Consider Setup’s newly released study reporting “nearly one-third of U.S. brands may be contemplating switching up their ad agency in the next six months, while more than nine in 10 say chemistry is the most important factor in forging a new agency partnership. Their study sought insight from more than 300 marketers across major brands and agencies.” Of equal interest, more than 25 years ago, Sanders Consulting Group conducted a similar study but exclusively of major brands. There too 30% of polled clients expressed a willingness to consider a new agency if approached.
So there’s good news and bad. Good news if your agency has capacity and the desire for new clients. That being the case, get moving. Refresh relationships with traditional and on-line search consultants. Clean and update your profile here at AgencyFinder. Where you have directory listings, clean up that content. Ramp up your pro-active efforts. Keep your ears open. However, there’s bad news if any of your existing clients decide they want a new agency and start looking around. To stem the tide, pay close attention to existing clients. Deliver “First-Class” service and support. Learn and become adept on what they need to stay ahead of their own business development curve.
Take note – literally one-in-three advertisers could be potential candidates for movement, either in or out. So make your agency visible. Wave your hands; make some noise. Spend some money and now is a good time to make that investment at Manager Plan – not later when other agencies have already done what you need to do.
Retirement. Now there’s a loaded word. For some — it’s the holy grail that they’re working toward. For others, it’s the epitome of boredom and obsolescence. Others believe it’s an impossible goal.
Whatever your feeling about retirement, there’s one thing we know for sure. You can’t work at your agency forever. So what’s the plan?
The truth is — most of you don’t have a plan. You might have a vague idea or two, but in terms of a concrete plan, not so much (if you don’t have SMART goals and deadlines, it is not a plan!).
We do a lot of work with agency owners to get their agency in a desirable position for someone to buy it. And in most cases – it’s tough going for awhile. Most owners wait too long to get started. They want to be out in a year or two but haven’t prepped the shop for that. Waiting too long diminishes their options. I can tell you horror stories of agency owners who wanted to be out five years ago…and are still running their agency today.
So let’s make sure that is not you. For the next few weeks, I am going to focus on one aspect of your agency that needs to be in place before anyone will considering buying it. I don’t care if you’re 35 and just launched your business. You should still be building your shop so that it can stand on its own. Just like Stephen Covey taught us — begin with the end in mind.
Is your agency sellable element #1:
The more specialized your agency is, the more likely it is to sell.
I know you’re sick of the niche propaganda but hear me out. Outside buyers are much more attracted to agencies who serve a specific niche or a couple of related niches. The competition is much lighter, you can command a premium price, and the target market is clearly defined and contained. It typically also means you have fewer clients with a higher AGI and either consistent project work or a retainer agreement of some kind. Which also delights a buyer!
If you’re a generalist agency, your only real option is going to be an internal sale. Odds are your clients are local/regional and you have a lot of smaller clients with one gorilla or two.
There are a couple exceptions to the generalist rule. If you are a PPC/Paid search/lead gen. agency — then your clients aren’t typically local and you’ve got a lot of retainer clients. That makes you more attractive than a generalist marketing agency. You’ve also probably put 20-25% profit to the bottom line for the last several years, so that’s also in your favor.
For this to be a selling point for you — you have to embrace it. Your website, content, and client roster all need to support your specialization claim. You can’t hid it under a bushel because you don’t want to say no to any/all prospects who do not fall into the specialty area.
Of course, I am just scratching the surface here — but you get the message. When you’re talking about selling an agency — there are riches in the niches.
For the past year, you have done everything you could to protect your team. Many of you have made some pretty significant sacrifices to make sure your folks had a job, health insurance, etc. during the pandemic.
But as I told you last week, their gratitude for all you’ve done was worn a little thin by November and now, you’ve got people asking for raises, leaving you for other opportunities, and just tapping out.
Behind closed doors, agency owners bemoan their employees behavior and admit that they’re taking the departure personally. It hurts when someone you’ve bent over backwards to help and to grow decides they want to leave. And the conversation usually starts like this, “After everything I’ve done for XYZ, they do this?
The answer is because they don’t think about you the way you think about them. Many agency owners think of their employees as family. As such, they go way above the call of duty to care for and nurture their employees. You might even refer to them as the kids or some other family colloquialism.
But they don’t think of you in the same way. Now, if you have a partner of the opposite gender, they might jokingly refer to you as mom and dad. But that’s in the “if dad says no, ask mom” sort of way.
They like and respect you. They might even love you. But they’re much better at separating their feelings for you from the job itself than agency owners are.
This was true before the pandemic and now that the crisis has passed, it’s true again. In last week’s newsletter I wrote about the shift from gratitude for having a job to asking for a raise. Again — they see the relationship differently. And, may I suggest, they view the relationship in a healthier way than some of us owners do.
Before I get hate mail, I want to be clear. I want you to love your team members. I want you to treat them well, pay them fairly, and create an amazing work environment. I want you to be invested in their growth. My personal goal is to ruin my employees for all others. But some have still left. Because it was the right thing for them, for their family, for their career, etc. We have to know that sooner or later, every employee is going to walk. No one can be indispensable.
We can’t think of the agency as our other family. It’s not healthy for us or the agency. When we think of them as family, we make bad business decisions. We keep a C player because we’re not sure they can get a job anywhere else. We tolerate lousy, corrosive behavior. We neglect to cut payroll when we don’t have the business to support it. We don’t call individuals out when someone disrespects the agency’s values. We go without a paycheck so everyone else gets paid.
They like/love and respect us. And many of them will stick around for a long time. But when they get a job offer for $10K more than we’re paying them, or they can get a promotion they might not get at our place for years — they will leave. Because it helps them get where they want to be.
We need to find a way to have that same healthy view of our employees. We can still love them as people but not be beholden to them for life. Next week we’ll explore how we can begin to make that shift.
In March, you shot into action. You were unstoppable because you had no choice. Either you were fighting to save your agency or you were so slammed you were struggling to get the work out of the door.
You chased clients. You soothed employees and came up with all kinds of crazy ways to support them. You approached your bankers with dogged tenacity to get financial support. You clung to every penny and squeezed a nickel’s worth of value out of each one. You were ON.
Drew points the way
As things stabilized, you scrambled to delight the clients old and new, dealt with medical surprises, and fought to cross the 2020 finish line in the black.
Your adrenaline kept you fueled for those ten months. You were relentless in your efforts and it paid off. But you drained the battery dry.
You shifted into a lower gear throughout the holiday season and then, as January arrived, instead of being refreshed, focused, and fired up — you were the total opposite. I’ll bet you thought you’d come out of the holidays raring to go, with boatloads of energy and focus. But instead, those adrenal glands that have been working all three shifts for ten months, appear to be on strike.
See if you recognize any of these symptoms:
Fatigue, particularly when you first wake up, with episodic crashes throughout the day
Poor stress response
Challenges with regulating your moods
Brain fog/difficulty focusing for any length of time
Cravings for salty and sweet foods
A reliance on caffeine and other stimulants
Apathy or struggles to rise to the occasion
Many of you have described it as struggling to find your “mojo”. Since you don’t have the luxury of taking a month off or cruising to a remote island, you’ve got to identify some techniques to replenish your adrenal glands so they can give you the boost you need when you need it.
I don’t even play a doctor on TV so I’m not going to prescribe specifics beyond saying that several medical sites suggest upping our intake of:
Vitamin B5, B10, and B12
They also suggest adding more water, more sleep, and avoiding too much sugar and caffeine. Nothing earth-shattering — but all good ingredients for replenishment. I think the most important recommendation is recognizing that you need to re-fuel.
The sprint is over. I’m not saying everything is rosy but the crisis has passed and you have survived it.
We’re now in the marathon stage of working our way through a recession and getting back into our groove. Now is the time to slow your pace a little, fuel your body, and re-boot your adrenal glands.
I’m sharing all of this with you because many of you have been pretty frustrated that you can’t just “snap out of it.” I want you to see that you’re not alone in experiencing this and it’s not just in your head.
Stop beating yourself up and go give your adrenal glands a spa day!
To be honest, I’m not. I’m inspired by how 2020 is wrapping up, but I’m not all that surprised. I’ve watched you since the pandemic struck, and you’ve been remarkable.
Here’s what I’ve been witness to since early 2020.
You and your team reacted quickly when the lockdown hit
You made sure your team had everything they needed at home — extra monitors, better chairs, etc
You reached out to your clients with a very genuine desire to help and stayed by their side as they navigated the craziness of COVID
You started working double shifts to help clients, counsel your team, and face the financial truths
You made the difficult decision to crunch the numbers and watch them every week so you wouldn’t be caught off-guard
You started beating the streets — reaching out to former clients, the prospects in your pipeline, and anyone who responded to your outbound efforts
You chased down the PPP funds so you could ride out the storm
You created new offerings that would help your clients climb out of COVID’s grips
You found new ways to do old marketing tactics that worked in this weird moment in time
You made some difficult decisions and faced some hard goodbyes that broke your heart but protected your shop
You buckled down and created some truly helpful content that served your audience and attracted new people into your community
You hosted zoom cocktail hours, trivia contests, and karaoke debacles to keep up your team’s spirits
You landed some new clients and figured out how to onboard them even though you’d never met them
You kept up the crazy hours, working nights and weekends to keep everything running and your team calm
You guided your team back to the office in a safe and sane way (or this may still be on your to-do list for 2021) and reveled in the energy, collaboration, and joy of being back together
You brainstormed with clients to help them see the opportunities within the crisis and maximize them
You celebrated every win (big or small) with your team, and you’ve shouldered every loss in private, trying to keep everyone’s spirits up
You have clawed, crawled, and kicked your way back to profits, and now you are not only surviving in 2020, but you are thriving in it. For 90% of you, that means financially thriving. But even if you’re still working your way back money-wise, you’re thriving in other ways.
You have set yourself up for an amazing 2021
No wonder you’re tired, and no wonder I’m not surprised. You’ve been amazing.
Have you done it all perfectly? Probably not. But have you done it all with a full heart and the best of intentions? Have you run yourself ragged to take care of your clients, your team, and your family as 2020 is wrapping up?
The answer to all of those is a resounding yes. So you shouldn’t be surprised. You are right where you deserve to be because you earned it. With every late night and moment of worry. I hope you’re proud of yourself and what you’ve done. If you’ll permit me to say so, I’m incredibly impressed and proud of you.
What did you think of the rubber chicken? Today’s business development pros strongly suggest you avoid the cold call. Maybe that time is gone but maybe it’s time to bring it back. Folks are abandoning email like files on dead meat; the experts now advocate we annoy people in a new way. Let’s fill up their text message folders. People have considered text messages personal and sacred. But they do see business intrusion coming and they aren’t happy. But there’s good news for those working in the B2B world. Your intended recipients expect to be approached, one way or other. Enter direct mail and the call.
Your targeted B2B phone call will hit the target. It will always take more than one attempt, but your target finally answers. “Bernard Epson here”, and you say “Bernard, what did you think of the rubber chicken?” Rubber chicken you say! Yes you sent Bernard (or his female equivalent) a bright yellow rubber chicken. And he’s been waiting for your call. This call format is not for the faint of heart. It takes someone who can strike up a conversation and keep it going. The chicken (or anything else) is your conversation starter. What happens next is up to you but if you’re good, you had a warm conversation and an open door to call again.
The US agency sector will lay off about 52,000 jobs over the next two years as media spend declines 23%, Forrester predicts. Agencies are projected to cut 35,167 jobs in 2020 and 16,578 in 2021.
The global picture is even starker, with the big six agency holding companies poised to eliminate an additional 49,695 global positions by 2021.
“It’s a dismal forecast,” said Jay Pattisall, analyst at Forrester and author of the report. “Layoffs are inevitable and already underway.”
To date, all of the major holding companies have announced layoffs, furloughs and voluntary pay cuts. This activity will only continue as large swaths of the economy remain shut down and categories such as travel and retail are dark.
“This set of circumstances is unprecedented,” Pattisall said. “The contraction of spending is across the board, and agencies as a service provider take the biggest hit.”
Advertising agencies, which have struggled to adopt technology and are experiencing a long-term financial decline, will be the hardest hit by layoffs.
Advertising agencies already account for more than 50% of layoffs across the sector, and they are currently laying off 15% of staff on average, compared to 7% at digital and media agencies. Digital and media agencies offer more relevant services to clients looking to embrace digital transformation and communications.
“Economically, [advertising agencies] have been the most challenged in the United States,” Pattisall said. “Advertising has become a more programmatic and data-driven offering, and [advertising] agencies have been slower on the uptake of that technology.”
As agencies shed jobs, some will inevitably close, especially those that skew toward pressured categories or traditional services. Smaller agencies are more likely to close than larger ones with more resources or cash in the bank, but public companies are held to greater scrutiny for cost-cutting and creating shareholder value.
“The impact should be pretty even across the two,” Pattisall said. “But it’s likely that you see publicly owned companies taking action earlier because of the economic pressures.”
As agencies are forced to reduce headcount, there’s “tremendous opportunity” to reshape their talent pool, Pattisall said. Agencies that embrace automation and hire talent with multidisciplinary expertise, as opposed to channel-specific knowledge, are better positioned.
“Ultimately, it will be less specialization and more of a multiskilled workforce that includes new systems and tools,” he said.
Agencies must also accept technology and automation as a fundamental part of their workflow. While digital and media agencies have been adopting automation, machine learning and AI for years, advertising agencies need to catch up.
Creative agencies, traditionally resistant to technology, have an opportunity to use automation to surface insights that inspire ideas, help teams collaborate and scale production. And media agencies can lean even further into AI and machine learning to inform audience segmentation, channel selection, budget allocation and measurement.
“I see all agency capabilities being assisted by automaton to one degree or another, from finance to HR, all the way through to strategy, creative and production,” Pattisall said.
Cuts to the agency workforce could inspire CMOs to bring more work in house, either to cut costs in the short term or as a result of agency talent drain. There will be more opportunities for brands to hire in-house talent or freelancers who have been laid off from agencies.
But eventually, companies will have to decide whether a long-term investment in an in-house team is worthwhile. And if it’s not, marketers have to play a role in reshaping agency structures and compensation models so they can survive in a new reality.
“CMOs that cut these corners may find themselves continuing to suffer from the impact of the shortening tenure inside the C-suite,” Pattisall said.
The invisible threat to your agency. I’ve owned my agency for 25 years, and we’ve never faced anything like 2020. A pandemic, having to abandon our offices, a recession, and the social unrest that much of the world has experienced for the last several months. All of them have tested and taxed our leadership chops like nothing we’ve lived through before.
Each of them on their own poses a threat, but the combination of all of the 2020 bizarre realities has created what I think is the most dangerous threat of all. What makes the threat even more insidious is that it can go undetected for a long time until it’s really taken hold.
The threat is the fragility of your team’s mental health, not to mention your own.
Many agency owners are talking to me about the overall malaise among their team members. I think when the pandemic hit, we all stood tall and were determined to endure the 2-3 month lockdown. But as we approach the 9th month of this, no one is unaffected. Productivity is lagging, tempers are flaring, and the fatigue is hard to ignore. We are all juggling more at home/work than is humanly possible, and we’ve been doing it for the better part of a year. This isn’t a problem we can just wish away or ignore.
Here’s how some agencies are helping their teams hold it together.
Mandatory days off: Some agencies are shutting down on certain days or limiting access to email/servers after 5 pm to force their employees to take some downtime. Other agencies are strongly encouraging their people to use their vacation time rather than lose it.
The zoom cocktail parties are passe but fun is still being had: Most agencies abandoned the zoom cocktail hours sometime during the summer. But they are finding ways to be creative/have fun with contests (pumpkin carving, BBQ cookouts, etc.).
Giving employees access to mental health resources: Many agencies are reminding their employees that their insurance covers mental health treatments and even providing employees with a list of providers.
Talking about it: The truth is, most of what is stressing out your team has nothing to do with work. But it is still seeping into the agency and impacting our work. Investing in meaningful conversations with your team members and talking about it as a group (crowdsourcing solutions) is helpful and healthy. It’s not just your employees. It’s you too. I feel it. You are bone tired. Physically, mentally, and emotionally. You’ve been surviving on fumes for a while now. And unfortunately, it isn’t over yet. Whether your agency is incredibly busy and scrambling to manage the growth or you are still struggling to rebuild after this past spring – you are worn out.
No one is going to mandate you do something about this. If I thought you’d listen – I would. But you’ve got to recognize that you’re dangerously close to crashing and do what you need to do to refuel and replenish.
For some of you, that might be a complete detox from your agency for a few days and hiding out in a cabin. For others, it will be getting on a plane and being anywhere but home. You’re going to have to self-diagnose. But I’m telling you – this can’t wait until you take time off in late December.
I know you’re looking longingly at 2021. But don’t ignore this threat in 2020.
How in the world can you expect to stand out; how will anyone find you? If you’re an ad agency or any of its derivatives, you’ve been told for years there are 29,999 more agencies in the US competing with you, wanting to be found. So what’s the secret for breaking through the clutter to connect with ideal clients?
Follow this… Not too many years ago in the mid-nineties, most agencies were content to prospect within a limited-mile radius of their office. Biz Dev consisted of direct mail, modest early-stage email and telephone outreach. And most competitors were also within that radius, but certainly nothing like 30,000! From the client’s perspective, other than Yellow Pages and Redbook, there was a crying need for a place or service they could use to search and find perfect-fit agency candidates. In 1997, to answer that need we introduced AgencyFinder.com, one place clients could visit to find and explore a database of extensive agency data contributed by our many good-friend agencies themselves. Substantial Internet traffic found us and for quite some time the “world was our oyster.”
We delivered no-cost algorithm agency search coupled with HI (human intelligence) consultant-assisted guidance. That was good for the industry because agency websites were themselves at an infant stage. Maybe you don’t remember, but agency websites were often wanting! Then after quite a spell, AgencyFinder copycat directories began to surface. Disappointingly directories embraced the “Google Model” – the more an agency paid the more prominent their display. Not really fair to agency or client. Close but “no cigar” in what they delivered, but they chipped away at our traffic anyway. And agencies were beginning to learn. SEO and SEM; keywords, social media – all to vector searching clients directly to their websites. And that’s where things are today. Slowly but without mercy, those 30,000 agencies each introduced websites all decked out in their best SEO, shouting “I’m here!” But what is here? Is it equivalent to searching a database of 4,500 prominent agencies committed to new business who drew upon more than 500 data fields, 7 essays, case histories and website access to factually and visibly define their firms, or is it the relatively shallow agency website data Google will use to find candidates? For local search Goggle is powerful, but most clients are well beyond locations as their primary stipulant.
So what to do… well, what goes around comes around. Direct mail is again shouting “look at me!” Agencies advise clients to target; so agencies should target as well. Email these days is destined to the giant junk mail folder in the Cloud. Clever DM can be a pleasant and compelling surprise. That coupled with professional telephone outreach to ask – “what did you think of what I sent?” can begin a meaningful business relationship. But don’t forget to check out or overlook AgencyFinder.com and those few like us that still offer the precision and free service that’s always been our forte’. If you’re an agency needing targeted client introductions Enroll Now. If you’re a client needing “perfect-fit” agencies, Search Now!
We’re going to kick this off with some tough love: The world does not need another generalist firm.
The reason why running your agency still feels so hard is you have not successfully positioned your firm. And let me tell you, avoiding The Difficult Business Decision is the single biggest problem when it comes to business development.
Specializing is scary. It feels risky. You don’t want to scare off leads — lord knows, they’re hard enough to come by!
Think about that for a second.
You call yourself a “full-service agency” because it makes you feel like you’re covering all the bases. Look no further, Mr. Client! There’s nothing we can’t do for you.
But if your client list is bloated with too many clients, paying too little but demanding way too much and, keeping you from actually attracting the ideal clients you so dearly need — you have a positioning problem.
Maybe it’s time to rethink risk.
Like a list of competitors as long as your arm — and that’s just your local market.
That is risky.
In this scenario, you have little or no power so you capitulate and write the Big Damned Expensive Proposal (and miss eating dinner with your family, again).
Your power comes from being seen as meaningfully different in the eyes of your ideal client.
To choose a focus for a market is to choose power. You are choosing to be strong.
The truth is, successful positioning is what separates the good WWP firms from the great.
They didn’t get there by failing to decide.
They got there by boldly staking their claim and building deep expertise in the service of their ideal clients.
They didn’t let an expensive consultant do the picking for them.
They didn’t delegate it to a writer or make it a branding-by-committee exercise.
They did the hard work of reframing their business around their bold decision (we’ll get to that later) … but first, they decided … to decide.
“I’m going to do X discipline for Y market.”
Stay tuned: we’re going to share the framework for making that Big Business Decision and all the things that flow from it that have served other WWP firms just like yours so well in a few days.
And just in case you’re thinking:
“I get it. I do. But we’re a creative firm … I’ll be bored with any one thing I choose in about 3 months flat. Then what?”
That’s a topic for our next email.
It’s one of the BIGGEST misconceptions — that your creativity will shrivel up and die. I promise you, it’s the opposite.
I’ll show you what your new and powerful world will look like in my next email.