8 Primary Problems for Ad Agency New Business


Problems for Ad Agency New Business

Agencies have lots of problems when it comes to new business.

Almost my entire career in advertising was spent in business development. I’ve been a consultant to advertising, digital, media and PR firms for over ten years. I’ve worked one-on-one with over 270 agencies. From my experience, new business is becoming more complex and challenging. 

Here are eight of the most common problems of small to midsize agencies and what to do about them:

1.  No Target

Having an identifiable target audience is the starting point for developing a successful new business program, but it has been a major challenge for agencies. The inability to define their prospects has many agencies floundering when it comes to lead generation. Their new business programs lack of focus.

What to do:

Profiling prospects is critical. It ensures you’re deploying your time, energy and resources on high probability targets.

When you ask most agency owners who their target audience is, they usually respond by saying something like, C-level execs of midsize companies, with an annual budget of …”.  But, this type of information doesn’t provide what you need to really reach your prospects.

Creating a useful potential client profile, will help you to identify and acquire a better understanding of your target market. It can become a guide for reaching your premium prospects. The goal here is to build a clear picture of this person that everyone can recognize. You can keep this simple or make it as comprehensive as needed.

Here’s a template to help develop your agency’s prospective client profiles:

  • Give your targets an identify
  • Gather demographic information
  • Know their challenges, goals and objectives
  • Know where to find your prospects and how they will find you
  • Know what services they are looking for
  • Know what industry publications they read and events they attend
  • Know what associations they are affiliated with

Build your prospect list. To build an up-to-date list of primary prospects, I’ve used resources such as LinkedIn, Business Journals and paid programs such as The List Inc., Red Books, Manageflitter and Hoovers.

2. No Point of Differentiation

Agencies have no point of differentiation. They all look and sound the same. By trying to appeal to everybody, they don’t appeal to anybody, particularly to the prospective clients outside of their market.

What to do:

Differentiation from competitors is the foundation of all successful marketing. But, it’s not easy to find key differences between advertising agencies. Contrary to their own mindless self-perception, all agencies have pretty much the same basic capabilities and processes. They all claim to be different at what they do, but they are all essentially the same.

Ad agencies still try to lead with being a full-service agency to attract new business but, marketers don’t find their claim to be credible.

Like it or not, prospects are seeking specialists. They’re looking for specialized agencies that have a proven track record of success to help them with their marketing challenges.

Prospects buy a solution to a problem. If they don’t know what problems you solve and the results you’ll deliver, it’s not likely they’ll buy your service.

Prospects buy YOU. After identifying the problem they want solved, prospects make a decision on who they will choose to solve it for them. Don’t focus on selling your services. Instead, provide communications and conversations where the focus is on your understanding of their problems.

3. Not Practicing What You Preach

Agencies don’t practice what they preach. For instance, most agencies don’t have a written marketing plan on how they’re going to promote their agency. That’s Marketing 101.

66% Of Advertising Agencies Report That They Do Not Have a Business Development Plan.

Marketers expect their agencies to market themselves effectively utilizing the tools they recommend to their clients.

What to do:

Very few advertising agencies used the medium they work and trade in to promote themselves. But a small agency in Minneapolis provides an unusual example of how they should practice what they preach.

Barrie D’Rozario Murphy, took out a full-page ad in the New York Times touting the  O’Toole Award that they received as the best small agency in America. The American Association of Advertising Agencies hands out the O’Tooles annually to honor the nation’s finest small, medium and large agencies.

Lewis Lazare, Sun-Times Columnist writes,

The BDM ad was unusual because it is an example of something we rarely see in the ad world nowadays, namely ad agencies advertising themselves. “It’s what we tell our clients to do, so we figured that we should, too,” explained Stuart D’Rozario, the founding partner at BDM who wrote the copy-heavy ad seen in the N.Y. Times.

The ad cost the small shop a solid five-figure sum to run, but it did what it was intended to do — build awareness and attract new business.

4. Too Dependent Upon Client Referrals

Most small to midsize agencies have become far too dependent upon client referrals because they are do not have a consistent new business program that includes both inbound and outbound strategies and tactics.

What to Do:

Have someone charged with the responsibility for creating and implementing an integrated new business program. Set goals and objectives that are reasonably obtainable. New business directors are like the rudder of a ship. They are responsible for keeping the process for new business moving even when the agency is busy. Consistency is more important than perfection.

5. The Cobblers Children with No Shoes

There’s an old saying, the cobbler’s children have no shoes. It refers to the fact that a busy cobbler will be so busy making shoes for his customers that he has no time to make some for his own children.

If I had a dollar every time I’ve heard that saying, as an excuse of why agencies tend to neglect their own new business program, I could have retired long ago.

What to Do:

It’s time to give the cobbler’s children some new shoes. Simply stop treating your agency as its most neglected client and promote it to your most important client. Make the work that needs to be done for new business a top priority.

6. No Positioning of Expertise

Ad agencies still try to lead with being a full-service agency to attract new business but, marketers don’t find their claim to be credible. According to research from the Association of National Advertisers (ANA), ‘Fortune 500 companies have an average of 17 agency relationships. None of them have an actual ‘Agency of Record.’

Prospective clients are looking for expertise. They search the internet to find those that have expertise within their arena. Without a positioning of expertise, the only positioning agencies have is as a vendor.

What to Do:

Prospects demanding expertise can be a good thing for the small to midsize agency owner. The rewards can be great.

  • Fewer competitors
  • A more focused new business program with less waste of time and energy
  • A much larger geographical market
  • The potential to earn higher premiums
  • More respect and better control of client relationships
  • Reliable new business opportunities with qualified prospects

But, you must be willing to name your area of expertise to market your agency on that distinguishable difference.

7. A Lack of Success with Inbound Marketing

As I have often expressed, new business has historically been a problem for agencies. But in recent studies, agencies have expressed that it is more difficult than ever before. Even the Rainmakers who were good at new business in the past are struggling today.

Agencies have not done a good job of making the transition from outbound marketing to more of an inbound marketing approach.

What to Do:

Instead of chasing new business, agencies have to learn how to be found. Why? Because the battle for new business has moved online.

Before agencies will have success transitioning from outbound to inbound and committing the time and resources, agency owners have to become believers. They won’t become believers sitting on the bench. They have to participate to understand the tremendous benefits of social media and inbound marketing.

8. The Riskiest Position in Advertising

There is an extremely high turnover rate for those charged with agency new business. According to a recent Agency-Marketer Business Report from RSW/US, the tenure of a new business director is 2 years or less. Only 26% of new business directors were viewed as successful. The role of the agency new business executive is the riskiest position due a dramatic change in the way business is acquired and the skills needed to be successful.

What to Do:

According to a press release by Reardon Smith Whittaker (RSW), nearly 85% of agencies continue to hire new-business development personnel internally hoping that “this hire will be the right hire.” Yet, the vast majority of them fail.

Before hiring someone responsible for your agency’s new business efforts, in addition to understanding their traditional new business expertise, you should explore what they really know about the following:

  • How to build an online community of prospects.
  • How to use social media and inbound marketing to provide a direct connection to your agency’s brand leader.
  • How to use the internet to create a niche for new business and gain a positioning of expertise to reach larger clients well beyond your local market.

If you need help in overcoming your agency’s problems with new business, please email me to set up a time to discuss.

Additional resources that may be of interest:

photo credit: Ken Whytock Educational Postcard: Do you have the same problem year to year? via photopin (license)

About Michael Gass

Consultant | Trainer | Author | Speaker

Since 2007, he has been pioneering the use of social media, inbound and content marketing strategies specifically for agency new business.

He is the founder of Fuel Lines Business Development, LLC, a firm which provides business development training and consulting services to advertising, digital, media and PR agencies.

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