Madison Avenue, we have a problem.
Based on recent stats from Copernicus Marketing Consulting of over 500 marketing programs for consumer and B2B products and services:
What’s more, when only 8% of marketers are “very satisfied” with their agencies, it’s not just a problem, it’s a potential disaster for our industry.
So what’s going on? Have people suddenly become immune to advertising?
ADVERTISING ISN’T FAILING, AGENCIES ARE.
Fact is, people have always been immune to bad advertising. Our relatively newfound ability to track and measure results simply confirms it.
Advertising effectiveness is in decline because the vast majority of “agencies” (digital, traditional and social) are operating within an antiquated business model. As a result, agencies are simply unable to deliver the most effective strategies, creative ideas and production values.
Bad advertising with bad ROI happens when agencies don’t have the right business model, access to the right people and an agnostic, evidence-based approach to solutions. This all creates a perfect storm for declining marketing effectiveness and client dissatisfaction.
We believe businesses deserve the following results from their marketing investments:
To achieve the above, you need an agency with the traits and capabilities we've outlined below.
If You Want To Maximize Your Growth & Profits From Your Advertising Investment Hire An Agency That:
1. Does Not Overcharge
You can’t maximize ROI if you’re paying too much for agency services. And your agency can’t charge you a fair price for its services when it’s paying for unnecessary overhead. It’s high time agencies took a long, hard look at their structures and business models. It’s time agencies chunk everything that does not directly help their clients and champion everything that does.
Consider an agency that is:
Willing To Earn Your Business
If an agency demands an Agency Of Record Contract or a monthly fee – run. Great agencies today work like a traditional consultancy. They’re more than willing to take on small, short-term projects to earn your trust and build a relationship. Great agencies know they’ll be successful and when they are you’ll hire them for additional projects.
Here's a simple way to ensure you don’t overspend on creative development. Work with an agency that is ok with charging you for only the creative work you use. (This is a similar model photographers and other artists use for their work.) For example, an agency should be willing to give you a much lower price for an ad that’s only used one-time in one medium than for unlimited usage. If the ad works and you want to use it again in the same medium or expand your buy and run it in other media, then you should be fine with paying a usage fee to the agency to do so. It’s a win-win where you only pay for what you use and the agency is incentivized to create work that actually works.
In an effort to compensate for lower fees and higher overhead, many agencies are not forthcoming on mark-ups, kickbacks and who is really executing the work you contract them to do. The best agencies, however, are 100% open and upfront about what things they mark up and why. For example, we mark-up certain production services because of the time it takes to research and negotiate bids to find the best fit for the job. Our clients know this upfront and we submit invoices directly from third parties with our mark ups. Some agencies get kickbacks from production and media companies they use. In addition to being unethical and possibly illegal, kickbacks give agencies an incentive to use the wrong production companies and less effective media platforms resulting in poorer performance. What's more kickbacks hurt honest businesses that don't grease the palms of crooked agencies. Read more about the kickback problem here and here. And lastly, agencies are notorious for baiting clients with senior teams and actually having junior teams do all the work. Or even worse, promoting work on their sites that was created by people who no longer work at the agency. Case and point, there's an agency out there right now who is showcasing a dozen campaigns on their site that I created and I haven't worked with them in over a decade! If you like a particular campaign make sure the team who created it still works for the agency and are available to work on your account. If you like a particular agency team, get it in writing that they will be the primary team working for you.
Does Not Have An Expensive Office
Are offices absolutely necessary for developing and executing great work? Absolutely not. In fact, evidence shows the opposite is true. Cool, open floor plans are actually detrimental to the long, interrupted periods deep-thinking creatives and strategists need. If you’ve ever worked in an agency you know the best insights and concepts happen outside of the agency. According to research, people who work remotely are “massively” more productive, more satisfied and happier and healthier than those who work in an office. Besides free coffee and a place to meet in-person, offices are a pass-through expense most clients could do without. I’ve owned two agencies with nice offices and I can count on one hand the number of clients that visited us each year. 95% of the time if an in-person meeting was needed, we’d go visit them.
Has A Small Full-Time Staff + Large Network Of Part-Time Specialists
80% of the average agency’s overhead is staffing. With an almost infinite number and ever-evolving ways we can reach and connect with people it makes no sense to limit an agency’s capabilities with a finite full-time staff with narrow expertise.
Today, the best agencies are not limited by scalability, expertise or even geography. They’re staffed with experienced marketing generalists plus an extensive network of freelance marketing specialists that can be brought in at will to Seal Team Six any marketing challenge. For example, our little agency in NC has a growing network of over 300 marketing experts and over 50 specialty production companies that give us unprecedented scalability and capabilities. What’s more they work with us for way less than they normally charge others. They know they’re going to get great work and a great case study for their portfolios.
2. Is Zealously Evidence-Based
Traditional vs. Digital, Long-Term vs. Short-Term, Direct vs. Branding, Inbound vs. Outbound…the last thing the ad industry needs is another opinion. Perspective – especially in advertising – is almost always self-serving. Digital agencies recommend digital solutions. Traditional agencies recommend traditional ones. Clients have their own opinions. Fact is, all three are often wrong. Case and point, a recent study by that shows a huge discrepancy between what unbiased research proves vs. what agencies and clients think is the most effective media at increasing ROI. Read the full report here.
3. Develops Powerful Long-Term Brand Platforms
Successful long-term brand platforms are built by agencies that are strategically guided and creatively driven. Or as we like to say, “Strategy first, tactics second – creative always.” The first step is uncovering valid insights from qualitative and quantitative research that ID three key areas of your business:
• The one thing you are most passionate and profitable doing...
• That your customers truly want, need and will pay for...
• That your competitors are unwilling or unable to do.
Where all three intersect (the orange "HP" triangle in the attached diagram) is where you'll find your unique position in the market. The ad industry has many names for the expression of this: Higher Purpose, Unique Value Proposition, Unique Selling Proposition,...etc. However only a few agencies have the experience and know-how to articulate it in a way that:
The big error we see agencies and clients making today is mistaking performing a social good as a business purpose. Doing good for the world can be your organization's purpose only if:
4. Is Managed By Experienced Generalists
There are a million-and-one ways to reach and persuade people these days. However, every company has a unique set of marketing challenges and opportunities. So odds are only a handful of marketing solutions will work best for you. Generalists who can draw upon multiple experiences solving multiple problems across multiple categories are best at diagnosing your problem(s) and finding the right solution for you.
Specialists, on the other hand, will only see your problem through the very narrow lens of their specialty. Digital agencies will only advise digital solutions. PR firms will only recommend PR solutions. Video production companies will only offer video solutions, etc., etc. Relying only specialists only to solve your problems is an opportunity cost no business that needs to maximize growth can afford.
5. Has An Amazing Portfolio Of Work + Case Studies
A recent Ehrenberg-Bass Institute study suggests that over 84% of advertising fails to get noticed. Highly creative campaigns are noticed more often, remembered longer and can boost overall effectiveness by 11x. If the agency you’re considering has boring creative or doesn’t feature its work and case studies front and center, consider another agency. See our work + case studies here.
6. Plays Well With Others
The ability to collaborate with others is key. Gone are the days when one agency ran the whole she-bang. With the increase in project work and multiple specialists needed from research to strategy to creative development to production, tracking, measurement and analysis, agencies must be able to work well with other agencies, internal teams, production companies and individual experts. Unfortunately, most agencies are out for themselves and see all other agencies as threats or in possession of a budget they want. Which means they can be perfectly pleasant people to hang out with but very difficult to collaborate with. Consider hiring agencies with large networks of freelancers as described above. They have collaboration built into their DNA.
7. Clients Love
When you do great work that gets great results, clients appreciate it. Sometimes that appreciation is blush worthy as in the one’s we’ve self-servingly included above. Before hiring an agency ask to see some client testimonials or better yet, call some of their clients and hear the good, the bad and the ugly firsthand. Read more of our client testimonials here.
About the author:
David Smith, Founder and Creative Leader, Immortology USA
David Smith is the creative force behind Immortology, a full-service agency specializing in developing legendary creative and strategic solutions that allow organizations to outsmart, outdo and outlast heir competitors without outspending them. Through research and insight, Immortology helps companies find and align their true callings with their customers’ real wants and needs in ways their rivals can’t or won’t. Specializing in creating long ideas that make more people notice, remember and feel good about their clients' businesses, they perpetuate success for years to come
Over the past two decades, David has created some of the world’s most memorable and successful ads. His campaigns have been covered by the NY Times, Adweek, Ad Age, Time, The Wall Street Journal, LA Times and Media Week. Shows such as Entertainment Tonight, Access Hollywood, Inside Edition, CMT and CNN/FN have featured his work. The 4A’s recognized his movement, “Stop The Adness” as the “most transformative idea of the year”. His campaign for Smirnoff Ice was the most successful product launch in United Distillers and Vintners’ history and his Lipton Brisk campaign has been included in the Museum of Modern Art’s permanent collection. His videos for Triumph Boats have been viewed by over 60 million people worldwide.