Blog Posts

Facebook-Cambridge Analytica Shows The Importance Of Data And Trust In Advertising

Written by ChuckMeyst2015 on . Posted in Agency Search Tips, Blog Posts

Editor’s Note: This era of digital data has fostered the concept of data scraping, or as Joshua comments, “Companies are offering agencies new data all the time but as industry players we are increasingly saying no because the way the data is obtained or used doesn’t sit well with our values and principles.” There’s a big difference between privately searching in a database for prospects that match your search requirements precisely,  versus publicly posting your opportunity only to experience a flood of prospects claiming to be a perfect fit. You can’t blame salesperson mentality, but the first process is precise; the second subject to question, audit and generally extra work. 

Today’s column is written by Joshua Lowcock, executive vice president and chief digital and innovation officer at UM Worldwide.

The advertising industry often talks about trust – trust between advertisers and their agencies, trust between advertisers and media owners. But very little is publicly said about the trust placed by the public in the advertising industry.

Individuals and the public at large have a right to demand and expect that advertisers, agencies, media and platform owners will treat them with respect. In digital, with the wealth of data available to marketers and the pressure to squeeze every last ounce of efficiency out of media dollars, there are always a myriad of companies offering new data sets.

Companies are offering agencies new data all the time but as industry players we are increasingly saying no because the way the data is obtained or used doesn’t sit well with our values and principles. As a result, these companies (often) quickly disappear. Data collected without clear permission or applied in inappropriate ways has no place in the advertising or media industry.

Data-driven marketing is an important part of our industry. If performed with transparency and respect for the trust the public places in us, it has the power to not only make our industry better but help advertising fund new content, services and tools that contribute value to society and the economy.

But if we betray the trust the public places in our industry and don’t treat the public with respect then we don’t deserve the right to use the public’s data. Zuckerberg acknowledged this in his post on Wednesday in response to the Cambridge Analytica situation: “This was a breach of trust between [Aleksandr] Kogan, Cambridge Analytica and Facebook. But it was also a breach of trust between Facebook and the people who share their data with us and expect us to protect it.”

Cambridge Analytica betrayed trust on many levels. Facebook was too trusting and was blindsided by how sophisticated the data industry has become. The lesson that can be learned for all of us is that data, like all things that can empower so much good, can be weaponized for bad. That’s why phrases like “computational propaganda” and “weaponized data” are entering the lexicon.

As an industry, we risk letting these negative terms become the brand for data-driven marketing unless we collectively stand up and say that Cambridge Analytica’s behavior is unacceptable and has no place in marketing and advertising. Cambridge Analytica does not represent the advertising industry. Its behavior and companies that behave similarly have no place in this industry.

What the coming weeks and months should remind us all is that, as an industry, we need to always ask the tough questions about data. Where and how is it collected? Has it been obtained appropriately and with permission? Is it compliant with privacy principles? Is it legal? And, just as importantly, is it ethically and morally right to use the data in an intended way?

The line between good and bad use of data is the moral, ethical and value compass of each and every individual working in this industry.

In the end, though, it all comes back to trust. We need to ensure that when the industry talks about trust and transparency, individual consumers are included and considered as important to the trust equation as agencies and advertisers. The more we include consumers in the trust equation, the better it will be for the industry.

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Agency Search: Everything you need to know to identify the best marketing or ad agency partner.

Written by ChuckMeyst2015 on . Posted in Agency Search Tips, Blog Posts

Easy Advertising Agency and Marketing Partner Search

From agency search consultants, marketing match-makers, agency directories and aggregators, finding the best resource for selecting an ad agency or marketing firm isn’t always what you would expect.  

Once upon a time clients used to find a new agency by asking colleagues for recommendations, asking media reps, or going to their files for a folder labeled “Ad Agencies.” Back then many agencies practiced the fine art of mailings and calling on potential clients. Advertisers relied on national and regional publications such as Adweek and AdAge to identify the hottest agencies.

Agencies used clever direct mail tactics and even took out ads to reach clients and identify their agency as a potential resource for future connections. Then as now, clients with truly large budgets reached out to or were found by the traditional “Agency Selector Consultant” – early-adopters like Dick Roth and MorganAnderson, eventually the likes of SRI, Pile and so on.

Its 2018 and now there’s a dizzying array of many different types of vendors who purport to offer easy or more effective ways to guide an advertiser to find a potential new agency or marketing partner. 

Before examining those options, let’s see if we can agree on a few fundamental factors when finding and hiring a new agency. Years ago, a client was often heard to suggest “you won’t find a diamond if you’re looking among lumps of coal.”Translation? You may not find a perfect agency partner if you’re looking among a collection of unqualified candidates. So the focus must be on identifying qualified candidates at the outset. The challenge: A client may or may not know the right questions to ask or how to match a potential agency’s capabilities with their most urgent marketing needs.

There’s more. Time and again industry experts write articles and blogs to suggest how to initiate an agency search and conduct a review with a mere handful, say 5-8. In a massive sea of agency candidates numbering anywhere from 15,000 to 30,000, without a very precise process, how could a marketer possibly narrow that down to the best 5-8 agencies? Seldom do those articles spend any time to address this salient issue most relevant to the client. I will share some options, but for the moment, let’s examine agency attributes and what ranks on the client’s wish list.

Drawing on our 20+ years providing match-making to advertisers, when given choices, their first is desire is for relevant experience in their own business category. Why? Because then a marketer doesn’t have to spend time bringing an agency up to speed on their nickel. However, some clients actually stipulate against prior experience or the anthesis thereof. Contending they don’t want to inherent ideas used and abused before. Regardless, category experience is a weighted attribute one way or other.

Finally what about services, location, size, case histories, work samples, a dog friendly environment (yes, they have asked for that), client testimonials and then some? Certainly they are important factors but for each client they are weighted individually.

The two qualities that can’t be relegated to statistics are creativity and chemistry. There is no consultant or service that can deny the client the opportunity to make those judgments.

Now let’s consider the various agency search resources with a few examples:

1. Traditional “Agency Search Consultant” – Roth Ryan Hayes, MorganAnderson, Select Resources, Pile & Co. We have yet to discover who was first to convince an advertiser to compensate a consultant for finding and assisting in the hiring of marketing firms that would otherwise be spending their time and money to introduce themselves to that advertiser, as had been the age-old B2B custom. So be it, it was done. These consultancies range from a few employees to an unbelievable collection of top-notch talent, most of whom have agency credentials. If you want and need it, they will sit side-by-side in meetings, manage much of the process and agency interaction and take an active role in the entire process. There’s a large list of 22 to choose from, but you will pay and generally, you need a substantial budget to justify their fees.

2. Traditional “Agency Directory” – These directories have content developed over time by the agencies themselves. Redbooks.com is the best example. In their words: “For almost 100 years, Advertising Redbooks has been providing competitive intelligence and prospecting data to media companies, advertising agencies, manufacturers, advertising services and suppliers, libraries and more. Looking for relevant content on companies and the advertising agencies that work with them? Advertising Redbooks is the source for uncovering key advertiser and agency relationships.” Historically this directory of both advertisers and agencies has been a great resource for vendors looking to sell goods and services to listed agencies and advertisers. It’s a comprehensive but pricey subscription service.

3. Traditional “Phone Book” Directories – You would know them as the Yellow Pages. Because they serve specific regions, the initial attribute is location. In earlier print versions, agencies were listed alphabetically. Now, like Google and Bing, he who pays gets best position! It’s a hodgepodge grip and grab process that at best, wastes time and at worst, wastes money. But for a small-to-medium firm wanting a near-by agency, it can be a limited but handy resource. Free but not that efficient.

4. On-Line Search Engines – Google, Bing & others – Self-explanatory. Provide incredible reach and coverage but tend to lack depth of available data. You can spend hours and keywords filling your bucket and you can fall asleep as you negotiate a wide variety of agency websites. You’ll need to create your own matrix to evaluate the relative merits of candidates they present. Free, but data is disparate and the process is significantly time consuming.

5. Digital Search Engine Matchmaker – In 1997 and as what was then a “vertical finder” pioneer, we launched AgencyFinder.com as a reverse-engineered adaptation of MarketPlace’s CD-ROM list creation tool. AgencyFinder blends the digital matching technology of a business dating service with its own, unique blend of one-on-one staff consulting to help hundreds of clients find the right agencies. The first algorithm criteria is always vertical market experience. In its first pass, it limits itself and identifies 35 or fewer “perfect candidates.” Each agency, when selected, is based on the content they contribute and post using some of the 500 offered data fields. Finally staff consultants send invitations (Requests for Dialogue – RFD) to 15 or so. Any and all agency content is contributed by the agency alone and reviewed before approval and activation. This service includes multiple client consultancies, agency invitations and due-diligence interviews. The service is free.

6. Association Membership Directories – Best example is the 4A’s. Founded in 1917, this trade association represents the lion’s share of the major agencies in America and is the leading authority representing the marketing communications agency business. Utilizing an updated on-site search engine, navigating within their members is straight forward. There’s also a wealth of valuable editorial information here about many aspects of the client/agency relationship and the proper elements of an agency review. Search registration is free.

7. Super Directories, Data Aggregators – AdForum, AgencySpotter, Clutch.co, ranked.com. If you’re into research and think you need tons of data, this is your cup of tea. With directories, it is incumbent on you to do it all – find, evaluate and ultimately invite and connect with the agencies you see as candidates. Search management is your responsibility. Note that listing positions are often a function of agency payments or sponsorships. When these directories first come to market, it’s not unusual to claim content for thousands of agencies, yet in-fact it takes months and even years for agencies to contribute of their own volition. This quick-fix is sometimes accomplished with data scraping, also known as web scraping, and is the process of importing public information from someone else’s website into your spreadsheet or local file. It’s one of the most efficient ways to get data from others on the web, and then channel that data to their website. A rigorous clicking exercise will often revel “empty profiles” with notes to the affect the placeholder hasn’t yet had time to contribute. Generally these are free services.

Conclusion

Testimonials, case histories, third-party assessments – When agencies are allowed to speak with clients, that gives the agency an opportunity to decide and show what content best represents their candidacy. In these areas anything collected and inventoried at a third-party site can quickly grow old and obsolete. Don’t weigh down the front of your process with too much research. Decide what your criteria for selecting an agency is before you start any process. Then evaluate what the agencies send for your consideration.

Monetization. Each service has their own business model for how they make money. However, revenue should flow from either agency or client but never both. A “Chinese wall” is not enough to prevent the potential for ethical conflicts, so know who pays what and when before your proceed.

I wish you happy hunting!

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Instead of Lowering Your Price, Lower Your Client’s Risk

Written by ChuckMeyst2015 on . Posted in Blog Posts, Marketing Consultancy

Guest Author, Tim Williams

You’ve just found $100 on the sidewalk. Should you put it under your mattress or buy a lottery ticket? What role does your tolerance for risk play in your decision?

In business circles, risk is almost always treated as something to be minimized. But can risk also be an economic positive?

The iconic Peter Drucker made a profound observation when he said “All profit is derived from risk.” Ponder that truism as you consider the nature of the compensation agreements you developed over the last 12 months. It’s likely you injected little to no risk in your proposals, which is in directly violation to the principle that if you want to make more money, you must take more risk.

Harvard’s Benson Shapiro offers this perspective: “Performance-based pricing is insurance. It insures that the seller does not undercharge the buyer.” In other words, introducing an element of risk in your compensation agreements not only holds the potential of making more more, but also making you a better pricer.

Who Bears the Most Risk in Agency-Client Relationships?

Now let’s look at risk from another perspective. Jack Skeels of AgencyAgile believes “The primary mediating characteristic of buyer-seller relationships is how risk is handled.” Says Skeels:

“When we ask agencies, ‘Who carries more risk in the relationship, you or your client?’ the answer is almost always ‘We do.’ Nothing could be further from the truth. Your client carries more risk than you do … by a million miles … Clients are completely vulnerable to your efforts (which they don’t see, understand or control), and when you fail, they can die.”

The method of agency compensation is an important factor here. Clients who buy hours are really only buying buckets of inputs that may or may not correspond directly with the needed outputs. But more importantly, these inputs may or may not produce the desired outcomes. Herein lies the risk being taken on by the client. The agency will work its hours and collect its fees regardless of whether or not the work is effective. While every good agency desires to do good work, there is no real economic incentive for them to do effective work.

True, the agency can get fired at the end of the contract period, but that misses the point. After nearly 30 years using the hourly rate system, smart clients have realized that this approach has a fatal flaw. Brand growth has been stagnant for more than a decade, and most major marketers have been slogging along in a low-growth mode, unable to generate the needed ROI on their marketing investment. These clients have now concluded that the hourly rate system does absolutely nothing to help this situation; they’re simply “renting people” in advertising agencies.

Accompanying this current low-growth cycle for brands is an understandable low-cost mentality. Hence the rise and power of procurement. The prime directive at corporations everywhere seems centered on efficiency and cost cutting.

But what are these client organizations truly buying? No company ever saved its way to success. My friend Tom Lewis, formerly of the IPA, observes that professional buyers of marketing services are now squarely in the habit of attacking the seller’s cost base, insisting on as low a profit margin as possible while purposely leaving workload ill-defined. This, Lewis says, results in a low seller’s profit and a low cost of purchase for the buyer. In return for a lower price, the buyer unknowingly accepts compromised quality and effectiveness.

So instead of complying with buyer requests to lower costs— which will not provide the client with what the results they’re attempting to procure — could agencies instead lower their client’s risk?

Three Things Clients Buy

One of the world’s foremost business strategists, Michael Porter, asserts there are three main reasons businesses buy the services of companies like agencies:

To increase their revenues
To lower their costs
To decrease their risk

While most agencies don’t know it, even the most hard-core procurement professional thinks in these terms. Former WPP head of procurement Tom Kinnaird emphasizes that cost is just one of four areas in which procurement professionals seek a “win.” They also seek to obtain value, maximize cash, and minimize risk. This risk can take the form of:

The risk of suboptimal performance by the seller
The risk of not receiving the promised features and benefits
The risk of the service provider not producing the agreed-upon results

Writing in the WPP publication Atticus, Scott Brenman proposes the idea of a “threat audit” to help identify risks your clients face. He then recommends including on briefs a section about risks and threats to keep both agency and client focused on ways to minimize them.

KBS+ co-founder Jon Bond believes that agencies aren’t really in the ideas business — or even the results business — but rather the insurance business. The best agencies, he says, embrace the idea that their essential purpose is to reduce risk for their clients. Bond proposes that agencies should proactively sell their services this way, which he believes leads not only to more new business wins (risk reduction is a powerful proposition) but also better pricing (the best insurance companies command the highest premiums).

In the end, Bond says, “Economics are more powerful than negotiation.”

Propulsion is written by Tim Williams of Ignition Consulting Group, a U.S.-based consultancy devoted to helping agencies and other professional firms create and capture more value.

THE DISRUPTIVE AGENCY MODEL – IS YOUR FIRM READY FOR THIS CHALLENGE!

Written by ChuckMeyst2015 on . Posted in Blog Posts, Marketing Consultancy

By Judy Shapiro. Published In AdAge November 16, 2017.

Editor comment: The headline question “Is your firm ready for this challenge” is AgencyFinder’s. As Judy points out and as I suspect you know too, your agency is challenged like never before, to integrate the technologies and media alternatives. The question might be – when will you find the time?

In a recent Ad Age post, I heralded a new era for agencies where “quality scale” was new revenue created through the design of trusted user experiences that can be deployed at scale. This level of sophisticated marketing design is beyond the scope of ad tech platforms or management consulting firms with their limited executional, real-world experience; presenting agencies with a potent new growth area.

That vision set the stage so now let’s turn our attention to the practical details which will require, perhaps, challenging almost everything we think we know about how agencies are run today.

Align to clients’ new “trust” value equation
A staggering 60% of top 100 advertisers plan to review their agencies in the next 12 months, clearly reflecting clients’ radically changing expectations of their agencies. More than ever, brands need their agencies to be experts at creating trusted digital experiences while remaining operational and financially transparent. This complex dance of positioning, creative, data and technology is new terrain agencies must conquer.

Yet this requires highly trained people not easily monetizable via typical agency fee structures. The answer lies in disrupting old fee structures in favor of industry certifications of people, not technology, similar to certified engineers from tech companies. We have the foundation for standardized accreditation with strong leadership from IAB, 4As and ANA, among others. An added benefit of standardization is that the industry can be more transparent and comprehensible in tackling complex disciplines like programmatic, predictive modeling, AI and data.

Re-invent agency structure to excel at the art and science of modern marketing
It’s no surprise that the pendulum is swinging in favor of reintegrating tech, media and creative under one roof so that agencies can focus on contextual user experiences within an agile campaign architecture. Unfortunately, this goal cannot be easily achieved by clinging to the traditional agency structure that was built 30 years ago.

It’s time to rebuild the agency model from the ground up with an emphasis on agility, measurability and efficiency. In this vision, there are three competency areas making up a core team:

Progress planners. This is where the strategy and campaign planning responsibilities are. Within this is team are account planners; creative and technical campaign planning; experiential designers — translating experiential design into workable campaigns — and social engagement planners.
Performance planners. This new expertise will plan the performance of all marketing programs with a new set of tools and competencies; media planning (all platforms), campaign proforma modeling, fraud management and customer experiential journey mapping.
Platform planners. This is where agencies connect the dots between platforms, programs and business results. This team owns predictive modeling, audience data, privacy compliance, transparency and platform auditing. This is also where clients get support with their technology challenges such as data integration.

As campaigns become a seamless integration of online and offline experiences, this new structure allows agencies to operationalize this revenue-rich experiential vision.

Pick a tech “trust” side and own it
Traditionally, agencies were neutral arbiters of tech, refraining from owning or even advocating for specific technologies. But neutrality came at high cost, leaving agencies underpowered in understanding ad tech well enough to protect clients. The opportunity for agencies of all sizes to become guardians of clients’ budgets against fraud and inefficiencies by mastering all the science behind ad tech; programmatic, content syndication, social, etc. By taking the side of transparency, agencies have an opening to reclaim their role as trusted advisors.

Agencies lost a lot in the preceding 10 years; talent, tech edge, advertiser trust and huge profits that went from agencies’ pockets into the pockets of VCs and tech ventures. To avoid the next ten years looking like the last ten, agencies must disrupt themselves to become masters of the trusted experiential world.

Judy Shapiro is CEO and founder of engageSimply.

Navigating The Seven-Year Chokepoint (Time to Review New Business Options)

Written by ChuckMeyst2015 on . Posted in Blog Posts, Marketing Consultancy

Guest Author – Blair Enns, Win Without Pitching

Agency business development has evolved over the years as technologies and media alternatives have evolved.  Most agency “business development” employees have little-to-no formal sales training, so imagine their frustration as they face many things “new” each and every day. To that, now add the seven-year chokepoint as Blair explains … Ed

In running a creative firm, everything appears to change around the seven-year mark. There’s a chokepoint at about that time that requires a change in strategy to get through. Some make it and some don’t.

The seven-year chokepoint was perhaps the first pattern I spotted soon after launching Win Without Pitching in 2002 (as a consulting practice, initially). So many of my new clients had been in business for seven years that at some point in my initial conversations I would venture, “Let me guess, you started the firm seven years ago?” I was correct far greater than chance would have predicted, and that pattern has held for 15 years. Even today, my guess is that more than 25% of the firms in our training program came to us somewhere around their seventh birthday. There seems to be something about being in business for seven years that precipitates the need for help in the new business department. But let’s back up.

In The Beginning
It’s likely that you started your career as an employee, working for someone else and thinking, “If it were my firm, I would do things differently.” Then in a moment that The E-Myth author Michael Gerber refers to as an entrepreneurial spasm, you went out on your own. There’s a good chance your first client was one you took with you from your employer, or perhaps it was your old employer, who used you as an overflow valve or chose to purchase your more specialized offering instead of staffing it in-house.

Level 1: Validation
Things went well and time flew by. One client led to another and another. You added people and capabilities, making it all look easy if a little harried. New clients kept coming in. And then they didn’t. Somewhere around the seven-year mark, your network just seemed to tap out, and everything slowed right down. This spawns an introspective moment for many firm principals. Where am I? How did I get here?

If you were to look back on your seven-year journey, you would see your path leading from your starting point to where you stand now. Along the way, you would see binary switches, like railroad switches, each representing an opportunity that came your way. They’re all switched to “On,” or “Yes,” leading to where you are now.

Those opportunities were random, arising from your reach or network. Some came to you easily and some you had to hustle for, but by saying yes to all of them, you ended up in a random place dictated by those random opportunities. That’s okay because along the way you learned a lot, including the confidence that you can be successful in business. Validation. But right here, usually at about the seven-year mark, the wild randomness that was the hallmark of the first level of your business needs to be replaced. That first type of success is not coming back, nor would you want it to come back. It’s time now for level 2.

Level 2: Life-Changing Success
Beyond the chokepoint at which your business quits growing organically, the journey, if it is to continue, must be more deliberate. From here on out you must set your course to a specific destination. That requires a visioning exercise of not only where you want the business to be at a set point in the future—perhaps another seven years out—but what you want the business to be.

Positioning the firm for this journey is vital. Positioning is the word we in the creative professions use for strategy, and strategy, according to Michael Porter, the Bishop William Lawrence University Professor at Harvard Business School, is the answer to the question, “How are we going to become, and remain, unique?”

Think of the primary components of your positioning as the answers to the questions, “What will we do?” and “For whom will we do it?” While keeping Porter’s definition in mind, the answers to those questions posed today should paint a picture of a global leadership position in seven years. My personal belief is that if you’re not aiming for global leadership then what’s the point? You and your firm can be anything in seven years, so why would you aim for anything other than the very best of something? If you cannot imagine being a global leader in this new area, then you must narrow either the discipline (what you will do) or the market (for whom you will do it) until you can imagine it.

Once you have your vision of global leadership, it’s time to pursue it steadfastly. The traits or tools of the first level of success are hard work and saying yes to everything. But these admirable traits are not the tools that enable the second level of success. Worse, once hardened into habits these traits work against you, because the tools required to get to the next level are saying no, and innovation, which I define as a combination of creativity and risk.

From Yes to No
“The difference between successful people and really successful people is that really successful people say no to almost everything.” -Warren Buffett

Saying yes to everything ensured your survival at level 1. It put money in the bank at a time when any dollar was a good one. But now you must view every new engagement as a strategic decision that will take you one step closer to your strategic vision.

Think back to your journey. Standing in the present, turn your attention away from the starting point 180 degrees to your new destination seven years ahead of you. You will get from here to there one step at a time, with each new client representing one of those steps. So how many steps do you think it takes to get from here to that future version of your specialized global leader firm? The answer is no more than 28.

For reasons I have covered elsewhere, your new business goals should be framed around managing a healthy churn of clients at a rate of about one new one per quarter. Every three months, on average, an old client fades away and, if your new business machine is working, a new, better one comes on board. Whether you like it or not, each client will take you one step closer to, or further from, that strategic vision of a global leader. So you must choose your new clients wisely. Seven years equals 28 quarters, 28 new clients, 28 steps away from where you are now. If you were to say yes to the next 28 clients that came along, where would that get you? The answer is somewhere that looks a lot like here. But few get to stay here, at the seven-year chokepoint, for long. They either figure out the next level, or they go out of business. There are exceptions—lots of them—that stay in this purgatory for years, decades even, but nobody wants to be stuck here, past the point of validation but well short of life-changing success. The first key is discernment: saying no to engagements that do not further your vision.

You must also bring the same level of discernment to your role. What functions does it make sense for you to hold onto, and which ones should you shed? And it doesn’t stop there. This ruthlessness of delegating, cutting loose, or otherwise saying no to things and people that do not advance the firm to its strategic target of global leadership needs to become the new habit, replacing the one where you would say, with a smile on your face, “Yes, we can!” Just because you can, doesn’t mean you should. And increasingly, in level 2, you shouldn’t.

From Hard Work to Innovation
My wife will occasionally observe that someone “is very successful. She must work very hard.” Recalling Peter Drucker’s observation on the source of all profit, I respond like a robot, “No, she must take a lot of risks.”

That is the second shift required for level-2 success—to no longer equate success with your own hard work, but with innovation, which I define as a combination of creativity (the ability to see an opportunity) and risk (the willingness to make large bets). Don’t misread that to think you should never work hard or that working hard is not a desirable attribute. As the principal, working harder may have been the answer to the question in the first seven years of your business, but it rarely is afterward.

The hard work habit becomes ingrained, though. Boxer was the noble ploughhorse in Orwell’s Animal Farm whose solution to every problem was “I will work harder,” even when the escalating crisis increasingly called for creative problem-solving or risk. The problem with hard work is it is consuming, and creativity—the ability to see new opportunities for your firm and clients—requires waste in the form of time to think. That’s why every firm that pursues efficiencies must trade some level of innovation to do so.

Entrepreneurship Is Risk
The propensity for risk is a highly personal thing, varying from person to person, but it is the one characteristic that defines entrepreneurs. They are always making bets. The size or frequency of those bets can puzzle or even terrify non-entrepreneurs. I need a certain amount of risk to make my life on earth meaningful to me, but I notice that the entrepreneurs I admire most tend to take more risk more easily than I do. I wish I could match them, but alas, if I want to sleep at night, I cannot.

We all find the risk-reward tradeoff that’s right for us, but some of us tend to settle into too comfortable a zone, and as a result, quit growing. Your firm needs to grow its way through this chokepoint. It’s delusional to think you will do so without taking more risk.

When creative firm principals at that seven-year chokepoint consider a new positioning to take them to the next level, some of them want guarantees. “How can I be certain this (the new positioning they are considering) is the right one,” they ask? “You can’t,” is the answer. There has to be some risk in the decision. Those seeking certainty before making the shift will likely find that game-changing success will always elude them. Their challenge is to push their own capacity for risk, which brings them closer to failure as well as success.

One Level at a Time
Business is a game with hidden levels. By succeeding at one level, you get invited to play the next. The common mistake is to bring those first-level tools to the next level. Not only do they not work here, but they also work against you. Many of the habits you learned you will now have to unlearn. Accepting this inevitable obsolescence of tools is the key to obtaining all the advanced levels of success.

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PRICING, NOT PRICE, AS A COMPETITIVE ADVANTAGE

Written by ChuckMeyst2015 on . Posted in Blog Posts, Marketing Consultancy

By Guest Author Tim Williams, Ignition Consulting Group

Tim Williams has consistently looked at the agency world and the agency model as needing change. Today’s media alternatives demand agencies find new ways to explain and sell, and Tim makes some good points about both. When the time comes for a client to search a new agency, our AgencyFinder.com model still prevails.

The way to win more business is not to offer the best price, but rather the best pricing approach.

Many firms will argue their clients are “price shoppers,” and it’s true undiscriminating buyers can be found in every market. But most smart clients understand you get what you pay for. The reason some of them seem prone to “buy on price” is much more about how we sell than how they buy.

Based on the hourly rate system, what most agencies sell is their costs (buckets of hours), so it’s no wonder their clients are focused on costs. But what would happen if agencies decided to sell their services in a different way?

Are you creative or aren’t you?

To stand out in a competitive pitch, inject as much creativity into your compensation proposal as you do in your proposed concepts and recommendations Give your prospect multiple ways to buy your services, not just a take-it-or-leave-it total of your estimated hours.

Car washes demonstrate more creativity in pricing than agencies do. They offer multiple options (silver, gold, platinum), various versions of car wash packages, premium add-ons, monthly or annual memberships, and more. Honestly, is adding up your estimated costs the best you can do?

You can’t really claim to be “a different kind of agency” without taking a different approach to the economic foundation of your success. Ron Gibori, co-founder of agency start-up BGO (Blinding Glimpse of the Obvious), puts it this way “There are no new models, just more talk, without a new approach to the money.” Ron’s partner Mark Beeching elaborates:

“We embrace shared risk and reward with clients in a variety of ways — from pinning significant fees to agreed performance criteria through to joint ventures with clients and shared or even full-risk ownership and funding of new IP by BGO. We’d rather apply our inventive business brains to new win-wins with clients than endless wrangling over budgets and billable hours …”

Changing your pricing changes the dialogue

At a minimum, decide you’re going to join the rest of the business world in selling outputs instead of inputs. (Can you imagine paying for a new laptop based on the number of hours it took to build it?) Then commit to replacing your standardized rate card with a spectrum of pricing approaches designed around customer value instead of agency cost. This can range from fixed price options to licensed programs; from royalties to outcome-based agreements; from dynamic pricing to usage of IP (the way Hollywood makes money).

Not only does a creative approach to pricing help you stand out from the firms creaking under the outmoded hourly rate system, it changes the dialogue you have with your clients when in comes to compensation. Would you rather be talking about something clients want to minimize (costs) or something they want to maximize (value in its many forms)?

From treadmill to virtuous circle

If you need some extra motivation, consider that transforming your pricing strategies is really the only way you’ll be able to create and sustain the “virtuous circle” that is the basis of every extraordinarily successful firm:

The elements of this cycle are interdependent. You can’t expect “effective work” to sustain your success if you don’t also have an effective way to get paid for it. In fact, without a pricing strategy that produces healthy margins, you’ll forever be swimming against the currents. As the late great Stephen Covey preached, “No margin, no mission.

ADVERTISING AGENCY SEARCH – SIMPLIFIED

Written by ChuckMeyst2015 on . Posted in Agency Search Tips, Blog Posts

Note: Marketing firms call themselves everything under the sun. Truth is the “handle” or “descriptor” is not important, but what IS important is their experience, the services they provide, their “personality” and the likelihood for great chemistry, then location, years in business and this list goes on. However you searched for an advertising agency, digital agency. Marketing partner, PR firm so that’s our topic.

But oh the drama and angst of searching, finding, evaluating and then hiring a new advertising agency, digital agency. Marketing partner, PR firm. Some say it compares to finding and hiring a new C-Suite executive. But it doesn’t have to be that way! Follow these simple suggestions below and you’ll enjoy a pleasant and educational process that you might later tell your associates – was fun!

Step # 1, Rule #1– You will never find a winning partner among a pack of losers. Lesson #1 – The most important and critical stage of your review is the identification of candidates. The first temptation is a Google search. Google’s first assumption, like it is for a fast-food lookup is that you want your agency nearby, so they perform a local search. If that’s your desire, fine. But if you already know who’s in your market, then that’s of little help. Same for Bing and Yahoo. All steer you to websites where navigating and comparing can be a nightmare. Another revelation – there is no set standard for agency websites (thank goodness) but that means you’re in for lots of variety and confusion as you  page your way, or scroll your way through dissimilar agency websites. I do promise you will be entertained if you are easily amused.

Let’s find your candidates. Don’t try to identify candidates one at a time, look for a service or search consultant that will help. Try search terms like “Ad Agency Search Service,” “Ad Agency Database,” “Digital Agencies,” “Find PR Firms,” “Agency Search Consultant,” or other variants. If you want assistance a search consultant is your ticket, but they come at a price. One free search consulting service that’s been around for some time is AgencyFinder.com. Check them out. Once you’ve found what you want there or elsewhere, define what it is you need.

What do you need in location or locations, size (employee count), Capitalized Billings (aggregate spend), Years in business? Then more specifically:

·        Fields served (vertical market experience)

·        Services offered

·        Market Specialization

·        Membership in Professional Organizations

·        Compensation options

·        Media experience

·        Primary Business (ad agency, digital, etc.)

·        Other

Step #2 Identify 20 or more agencies (yes 20) and then spend time on their websites. Build a spreadsheet to manage your work. Look for reasons to remove some, not to invite them. Narrow your list to 12-15. Put together your invitational package (an outline of what you seek from the agency) but not an RFP – that’s premature. Prepare an invitation that can be sent by email, fax or overnight carrier. Don’t interview anyone until they have your invitation in-hand and have come forward. Instruct those with interest to send an email to schedule a day and time for a telephone interview. You invite 15; 10 may respond and wish to continue.

Step #3 Hold your due-diligence telephone interviews. The “format” is free-flowing but an opportunity to get to know each other, learn what they do and how they do it, probe to discover to what extent they have experience in and understand your industry. Note what questions they ask you. Determine if they are interested in becoming your agency. If YES, ask them to send you a “Pitch package” – a collection of relevant samples of similar work, then an open-format letter describing how and why they want your business. You or they eliminated 3. You are down to 7.

Step #4 Examine those agency materials and share what they sent with colleagues. Decide who to cut and who to keep. Notify both with pleasant, professional messages – email or phone. Those who are cut will invariably want to know why; try to be honest but gentle. DO NOT fail to notify those you have cut. You cut 2, down to 5.

Step #5 For those still in contention, let them know and if your budget warrants, schedule a visit to those agencies. Plan for an “Agency Tour,” an opportunity to see their facility, meet various employees, see finished and work-in-progress. Look as well for work lying around that isn’t in your wheelhouse, but something you might have admired. Form your opinion and make judicious notes. After visiting 5 semi-finalists your top 2-3 should be evident.

Step #6 Invite the Top 2-3 to come to your headquarters and make final presentations. Give them adequate time to prepare. You identify the assignment and provide the facility. Voila!!! Discover your new agency!

Now it’s Your Turn                                             SEARCH NOW

7 WAYS TO CREATE NEW REVENUE STREAMS

Written by ChuckMeyst2015 on . Posted in Blog Posts, Business Development

Guest Author: Tim Williams, Ignition Consulting Group

Tim’s contributions are “spot-on” and we’re happy to share them when available. His content is significant and if you read carefully, it suggests that running an agency is clearly a full-time job (for those who missed that class).  The same goes for everything you find necessary for new business development.  With today’s litany of business development options, it make sense to bring in someone with special skills to teach and train your people. Many of the skills required today are not “self-taught.” And if not special people with special skills, engage a service that delivers “opportunities.” Is your answer to Tim’s first question “Yes?”

Would you like to earn money while you sleep? Most of your clients do. 

While most product and service companies have diverse ways of generating revenues, agencies and other professional firms generally don’t make money unless they’re recording hours on a timesheet. “Work a million hours, make a million dollars,” as the saying goes.

This is why the agency business is not really scalable. As long as your product line consists of “billable hours,” the only way you can scale your company is to add more people. And with the current pricing pressures on the time-based compensation system, this makes agencies perpetually high-volume, low-margin businesses.

But it doesn’t have to be this way. An emerging crop of innovative firms across the globe are successfully cultivating new revenue streams, diversifying their sources of income, and yes, even making money while they sleep.

How do they do it? Here are seven ways you can accomplish this in your own business.

1. Diversification
Purposefully diversify your compensation approaches with clients

Your personal investment portfolio (the money you’re saving for retirement) is diversified for a very good reason: you’ll get a much better rate of return. The same logic holds for your firm’s compensation portfolio. If your revenue streams are generated in a variety of different ways, you dramatically improve the chances of earning an above-average year-end profit.

2. Non-Standardization
Replace a standard rate card with an array of revenue options (a “pricing stack”)

Besides being remarkably uncreative, a standard list of hourly rates is a wildly suboptimal way to capture the value you create for your clients. When asked by a prospective client to supply your “rate card,” respond instead with your version of a “pricing stack” — an assortment of different ways your firm pricing its services. These can include such approaches as:

FIXED PRICE OPTIONS 

REVENUE SHARING

USAGE

DYNAMIC PRICING

SUBSCRIPTION-BASED

LICENSING

ROYALTDIES

3. Risk Management
Bet on your own success by injecting elements of risk in selected opportunities

Not every prospective client is a candidate for an outcome-based compensation agreement, but some are. When you sense an opportunity to get paid for marketplace outcomes instead of agency inputs, seize it. You’ll learn from it and get better as you go.

4. Productization
Turn selected solutions into programs and products

As stated earlier, labor-based services on their own are not very scalable. But programs and products are. By packaging up selected services into programs and products, you enhance the perceived value of your offerings and create the potential for new ways to charge for what you do.

5. IP Ownership
Package your intellectual property in ways that can generate recurring revenues

Most firms have a wealth of valuable intellectual property scattered across their file servers. This can be “productized” and licensed to clients.  Look for opportunities to license existing IP (software code, analytics dashboards) instead of approaching every assignment as “work for hire” in which the client automatically owns the IP. Why should your clients buy everything you do for them when they can rent some of it for much less?

6. Unmet Needs
Move beyond widely available services to develop solutions for the unmet needs of clients

The profit problems at most firms can be correlated directly with a service offering that the business strategist Clayton Christensen calls “overdeveloped services.” Good luck charging a premium price for something clients perceive they can get down the street at half the price. Instead, turn your energies to the “underdeveloped services” designed to meet the unmet needs of the marketers you serve.

7. Experimentation
Adopt a “test and learn” approach to generating revenue streams

The most profitable agencies we have ever worked with have the attitude that every new assignment is an opportunity to craft a new compensation approach they’ve never used before — the equivalent of a pricing “test kitchen.” They expect varying levels of success, but that’s the point. They learn from their experiences and get better and better at developing more creative, more effective ways of capturing the value they create for their clients.

*     *     *

Propulsion is written by Tim Williams of Ignition Consulting Group, a U.S.-based consultancy devoted to helping agencies and other professional firms create and capture more value.

The Technology Sector’s Negative Influence on Creative Firms

Written by ChuckMeyst2015 on . Posted in Blog Posts, Marketing Consultancy

Guest Author – Blair Enns, Win Without Pitching (He’s on a roll)

No, this isn’t a rant about how things were better before everything was digital. Rather, it’s an observation on how principals of creative firms have borrowed some of the wrong things from the cultures of technology businesses and startups, in particular.

First, The Good
The buzz of innovation and deal flow coming out of Silicon Valley and other technology startup hubs is infectious. There’s so much that’s good about it and, in recent years, creative firms have borrowed some good things from tech:

1. They’re more open to exploring alternative business models
2. Some firms are launching their own start-ups or spinning off some of their internal innovations into other businesses
3. Principals are lifting their eyes to the horizon, being more tuned in to what’s likely to happen next, well before it starts to happen
4. Firms are fostering culture as a means of recruiting and retaining good people
5. Some firms have their own labs or R&D divisions
6. All great stuff. But I also see problems created by the wholesale adoption of some practices and viewpoints from the tech startup world in the culture of creative firms. There are two in particular that I think have been the most damaging.

Then the Bad

1. A Tendency Toward Productizing
Look at a few websites of firms that do some form of technology marketing. Many are taking too many cues from the SaaS companies whose marketing automation products they’ve aligned their businesses to. Specifically, they’re productizing their services in a bid for scale without stopping to consider the myriad of other implications of such a strategy. I’m a fan of Hubspot–the company and the technology–but I can’t discuss this topic without pointing out that the ecosystem of Hubspot partners firms is an egregious example of unnecessarily productizing what should usually (not always) remain a customized service: marketing.

Hubspot has served their partners well by providing so many resources to them to help them build their businesses, but the price seems to be that Hubspot has attracted firms that really want the model of success to be told or handed to them rather than those willing to innovate their own way forward in the quasi-paranoid, quasi-isolated way that is typical of an entrepreneur.  Hubspot partners, and other firms like them who resell other software, package and price their services like software companies, not recognizing that theirs is a dramatically different type of business requiring different pricing and business models.

The trade-offs between these business types are many. You can watch my talk at Hubspot’s Inbound Conference last year where I discussed it at length.

2. A Focus on The Exit
Is there anything more ridiculous than someone you’ve just met asking you, “What’s your exit strategy?”

As I’ve previously written, my exit plan is death, and I think yours should be, too. I can be talked into seeing the merits of a technology company spinning up and then selling so that their own little technology becomes a small part of some larger technology that takes over the world and makes all the players rich. But in truth, I think most (certainly not all) of those sales and stories are vacuous nonsense. Regardless, in an independently-owned, knowledge-based business, having one eye on the exit is about the best way to neuter your business. Watching a creative firm principal ease into retirement while the firm slides into irrelevance has always been one of the most painful things to witness. But now the young owners have this disease too, except their exit is a short-term sale.

Again, maybe if yours is a technology company developing a real proprietary technology, a short-term sale is something to shoot for. But if you’re still in the service or expertise business then a sale is unlikely. Build a great firm that allows you to go deep into your client’s problems on a customized basis and reap the rewards of such a business along the way. Having one eye on the exit in this business is the wrong thing to do, no matter what your age.

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“As a next step, I’d like you to come back with some concepts on what this campaign might look like.”

Written by ChuckMeyst2015 on . Posted in Blog Posts, Business Development

Guest Author – Blair Enns, Win Without Pitching

The client was politely but firmly taking charge, proposing what he clearly saw as a logical next step. Even though he was still a prospect at this point and not a paying client, he seemed to be conditioned to believe that our firm doing work for free made sense for all. I didn’t see it that way. Matching both his politeness and assuredness, I replied without skipping a beat, “We never pitch.” It was a lie. We pitched all the time but I was getting tired of it. I’d seen this film before and I knew how it ended. I wanted to try to change the ending, even if I didn’t know what should come after my small act of defiance. What made this particular exchange interesting though was that my boss, the president of the firm, was seated next to me and he replied to the client at exactly the same moment I did. “That sounds good,” he said. Cue the awkward silence.

It’s so long ago now that I don’t recall what happened next. I think I remember the three of us exchanging glances, Mexican standoff-like, but I don’t remember what language my boss or I spun to extricate ourselves with minimal embarrassment before we retreated to work on the pitch. I do know the client never hired us. I don’t think he hired anybody. It was the classic example of an overeager salesperson (me) mistaking interest for intent, and then an agency CEO, who had flown in for a meeting that never should have been, wanting to salvage something from the trip. Neither do I remember the details of the conversation with my boss that followed. I vaguely recall there was no real friction between us. I think he appreciated my alternative approach but would have liked to have known in advance what the play was going to be. The problem was that I myself didn’t know. I just sensed another client who was about to put us to work, for free, and not hire us.

If we list the things that went wrong on this opportunity, we find: 

1.     The client had not yet formed any intent to solve his problem, therefore, in all likelihood, the meeting never should have happened. At the very least it was poorly qualified beforehand. Wasting your boss’s time and money by having him fly in for a poorly-qualified meeting is a major no-no. In all likelihood, he was probably coming to town anyway and asked me to line up some new business meetings. (Again, the details elude me.) Such a request is perfectly legitimate but also enough pressure to cause a salesperson to set up meetings that shouldn’t be. I don’t remember anything about the dialogue that led to the meeting, but I’ll bet it was me pushing for it and not the client. In such a context the dynamics become clear, with the client thinking, “these people really want my business. Of course, they’ll bring me some free ideas!”

2.     We let the client lead in the meeting and then we agreed to follow even though the place he was leading us to wasn’t in our best interest, or at least I didn’t see it as such.

3.     We, my boss and I, were not operating from the same playbook. I had contradicted him in front of the client. If I had told him in advance how I wanted to handle such a request, I think he would have agreed to play it my way. He was a great that way. But it wasn’t part of any predetermined plan of mine either.

All the errors seem silly to me now, but back then I just didn’t know. I was a new business person. It’s not like there was anything that resembled training for this role. You copied what was done by those around you and those that went before you, based on the stories and the decks. And you improvised.

In the many years since this incident I’ve seen that this lack of cohesion on business development topics is common–perhaps even the norm–even if most examples don’t manifest themselves in a subordinate putting his boss in an awkward position the way I did. Just today I heard from an executive at a medium-to-large independent firm frustrated at the firm’s leadership team’s inability to get on the same page. “We have rules we’ve agreed to about when we will pitch and when we won’t but we break those rules all the time, and we always lose.”

There are so many different challenges that can affect a firm’s new business success, but not having everyone agree on some basic policies and procedures has got to be one of the most common and most significant.

If you’re trying to extricate your firm from a new business rut, a good place to start would be to get all the key players together (I mean ALL. Don’t let the chief transgressors skip this.) and agree on some basic new business rules, such as:

What do we require from the client before we will incur any expense?
What information do we need before we agree to a meeting?
Under what conditions will we respond to an RFP?
What is the smallest engagement it makes sense to take on?

Of course, agreeing on the rules and enforcing them are two different things. I suggest that once you lay out the rules, commit to a brief postmortem on each late stage opportunity (any opportunity that proceeds to a win or a loss) and, rule by rule, ask yourselves how you did. After a few such reviews, the patterns of transgressing and enabling will become clear. Then you need to decide what to do about  that . You can cross that bridge when you come to it. For now, commit to getting everybody on the same page by setting up the rules and reviewing every won or lost opportunity against them

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