Selecting An Advertising Agency

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Selecting an ad agency

Don’t Spend Good Money Sending out a Bad Impression!

Maybe you’ve asked these questions before. Many people know their business but find the business of advertising a bit mystifying. Let’s take an enlightened look at advertising and at ad agency selection.

First, every business should advertise consistently. However, all advertising is not created equal. A number of variables come into play before determining where to advertise and what to say. Sometimes the best advertising is nothing more than a bigger sign outside to attract more passing traffic. Other times it requires a detailed plan that systematically rolls out the use of several different mediums to a resounding crescendo of your corporate message.

In either case, not advertising is like winking at a girl in the dark…you know what you’re doing but she has no idea.
– Ed Mallof, Founder of MAN Marketing

A good advertising agency can give you a marketing map for your business that clearly leads you to your desired destination. By the way, destination comes from the word “destiny”. If you don’t decide your destiny early on, you may find yourself very disappointed years from now when you haven’t arrived anywhere.

Ad agencies can work within budget to achieve reasonable goals that pay off now and in the future. You might think of them in much the same way you think of a financial planner. Agencies make recommendations on how you should invest your budget to realize the greatest return on investment. And you should expect exactly that…a return on investment.

When selecting an advertising agency, do just that. Select it. Don’t just hire the first guy who walks in your door. Advertising agencies are like snowflakes. No two are identical. Your job is to find the agency best equipped to handle your marketing needs. A good advertising agency should be able to produce great work in all different mediums, traditional and digital.

Ask four media sales people to each recommend three or four agencies and then call those with more than one recommendation. Do not allow your selection process to become a personality contest. It’s important that you like the agency account executive that you work with, but it’s more important that you respect that person’s knowledge and experience. You cannot afford to let someone learn the advertising business at your expense.

Review presentations from all agencies under consideration. Visit their offices and meet the people who will be working on your account behind the scenes. Then ask the finalists for a complete list of their accounts and randomly call two or three clients. Get a true assessment of agency performance rather than a canned endorsement from an agency supplied reference.

Finally, gain a clear understanding of how the agency is to be paid. Advertising agencies are generally paid in one of four ways. Recognized agencies receive a 15% commission on any ad space or airtime that they purchase on a client’s behalf. This is the oldest and most widely accepted method of agency compensation.

However, a client can suffer if he has not chosen his ad agency at least partly on it’s reputation. For example , if you pay your advertising agency for a month’s worth of advertising that it ran for you and the agency fails to pay the media, you quite possibly will have the media chasing you for payment.

Another possible pitfall is the commission structure plan. If you have hired a talented salesman, instead of a talented adman, you might find yourself being sold advertising purely for the sake of bumping up the bill. The higher the bill, the higher the commission they earn. Agency integrity is important to monitor under this commission structure.

An agency also earns money through production charges. This is generally, but not always, a 15 percent markup on out-of-pocket expenditures that the agency makes on behalf of their client. Printing costs are one example.

Establish the agency’s markup percentage in advance and periodically shop it’s quotes just to make sure that they are remaining competitive. However, do not squeeze the agency to beat your lowest quote. For the sake of saving a few dollars you risk draining your agency of any enthusiasm that they have for your account or worse, they may be forces to use an inferior supplier to meet your demand. You get what you pay for.

Thirdly, some ad agencies bill their clients by the hour for services like artwork and copywriting. The hourly rate can vary greatly and depending on which agency personnel are used on any given project. Also, the unknown factor of what the final cost will be is a dangerous way to structure an agency relationship. I generally recommend requesting a not to exceed price when working with an agency this way.

Finally, many agencies work on a monthly retainer fee. In situations like this, make sure that both you and the agency have a clear understanding of exactly what the fee will cover. It is a good idea to have all of this spelled out in writing.

Because no two agencies are alike, payment plans can be any one or a combination of the aforementioned. Allow the agency a reasonable profit, but demand a quality finished product.

Your advertising is your first and sometimes only opportunity to make a good impression.

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