As a small business, choosing an advertising agency is a major commitment. Asking some key questions will help you make the best choice for the future of your company.
So you've been handling all the marketing duties at your small business and you realize that you've grown to the point that you need some outside help. Maybe you see some major market opportunities and you want a group of experts to help you take your business to the next level. Either way, it may be time to find an advertising agency.
Choosing the right advertising agency is not an exact science. Find the right fit and you'll enjoy an increase in visibility and sales that you could never have achieved on your own. Pick the wrong agency, however, and all you'll have to show for your efforts is a costly waste of time and money.
If you have been actively advertising on your own, you have most likely already been contacted by some agencies soliciting your business. The local advertising council or professional organization is also a great place to begin your search - virtually all reputable agencies in a given area will be members. From here you will be able to put together a "short list" of agencies to choose from.
At this point, you'll want to start meeting with some agencies. To ensure that you'll get an accurate picture of an agency's services, you'll need to provide each of them with an estimated advertising budget and some basic marketing and/or sales objectives. Make sure you give each agency the same information - this will keep a level playing field and allow you to have a comparison point. During these meetings, use the following questions and guidelines to help you make a decision.
How big is the agency? Agency size is traditionally measured in media billings, but is increasingly expressed in overall revenue and number of employees as well. As a small business, it is not unusual for your advertising agency to be larger than your own company, so overall size is not as important as the size of the team assigned to your business.
A key evaluation is to look at the billings of each of their clients, and see where you would fit in. You'll want to ensure that your advertising budget is not such a small portion of the agency's overall billings that you'll be overlooked. On the other hand, it may not be advisable to be the agency's largest client, as they may not have the experience to work with a business of your size. Most clients feel comfortable somewhere in the top five of an agency's client roster.
A careful review of their client list is also important in determining an agency's experience base. While you would never use the ad agency of a direct competitor, does the agency have any other clients in related business categories or facing similar challenges? Are they up to date on the current trends of your industry, or do they have experience talking to your target audience? Most smaller agencies tend to specialize in certain industries - their current and former client lists will showcase relevant experience.
Another key element to consider when reviewing a client list is retention. While client turnover is fairly common in the ad business, an agency whose clients stay for less than two years is a cause for concern. You'll want to see that they have a few long term clients (five years or more) to show that they can successfully service a business as it grows.
Are their services and capabilities a good match for your needs? Ad agencies generally have many specialized departments, including media placement, research, direct mail and interactive advertising. If you know that your target audience is best reached by niche trade magazines, you don't want to pick an agency whose only experience is flashy television campaigns or a shop with only direct mail capabilities. Unfortunately, some agencies will say they can do it all, so you'll need to thoroughly examine the kind of work they produce to determine where their strengths lie.
When you review their work for other clients, do you like it? While all creative work is subjective, you should at least be able to judge their creative product on how effectively it conveyed its intended message. Did their media program reach its intended target? What was the success rate for their direct mail campaign? In order to get your business, an agency should be able to provide you with case studies of their work, and explain why that work was deemed a success by that client.
Speaking of creative work, how much is it going to cost? At this point, it is impossible to know exactly the scope of work involved for your business, so don't expect a detailed cost right now. Based on your advertising budget, however, they should be able to give you a good outline of their fee structure. Some agencies mark up media placements and production costs, while others charge monthly retainers based on the hours needed to run your account. Agencies have devised a myriad of fee structures to suit many types of clients. The best compensation model for you may be reached by trial and error at first, but you should always be given the opportunity to re-negotiate your contract based on the changing needs of your business.
Part of the fee discussion will address an agency's working style. Do they tend to heavily staff their accounts with multiple specialists dedicated to your business, or are agency personnel called in on an as-needed basis? Will you be contacted by a variety of team members, or will you have one key point of contact? These answers can determine how you are charged for services, but the agency should also be willing to work with your preferences. Agencies can sometimes forget that advertising is a very small part of your job, and have the tendency involve many levels of personnel. You'll need to make sure they listen to your requirements for contacting you and your preferred working style.
Do you feel a good personality fit with not only those dedicated to your account, but agency management as well? Due to the proprietary nature of ad work, the agency-client relationship can be very involved. You'll want to feel comfortable with those people you may be talking to daily. Do you feel that they really listen to you and the needs of your business? In addition, advertising agencies have notoriously high turnover rates - how is their staff retention and will it affect your business? You don't want to be "breaking in" a new contact every six months.
An ad agency is a business and you'll need to look at how they run their business. Is their financial overview available to you, and if so, are they strong enough for you to consider linking your business with them? How do they pay their vendors? You'll want to make sure that their accounting style is compatible with yours, because they will be paying vendors on your behalf. Your financial reputation will be tightly linked with theirs in the eyes of these vendors, so you want to make sure you are comfortable with how they handle the money you pay to them.
While they are courting your business, an advertising agency will naturally only show you their best side. Make sure to ask for client references, and check them thoroughly. Don't be afraid to ask questions regarding the quality of the agency's deliverables, and whether the work is produced on time and on budget. It is easy to get caught up in the "wow" factor, but whether or not an agency can actually execute their ideas is crucial to your marketing success. While following these criteria doesn't guarantee you'll find the perfect agency, you'll have some confidence that you are asking the right questions to make your choice.
