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How to find, evaluate and hire an advertising agency, PR firm or marketing partner
Much is written about the process of hiring an advertising agency (ad agency). The hiring process itself is relatively easy – with a handful of finalists, you fine-tune and define the requirements, come to agreement on fees for services, establish legal terms and conditions, etc. The challenge however is not hiring, but finding qualified candidates.
If one accepts the premise that every client wants the very best advertising agency (ad agency) they can afford, then the task begins by defining precisely what the client needs and wants in an agency. The client can begin with a clean sheet of paper to define such attributes, or take advantage of existing attribute “menus” which can be found at appropriate third-party Internet web sites designed specifically for that purpose.
If you accept the fact there are more than 30,000 advertising agencies in the US alone, then it is imperative that each client reduce the size of that list substantially in order to create the smaller, more manageable invitational list. If such “cuts” were to be attempted based on services desired (such as account management, creative, media buying, direct marketing, etc.), little reduction would be seen in the original list of 30,000 until the collection of desired services had grown considerably. When clients are asked to identify some of the most critical agency attributes, previous experience in category is generally high on everyone’s list. Meaning, clients want to speak with and consider advertising agencies that have previous or existing experience in their business category. With tremendous pressures to see sales activity almost immediately, few clients are willing to take the time, or make the investment, to allow the new advertising agency to become educated on their nickel.
The candidate identification process begins by finding advertising agencies with experience in your particular business. Then it makes sense to screen them further, looking for those that are able to provide the services you want and need. Define and refine your list even further. Seek those that have experience marketing goods or services to the people who purchase your goods or services. If that means “females 25 – 40,” baby-boomers or senior citizens, then make that a condition. If geography or location is important, define that as well. Overall experience (years in business), size (generally staffing rather than capitalized billings) plays a role, and in some cases, membership in specific associations will add value.
Historically, clients have struggled to create the appearance that they knew precisely what they wanted and in what form. To do so, they cannibalized and adopted the fairly common RFP (Request for Proposal), used for years by purchasing agents when seeking bids on commodity items. RFP’s were sent to long and large lists of ill-assembled “agencies” – often pulled from name-only listings in telephone Yellow Pages, or from mentions by business colleagues and media reps.
Such RFP invitations meant tremendous labor for the client, and resulted in relatively low rates of response, coupled with a mixture of some qualified but many unqualified respondents creating a significant burden for the client. Dissimilar agency materials had to be sifted through for common information, and that information was then posted to a client-created spreadsheet. The challenge was to find qualified candidates and some basis (apples-and-apples) for comparison and subsequent evaluation. Finally, in evaluating “creative” candidates (i.e. – marketing partners, vendors, etc.) it is virtually impossible to bid or place monetary value on something that is of such esoteric value and subject to a myriad of interpretations. With few exceptions, the creative services of an advertising agency can not currently be evaluated on a “price comparison” basis.
With the availability of the Internet and specific services designed precisely for this task, there is no excuse for ever using an RFP again to find an advertising agency. Alternatively, what is known as the RFI (Request for Information) makes sense, for your search for an advertising agency, pr firm or similar marketing agency should be based on your evaluation of information – an apples-and-apples examination of attributes; then of work product, then of relationships (chemistry) and then of specific suitability. With a list of carefully defined advertising agency candidates in hand, it now makes sense to extend an invitation to those candidates, requesting just that information not already known to the searcher.
It may seem that defining the candidates’ list is the biggest challenge. Many clients are surprised to discover that what they thought might be a sought after invitation is summarily dismissed by many who receive it. The preparation and execution of “invitations” is of itself a critical component, and often best left to third-parties that have established agency contacts and have identified the most senior agency executives responsible for new business development.
If and as the invitations are accepted and responded to, the client is advised to hold telephone interviews as a first step. Successful interviews (deemed so by both parties) should lead to the sending of, and receipt of agency materials (agency brochure, relevant samples and short letters of interest). Where the value of the account is substantial, and the work expected from the advertising agency (ad agency) is critical to the client’s business success, clients should visit and tour each preferred agency as the first face-to-face meeting between client and agency. That tour will be enlightening, both in revealing the agency’s full capabilities, plus it allows for the assessment of the agency’s personality and the likelihood of good “chemistry” between all the players.
As a final step in the agency selection process, the client should invite two or three “finalists” to present and propose (to you and your management at your corporate headquarters) a strategic plan for managing your business – during the following fiscal year or appropriate fiscal period) with a budget you are willing to reveal. And to do so, you will need to furnish each candidate with a “marketing brief” that encompasses vital historical statistics, information on your company and on your marketing and advertising activities in years prior.
If you follow such a plan, and assign and allow qualified individuals within your company to manage such a process, you will be successful in identifying and hiring a powerful marketing partner!
When to Hire a Marketing Agency
The obvious but great time to hire a marketing agency (“marketing partner”) is when you don’t have one. The next time is when your incumbent continues to fall short of your declared expectations and isn’t doing anything to correct the situation. Another time, which we may never see again, is when your business is doing well or bank account has been running consistently in the black and you want change for chage sake. If any of these are true, this is as good a time as any to assess your need for professional outside marketing counsel
What is marketing?
The expression marketing gets used, abused and confused, but I like the simple definition – “the process of bringing goods or services to market.” The actual act of transferring ownership is implied. Having said that, marketing means that a host of processes are potentially involved:
- public relations
- collateral materials
- sales promotion
- direct marketing
- interactive marketing
- trade shows
You may have sufficient staff so that you don’t need much outside help. Then again, if that list encompasses more than you expected, or more than you’re doing for yourself, maybe it’s time to favor hiring experts “as or when you need them.”
Whatever the case, the coming months will determine just how well your company will fare in the improving economy.
If you handle marketing in-house:
If you don’t have an existing agency relationship, consider this:
- You know YOUR business; are you also a trained marketing expert?
- Even if YES, do you have time and energy to handle both jobs?
- How does your marketing compare against your competitors?
- Is your ad budget more than 5% of gross sales?
- Do you HAVE an advertising budget?
- Is your marketing founded on research?
- Does your in-house work (really) save you money?
- Wouldn’t it be nice to tell colleagues you’ve finally hired your “own” agency?
If your answers suggest you may be compromising more than one on this list of eight, then that would justify conducting an agency review to evaluate your options and subsequently hire an agency if the evidence supports that action.
A good outside, third-party professional marketing organization (today they carry various names including “ad agency, integrated marketing communications firm, new and interactive agency, mar-com organization, public relations firm, etc.), is able to provide that big-picture, out-of-the-box perspective we all hear about. The expression “integrated or fully-integrated” is meant to suggest that the firm is neutral both in it’s examination and subsequent recommendation as to what combination of “marketing or media elements” would be appropriate for your company to use. But fully integrated also means that the agency should be capable of transparently delivering the impartial solution(s). Meaning – the agency may not provide ALL the necessary services under one roof, but they have strategic alliances in place such that they can provide those services without burdening you with any extra steps or risk.
If you already have an agency:
If you already have an agency under contract, ask yourself:
- Is their work for us fresh and exciting?
- Are we getting what we pay for?
- Do they think about us without being prodded?
- If we need “full service”, are THEY “full service?
- Do they fight for what they believe (and know?)
- Do they respect us (our service or product?)
- Do they understand our target market?
- Have they explored ALL the options?
- Are we their BEST client?
- Do they generate a Return On Investment?
If your answer is NO to more than one on this list, it too would make sense to conduct an agency review to evaluate your options. That is, assuming you’ve already spoken with your agency about your concerns regarding the point(s) in question. You do owe them that.
On the budget topic:
In any agency review, don’t let anyone tell you that money (or budget) doesn’t talk! Each agency (marketing organization) has certain client budget minimums, arrived at through experience and predicated in part by the economy and their current client load. That’s why it’s important, for the sake of conducting what you want perceived as an “informed” agency review, that you have some idea of what your budget is or should be.
How much you CAN spend depends on how much you can afford. Not just based on “what’s in the bank,” but a complex calculation that includes predicted response (ROI) to your pro-active marketing actions, coupled with a cash-flow analysis, and based on anticipated and available funds.
How much you SHOULD spend is for the marketing professionals (ad agencies, public relations folks, other marketing types) to determine. That takes into account your corporate objectives (as in – sales as a result of…), intended market share, or increase in market share, ability to fund expenditures, etc.
Maybe you’ve had an unpleasant experience by declaring your budget early on or what you thought was too openly. That has happened. But as a general rule, when you speak with the interested agencies, engage in open dialogue when it comes to your BUDGET.
If it’s time to hire a marketing partner:
If you’ve done your due diligence and have concluded it’s time for a new agency (or a fresh marketing partner), think and act carefully. Identify, invite and investigate only those candidates that possess the attributes you demand. This is much more than a hunt for pretty pictures, so don’t start looking at creative samples until you’ve confirmed a fit based on capabilities and some degree of chemistry (likeability) tested during a telephone conference. After that, it makes sense to ask for creative samples. In the final analysis, you’ll select for capability, chemistry and creative. As virtually everyone learns, in business, birds-of-a-feather flock together and likes do attract.
Finally, regardless of your size (gross sales, budget, market-share, employees or locations), be certain your marketing candidates will do for you that which you can’t already do for yourself.
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! Even a smaller budget of $2 million could exceed $180,000 over 60 days.
Here’s what can happen:
- The incumbent learns you’re 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.
- Your review goes public. That makes you a magnet to aggressive agency new business executives. With more than 30,000 US agencies out there (SIC #7311), it’s an avalanche waiting to happen.
- You get caught up with unqualified agencies. The Agency RedBooks, an industry bible, lists 13,500 US and international agencies, suggesting that almost fifty percent of the agencies out there will never be found as long as they continue to pursue new business their “unlisted” way. Of the 30,000, 86% have fewer than 9 employees. Consequently, many aren’t great candidates for every account, but they don’t always want to accept that. So the volume of provocative and compelling over-night shipments they send can inundate and distract you. That adds days and it adds dollars.
- 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.
- 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.
If you run up the numbers, you can see that a poorly orchestrated or protracted agency search could cost more than the benefits derived from a great new agency.
What Role Creative?
In the final analysis, the agency’s creative output has much to do with the client’s business success. But what can you tell, what can you learn by looking at an agency’s creative samples? Stated another way, when SHOULD YOU examine the agency’s work?
A successful agency review should never begin by evaluating agency samples or selecting agency candidates based on creative. Experienced clients have learned that creatives move from shop to shop, and they also know that great clients generally contribute to great agency work. By example, Client A is always immersed in the creative process. They contribute concepts, copy, layout and design. They guide and encourage their less-than-assertive agency. But they both like it that way. In fact, the agency has been successful landing other clients very much like Client A. Those are great matches of creative and chemistry.
What about your role as a client? Are you capable like Client A or interested in ground-level involvement? Some clients want an agency that constantly offers fresh new ideas, new techniques, something cutting edge and somewhat daring. Client B demands much, but entrusts their agency’s creative team to produce and present options for consideration. Client B expects their agency to sell the creative and predict the ROI. But ultimately, even in a more passive role, the creative must be tailored to and have chemistry with EACH client. One size creative simply does not fit all.
What CAN YOU tell from creative work? Very little initially. It’s better to select your agency candidates based on attributes (relevant experience, capabilities, services, size, location and more) rather than on what they’ve done for others. Selecting from samples blinds you to the critical client/agency relationship, making it very difficult to judge an agency’s actual value to you.
When is creative relevant? AFTER you’ve identified your candidates using other techniques; AFTER you’ve spoken with those agencies; AFTER they’ve had a chance to understand your needs and style for conducting business. It’s then and only then that each agency should be allowed to present their most appropriate work; work which was produced under similar circumstances for similar clients.
NOW you’re in an excellent position to judge!
The First Meeting – Where Do You Meet?
For years and continuing today, clients have generally expected to hold their first face-to-face agency meetings at their own offices, not at the agency. That’s what we hear when we speak with clients about their plans for subsequent actions. Maybe it’s natural to think that way. Clients ask “What Have You Done for Others & What Can You Do for Us.” They expect something like the traditional “Dog & Pony” show. Can we blame them?
Agencies that practice some form of ongoing “new business outreach” generally request an audience so they can “Show What We Can Do for You, with No Obligation!” Seldom does the agency suggest meeting at their place, for that would entail an investment (and something of a commitment) by the client. Admittedly a harder sell.
But think about it – if you (the client) want to learn all about the agency (including seeing their place of business, evaluating their creative work, their clients, their ability to think strategically, the range and quality of their staff experience, and their personalities), what better place to meet than AT THE AGENCY!
This important visit by the client should include an agency tour and “capabilities” presentation (best done in that order), and is a magnificent opportunity for everything to unfold naturally without pretense. The tour reveals a house-in-order and work-in-progress. You meet agency staffers in their own work environment, where they’re most comfortable and most at home.
The concluding capabilities presentation usually takes place in the agency conference room, but since it follows the tour, much of what would otherwise have to be “Power-Pointed” has already been seen first-hand. Individual presentations by agency principals are now done in a relaxed fashion, in an “agency-and-client” rather than “agency-and-prospect” atmosphere.
This agency visit is one of the best selling/buying interactions in the process.