Recession « FUEL LINES Fueling Ad Agency New Business Through Social Media

Survey: Economy Improving, New Business is Up for Small to Midsize Ad Agencies

January 27, 2011

Having endured one of the harshest economic periods since the great depression, agencies are reporting that 2011 is off to a better start.

A total of 430 advertising agency executives participated in the 2010 Advertising Agency New Business Survey.

The survey was sent by e-mail to a database of over 10,093 U.S. full service advertising agencies ranging in staff size from 5 to 350 full-time employees. The survey closed end of day, December 31, 2010. The survey was developed and results analyzed by Michael Gass Consulting, Special thanks to THE LIST for providing the data sampling.

The results are not a scientific study, it does however, provide an indication of their beliefs, feelings and perceptions regarding agency new business trends in the last quarter of 2010.

Here is a summary of the survey results:

How has the economy impacted your business? Business is up or up significantly for 47% of the 430 advertising agencies that responded. 34.3% reporting that business was down or down significantly. These percentages are reverse from a similar study conducted in 2008. It looks like the end of The Great Recession for the advertising industry and business is starting to improve.
Would you say that obtaining new business is easier or harder than it was in 2009. New business is slightly better. In a 2008 survey, 56% of the agencies indicated new business was hard/harder than the previous year. That number drops to 47% for this 2010 survey, indicating a slight improvement. For 34% of the agencies surveyed new business was the same. 18.5% said it was easier or a lot easier in 2010.
What is the number one reason why it is harder to obtain business versus last year? Lack of opportunities (48.6%) was the number 1 reason new business was harder, followed by more competition (23.8%).
What are the 3 top sources for new business? 50% of ad agencies generate new business through referrals (25.9%) and personal networks (24.5%), the third primary source of new business is the agency’s website (9.1%).
Does your agency have a full-time new business director? If yes, how long have they been employed? More than half of the agencies (57.3%) have a new business director and most of them (38.5%) have been in their position 5 or more years.
Does your agency have a blog? 35.8%, of the agencies surveyed still do not have an agency blog.
Does your agency have a written new business plan? Just over half of the agencies that responded (53.7%), have a written new business plan.
Does your agency have a unique point of differentiation from competitors? An impressive 76.8% of agencies surveyed said yes, they indeed have a unique point of differentiation from their competitors.
When asked to briefly describe how their agency was different from the rest, you can decide if they are really that much different from their competition. Here’s a link to over the 243 of the agency’s that chose to respond: http://bit.ly/i3oe8J

Click on the following link to download a copy of the 2010 Advertising Agency New Business Survey

6 Comments | New Business Survey, New Business Trends, Recession | Tagged: 2010 Advertising Agency New Business Survey, Ad Agencies, business development, Michael Gass, Recession, The List | Permalink
Posted by Michael Gass

Survey: Marketers Top 10 Wish List For Ad Agencies of the Future

February 2, 2010

Digital marketing is thriving during the recession. Clients are switching agencies based on digital marketing knowledge. Traditional agencies need to be competent at digital marketing now.

Forrester’s recent projections of interactive marketing spend through 2014 show social media increasing at an average of 34% year over year.

A national survey provides insight into what marketers want from their agencies. The Agency of the Future Survey, sponsored by Sapient. Though this survey was conducted just over a year ago, it is a perceptual look back as well as a look forward and still has relevance for agencies today.

The survey polled more than 200 chief marketing officers (CMOs) and senior marketing professionals, all of whom are either directly or indirectly responsible for managing digital marketing budget allocation across multiple channels.

Based on the survey results, Sapient, created aTop 10 Wish List for Agencies of the Future:

A greater knowledge of digital space
More use of “pull interactions”
Leverage virtual communities
Agency executives using the technology they are recommending
Chief Digital Officers make agencies more appealing
Social media savvy
Agencies that understand consumer behavior
Demonstrate strategic thinking
Branding and creative capabilities
Ability to measure success

Tim Williams, author of Take A Stand For Your Brand, encourages agency execs to assure their personal relevance in the marketing communications industry. He writes,

“Increasingly clients are turning to agencies not only for help but for thought leadership in digital marketing, and only the most progressive agencies are in a position to deliver it. Agency principals recognize the urgency and importance of the shift to digital, but are personally unprepared for the change.”

Tim suggests a solution to the problem: Create a self-study program that provides a fast track understanding of digital marketing and adapting your agency to the new digital landscape.

He says, “Think about the digitally-talented people you know and you’ll realize most of them are self-taught. They took an interest in digital and learned it on their own. You can do the same, especially because everything you need to know about digital is online, and most of it is free at sites ranging from the Interactive Advertising Bureau (IAB) to ClickZ.”

Additional “digital” related articles that may be of interest:

6 Comments | Agency Leadership, Digital, New Business Trends, Recession | Tagged: Advertising, advertising agencies, digital marketing, jason baer, marketers, Recession, sapient | Permalink
Posted by Michael Gass

4 Questions to Assess Your Ad Agency’s Readiness for Change

August 13, 2009

“If all you’ve got is a spreadsheet filled with red ink and dire forecasts, it’s easy to be paralyzed by fear and resistant to change. But if you can summon some leadership nerve, then hard times can be a great time to separate yourself from the pack and build advantages for years to come.” Bill Taylor, best selling author Mavericks at Work.

Harvard Business Publishing, is part of my daily reading. An article I read this morning by author, Bill Taylor, “The 10 Questions Every Change Agenct Must Answer” was adapted for this post. I thought these questions were very applicable for small-to mid-size ad agencies in this rapidly changing and challenging new business environment.

Bill writes, “When it comes to creating the future, the only thing more worrisome than the prospect of too much change may betoo little change — especially in an economy where there are too many competitors chasing too few customers with products and services that look too much alike. Now is the time to rethink long-held strategic assumptions inside your company (agency), to challenge decades of conventional wisdom in your industry, and to push yourself to learn, grow, and innovate.“

Here are four questions to help your agency face the challenge of change:

1. Do you see opportunities other agencies don’t?

Change breeds opportunity. Be the first to find new opportunities. Don’t play by the rules, unlevel the playing field and redefine the rules of the competition. Don’t wait for other agencies to lead the way, be innovative. French novelist Marcel Proust said, “The real act of discovery consists not in finding new lands but in seeing with new eyes.”

2. Can your clients live without you?

Our clients options are rapidly evolving. Ad agencies can no longer pretend to be all things to everyone. The use of terms like full service, proprietary processes, great creative, strategic and integrated doesn’t mean anything anymore to prospective clients. Agencies must specialize and create a strong appeal to a particular target audience. If you try to appeal to everyone, you will appeal to no one. Agencies used to be comfortable in the middle of the road. Today, the middle of the road is the road to ruin.

3. Are you learning as fast as the world is changing?

Clients expect leadership. Currently agencies are behind the curve. To survive change you must get ahead and stay head of the curve. In a world that never stops changing, great leaders can never stop learning. How do you push yourself as an individual to keep growing and evolving — so that your agency can do the same?

4. Are you consistent in your commitment to change?

The problem with many agencies is that all they do is change. They go from one consultant to another, from the most recent fad to the newest. If you want to make deep-seated change, then your priorities and practices have to stay consistent in good times and bad.

“If all you ever do is all you’ve ever done, then all you’ll ever get is all you ever got.”

Read Bill Taylors entire article: The 10 Questions Every Change Agent Must Answer

Additional articles that may be of interest:

2 Comments | Agency Leadership, New Business Trends, Recession | Tagged: Bill Taylor, Blogs I Recommend, change, change agent, Harvard Business Publishing, Michael Gass | Permalink
Posted by Michael Gass

Expand Your Agency By Narrowing Your Focus

August 6, 2009

Most ad agencies have an unfocused new business strategy. They try to be everything to everybody. Tim Williams, in a recent article titled, “Focus to Grow”, says,

“In turbulent times … The natural response is to “try a little bit of everything”; to expand your services, broaden your capabilities, and try to appeal to more clients. It seems like common sense, but it’s exactly the wrong response. The best growth strategy — in good economies or bad — is to decide what not to do.”

Tim sites these five benefits for the agencies that are willing to expand by narrowing their focus:

The greatest earning power. It is a no brainer, a specialist will always earn more than the generalist.
The largest geographical market area. “Focused firms draw clients from all over the globe, not just from their own Zip code.”
The fewest competitors. ”The easiest way to narrow your competition is to narrow your focus.”
The greatest degree of respect from clients. ”Knowledge and expertise = respect.”
The most sophisticated clients. “A quality value proposition attracts a quality client.”

There are a lot of agency principals that agree with this thinking but are afraid to take the initial step-out. I understand their hesitation. But there is a way to take the initial steps without the perceived risks through the use of social media. Social media allows an agency to:

“Easily” target a specific audience (i.e. Locomotion Creative, Blue Collar Branding)
Discover its most appealing point of differentiation through an active engagement with its best prospective clients (i.e. Stephanie Holland, She-conomy)
Be positioned as an expert (i.e. Park Howell, A Brighter Shade of Green Marketing)
Affordably build a national awareness among your best prospects (ie. Jaci Russo, The Russo Group)
Allow your prospects to better understand how you think, your philosophy and strong points of view (i.e. Bob Hoffman, The Ad Contrarian, )

These are some helpful articles to get started. I would also encourage you to read Tim Summer’s book Take a Stand for Your Brand

6 Comments | New Business Trends, Recession, Social Media | Tagged: Blogs I Recommend, Bob Hoffman, Ignition Group, Locomotion Creative, Michael Gass, park howell, Social Media, Stephanie Holland, Take A Stand for Your Brand, Tim Williams | Permalink
Posted by Michael Gass

Recession Creates Opportunities for Small-to Midsize Ad Agencies

July 16, 2009

The U.S. has experienced nine recessions since World War II, which means we’ve lived in recessionary times one year out of every six.

A recessionary period is actually a great time to promote your agency an increase your market share and profits.

In a recession, clients usually significantly cut their marketing budgets, even though it is the most important tool a business has during this difficult time. Ad agencies tend to do the same, having a hunker down and wait mentality.

We are in a severe recessionary period with no end in sight. This leaves many businesses and ad agencies wondering where they can cut costs. Studies and experience prove marketing should be last on their list.

A series of six studies conducted by the research firm of Meldrum & Fewsmith showed conclusively that advertising aggressively during recessions not only increases sales but increases profits and market share.

This fact has held true for all post-World War II recessions studied by American Business Press starting in 1949.

Kraft salad dressings and Jiff peanut butter both raised marketing budgets during the last recession and increase sales by 70% and 57%, respectively.
Pizza Hut increased their marketing budget and increased sales by 61%.
Taco Bell increased sales by 40% by increasing their advertising expenditures.
Wal-Mart smothered competitors with Every Day Low Prices during the 2000-2001 post-bubble slowdown.
During the 1989-91 recessionary period, most of the beer industry cut budgets, but Coors Light and Bud Light increased theirs and saw sales jump 15% and 16% respectively.

Agencies know that advertising in an economic downturn is not a drain on their clients profits but can actually significantly contribute to and increase in profits and market share.

McGraw-Hill Research in a study of U.S. recessions showed that business-to-business firms that maintained or increased their advertising expenditures during the 1981-1982 recession averaged significantly higher sales growth, both during the recession and for the following three years, than those that eliminated or decreased advertising. By 1985, sales of companies that were aggressive recession advertisers had risen 256% over those that didn’t keep up their advertising.

RMR & Associates provides this list of brands that creatively changed their messaging to reflect the new customer mindset and counter a recession:

A-1 Steak Sauce’s message that “A-1 Steak Sauce isn’t just for sirloin anymore.” Indeed, its ability to enhance flavor applied equally to hamburger.
Dow, maker of Ziploc food bags, shifted funds from Glass Plus cleaner to help introduce a new line of Ziploc freezer bags that protect the freshness of leftovers.
Quaker Oats capitalized on two successful recession messages. First it reversed a long-term decline in sales by increasing spending for the message that its grain products are inexpensive sources of protein. Then it stressed value as actor Wilfred Brimley promised, “A bowl costs you one nickel and four pennies.” That message worked so well that Quaker allotted half its budget to it. Result? Powerful sales.
Lipton successfully promoted its Cup-a-Soup line as not only conventional but inexpensive.
Wendy’s met the recession with a head-on message: “Look, I know you have less to spend these days, but that doesn’t mean you have to eat less.”
Ikea had a similar idea: “What recession? Sure the country’s going through a recession. That doesn’t mean you have to.” It worked.

The information above is the kind of data that agencies use to demonstrate to their clients, the importance of advertising in a down market. But this “do as I say, not as I do” mentality raises suspicion.

If agencies are hunkered down during a recessionary period, if they aren’t promoting themselves, if they aren’t using the tools they recommend to clients, then why should anyone else.

One major advertiser summed it up best.

“When times are good, you should advertise. When times are bad, you must advertise.”

A recessionary period is a great time to promote your agency an increase your market share and profits. Do the opposite of what your competition is doing. Develop a simple agency promotional plan that you can consistently implement using a combination of traditional and social media. Treat your agency as if it was your most important client.

Additional articles of interest:

28 Comments | New Business Tools, New Business Trends, Recession | Tagged: ad agency advertising, ad agency promotion, advertising in a recession, agency new business consultant, Blogs I Recommend, Coopers & Lybrand, McGraw-Hill, meldrum & Fewsmith, Michael Gass, midsize ad agencies, Penton Research Services, small ad agencies | Permalink
Posted by Michael Gass

In times of economic crisis shouldn’t ad agencies lead?

February 24, 2009

Given the current economic crisis and the communications revolution, on Monday, February 23rd, media baron Rupert Murdoch issued an urgent internal communication, warning his staff:

“We are in the midst of a phase of history in which nations will be redefined and their futures fundamentally altered. Many people will be under extreme pressure and many companies mortally wounded. Our competitors will be sorely tempted to take the easy beat, to reduce quality in the search for immediate dividends.

Let me be very clear about our company: where others might step back from their commitment to their viewers, their users, readers and customers – we will renew ours.”

He declared, “The direction of the business now and over the next few years will define the character of our company for decades.”

Hopefully the advertising industry, with all of its resilient creative and intelligent minds, is as committed to finding solutions for its clients during the current economic crisis and global communications revolution.

What are your thoughts? Do you think ad agencies are already leading or are they behind?

2 Comments | Recession | Tagged: Advertising Industry, agencies lead, economic crisis, Michael Gass, Robert Murdoch | Permalink
Posted by Michael Gass

400 articles on the subject of “Advertising In A Recession.”

January 14, 2009

BusinessWeek‘s online Business Exchange now has posted a synopsis and links to over 192 news articles and 202 blog items on the subject of “Advertising In A Recession.” This topic is part of Business Exchange idea, suggested by Jessica Sibley. I’ve added an additional six “advertising in a recession” articles of my own for a total of 400.

One of my favorite agency blogs, The Ad Contrarian, has the most read article out of them all entitled Good Strategy For Bad Times, written by guest blogger Sharon Krinsky.

Here are the top 10 “Advertising in a Recession” articles:

Check out all of the articles and post: ADVERTISING IN A RECESSION

Additional RECESSION articles that might be of interest:

ReTweet: 400 articles on the subject of “Advertising In A Recession” http://tinyurl.com/michaelgass

10 Comments | New Business Trends, Recession | Tagged: Advertising, Business Exchange, BusinessWeek, Jessica Sibley, Michael Gass, Recession, Sharon Krinksky, The Ad Contrarian | Permalink
Posted by Michael Gass

Promote Your Ad Agency Through the Recession

October 6, 2008

Let me preface this post by saying that small to midsize agencies have a once in a lifetime opportunity to grow their agency during the current, turbulent financial crisis. Now is the time to step up your advertising agency’s new business efforts.

Promote your agency through the recession by expanding your agency’s “Online Footprint.”

In 2008, four things have taken place that particularly impacts small and midsize agency new business:

In a 2008 CMO survey, 80% of decision makers say they found the vendor, not the other way around.
CMO Council’s Marketing Outlook study states that Marketing 2.0 is by no means a brand new idea, but this year it becomes mainstream with the general public.
Tim Williams, founder of Ignition Consulting Group , and author of the book, Take a Stand for Your Brand, declares in 2008 that it’s, “The End of Cold Calling.”
The current economic crisis that is impacting advertising budgets and will greatly accelerate Web 2.0. Following this recession, there will not be a return to business as usual.

How does this impact ad agency new business?

According to current research and trends, traditional media and methods will no longer generate sustainable leads for your agency’s new business. The new business paradigm that we are witnessing is positioning small and midsize advertising agencies online to be found their best target audiences. Agencies should develop an appealing point of differentiation and use Web 2.0 tools to greatly expand their agency’s “online footprint” to be easily found by their best prospective clients.

Below is an overview chart of the various inexpensive, online tools agencies can use to expand their online presence:

As a first step, I would suggest subscribing your agency to the following online services. It doesn’t matter if you don’t use them all immediately, but it is important to get a general understanding of them. Sign up for:

Facebook/Myspace
LinkedIn
Twitter
Digg
Technorati
Feedburner
GoogleAnalytics
YouTube
Flickr
Wikipedia entry

Secondly, agency principals and staff subscribe to relevant online professional networks and professional online forums. You and your staff should immediately link to one another, then to clients, friends and prospective clients. Everyone becomes an agency ambassador.

Experience the new media tools for yourself and build your staff’s capabilities and utilize the cost effectiveness of new media to promote your agency. For success, you’ll need to understand that motive matters, these tools need to be used correctly. Also they wont be effective unless they are used consistently.

Thirdly, create an agency blog, specific to a particular target audience. Provide useful information and resources. Build relationships and trust along with being positioned as an expert among your target group.

Fourth, continue expanding your agency’s online footprint using other new media tools such as eNewsletters, online surveys/polls, PR, presentations (SlideShare), downloadable whitepapers, PPC (AdWords), Ebooks and article marketing (EzineArticles).

When other agencies are cutting back, there is no better opportunity to pick up new clients, increase your agency’s profile and market share. You can do more online with a fraction of the cost.

If you have questions please don’t hesitate to email them to me.

Additional articles of interest: