Have Ad Agencies Actually Learned a Lesson? RFP Rejection Rate Hits an All-Time High.
AgencyFinder’s CEO provides some clarity on recent reports that ad and PR firms are starting to turn away requests for proposals because of their low budgets, unrealistic expectations and vague direction.
Richmond, VA (eReleases, November 6, 2013) “We find most ad agencies and PR firms follow “the customer is always right” rule – it’s just that they’re now realizing not every customer is right for their business,” says AgencyFinder CEO and Chairman, Chuck Meyst. The Richmond, VA-based search and selection consultancy has helped advertisers find marketing service providers for projects and long-term account assignments since 1997, “But I’ve never seen the climate for new business be as disrupted as it is right now,” says Meyst.
Meyst cites Rupal Parekh’s recent article in Ad Age (October 25th) that provided a concise summary of a problem he’s seen developing over the past 15 months. In the article, Parekh writes: “Fourth quarter is typically when agencies go into a new-business frenzy, licking their chops for a chance to bring in fresh accounts. But a funny thing is happening this year: Many requests for proposals are leaving a bad taste in agencies’ mouths. Shops are taking a look and tossing them out.” AgencyFinder’s own internal measurements seem to bear that out.
“We conduct hundreds of small and medium-sized account searches a year,” explained Meyst. “So it’s natural for us to see an ebb and flow in deal volume every year.” He explained that search volume typically starts to back off in November and December as consumer-driven business is neck-deep in holiday sales volume and business accounts are wrapping up their fiscal years.
“One long-recognized fact for everyone – client and agency alike – is that January is a time for planning and preparation; the wheels of action and spend tend to start turning in February. One would think that means most agency searches for Q1 projects wrap up before Halloween – but that’s not been the case this year. Instead, there’s been a quiet backlash against the old mainstay of the agency review: the RFP.
“Fees offered by potential clients are too low; timelines for pitches too short; briefing documents (i.e. RFP’s) are too vague and many marketers overstep bounds by demanding that agencies relinquish ownership of their ideas to them,” writes Parekh in his AdAge article.
“Given the staff-cutting and other downsizing work agencies have had to do to stay afloat during the past few years, the traditional demands made by a prospective new client are falling on deaf ears,” said Meyst. “And clients should be careful not to get indignant about it – there are four important facts they need to keep in mind as they try to find the right agency for the right job at the right price for 2014.”
#1 Time is of the essence
“This isn’t just some tired cliché,” says Meyst. “Advertisers need to move now and move quickly to get their ideal list of agencies identified and pre-qualified. If the advertiser has never conducted a full agency review before, they would be wise to work with someone who knows what questions to ask and what to look for.” AgencyFinder provides a free e-book on conducting an agency review on their website. Click here to view instructions on How To Get Started On Your Agency Search.
#2 Objective criteria makes all the difference
It’s easy for clients to fall in love with a long-established agency brand – but many of those big brand names have been consolidating in the last year or two. What works best is when you dive deep to find agencies with key skills that will make a difference to your business right away. According to Meyst: “AgencyFinder’s database of over 3,000 agencies breaks each one down by more than 500 different capabilities, areas of expertise, geographic location, size and approach to business,” explains Meyst. By providing such a deep pool of data, we’re able to come up with 15-20 pre-qualified candidates for just about any client.”
#3 Economic uncertainty works to the prepared advertiser’s advantage
Securing agency-client relationships early in 2014 will play an important role in many brands’ efforts to “claim the strategic high ground” for the year in advance of primary and national elections, an roiling TV market with Olympic Games and more taking out huge swaths of availability and an explosive increase in mobile video (up nearly 300{134d34c2111681da9505ff623b30c9097f7505a873677dd5149382504667502e} over the past year).
“The last thing an advertiser is going to want to do is waste months trying to whittle down a short list of under-qualified agencies to find the “best, bad choice” from a limited talent pool,” says Meyst. “In addition to questionable talent, neglected customers and a frustrated client, the lost time will mean both client and agency are facing a completely different economic situation than when the review was started.”
#4 The advantages of an online database for reviews has never been more apparent.
“We’re able to identify a target list of pre-qualified agencies from our database in a matter of a day or two and have the first round of due diligence calls scheduled to take place within a week of initiating the search,” explained Meyst. “Speed is a given with a service like AgencyFinder and both the agencies and client are expected to be very responsive.”
Clients are also expected to follow-through on the promises made in their brief. That’s why the AgencyFinder model requires clients to post a performance guarantee before the search can start. “We want to make sure clients will award their project or account to an agency at the end of the process – otherwise all we accomplish is frustrating a lot of people,” explains Meyst.
“Have no fear, though,” he continues. “If the client hires an agency, the deposit is returned in full. Our service is paid for by the agencies who participate in the reviews we conduct. For clients who use us and hire the agency that makes it all the way through at the end, there’s no charge. It’s a unique feature of AgencyFinder – and has been a part of our business model for nearly 20 years.”
# # #
About AgencyFinder
AgencyFinder and its web sites agencyfinder.com and agencyfinder.eu offer a service of Business Partnering, International, Ltd. (BPI), a Virginia corporation founded in February of 1997. The service is unique in its match-making process for pairing advertising, public relations and marketing agencies with advertisers and is intended for use by companies seeking agency support for projects, campaigns or long-term relationships.
Searching and invitation management is free to marketers and supported with complimentary search consulting advice (telephone and on-site consultations) provided by BPI’s executive staff. Advertising agencies and public relations firms (right-sized for budgets less than $100,000 to more than $200 million) pay annual registration fees to have their profile in the on-line database and eligible to participate in AgencyFinder-managed reviews.
Contact:
Contact: Mike Bawden
Partner – Bawden & Lareau Public Relations, LLC
563-359-8654
