Here’s what to consider when choosing an advertising agency
By Robert Grede, for SBT
Why do you need an advertising agency? An ad agency marks up everything it produces as much as 20%, charges 15% commission on media, and doesn’t know nearly as much about your product or industry as you do. Who needs them?
You do.
First, an agency takes the burden of the production process off your hands and makes sure everything is done right.
Agencies charge for production because they earn it. You may know how to contact a good illustrator; you may know how to spec type, judge a good chromolin, or even read a printer’s blueprint (or Vandyke). But it’s not likely you know how to do all of these things.
Second, you generally pay the same price for media whether you use an agency or not. Better to let a professional do it for you.
Third, the pros at ad agencies are functionally specific. Your lawyer or your accountant will never know your industry as well as you do. They know law and accounting.
Likewise, your ad agency knows advertising and how to apply it to your business.
There are three ways to delegate the advertising function: choose a full service agency, an advertising "boutique" or a consulting service.
The full service agency is ideal if you need full service. That includes marketing research, media planning and buying services, idea concepting, copywriting, layout and design work, and production services.
The big full service agencies generate some of the best creative ideas in the world. Their advice and counsel could be worth every penny you pay for it.
Unfortunately, big agencies like to work for big clients. Their best people work on accounts that generate lots of income. They may do great work on full-page ads in Sports Illustrated.
But a quarter page in Control Engineering is just not their cup of gin. So your account gets sloughed off to the new kid. You may like the sound of saying your agency is Leo Burnett, but the benefit often ends there.
If you need a full service agency, go for one that suits your size. Look for a small, personalized operation headed by one or two pros, experienced advertising professionals who work on each account themselves.
Such a firm will work closely with you and get to know your manufacturing, marketing, and sales needs. It can serve as a source of experience and advertising wisdom. In effect, you pay for its talent, not agency overhead.
Then again, if you don’t need all the services of a full service agency, you don’t have to pay for it.
Use a "boutique" agency. It’s an "ala carte" approach that often works well for a smaller business.
A boutique agency is usually founded by one or two professionals with specific skills. They specialize in one or two functions. That way, you don’t pay the overhead for services you don’t use. You pay only for the services you need.
For example, you have a dynamite ad that ran in your local paper and generated lots of sales. Now you want to expand to other markets. You may only need a media buying service to plan and buy the most efficient newspapers in your chosen markets.
Or, your industry has only one trade magazine that is read by everyone. And you want to continue advertising in it exclusively. You may only need a creative boutique to design and execute a few innovative ads that will pull in customers.
The third option is the independent consultant. These are usually single-person operations. Their overhead is low, and you can count on their close attention.
The independent advertising or marketing consultant frequently works with a loose affiliation of similar one-man (or -woman) operations to provide a complete range of services.
Sometimes, they can lack depth of knowledge in more than one or two functions. And they may try to do too much, rather than calling upon others with more expertise.
But if you find one with the right combination of skills, one who’s demeanor and temperament are compatible with yours, an independent consultant may be the most efficient use of your advertising dollar.
Too often, clients choose agencies based upon whom they know. Some agencies even expect their people to spend a certain amount of time on the golf course wooing new business.
While your golfing buddy may be a great guy, his agency’s ideas about advertising may not mesh with yours.
Friendship and trust are important in your agency relationship. But don’t choose your agency solely upon that basis. You may end up paying for it in the end. And friends shouldn’t make friends pay for the relationship.
Before selecting your advertising firm or independent consultant, ask to see some of their best work.
Look for experience in your industry. While you cannot expect them to be familiar with your specific product or service, look for familiarity with your industry category.
For example, you can’t necessarily expect them to understand manufacturing and distribution of semi-circular widgets made of vacuum-molded high-impact titanium plastic.
Rather, do they understand the small manufacturing business?
When viewing their presentation, don’t be fooled by "glamour." Some operations are run by hot, ambitious types who are on the make for the big time. They regard your small account really as no account, merely a meal ticket until something better comes along.
The work they produce for you is smart-looking, flashy, and generally sells them, but rarely you. It lends itself well to full-page, four-color formats, when what you need may only be a quarter-page of black-and-white.
Their demeanor is captivating, enthusiastic, and winning. They will go far in this world. Just make sure it’s not at your expense.
Better to look for a "total approach concept". Not one-shot flashy ads.
An agency or consultant that develops a series of ads, brochures or collateral pieces around a common theme will likely build a consistent image for you, too. Ultimately, they will help you establish awareness and recognition in your industry, and create a strong association from one marketing effort to the next.
Robert Grede, author of Naked Marketing – The Bare Essentials (Prentice Hall), teaches marketing and entrepreneurial management at Marquette University. Learn more on marketing at www.thegredecompany.com
March 7, 2003 Small Business Times, Milwaukee
