The two big questions that ad agencies are asking: “How do we price new media and what type of services should we offer?”
A great resource to help find answers to those two questions is found in a recent released publication released by the American Association of Advertising Agencies (AAAA): “Understanding the Economics of Digital Compared to Traditional Advertising and Media Services,” written by Joe Burton, COO of Universal McCann agency.
Mr. Burton explains,
“Our industry is facing the its most significant change since the invention of TV – the migration to Digital.Digital is unlike any other medium and should not be viewed using traditional benchmarks. The high-volume, low-dollar, high-complexity nature of Digital programs makes it the most labor intensive medium in the advertising industry
… these issues require resources and drive a cost of providing basic Digital services that is directionally double that of traditional full service agency fees, when expressed per dollar of the media spend.”
Joe explores the key drivers that contribute to the higher costs of Digital advertising and media agency services when compared to traditional marketing services and he stipulates that “these issues require resources and drive a cost of providing basic Digital services which is directionally double that of traditional “full service” agency fees, when expressed per dollar of media spend.”
Read the full report: “Understanding the Economics of Digital Compared to Traditional Advertising and Media Services.”
There are small-to midsize ad agencies that are currently generating new business and income through new media. Here are a few similarities among agencies that are having success that may be of help:
- Agency principals are well versed in new media and are actively writing and speaking about it.
- Agency staff are also participating in new media and are conversant.
- Agencies are offering new media workshops, seminars and luncheons.
- They are “confidently” leading discussions about new media with prospective clients.
- Agencies can demonstrate their own participation in new media which is powerfully effective.
- Proposals are most often based on scope of work, a flat monthly retainer based upon an annual agreement usually at a blended agency rate of $125 per hour.
- Most that I am aware of are basing the pricing of a proposal on scope of work, usually estimating agency time at a blended rate of $125 per hour. Proposals are for a monthly retainer based upon an annual agreement.
New media has leveled the playing field for smaller agencies.
Additional articles that may be of interest:
- Social Media Tips for CEOs: Develop An Ad Agency Blog for New Business
- 10 Reasons Ad Agencies Should Participate in Social Media for New Business
- Four Ways Social Media is Changing Advertising Agencies New Business
Working in the B2B space (manufacturing clients) is perhaps a little bit easier when it comes to dealing with new media. Our client’s customers are not as social media savvy as in the B2C environment. In fact, we’ve found that social media sites are commonly being blocked at the corporate level of target audiences. I see blogs as the most useful new media tool available in the B2B world I live in – if for no other reason than SEO.
http://www.gingerquill.com/Gingerquill-Premeditated-B2B-Marketing-Blog/
Thanks for you input Jeffry. There’s growing discussion of social among B2B clients. Your insight is appreciated.
Thanks and Please continue to keep updating your Web site. I will be stopping by just about every time you do .
Currently it appears like WordPress is the top blogging platform available right now. (from what I’ve read) Is that what you are using on your blog?
Yes. My blog is a WordPress.com blog.