How To Select an Advertising Agency
We believe that selecting an advertising agency is not all that different from successfully organizing or carrying out any other aspect of a company’s operations. It involves strategic planning, setting goals and objectives, and execution. Here are the basic questions you should be asking and some thoughts on how to find the right answers.
1. First, ask yourself if you really need to change agencies.
Hiring a new ad agency can be a time-consuming, nerve-wracking process. It is certainly disruptive to your business, so sometimes it’s smarter to solve problems with your existing agency than to switch. We always tell clients that you don’t have to change agencies to change your agency. What you need to do is keep an open, active dialogue, and give your agency feedback on how they are doing – the good and the bad.
Remember that both you and your agency have made an investment in learning your company, your markets, your products and your competitors. Could that investment and the relationship with the incumbent agency be saved by switching 1-2 people on the account and saving the knowledge the other team members have learned? Maybe. It’s up to you to decide if it’s worth the time and risk. In some cases, a heart-to-heart talk with your account executive or agency principals may be all that’s necessary to solve the problem.
If you’ve made the decision to switch agencies, the first thing you should do is to determine what went wrong with the incumbent and why. Be brutally honest in writing down the problems or specific people on both sides (agency and client) that caused or exacerbated issues that finally led you to call it quits. Lay out a set of strategies you can use to prevent similar problems in the future through a better agency selection process, or with better day-to-day working systems.
If you fail to take this hard look at your agency and yourself, you may repeat the same problems with your new agency. Too many clients make the same mistakes again and again, and then blame the agency. That’s just not good business.
2. Don’t ask an electrician to fix your plumbing.
Some people have special skills and experience that are specific to your needs. So do agencies. You want to make sure you hire the one that is right for the job. You can start by creating a list of projects you will want the agency to do, and then order them in terms of their priority. Then use that list as a guide when you interview agencies.
Some clients believe that it is essential for the agency to have specific experience in their business category. We can’t deny that it is certainly helpful to know something about the business you are in. But that shouldn’t be the only criteria. If the agency has a particular knowledge of your target audience, or the primary media you need to reach that audience, then they could be the right agency for you, even if they have never worked in your category. You should take a hard look at their knowledge base and skill sets, and how they think, before adding or deleting them from your list.
Remember that most agencies will tell you they’re skilled at a wide range of activities – strategic branding, media advertising, public relations, interactive, direct mail, sales brochures or catalogues, and dealer promotions. Make sure they can back up those statements with proof of performance by reviewing examples of their work for other clients. No agency does everything equally well across the board. The key thing is that the agency’s abilities match up with your priority areas.
3. Don’t be seduced by a pretty face.
Agency new business people are almost always great salespeople. That’s why they are the face of the agency! Most will want to show you their agency reel, and that can be a good litmus test for many clients. But in the end, you must decide if what they are selling is what you really need. Of course, the creative product is important. After all, that is what everybody sees. But in reality, different characteristics are also important to evaluate. Some clients need strong account service personnel or specific market experience, some don’t. If you run a complex media schedule, negotiating skills or media planning should be at the top of your list. If you need an agency that can integrate a full-range of marketing communications strategies, make sure they can back up what they claim.
We are very proud at our agency that we also get involved in a lot of non-traditional work for our clients. One example of this is the role we play with a specific client in fundraising to support their research efforts. We believe that our role is to help our client grow their business, regardless of whether it falls under the definition of a traditional advertising agency relationship. The important thing is to ask the agency to show you samples of all the work they’ve done that is relevant to your needs, and to provide you with a list of client references so that you can verify the accuracy of their claims.
4. Match the size of your account with the size of the agency.
Many clients feel that it’s best to be a big fish in a small pond - you stand out and everyone looks up to you. But if you hire an agency that’s too small for your account, you may not be able to get the complete range of services you need. On the other hand, a larger agency may offer a broader range of services, but they might also be too expensive. Or, because of your account size, you may be relatively unimportant, so you find it hard to get their attention, or their best people to work on your account. We think it is best to position yourself in the middle of the pack among an agency’s clients. Size does matter, whether the agency wants it to or not.
5. Keep every decision maker in the information loop at every stage.
A smaller group is usually better than a larger group, but everyone who will be involved in the final decision should be involved at every step of the agency selection process. We have seen too many cases where a senior executive steps in at the last minute with a different set of priorities and you find that you have wasted a lot of your time, as well as the time of the agencies that are pitching for your business. Certainly, the individual who will work with the agency on a day-to-day basis should be on the selection team, as well as that person’s immediate boss. Depending on your corporate structure, you should also include the corporate head of marketing and the CEO or GM.
We believe that the person with the biggest ultimate involvement with the agency should be in charge of coordinating all contact between the client and the candidate agencies. The importance of each person’s vote will vary from company to company, but the people who’ll work with the agency on a frequent basis should have the biggest voice in the decision.
6. Don’t forget to tell the incumbent before the word is on the street.
The first step you need to take is to tell your current agency you’re conducting a review and why. If they will be seriously considered in the selection process, tell them. If not, thank them for their past services, and tell them you’ll be naming a new agency. Don’t do them the “courtesy” of involving them if they have no real chance of being retained. This wastes your time and theirs. Don’t try to hide the situation. The agency business is a small universe, and the chances are pretty good that they’ll find out through the rumor mill anyway.
7. Save time and effort by pre-screening viable candidates.
Most companies interview too many agencies. They like to say, “We talked with 30 agencies,” or “We reviewed questionnaire responses from 45 agencies.” The truth is that lots of interviews waste of a lot of time. A “cattle call” involving a herd of agencies is an almost certain sign of a rank amateur or someone trying to look good to management.
In most markets, there probably aren’t more that 6-8 agencies you should look at closely. Rather than looking at the credentials of a lot of agencies, use a more careful eye to look at a more limited pool. Check out their web site. Talk to friends, colleagues, media reps and vendors you trust. Take them into your confidence and swear them to secrecy. Tell them exactly what you’re looking for and ask for their suggestions.
Once word gets on the street that you’re looking, you’ll hear from lots of agencies that want a hearing. Don’t give in to them. Stick to your guns. If you’ve done your job right, you already know who’s right for you and who’s not.
8. Start the process with an interview, not a letter.
We’ve been on the receiving end of literally hundreds of solicitation letters from clients seeking an agency. Too often, we don’t really have enough information to give them our best response because we don’t know enough about their true needs. Especially what they are looking for in an agency relationship. Even a well-written letter with a statement of goals and objectives has blanks that need to be filled in before the agency can give their best response to an RFP.
Once you’ve narrowed your list to those agencies you’re interested in, invite them in for an interview. Ask the same questions of each agency, and keep track of their answers. It’s the only way you’ll be able to compare apples to apples and make a smart decision. If you’ve done your preliminary homework, and determined that the agencies you want to interview are those that are best qualified to meet your needs, the answers to the questions you ask are going to be strong factors in determining who you select.
You should also be comfortable with the chemistry between the people in the room. Ask yourself if these are the kind of people you truly want to work with. Never hire an agency you aren’t excited about, just because they scored well on a numbered scale. If you don’t like them now, chances are you won’t like them any better in a year.
9. Keep the RFP (request for proposal) simple and to the point.
A good RFP should be designed to answer four questions: Does this agency have the right background and experience that I need to move my business ahead? Does this agency have good references from clients and vendors? Can this agency bring new ideas and abilities to help me do my job better? Who will work on my business?
If you have done some homework by pre-screening, you already have a lot of the basic answers to these questions. So don’t get bogged down by playing twenty questions at this stage. Use the RFP to gain a sense of how they think, so that you can compare that to your own thinking, as well as evaluate how beneficial they can be to helping you grow your business.
Do not ask the agency to give you a spec plan at this stage. As the saying goes “There is more than one way to skin a cat” and it is almost impossible for an agency to give you its best thinking without a lot more knowledge and insight into you and your company. It’s okay to ask for their specific opinion on important issues, but if you ask for specific plan recommendations, it becomes a crap shoot determined by which agency guesses right, not which agency is best for your needs. If you do decide to ask two finalists for some specific plan recommendations, make sure you clearly define what you are asking for, and keep it limited to a simple topic, so that you can make an apples to apples comparison of their responses. An RFP may take hundreds of hours to respond to, so don’t waste the agency’s time in preparing, or your time in reviewing them. Keep it simple.
10. Don’t ask for spec work unless it is critical to the final decision.
Doing spec work is expensive. It will cost the agency time and money. So don’t ask for spec work unless there is a good reason. There may be times when “spec” makes sense. If you’re a software company, and the agency has no software experience, ask for “spec.” If the agency is proposing TV, and has very little TV experience, ask for “spec.”
If you do ask the agency to give you spec ideas or creative, we think it is a good idea to pay for that work with a fair and reasonable fee to the agency. This can give you the right to use that work if you include that in a written agreement with the agency. And it also says something about your integrity as a client. That’s not a bad way to start a new relationship. And be prepared to invest yourself in the spec development process, unless you want to rely on that luck factor again. In our experience, spec work without guidance from the client is like finding fool’s gold. It may look good, but it is seldom as valuable as the work they’ll actually do on your account. Use the spec development process to get a sense of how it is to work with the agency. It’s your chance to take a test drive.
The selection of an agency is a grueling, expensive process, for both the agency and client. Don’t put yourself or a group of agencies through this grind unless you seek a partner for the long-term. If you feel you need only short-term help, or a few projects completed, you can probably find an agency which will do them for you. But the process, and your expectations of what agencies should be expected to do to earn your business, should be much different.
Plan to make a commitment to the agency you hire. Don’t assume that if these guys don’t work out, you’ll hire someone else. The cost, the learning curve and the disruption of your marketing program make this a very unwise approach. A good client/agency relationship is like a good marriage. It takes time. It takes commitment. It takes respect and effort from both sides. It’s not always easy, but the rewards are there if you work hard enough at it. Good hunting!
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