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6 ways ad agencies are falling short

6 ways ad agencies are falling short Jay Friedman

I typically side with agencies in most debates. I've worked in a large agency, a small agency, and visited with hundreds of agencies of all sizes. Despite my empathy for agencies, nobody's perfect and we all have room for improvement. Over time I've seen six specific ways agencies are falling short and have room to improve themselves.

Running an agency instead of a great company

If you've laughed while saying any of the following, you probably work for an agency:

  • "Everyone here works, like, 24/7. We all put in at least 50 hours/week or more."
  • "No, no, no. We don't have management training!"
  • "If people are upset, they can go to HR!"

Unfortunately, these aren't things to laugh about. Agencies have exceptionally high turnover in most individual contributor roles and these statements are representative of the cause. Most agencies are so focused on just "getting the work out" that they rarely take the time to run their own company. This is the equivalent of trying to put an oxygen mask on the person next to you before you put on your own.

When I've asked agency owners why it works this way, the most common answer is that they can't afford things like a robust training program, management training, talent development programs, or to administer a full 360-degree feedback and review process. This reminds me of the quote where the CFO says to the CEO, "What if we spend all this money on training and the people just leave?" To which the CEO responds, "What if we don't, and they stay?" There are concrete ways to measure the results of these efforts (an internal annual survey, turnover rates, glassdoor.com ratings, to name a few) and ensure the focus you put on these efforts pays off.

Culture of project management, not results measurement

As mentioned above, "just getting the work out the door" dominates most agencies' mentalities. But, think about when an agency pitches a client. Did the agency pitch the client on being really great at getting the work out the door, and end the pitch there? Clients hire agencies for results. Agencies typically promise great results in a pitch and rarely follow through with rigorous, consistent measurement.

Rigorous measurement involves experimental design, setup, measurement, testing, measurement, and analysis. Too often agencies and clients think about testing or measuring after the campaign is already launched due to the urgency around getting a campaign launched. Campaign launch urgency is rarely a product of real urgency and most often a product of poor planning. And often that poor planning resides with the marketer. However, it's the agency's job to design the right experiment and measurement requirements, and to advise the client of what insights they'll gain collectively as deadlines are missed to test correctly.

Consistent measurement is needed because all point-in-time experiments are just one -- one result at one point in time. We learned in science class that we can only deem something scientific if we can repeatedly, reliably, and provably achieve the same result. Whether your measurement periods are a week, a year, or somewhere in between, it's important to establish what you'll measure, why you believe the measurement is reliable, how you'll attempt to repeat or disprove it, and finally, that the measurement never ends.

Valuing their own work

As an agency falls into the trap of "just getting the work out the door," the chaotic culture this creates leads to internal devaluation of the work. I guarantee that if an agency were to consistently bring brilliant measurement strategies, results, and insights to a client, that agency could and would stand very tall when discussing scoping, rate, and fees.

With truly amazing results, the agency holds the cards in the negotiation. They've done what no agency has ever (likely) done before for that client, and if the client decides not to pay up, the agency has a heck of a case study to bring to that client's competitors.

Of course, getting to this spot requires doing all of what is in this piece well and correctly. It's hard to tell a client to pay more if consistent and repeated results aren't present. Creating those results isn't possible if people aren't developed or are just trying to get the work out the door.

Culture of "The client said…"

I once had a client call me just as we were going live with an automotive campaign only to tell us to stop and change the vehicle model immediately. It made no sense to any of us. All the research we had done showed that the originally planned model sold well during this particular month, the model was relatively new, and we thought we had the best chance of driving sales increases. The vehicle model the client asked us to switch to was not doing well and was out of season. Later we found out the original vehicle was nearly sold out and the new model being advertised was in such long supply on the dealers' lots that the dealers were starting to be adversely affected. They can't exactly send the cars back to the factory and say, "Just kidding. We didn't want these."

The point here is that clients often have very good reasons for their direction. Often they don't communicate their rationale logically or sufficiently, which leads to communication challenges. However, good communication is never a bad idea, and taking an extra two minutes to get everyone on board yields smoother execution and better results down the road.

Agencies owe it to themselves and their clients to get an explanation to fully understand the business rationale behind their direction. Both the agency and client have information the other doesn't that should be used to make a smart decision rather than just taking a client's direction and running with it.

"Made here" pride over client business results

I believe an agency's core role is to deliver two things -- great marketing strategy and insights from campaign analytics that drive even better strategy the next time. The rest can either be done within the agency or outsourced, but that decision is less important. I've spoken with so many agencies that don't see it this way, though. They believe they need to own and perform every step of the process in order to face the client with confidence in their product. I believe part of this comes from being unable to get out of the "just get the work out the door" mentality. When an agency believes its product is project management and just doing the work, people at the agency forget they can deliver higher level value to a client by focusing on the right things.

There are examples in every industry of partnering/outsourcing to focus on core competencies and not be a "master of none." Automakers don't make the seats, tires, or even transmissions in their vehicles because others specialize and are better at it. But you don't see a dealership salesperson lacking confidence in the vehicle because their automaker didn't build every component themselves. Imagine your favorite Italian restaurant. You've just had an amazing meal and feel like some dessert. The restaurant focuses on making great Italian food but not dessert, so they proudly feature desserts from a great bakery a few miles away. Not only do they brag about outsourcing their desserts, they also charge and earn more money for the dessert than the bakery does on its own!

Not playing the long game

As you've seen, each of these points relates to at least one other one, if not them all. All of them roll up in some way to playing the long game in business rather than the short. If the focus is always about saving a client on the edge, great planning and work will never be done for the other clients that appear secure. If the focus is always on getting the work out the door rather than planning and delivering great strategy, an agency will always be in "save the client" mode with one or more clients.

Most people agree the agency model is broken. I'm one of the few who believes it's fixable without a complete overhaul. In fact, some agencies are doing most or all of this right, so it can be done! These are some basic principles agencies can apply to put themselves in a position to own and control the client relationship, be more profitable, retain employees, and be a more complete and successful agency.

Jay Friedman is COO of Goodway Group, and a partner in the 3rd-generation family company founded by Milton Wolk in 1929. Friedman joined in 2006 to add a digital media component to Goodway’s offerings, beyond the existing print and promotional...

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Commenter: Reid Carr

2016, October 26

Hi Jay. Totally agree with your points (and have a few more thoughts, myself...). I thought that last one, "Not playing the long game" was going to speak to the "built-to-sell" mentality of many agencies. So, it isn't that I disagree with your point, but to add one that I thought was related to many (and why people don't formalize processes, infrastructure, etc... is that they think it will be someone else's problem when they sell the business. And, I think you might agree, as a partner of a 3rd generation family company. There is just something different about businesses built to sell to someone else vs those built to hand to the next generation.