Four Growth Strategies Smart Ad Agencies Follow Despite a Bad Economy


Most advertising executives from partners/owners to account managers are well aware that during a recession, one of the first places many businesses cut budgets is in marketing, advertising and programs focused on promoting long-term business growth. This is why advertising agencies and marketing services companies have been seeing continuing lay-offs and many have gone out of business over the past few years. Their clients have cut budgets or have simply left to find other agencies that they think might get better results for them on a smaller budget.

Probably, the most frustrating part of this for ad agency professionals is the common knowledge that companies and brands that continue to invest in marketing and future growth will keep and/or gain market share once the recession ends, and those that do not, often stagnate or fall behind.

Ironically, the same ad agency professionals who express annoyance at clients for being so wrong-headed about marketing investment are doing exactly the same thing to themselves. Agency professionals, particularly at smaller agencies will say that client work comes first to explain why their own marketing and business development programs are poor or non existent. The sad news is, that if they do not continue investment in their own marketing and business development outreach, “The shoemaker’s children have no shoes” could just as well turn into, “The shoemaker has no business.”

The good news is there are ad agencies with leaders who want to be around a long time and practice what they preach to their clients. They continue their marketing and business development programs in good times and bad. Here are four strategies growing agencies employ to help them stay on top, sustain growth and win new business despite a bad economy.
 
1 - They continue to pursue new business and new relationships.
Pursue
is the key word here. Agencies that are proactive about new business and do not wait for referrals, RFPs or incoming calls to win new clients will be better positioned for continued growth than their competitors once the recession ends. Having a large, qualified pipeline of leads that may not have an immediate return on investment but will pay off in the long term is possible if the right person(s) are in place to build and nurture new relationships and to direct/develop agency promotion and marketing to attract and engage targeted prospects. I know from personal experience this can yield large rewards.

Case in point; My team and I doubled the size of one agency I worked for by acquiring clients in a particular industry category where we had little experience, but the industry itself was booming and the agency principals really wanted to get a piece of that pie. I knew however, that it was smart to make and keep connections with decision-makers in other industries as well. I kept these relationships alive through systematic and continuing personal communications and through agency communications like case studies and e-newsletters.

When the bubble burst for the"boom" industry I had been pursuing and many of the accounts we won started to disappear, I and my peers at the agency did not panic because I had built up relationships for us with marketing decision-makers in other categories. We soon won more accounts in other categories, while agencies that had focused only on the “boom” category and did not have someone working other leads, suffered.

2- They make sure their marketing communications will engage and attract the decision makers in the industries they are targeting.
This may seem like a no-brainer but there are tons of examples of ad agencies with really cool looking websites that seem to be designed to impress other agencies or creative personnel, rather than the CMOs at the companies they are trying to build credibility with.


A CMO’s tenure today on average is between 2-3 years primarily because they are under increasing pressure to produce measurable results for the company that employs them. A recent article from Ad Age, Why It’s So Hard for CMOs to Keep Their Jobs , sums up their dilemma beautifully.


CMOs today are unlikely to choose to work with agencies that do not appear to have experience in their category. Right or wrong, they are wary of working with an agency they perceive will have a long learning curve. So, if they go to an agency’s blog, LinkedIn profile or website and see nothing that pertains to their industry or industry’s business challenges, they are much less likely to answer that cold call, respond to a letter or return the email of the person at the agency who is trying to get that first capabilities meeting or introduction.


When working for one agency, I had conversations with numerous CMOs and Marketing Directors who told me that they had not responded to my calls at first because when they went to my agency’s website, they did not see anything there that pertained to their industry, an industry I was tasked with penetrating.
Fortunately, in most cases, if I was lucky enough to get them to talk with me anyway, I was able to persuade them to meet.

I would then spend the next few days scrambling to develop case studies that would be relevant for my prospect. Or - I would work with my team to develop a top line marketing strategy or some ideas that would address a challenge they were having based on pain discovered. All of this took a good deal of time and effort. Reinventing the wheel for each new prospect often ended up with an eventual win, but the up front investment required to win the new account meant that account would not yield a strong return on investment for the agency as quickly as desired.


Ad agencies that do not have or are not willing to develop the marketing materials necessary to support new business development teams’ efforts are setting themselves up for failure. Business developers are usually fairly independent, self-motivated, persistent and smart. Some make excellent marketing strategists as well. Without the right marketing tools however, agency hunters may not have the edge they need to compete effectively against agencies that have made it a priority to give their new business team the support required.


3- Their case studies are substantive not fluffy.
Case studies with real results are a must-have for any agency that wants to be taken seriously by the decision-makers they target for new business. Assuming the agency’s leaders know that CMOs are under pressure to produce strong ROMI (Return on Marketing Investment) they should also realize that having a case study in their target audience’s industry is not enough if the case study does not include tangible results. I cannot tell you how many case studies I have seen that end with something like, “The marketing collateral and brand advertising we produced made our client stand out in a competitive market.”


This leaves the CMO thinking, “Really? And how many new inquiries, web hits, etc did the campaign generate? How were the results tracked? How do you know that the campaign made your client stand out? Did they stand out in a good way or a bad way?”


I can hear some ad agency professionals saying, “But we signed a client confidentiality agreement. We cannot share anything like that.” Yes you can. If your client gives you permission to talk about or show work from their campaign, but you cannot give specific results, ask them if you can talk in percentages instead. If your client will not allow you to mention them at all, create a case study that describes the client, the challenge, the solution and the results without actually using the client’s name.


If your case studies do not include the kind of results that prove you did your job well, you would be better off not having them at all. Ad agencies that win new business understand the importance of ROMI to Marketing decision-makers and respect their audience.


4 - They are up to date on all of the new marketing trends, tactics and technologies.

Not much needs to be said about this. Full-service ad agencies that claim to deliver integrated marketing communications but have not developed capabilities or expertise beyond traditional advertising and/or have not developed partnerships with companies that do offer that expertise, are unlikely to achieve sustained growth. When the “next new big marketing thing” arrives, the agencies that have kept an eye on the future will continue to prosper.

 
So, will following these strategies guarantee an agency will thrive and grow during and after a recession?
Of course not. But the ad agencies that have a strong new business development team and/or leader as well as a marketing team that believes in the importance of developing and providing the tools and strategies that will support new business development, will certainly have increased the odds that they will grow and prosper for years to come. 

By Laureen Peck

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