The Advertiser Feature
Originally printed in The Advertiser, March 2001. Reprinted by permission.

A Day Late and $37,500 Short


A poorly orchestrated agency search
could end up costing millions!


Charles G. MeystChairman & CEO
Business Partnering International, Ltd.

 

In conversations with clients throughout the years, I have yet to speak with anyone who doesn't agree that it's financial folly, fiscal irresponsibility, or economic suicide to continue in a relationship with an advertising agency that isn't producing positive (beneficial) results. Everyone seems to know the consequences of working with the wrong agency.

Here's the Case for Working With the Right Agency!

Initially, marketing executives tell us they're pleased with the work their agencies are producing. So in a word, it appears clients ultimately end up selecting and partnering with what they refer to as "a great agency." At least until…

So why be unduly concerned with the agency selection process? What does it have to do with corporate finance? Because in and of itself, the agency selection process could be the most significant financial experience of your client/agency relationship. So the challenge is not so much to find and select the perfect agency (for we all seem to eventually get there), but to do so responsibly, with dispatch and efficiency.

The Cost of An Agency Search:

It's estimated that for every million dollars of ad budget, each day of an agency search costs about $1,500. That doesn't include executive man-hours, brand erosion and loss of momentum or market share. The cost of a $25 million search could run $37,500 each day; more than $2 million over an uncharacteristically short 60-day search! A poorly orchestrated or protracted agency search could cost more than the benefits derived from a great new agency.

Here's what can happen:

  1. The incumbent learns your looking. Whether consciously or subconsciously, the agency's work takes a downturn. Fear of loss knocks them off their cutting edge; they're less inclined to bring you those big out-of-the-box ideas, or at worst, they're not inclined to present anything that would benefit your new agency relationship.
  2. Your review goes public. That makes you a magnet to aggressive agency new business executives. With more than 26,000 US agencies out there (SIC #7311), it's an avalanche waiting to happen.
  3. You get caught up with unqualified agencies. The Red Books, an industry bible of directories, lists 13,500 US and inter-national agencies. That suggests that almost fifty percent of the agencies out there will never be found as long as they continue to pursue new business their way. Of the 26,000, 86% have fewer than 9 employees. Consequently, these agencies aren't necessarily great candidates for your larger account, but they're not always willing to accept that. So the volume of provocative and compelling overnight shipments they send will inundate and distract you. That adds days and it adds dollars.
  4. You lose key players. If the search team isn't organized and in agreement as to selection procedures, it can result in executive departures. It's not uncommon to see a key marketing executive walk out as the new agency walks in. And there's no measuring the impact of exits on corporate morale.
  5. Industry press infers your search is poorly managed. Public corporations are beholden to stockholders. An ill-run search can put the client at legal risk, giving rise to litigation for prejudicial practices.

The Perfect Agency:

Before we explore some fiscally responsible procedures, let's look at what constitutes the perfect agency. Most clients and agencies agree on the components:

1. Relevant experience,
2. Breadth and depth of capabilities,
3. On-point strategy,
4. Proximity,
5. Creativity,
6. And Chemistry.

Of course that's viewed from the client's eyes, with only chemistry likely to change in their view. Chemistry is that elusive "likeability" component; an expression of how the client and agency contacts get along, their respect and affinity for one another, a commonality of purpose, enthusiasm for the task at hand, and a common sense of direction and shared responsibility. Those who teach chemistry preach, "birds of a feather flock together -- in business." When players change, chemistry changes. Of all the components, everyone agrees chemistry is the one element that inevitably leads to change and an agency review.

The Perfect Search:

With an understanding and appreciation for daily costs, there's an incentive to develop and then follow a simple set of sequential steps:

  1. Have valid reasons to dismiss the old before hiring the new.
  2. Identify and assemble your "fixed & locked" executive search team.
  3. Define team duties and responsibilities - how and who calls the shots.
  4. Determine if you need assistance from a consultant, and for what.
  5. Take measures to keep your search private and confidential.
  6. Take time to carefully construct a list of your ideal agency criteria.
  7. Use Internet technology to help identify all the qualified agencies.
  8. Extend invitations, asking for a serious show of interest, not creative samples.
  9. Screen initial candidates using telephone interviews.
  10. Request relevant materials from candidates that impressed you.
  11. Cut to a short list based on their submitted materials and phone interviews.
  12. Hold your first face-to-face meetings - at the ad agency offices.
  13. Identify finalists and then invite them to your offices.
  14. Hold final meetings (presentations & negotiations with your team)
  15. Select the most qualified and compatible agency.
  16. Thank those you couldn't select; then notify the press.

The Perfect 21st Century Search:

The Internet gave rise to business models, processes and procedures that could not have existed without it. In 1997, we launched agencyfinder.com, the Internet's first and only on-line/off-line consulting service for client and agency matchmaking. The service evolved from new business consulting we were providing to advertising and public relations agencies in Europe and North America. Our challenge was to facilitate and help expedite what had become an expensive, time consuming and frequently frustrating process - for client and agency alike.

What we offered was a first - clients or consultants were able to take advantage of the far-reaching, cost-effective attributes of the Internet to search through a vast database of advertising, public relations and marketing firms that demonstrated their commitment to new business development and their desire to be found - by the right clients, for the right opportunities.

Agencyfinder.com is in some ways similar to an industry directory, yet with an opposing business model. Directory listings are free and the books are sold. Directory CD-ROMs and Internet adaptations use the same financial model - owning or searching carries a fee. Our objective was to give all qualified searchers free and immediate access to allow them to select "certified" agencies based on their database information. This allows agencies that took the initiative and applied for "certification" to pledge professional behavior, and to support the virtues of an expeditious, non-prejudicial selection and matching process.

Our business model is based on more than directing searchers to an agency's directory listing, but rather to collect and inventory informational and intellectual agency content to allow searchers to take advantage of our powerful search algorithms. That process narrows and selects candidates based on attributes (such as relevant experience, breadth and depth of capabilities, on-point strategy and proximity), and then on seven comprehensive essays and client case histories. These essays and case histories not only explain the agency's philosophy, creative development process, corporate culture, and view on the client/agency relationship, but they also provide insight on agency personality - and in so doing, begin to shed light on that most powerful and significant of all selection components - chemistry.

Our process also accepts the fact that no technology platform of itself can substitute for human expertise and consultation. That's why we intercept and assist clients during the final stages of their search to explain, question, clarify, and then assist in preparing the invitational RFP's. When all is ready, we handle the paperwork and extend the invitations. Our turnaround is generally 24-48 hours. Clients are comfortable with our role as observer and facilitator once invitations and confirmations are delivered.

Some 21st Century Search Tips:

In order to take full advantage of the latest Internet agency search technologies, consider the following:

  1. Use an Internet agency search service funded by the agency or the client, not both.
  2. Use those that offer an extensive range of search criteria (+400 data fields). 
  3. Use those where agencies have applied, rather than being included without permission.
  4. Identify candidates using search algorithms, not just by a ranking, alpha-sort, geographic location or size.
  5. Select an Internet service that uses algorithms to identify candidates.
  6. Use directory data sparingly to prepare for your telephone interviews.
  7. Don't rely on published client lists; better to avoid that topic at this stage.
  8. Work with search professionals that have credentials in successful agency searches.
  9. Work with professionals that will handle the invitational process to expedite your search.
  10. Be fair, honest, forthright, professional and ethical.
  11. Have some fun!

Final Thoughts:

The search for a new agency isn't something any client should get the "hang of!" Even done properly, it's an infrequent occurrence. That's why no one in the agency community expects the client to be an expert in this area, but they do look for honesty and integrity.

The client wants to conclude their agency search by selecting a "perfect" agency. To that end, be certain those who speak for your company do so from the most executive level. With the economy as it's been for the past few years, agencies have been hard-pressed to assimilate additional bus-iness from the best of new clients. Admittedly, this new economy is already changing workloads and attitudes. Agencyfinder's industry leaders and rising star agencies are much like you -- looking to pair up with the best and most appropriate new clients. Honesty, accuracy, proper attitude and professional courtesy will contribute to a satis-factory and financially rewarding outcome.