How to Select an Ad Agency

Posted on September 29, 2009

There have been a lot of books, conferences, blogs, and other commentaries all touting the value of transitioning your marketing strategy from “interruption” to “interaction” with customers and prospects.  Count this blog site as one more that heartily promotes this approach and I strive to help companies (and ad agencies) make the transition.  However, despite consuming millions of Seth Godin books and attending all the right conferences, many marketers continue to “interrupt many hoping to connect with a few.”

Why does this happen?  Part of it lies in “old habits being difficult to break” but there’s another influence — the marketer’s ad agency.  Specifically, ad agencies produce advertisements — and advertisements are viewed as interruptions by consumers.

I realize the controversy of this statement, but you should also also realize the truth in it.  While marketers initially hire an ad agency to create advertisements, over time they tend to relinquish their marketing strategy and execution to their agency.  While this is a great revenue opportunity for the agency, it is bad for the brand marketer for three reasons:

  1. Outsourcing strategic marketing functions results in loss of internal marketing competency,
  2. Ad agencies are structured around tactics: creative design, production, and media buys to deliver ads — not CRM-based, integrated marketing
  3. Ad agencies are compensated based on executing tasks — not producing sales/profits results

At this point, there may be some agency AE’s or marketers saying “…. come on Steve, aren’t your comments a bit over the top?” I don’t think so and here are some data points to illustrate my point and to use as a screener for determining whether you have the right agency:

(1) STAFF EXPERIENCE – read the LinkedIn profile(s) and resume(s) of the Account Executive & Account Director assigned to your account — have they ever worked a job in your industry or area of specific need?  Do they have sufficient years of experience to be credible in their recommendations? (this will rule out many 25 year old AE’s).  Do the agency partners or senior leadership have any “client side” experience actually performing the work you are paying them to do? (P&L responsibility is preferred so that they understand YOUR pain in needing to grow sales).

(2) ORGANIZATION STRUCTURE – is the agency structured around deliverables such as “creative”, “production”, “print”, “web development”, etc. — or is the agency structured around the steps of the Customer Journey (awareness, consideration, purchase, endorsement).  The former won’t help you if you’re counting on the agency for demand generation.

(3) METRICS – what does the agency consider to be KPI’s of success at each stage of the sales funnel and do they measure/report it for you?   In other words, beyond “impressions” does the agency actually measure prospect behavior through the entire sales funnel and demonstrate pedigree in interpreting the data and making recommendations?

(4) PLANNING – if you’re hiring an agency to execute beyond ads, do they layout an annual marketing calendar, spend your money to develop/deliver campaigns in quarterly increments, and then consider the “job done” when the campaigns are delivered on time?  Or, does the agency realize that you cannot plan Q4’s holiday promotions in Q1 when there are nine months of unknowns out there — thus, the agency has a real-time market response model based upon unfolding social/political/economic events?

(5) CRM – does the agency have a defined process for lead generation as part of their ad strategy?  Does the agency view lead generation as one of the primary reason for advertising?

(6) SUCCESS FOCUS – does the agency have a culture (office, website, PR) that celebrates awards for creative work — or celebrates sales charts for growing client sales?   Ryan Kelly suggests that a sure fire way to judge whether you’re about to hire the right agency is what you see highlighted in their office waiting area.   If you see awards and trophies for creative execution, then beware that you’re marketing budget will likely be used to finance the creative portfolio of another Art Director.  However, if you see case studies and data reports showing increased client sales, reduction in customer churn, improvement in customer retention, etc. — then you’ve likely arrived at the right agency.

At the end of the day, I’m really only suggesting that your marketing budget be used to grow your business — and after all, isn’t that why you pay a retainer in the first place?

Happy hunting


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