied to any communications agency type.
The Wonderful Agency: Background
Wonderful is an integrated marketing communications agency based in Dallas. Wonderful describes itself as (from Wonderful’s Twitter profile):
“A full-service advertising and marketing agency blending traditional and non-traditional media with digital services, graphic design, and social media.”
A bit boring, but at least they’ve made a statement.
Wonderful: Management Issues
Wonderful is entering a next-stage business phase where it would like to add larger national clients to its roster. In order to do so, it would like to set up client management systems to improve its workflow efficiency and to improve and manage its client relationships and most importantly… increase agency profitability. The agency must also build a business development system that will help them entice and land the type of clients that they need for agency growth. [Read more…] about Advertising Agency Process and Profitability