According to principals and new business directors, traditional new business methods aren’t working.
Michael Gass Consulting recently sponsored the 2008 Advertising Agency New Business Survey, a national online survey of small to midsize advertising agencies. The purpose of the survey was to gain insight into the perceptions and trends regarding agency new business in light of the current tumultuous economic climate.
Our sample came from a database of 4,955 U.S. full-service advertising agencies ranging in staff size from 5 to 80 full-time employees. An online link to the survey was also made available.We emailed the survey advertising agency CEOs and new business directors in August and kept the survey open through October 5, 2008 using an online questionnaire. There were 302 agencies that responded.
The survey was developed and results analyzed by Michael Gass Consulting, with greatly appreciated support and input from Dr. Phillip S. Rogers. Special thanks to THE LIST for providing the data sampling.
It isn’t surprising that half of the agency leaders surveyed stated their business was down or down significantly from last year and that new business was harder or a lot harder to obtain. Nor is it surprising that there were fewer new business opportunities and prospects were harder to reach. What seems to be revealing is the vast majority of these agencies are still relying heavily upon referrals and networking for new business and these traditional methods are not working.
Even though the rapid rise of new media has been accelerated by the current economy, according to this survey, agencies were not utilizing new media tools as a source for new business. Only 33 percent of these agencies even had a blog. Email, search engine optimization and eNewsletters were rated less than 4 percent as a source for new business opportunities and as a way to reach prospective clients.
Findings further indicate that ad agencies are not digitally prepared. They are way behind the growth curve of new media. That problem is compounded with the current economic crisis whichwas already hurting agency new business. Agencies would be wise to incorporate new media tools into their new business program andexperience how these tools can be used to generate leads first hand.
According to many economists, 2009 could be much worse than what we are experiencing this year. Agencies will need to make new business a top priority to survive. When asked if their agency had a new business director, 48 percent said no and 42 percent said they had no plan. A good number of agencies still do not see the importance of having someone oversee their new business practices. If everyone is responsible for new business, no one will be.
This is a revolutionary time for the advertising industry. A communication revolution. There is definitely a revolution taking place in the way agency new business is acquired. This will require the use and greater dependence upon new media tools for agency new business. The new business paradigm shift that is taking place requires agencies to properly position themselves, creating a strong appeal among their best target audience, enlarging their online footprint where they can be found. When your target audience is ready to engage, they will initiate the contact.