Given the plethora of commodity services most ad agencies provide today, they need to differentiate themselves from their competitors. They need to stand out by showing clients how their services and creative work are better than other agencies, if their business models are to survive and thrive.
For those who want their ad agencies to stand out, there is simply one rule that matters: Success does not come through conformity.
I had a discussion recently with the head of a respected brand name ad agency with several offices throughout Asia. This is what he told me:
“I continue to explore ways to differentiate our agency offering. I keep running up against new competitors of all sizes and disciplines. I've spent considerable time mapping out all the different disciplines that we compete in. I’ve included companies with their own media planning and buying, companies that have purchased other agencies that create content directly for clients, entertainment companies to data companies, to digital companies with direct client relationships, to design firms, even companies that provide analytics and digital production. The exercise made me realize that there are far too many agencies, big and small, all vying for their pool of marketing dollars. Technology has made it possible for everyone to expand their capabilities. We have so many different ways to reach the consumer, and so many different types of ad agencies, the playing field has really grayed who does what.”
Fact is, most agencies appear to offer everything under the sun. To stay profitable, many have gone through a period of diversification. For a time, it seemed, everybody else was headed in that direction, so it looked like it must be the way to go. As a result, the advertising industry had converged around “full-service” and “integrated.”
What clients are really looking for in an ad agency
Rather than differentiating their offering by sticking to what they know best, agencies are rushing to be seen as the ultimate one-stop marketing shop. Problem is, sophisticated marketers aren’t really looking for that. Neither are clients looking for generalists, they’re looking for best-in-class specialists.
Though all the talk, noise and hype today centres around digital technology and gadgets, clients are really looking for creativity—big ideas that will give them a competitive edge in their markets.
Neil French once remarked: “There’s about 40 or 50 agencies in the world that are any good at creating a great campaign, and all too few of them can do it consistently.”
Indeed, that’s a very tough standard. As it turns out, the companies that are most admired for their creativity are rarely the largest. The plain truth is this: the most exceptional agencies have chosen not to focus on revenue growth, but rather to be the best at what they do. They choose to focus on doing great work, building a great agency culture, providing great service to their clients, and creating a great environment in which to work. It’s these values that make them the leaders in their field.
Consider this for a moment: What ad agencies do you admire?
Most likely you are thinking of the ones with a great reputation for innovative work. High on my list are BBH, Droga5, Ogilvy, TBWA, Weiden+Kennedy, BBDO, Goodby-Silverstein, and DDB. None of them are one hit wonders. They are consistent big idea generators. Their creative work is usually the part we can easily observe. But what is it that enables these agencies to produce great work? What’s the cause that produces the effect we admire?
“To produce great advertising in an agency, you need three things,” notes Mr. Neil French. “The management that wants it. The creative people who can produce it. And, mot importantly, the client who will buy it.” Instead of being driven by the market, by revenues, or even by the client, the agencies that commit themselves to an ideal or are driven by creativity, do what they do for a purpose that that transcends collecting a paycheck. There’s little doubt about it, those with the strongest ideals produce the strongest work, have the strongest cultures, and enjoy the strongest reputations.
Agencies willing to stand by their beliefs are more likely to succeed.
To differentiate your advertising agency from the others, you have to start from the inside and work your way to the outside. Here’s what I mean.
Years ago, I left The Ball Partnership, one of Asia’s most creative agencies at the time, and joined BSB (later Bates) as its Regional Creative Director and Chief Executive. I was hired to “ignite the agency”. In effect, I was really hired as a “Change Agent”—empowered to turn a lackluster group of agencies into a well oiled and respected creative shop. Once I came onboard, it took only a few weeks to learn that the agency management had been unwilling to stand up for their creative work if it meant taking on a client who rejected anything slightly off what they “expected to see”. The agency was symptomatic of the subservient attitude some agencies have when it comes to client relationships.
The Ball Partnership had taught me that an agency willing to stand by its beliefs and principles was actually much more likely to succeed in the long run. So, the very first thing I did for BSB, was to write an agency vision and mission. I wanted BSB “to be the best agency in each market, not necessarily the biggest”. I was determined to “build a staff of the most able, dynamic and committed people”. I wanted the agency “to be spoken of highly by our clients and in particular, the industry at large”. I wanted “BSB to be the agency everyone wanted to work for”.
Experience is the best teacher
After three months, I invited all key management from our various offices around the region to meet with me in a management conference. This is what I told them:
“BSB has done some amazing things. Look at all the great clients we do business with. Look how long some of them have stayed with us. You should be very proud of that fact. But now is no time to rest on our laurels. Most of you have told me that you want to grow a creative reputation; win recognition amongst your peers and with the media, and be more competitive and innovative to succeed in new business pitches. I’ve listened, and from today, we are embracing a much needed change in the agency to move forward. None of us can achieve this alone, we need to do this together. We need to create a different environment; an exciting culture; a company focused on creativity in all things we do—in all our disciplines. Let’s do that as a team.’
Three months later we held a conference in Thailand. All the companies executives came, Managing Directors and Creative Directors. At first, some didn’t want to come. They feared having to go through more changes at their agencies. There was friction in the ranks. I had to speak with them individually, but in the end, everyone came, and they all participated in the agency’s cultural evaluation. Each Managing Director was asked to create a SWOT analyses of their own office.
During the first days’s meeting, the group created a list of core values. Many of the values were typical at first: Dedication. Hard work. Long term relationships. Selectivity. Serve only good brands... But on the second day, we eventually got to decide on some core values that really excited us. It was a fascinating process. And by the end of the day we had several thoughts on paper. These were some of them:
- Work with exciting clients.
- Deliver ideas that WOW our clients
- There’s no such thing as a boring assignment.
- Be passionate about our industry
- Be passionate about our company culture
- Eliminate “NO”.
- An idea is never a wrong idea.
- Embrace change and try new things.
- Learn from failure.
- Ask more questions. (Don’t pretend to know all the answers.)
- Embrace and drive change. (Never accept “comfortable” or the “status quo”. )
- Be creative. Every Bates employee enjoys being creative.
- Never stop learning. (We encourage everyone to challenge themselves to learn, grow and push the boundaries.)
- Communicate openly and honestly.
- Collaborate more with other regional offices.
- Clients respect an agency more when the agency is confident.
The best agencies stand for something—not everything
How often have you’ve been asked to describe your ad agency? Or describe what it does that’s different? You’d be surprised to know that most agencies think they’re more differentiated than they actually are. Need some proof? Here it is: A recent survey of ad agencies revealed that while 80% of agency management feel their offering is highly differentiated, only 8% of their clients actually agree with them. Brand awareness is not the same thing as a positioning.
I took my own survey of advertising agencies in the Asian region, big ones, mid-sized firms and several small ad agencies. I looked at their websites to see how they differentiated themselves. What I found was that most of them have yet to do the hard work of defining their ‘brand’ positioning. Many agencies are unable to articulate a clear positioning strategy because they don’t really have one. Reason being, they often wimp out because they are not willing to publicly put a stake in the ground.
One year ago, I was invited by an ad agency to help them write their positioning statement. They had been around for over fourteen years, and new business was drying up. The president of the company informed me that in all that time, they had continually failed at writing a unique positioning for themselves. It made me wonder: if they can’t define their own brand, how in the world will clients ever understand what they have to offer. As silly as this may sound, you’d be surprised at just how many ad agencies fail to position themselves. If they can’t do it for themselves, how in the world can they do it for their clients?
The interesting thing is that when it comes to clients selecting an agency, most will tell you they are not the least interested in staff size, the number of offices the agency has globally, whether an agency is full service, integrated, or a great marketing “partner”.
So the best thing an agency can do is to make a careful, honest analysis of what they know and do best. They need to ask “In what areas are we just a commodity?” “In which areas can we sell ourselves as a real brand?” “What do we have or do that’s different?” The goal is to minimize the commodity side of the equation and maximize the brand side.
You may come to a conclusion that the services you provide are not radically different from other agencies. If that is the case, remember this: During client new business presentations, an agency is far better off talking about its beliefs and point of view, rather than preaching its capabilities.
One final point. It’s easy to talk or write about creating an agency positioning. Fact is, given all the commodity services agencies provide today, a truly unique agency positioning is one of the hardest thing to write. Just take a look at agency websites. Most would lead you to believe that they are one great talent magnet; that they produce stellar work for outstanding clients. But of course, only about 2-5% really do. What ultimately distinguishes them is not the rhetoric, but the reality of walking their talk.