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Tuesday, January 7, 2014

The Ad Agency Positioning Paradox

One of the greatest cliches in the advertising business is that,“New business is the lifeblood of any advertising agency.” It is obvious as you only grow an agency by getting new assignments from an existing account or by “stealing” a new account from someone else. Tied in to that reality is what is often referred to as the “leaky barrel” effect. No matter what, you are going to lose some business quite regularly due to conflicts over compensation, chemistry, buyouts, new marketing directors and, of course, the state of the economy.

So new business is vital especially to a small or mid-sized agency’s survival in our new digital world. Interestingly, I have never come across an advertising agency that does not stress a key benefit that they can bring to any client is how to position the company’s brand(s). Yet, at the same time, it is a rare agency that seems to know how to position ITSELF when pitching new clients.

If you have attended a number of new business shootouts, or talked with people who have, you find that agencies tend to talk of the same capabilities. They may put different names on what they claim to be proprietary tools, but virtually all seem to have the same approach. Even the jargon is the same. How many times have you heard people say, “We are media agnostic?” (see Media Realism, March 21, 2013).

So, very few agencies stake out a differentiated position for themselves even though that is what they preach to all clients and prospects as a necessity. Without the agency positioned clearly, the new business road gets bumpier for several reasons:

1) Without a clearcut positioning you have no target audience that would find the agency’s services very appealing
2) If you are a prospect, agencies often look interchangeable. So, with clear positioning you will be different and stand out. Not to everybody, but you only need a few wins each year or so.
3) Unless you look different, you are probably chained to your own backyard. Will someone fly cross country to see you if you look and sound like everyone else?
4) True expertise in something can set you apart. Do you have it in some discipline?

Besides positioning, there are other mistakes that agencies continue to make decade after decade in new business presentations. I sent a draft of this out to many of my panel members who forwarded it to some agencies that I do not know and to a number of clients as well. Here is a sampling of the responses that I received:

1)“The CEO needs to be a master of ceremonies but should not dominate the proceedings in terms of time spent talking. Too many agency chiefs answer all questions and talk over department heads as well. It makes the shop look like a Potemkin village.”
2) Listen to the clients! A marketer wrote the following to me--“We stressed to the four agencies that we were down to that we could not afford national TV. What we needed was some combination of social media plus online and maybe a bit of targeted magazine. We were open to their media mix ideas.” The agency chief said, “Wait until you see our reel.” My boss said sharply, “We do not want to see your damn reel.” “Yes, you do”, replied the agency CEO who promptly shut off the lights and began the  video. “It was a theatre type of setting in their conference room and the room was extremely dark. When the lights came up, my boss was gone. I was not given a ride to the airport, both my boss and I had a good laugh over a drink before my flight left. Clearly, the chemistry would have been awful.”
3) Be careful who is in the meeting and coach them on taboo subjects. Two people told me very similar stories but here is the more colorful--”My creative director insisted on having a young writer in the room even though there was no role for him and the guy has no verbal filter. A prospect looked at a good spot and asked how much the production cost was for it. The young guy beamed and blurted out, $375,000. Our prospect shook his head and said that he could never afford that. For the next half hour, he kept bringing it up despite our promise that we can do low cost and effective TV production. The young account guy who drove the prospect to the airport said that he brought it up three more times in the half hour ride. We lost a good shot at a fine piece of business because our creative head refused to coach a talented young guy on what to say and what not to say".
4) Seven different people weighed in on this final one--do your agency credentials quickly and then have a laser focus on their business. You have already sent them reels and successful case studies. Talk about them--the prospective client. The kiss of death is when a prospect says, “This is fine but when are you going to talk about my needs.” I have seen this for over 30 years, but agencies keep doing it. Ad agencies are famous for people with outsized egos. This is one case where they need to check their egos at the door.

Will the situation improve? Maybe, maybe not. With agencies closing their doors or downsizing in to consultancies, one would think that some would get the message.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

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