April 03, 2017
Are the Mad Men days of the big idea over?
Digital ad agencies need to find clients the same way sharks need to keep swimming forward in order to live. Stop swimming and you are out of business.
After that, agencies have to work to keep clients. Agency complacency, changing technology and a shift towards a shorter-term project outlook contributes to the churn.
We talked to practitioners at several agencies, as well as one strategist, about the agency-client relationship. They give a sense about how the art changes, the business does not, and the rest stays human.
Where do clients come from?
“The traditional rules of marketing have not changed,” says Peter Levitan, former agency executive and owner, now a self-employed strategist. “The primary way, the default, is referrals.” Levitan says. “Who doesn’t like referrals?”
So why is it that word of mouth is the way agencies get business? “They do not have an active business development program,” Levitan says. About 60% of all agencies have no business development plan. “That is the problem of being in a low-margin industry….finding the manpower to run business development when you spend 10 hours a day taking care of the client.”
Clients may not know the technology when seeking an agency. “It is the agency’s job to seek out these people and help them understand that the solution to their problem lies in digital marketing.” says Lauren Persico, SVP and partner at Driven Local, a digital ad agency based in Islandia, New York.
Then there are some clients who are already tech-savvy. “These people tend to shop around, interviewing a few potential partners before settling with their agency.” says Persico via e-mail. “It’s important for the agency to respect the knowledge of these clients and provide a solution that allows that the control and transparency of their campaigns, while still offering advances and suggestions for additional success.”
“Clients that are unhappy with their current agencies will look for new agencies, and even clients that are happy, tend to be looking for better agencies. Agencies are always looking for new clients! “ notes Dan Beca, director of marketing technology at Catalyst (Rochester, New York). “Clients should be looking for smart groups of people that can produce real results, and measurable results. Good creative, friendly staff, on-time/on-budget projects are all great things to look for in an agency, but if at the end of the day you’re not seeing results, those things won’t matter. They’re minimum requirements these days.”
“While for the most part clients seek agencies, the best agencies will do work that gets them out there and convinces the clients to start seeking.” says Flynn Zaiger, CEO of Online Optimism, (New Orleans). “This can take the form of presentations, appearing at conventions, or simply attending networking events. Providing useful information, whether in slideshows, or over drinks, is essential to getting clients to start desiring more information on digital marketing, which leads to business for agencies.”
“Clients should be looking for an agency whose values are aligned with theirs.” says Katherine Long, CEO of Illustria (Washington D.C.), a firm that specializes at providing marketing services for high-tech companies. “Just as a traditional Madison Avenue agency would be a bad fit for our clients, Illustria’s services would also not be best suited for companies who have a different philosophy around growth.”
Making a value proposition
Clients want to know what they are getting for their money when they retain an agency. Numbers matter. So do values.
“With digital, and the increased trackability, we’ve found more clients asking for numbers and data when pitching. This just means that reporting and analysis has to be a priority for all companies,” says Zaiger.
“I think when pitching new clients, there’s a huge focus on telling them something they don’t already know, and getting them excited about the results they can expect from what you’re pitching.” says Beca. “ When it comes to managing relationships, I think it’s making sure that there is still value on both sides of the equation.”
“I suggest providing an insight the client does not have,” Levitan says. Google Survey is a good place to start looking for those insights, he noted. Finding that insight “will get you new business,” he says.
Levitan gave one example from personal experience. While trying to get a non-profit to sign on, he pitched this insight: the public perceived the organization as one of the five most well known, but least in need of donations.
Pitching the crucial insight harkens back to the Mad Men era of advertising in the 1960s, when ad agencies pitched on the basis of the “one big idea”. Levitan explains that today, “ad tech rules. The Mad Men days of the big idea have been pushed to the back burner.” Digital firms lead with technology, but “forget they are dealing with humans.” he added.
“There is no one size fits all in digital marketing. When working with a client, it is important to be transparent. We want them to feel like they are in total control of their business while trusting us as digital marketing experts to get the job done. Our clients know the full scope of what we’re doing, why we’re doing it, and what we’re charging.” Perisco adds.
Unhappiness is a cold client
The agency-client relationship can be like a marriage: It takes work to keep together. Danger lurks when indifference creeps into the relationship. Never take the client for granted.
“Complacency is always a killer. If you’re not producing, you’re going to be in the bullseye.” says Catalyst’s Beca.
“If you break their trust by delivering the same work that isn’t producing the business results that they’re looking for, they will leave.” adds Long.
“It’s efficient not to lose your clients,” Levitan says. Have a plan and a staff to keep the client. This is a major issue for agencies, especially now that technology can make that seemingly solid relationship more fluid.
“I believe the biggest problem is that client relationships are difficult for agencies to track ROI on. What’s the value of a friendly phone-call upon onboarding? How do you measure the effectiveness of a slightly customized reporting template? You can’t.” says Zaiger.
Avoiding the short-term, commodity relationship
Technology comes and goes at the speed of invention. That leaves clients with a dizzying array of online places to pitch their ads. No agency can master them all. Agencies must find a way to differentiate themselves in an increasingly project-based environment.
On any given day, a client may be hit on by six or more agencies seeking new business, Persico notes. The best defense is a strong relationship.
“If you’re a good fit from the start, with transparency that easily makes the value of the efforts visible, it [the relationship] will last longer. If not, it is more abbreviated and the client is more likely to try out someone new.” Persico says. And be sure to maintain trust. “Don’t lose that human element; it makes all the difference.” she added.
Ilustria’s Long echoes that sentiment. “Although technology has enabled the world to change faster, what hasn’t changed is that relationships and success are ultimately built on trust. When you deliver on trust, you can form long-term, resilient relationships. “
Trust is good, but clients sometimes have different needs. “Shorter relationships are the new trend with more work moving to be project-based versus retained relationships.” says Beca. “Delivering solid work and staying ahead of the curve allows you to combat this to some degree. Having great client relationships helps significantly, but we live in a world of ‘What have you done for my business lately?’”
Client relationships are definitely growing shorter. “This isn’t necessarily a bad thing. With digital, strategies change far faster. With a new ad or social network popping up daily, there’s simply too many strategies for a company to try at once.” says Zaiger. “So they test things out, which is better for the companies, and it means that only the best agencies will survive.”