Editors Note:  This passed my desk today and I shared via LinkedIn and FaceBook with the headline:

My God, this man has got it! And it took an outsider to make the point so simply clear. Attention all New Business Coordinators. Either step aside or learn what it takes to do new business as it needs to be done. (And if  YOU are a NB person take heed. And if you’re an agency owner/Manager, please pay attention).

There’s recently been discussion that the industry needs to support its new business managers more. As one myself it’s no surprise that I whole-heartedly agree with the sentiment: new business for any industry has a direct impact on a company’s growth, and there is nothing more important than this both culturally and financially.

However, I can’t help feeling like the role of new business has potentially lost its stature because we, as new business professionals, have let it happen.

I have only been working in the advertising industry for a few years – before I joined ad-land I worked in various ‘hard sales’ roles. And as an outsider looking into the industry, its definition of new business wasn’t really what I regarded as new business.

To me, new business has always leaned more towards a sales role than anything else. It has always been about developing narratives to persuade your target market that your product or service is the hand-in-glove fit for them and the answer to all their challenges. It is the proactive searching of the market to find clients that will benefit from your offering and then once you find them, building that relationship with them.

The admin has always come second for me. Don’t get me wrong, what comes after the initial contact is still absolutely critical to successful new business. But the hierarchy should always be proactive first, reactive second.

This is how it works in most new business roles, so why should it be different in advertising?

I think perhaps that new business departments or individuals have let their role become devalued. In far too many cases, the person responsible for new business in an agency is seen as the person who expertly answers the incoming RFIs or puts together the credentials document before an important client pitch or meeting. This isn’t new business; it is inbound admin at best.

The concept of waiting for briefs to come in is something that really grinds with me. In years gone by, the bigger, more established agencies have had the luxury of RFI after RFI landing in their inbox.

However, with the changing media landscape – as well as more and more clients looking to a wider range of agencies – this luxury is likely to become a rarity. Agencies can no longer afford to have their new business teams or individuals as in-bound sales or admin people.

The process of building relationships and actively trying to speak with prospects has become a lost art within the advertising industry.

‘Content is king’ is something that you hear at every new business breakfast, seminar and networking event. Yes, it absolutely is, but what is more important is what you do with that content. Posting content on your website or social channels is the easy part, but if we are honest it requires little effort.

Proactively shoving that content under the nose of your number one new business target in an engaging way is much harder. It can be easy to shy away from the harder work when it has become accepted wisdom that new business is more inbound then outbound.

If we want new business to be truly considered at the top table as a key cog in the machine – if we want our voices to be heard – then new business needs to stick its neck out. It needs to fight really hard to become a respected part of an agency’s makeup again – not by answering RFIs, building decks and getting good coverage in the trade press but by becoming more proactive, more outward facing and – essentially – more like sales.

It needs to take responsibility for driving the agency forward and making sure that every single person in the building comes on that journey.

Only then will us new business managers get our voice, one hustle at a time.

Jack Williams is head of new business at Atomic London

Intro: I responded to Paul’s post below with this comment: “You have painted a very disappointing picture of our industry but it explains why so many agencies struggle investing in the expenses of business development.” Meaning – with margins so thin, I could understand what has long been a reluctance within agencies to invest in agency business development. Paul responded: “I didn’t mean it to be disappointing. It is merely a statement of how things are and have become under the holding company model.” I’d suggest it’s disappointing that it’s come to this for the fine agencies within the holding companies.

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After reading about Sir Martin Sorrell’s resignation as CEO of WPP, I decided to look at the composition of boards of all the major holding companies.  It was a revelation, but not surprising.

First, let’s understand the function of boards.  They are there to set policy and priorities for a company.  This includes a multitude of items from finance, dealing with the financial community, personnel policy, compensation, moral leadership and many other areas of policy.

Looking at the members of each of the holding company boards reveals what we have known for a long time.  The holding companies, despite recently establishing cross-function agencies to pitch and handle major accounts which report directly to executives of the holding companies (e.g. WPP’s Red Fuse which was established to handle Colgate worldwide is an example).  The holding companies are definitely not advertising companies.  Not even remotely.  They are financial firms. And most have
no board members who know anything about advertising, communications or people management.

All the major holding companies have similar boards.  They are made up of investment bankers, fund managers, an occasional senior executive from an advertiser.  With the sole exception of Omnicom, there is not one single board member with an advertising agency background.  There are no real human resources professionals (“our assets go down the elevator every evening”).  Although one company has an executive recruiter on the board, but that person was not an advertising recruiter.  All the emphasis appears to be on making and managing money.

The irony is that before the holding companies came along, there were plenty of agencies which were highly profitable and extremely well managed.  Just look at Grey, Bates, even Deutsch.  They were money machines.  But no longer.  The holding companies have stripped away their essence, leaving almost all the big agencies the same.

No wonder things are as they are.

There is no emphasis on the work.  There is a lack of creativity.    Salaries are out of line with similar industries (entry level salaries are particularly poor so that agencies rarely attract the best and brightest young talent).  There is tremendous employee turnover. Salary freezes are the rule rather than the exception ; raises are delayed, forcing talented executives to look for new jobs in order to make a livable wage. Profits in advertising are actually low compared to other businesses.  Morale at most of the major agencies is, at best, only fair.

I have no sense that the holding companies are dealing with any of these issues. Rather, what we hear about is dealing with Wall Street.

It is time for the holding companies to encourage creativity among their agencies.  P&G and Publicis demanding that their agencies work together to make a better product is laughable since threats don’t make good ads.  While working well together is admirable, good work comes from a strong self-positioning, employee belief in the work and the willingness to fight for it.  Doing better work comes from not being afraid of clients and fighting for what is right rather than simply giving in because it might affect the profit level to be turned over to their holding companies.  BBDO is a perfect example of this.

It is time for the silos to end.  And that can only happen when digital and above the line are all under the same roof and all working together.  Almost every agency president I have talked to agrees with this, but being able to affect this change is complicated by the holding company ownership.  All it takes is for there to be one appointed leader who controls the entire process and has both the authority and responsibility to make it happen.

Agencies are managed for profit, but they would be more profitable if they were managed to encourage growth and creativity.  This includes fighting back against the procurement departments of prospective clients; agencies must be allowed to make a reasonable pre-tax profit which will fund growth. It means turning down accounts if a reasonable profit is being denied to them.  But the holding companies are looking at additional revenue at any cost – even losing money on new accounts. By procurement insisting on lower costs, they are precluding their agencies from pushing back for better, work – the holding companies demand keeping business at all costs.  I know one story where an agency was losing money on an account and resigned the business, which actually made the agency more profitable.  The president of the agency had his wrists slapped by the holding company CFO and was told it was beyond his scope of responsibilities (despite his contract called for maximizing the agency’s profits).  The company wanted the revenues and actually didn’t care about the profits.

It is time to address the excessive turnover among advertising employees.   If people are the principal assets, they should be treated that way.  Training programs for juniors are a thing of the past.  There is  some training for very senior executives, but these represent an elite few.  Employees cannot obtain timely promotions and rotations.  Once upon a time not so long ago, these were built into agency operating philosophy, but now that clients can dictate who can work on their business and how much they get paid, this is also a thing of the past. Constant wage freezes, in order to generate and maintain profit for the holding companies, forces aggressive and high-functioning employees to leave.

The list goes on.

Today’s post courtesy Paul Gumbinner, President of The Gumbinner Company, executive recruiters for advertising.  www.viewfrommadisonave.blogspot.com 

It’s not your job to win more new business says today’s Guest Author Blair Enns

It’s your job to win the right new business. That means engagements that meet the following four criteria:

1. A proper-fit client that takes you one step closer to the strategic vision of the expert firm you are building
2.At high profit margin
3.With low cost of sale
4.And your firm positioned to have the greatest possible impact

Let me unpack each of these criteria and then give you some options for improving your new business performance across all of them.

Proper-Fit Clients
Whether you acknowledge it or not, you reinvent your firm one new client at a time. You should have a vivid and wildly important goal off in the distance that you are navigating toward. It’s a detailed vision of the expert firm you are building, and each new client is a step toward or away from that vision. No vision means no standards about what client engagements it makes sense for you to take on. A vision that is continuously compromised by a leader that keeps making exceptions for clients because of revenue or “the portfolio” is ultimately hollow and dispiriting to the larger team. A top-down vision is required and each new client engagement should be a measure of how serious the firm is about that vision. The vision exists or it doesn’t. It’s meaningful or it isn’t.

High Profit Margin
Profit margin is like power in the relationship in that it only diminishes with time. The new business person or team sets the profit standard with the very first sale, properly expecting that it’s all downhill from there. (The only question is the steepness of the slope.) Winning business on price while hoping to make it up later, or on volume, is not a valid approach for an expertise-based business. Profit diminishes as you move from the expert practitioner position in the relationship to partner status and then quickly to vendor. The slide is inevitable so it’s your job to start high with the first engagement at a price and profit level higher than the overall average you’re targeting.

Low Cost of Sale
Of course nobody wants higher costs than necessary but a low cost of sale is vital because it signals other more important things. Are you seen as the expert practitioner or just another vendor? Vendors have high costs of sale, low profit margins and lack the high ground required to challenge the client’s thinking. Your cost of sale is a barometer of the relationship and its power dynamics, which will ultimately play out in the engagement itself, impacting your ability to create value for the client.

Positioned for the Greatest Impact
The sale is the sample of the engagement to follow. To have the greatest impact on your client you must be allowed to lead. If you are not allowed to lead in the sale then you will not be allowed to lead in the engagement. That’s why winning a pitch or in any way winning new business while playing the polite, compliant rule follower is not good enough. You cannot be a good soldier in the sale, dutifully following orders, and then suddenly try to become the general in the engagement. That’s the definition of a coup. Rather, you should be navigating the sale in a way that sees you seamlessly take the lead, with the client allowing you to move naturally and unthreateningly from the vendor position to the expert practitioner position.

That’s what they teach in Win Without Pitching.

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If you’re like me, you spend a chunk of time looking at agency websites. Many are now both beautiful, informative and compelling. I remember the early text-only centered column display sites. Today the format is clearly hi-fi wide-screen, many with short-form videos playing under superimposed copy and credits. But I’ve also noticed a resurgence of a look – the look of facial hair.

Miss Lilly Newfy

I suspect it’s happening everywhere, but in the agency world not too many years ago, men were close-shaved, wore double-breasted suits with padded shoulders, and sported equally close-cropped heads-of-hair. Facial hair and beards were for old men or homeless. I’m wasn’t surprised when today, as I scrolled the Team page of a 34-person agency, there they were – all ages with full beards, mustaches, goatees, bushy sideburns, and neatly trimmed Ryan Seacrest stubble. I was heading to the bottom when a woman appeared, and you guessed it, she was clean-shaven!

Today’s styles everywhere tend to be casual, so I’m also surprised by the tight, almost pinched look being sold as todays’ suits for men. What’s a gent with some paunch to do? How about cargo pants, a handsome belt and a great UNTUCKit band-collar wrinkle-resistant shirt.

Chemistry or get-along-ness always plays a deciding factor in the selection of a marketing partner, and “looks” is an important ingredient. Is it a factor in your search?

Note: If you happen to be searching for a new marketing partner, you’ll encounter hair at AgencyFinder, but only after you identify some of the best agencies in the world using digital fact-based and consultant-assisted identification. If you’d like, sign in here and start a free search: https://www.agencyfinder.com/advertisers/advertising-agency-search/

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Editor’s Note: This era of digital data has fostered the concept of data scraping, or as Joshua comments, “Companies are offering agencies new data all the time but as industry players we are increasingly saying no because the way the data is obtained or used doesn’t sit well with our values and principles.” There’s a big difference between privately searching in a database for prospects that match your search requirements precisely,  versus publicly posting your opportunity only to experience a flood of prospects claiming to be a perfect fit. You can’t blame salesperson mentality, but the first process is precise; the second subject to question, audit and generally extra work. 

Today’s column is written by Joshua Lowcock, executive vice president and chief digital and innovation officer at UM Worldwide.

The advertising industry often talks about trust – trust between advertisers and their agencies, trust between advertisers and media owners. But very little is publicly said about the trust placed by the public in the advertising industry.

Individuals and the public at large have a right to demand and expect that advertisers, agencies, media and platform owners will treat them with respect. In digital, with the wealth of data available to marketers and the pressure to squeeze every last ounce of efficiency out of media dollars, there are always a myriad of companies offering new data sets.

Companies are offering agencies new data all the time but as industry players we are increasingly saying no because the way the data is obtained or used doesn’t sit well with our values and principles. As a result, these companies (often) quickly disappear. Data collected without clear permission or applied in inappropriate ways has no place in the advertising or media industry.

Data-driven marketing is an important part of our industry. If performed with transparency and respect for the trust the public places in us, it has the power to not only make our industry better but help advertising fund new content, services and tools that contribute value to society and the economy.

But if we betray the trust the public places in our industry and don’t treat the public with respect then we don’t deserve the right to use the public’s data. Zuckerberg acknowledged this in his post on Wednesday in response to the Cambridge Analytica situation: “This was a breach of trust between [Aleksandr] Kogan, Cambridge Analytica and Facebook. But it was also a breach of trust between Facebook and the people who share their data with us and expect us to protect it.”

Cambridge Analytica betrayed trust on many levels. Facebook was too trusting and was blindsided by how sophisticated the data industry has become. The lesson that can be learned for all of us is that data, like all things that can empower so much good, can be weaponized for bad. That’s why phrases like “computational propaganda” and “weaponized data” are entering the lexicon.

As an industry, we risk letting these negative terms become the brand for data-driven marketing unless we collectively stand up and say that Cambridge Analytica’s behavior is unacceptable and has no place in marketing and advertising. Cambridge Analytica does not represent the advertising industry. Its behavior and companies that behave similarly have no place in this industry.

What the coming weeks and months should remind us all is that, as an industry, we need to always ask the tough questions about data. Where and how is it collected? Has it been obtained appropriately and with permission? Is it compliant with privacy principles? Is it legal? And, just as importantly, is it ethically and morally right to use the data in an intended way?

The line between good and bad use of data is the moral, ethical and value compass of each and every individual working in this industry.

In the end, though, it all comes back to trust. We need to ensure that when the industry talks about trust and transparency, individual consumers are included and considered as important to the trust equation as agencies and advertisers. The more we include consumers in the trust equation, the better it will be for the industry.

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From agency search consultants, marketing match-makers, agency directories and aggregators, finding the best resource for selecting an ad agency or marketing firm isn’t always what you would expect.  

Once upon a time clients used to find a new agency by asking colleagues for recommendations, asking media reps, or going to their files for a folder labeled “Ad Agencies.” Back then many agencies practiced the fine art of mailings and calling on potential clients. Advertisers relied on national and regional publications such as Adweek and AdAge to identify the hottest agencies.

Agencies used clever direct mail tactics and even took out ads to reach clients and identify their agency as a potential resource for future connections. Then as now, clients with truly large budgets reached out to or were found by the traditional “Agency Selector Consultant” – early-adopters like Dick Roth and MorganAnderson, eventually the likes of SRI, Pile and so on.

Its 2019 and there’s a dizzying array of many different types of vendors who purport to offer easy or more effective ways to guide an advertiser to find a potential new agency or marketing partner. 

Before examining those options, let’s see if we can agree on a few fundamental factors when finding and hiring a new agency. Years ago, a client was often heard to suggest “you won’t find a diamond if you’re looking among lumps of coal.”Translation? You may not find a perfect agency partner if you’re looking among a collection of unqualified candidates. So the focus must be on identifying qualified candidates at the outset. The challenge: A client may or may not know the right questions to ask or how to match a potential agency’s capabilities with their most urgent marketing needs.

There’s more. Time and again industry experts write articles and blogs to suggest how to initiate an agency search and conduct a review starting with a mere handful, say 5-8. In a massive sea of agency candidates numbering anywhere from 15,000 to 30,000, without a very precise process, how could a marketer possibly narrow that down to the best 5-8 agencies? Seldom do those articles spend any time to address this salient issue most relevant to the client. I will share some options, but for the moment, let’s examine agency attributes and what ranks on the client’s wish list.

Drawing on our 20+ years providing match-making to advertisers, when given choices, their first is desire is for relevant experience in their own business category. Why? Because then a marketer doesn’t have to spend time bringing an agency up to speed on their nickel. However, some clients actually stipulate against prior experience or the anthesis thereof. Contending they don’t want to inherent ideas used and abused before. Regardless, category experience is a weighted attribute one way or other.

Finally what about services, location, size, case histories, work samples, a dog friendly environment (yes, they have asked for that), client testimonials and then some? Certainly they are important factors but for each client they are weighted individually.

The two qualities that can’t be relegated to statistics are creativity and chemistry. There is no consultant or service that can deny the client the opportunity to make those judgments.

Now let’s consider the various agency search resources with a few examples:

1. Traditional “Agency Search Consultant” – Roth Ryan Hayes, MorganAnderson, SRI, Avi Dan, Pile & Co. We have yet to discover who was first to convince an advertiser to compensate a consultant for finding and assisting in the hiring of marketing firms that would otherwise be spending their time and money to introduce themselves to that advertiser, as had been the age-old B2B custom. So be it, it was done. These consultancies range from a few employees to an unbelievable collection of top-notch talent, most of whom have agency credentials. If you want and need it, they will sit side-by-side in meetings, manage much of the process and agency interaction and take an active role in the entire process. There’s a large list to choose from, but you will pay and generally, you need a multi-million dollar budget to justify their fees.

2. Traditional “Agency Directory” – These directories have content developed over time by the agencies themselves. Redbooks.com is the best example. In their words: “For almost 100 years, Advertising Redbooks has been providing competitive intelligence and prospecting data to media companies, advertising agencies, manufacturers, advertising services and suppliers, libraries and more. Looking for relevant content on companies and the advertising agencies that work with them? Advertising Redbooks is the source for uncovering key advertiser and agency relationships.” Historically this directory of both advertisers and agencies has been a great resource for vendors looking to sell goods and services to listed agencies and advertisers. It’s a comprehensive but pricey subscription service. They’re now part of The List.

3. Traditional “Phone Book” Directories – You would know them as the Yellow Pages. Because they serve specific regions, the initial attribute is location. In earlier print versions, agencies were listed alphabetically. Now, like Google and Bing, he who pays gets best position! It’s a hodgepodge grip and grab process that at best, wastes time and at worst, wastes money. But for a small-to-medium firm wanting a near-by agency, it can be a limited but handy resource. Free but not that efficient.

4. On-Line Search Engines – Google, Bing & others – Self-explanatory. Provide incredible reach and coverage but tend to lack depth of available data. You can spend hours and keywords filling your bucket and you can fall asleep as you negotiate a wide variety of agency websites. You’ll need to create your own matrix to evaluate the relative merits of candidates they present. Free, but data is disparate and the process is significantly time consuming.

5. Digital Search Engine Matchmaker – In 1997 and as a “vertical finder” pioneer, Business Partnering International, Ltd. launched AgencyFinder.com as a reverse-engineered adaptation of MarketPlace’s CD-ROM list creation tool. AgencyFinder blends the digital matching technology of a business dating service with its own, unique blend of one-on-one staff consulting to help hundreds of clients find the right agencies. The first algorithm criteria is always vertical market experience. In its first pass, it limits itself and identifies 35 or fewer “perfect candidates.” Each agency, when selected, is based on the content they contribute and post using some of the 500 offered data fields. Finally staff consultants send invitations (Requests for Dialogue – RFD) to 15 or so. Any and all agency content is contributed by the agency alone and reviewed before approval and activation. This service includes multiple client consultancies, agency invitations and due-diligence interviews. For marketers the service is free.

6. Association Membership Directories – Best example is the 4A’s. Founded in 1917, this trade association represents the lion’s share of the major agencies in America and is the leading authority representing the marketing communications agency business. Utilizing an updated on-site search engine, navigating within their members is straight forward. There’s also a wealth of valuable editorial information here about many aspects of the client/agency relationship and the proper elements of an agency review. Search registration is free.

7. Super Directories, Data Aggregators – AdForum, AgencySpotter, Clutch.co, ranked.com. If you’re into aggressive research and think you need tons, this is your cup of tea. With directories, it is incumbent on you to do it all – find, evaluate and ultimately invite and connect with the agencies you see as candidates. Search management is your responsibility. Note that listing positions (or arrangements) are often a function of agency payments or sponsorships. When these directories first come to market, it’s not unusual to claim content for thousands of agencies, yet in-fact it takes months and even years for agencies to contribute of their own volition. This quick-fix is sometimes accomplished with data scraping, also known as curation, and is the process of importing public information from someone else’s website into your spreadsheet or local file. It’s one of the quickest and unencumbered ways to get data from others on the web without asking for or getting permission, and then channel that data to their website. A rigorous clicking exercise will often revel “empty profiles” with notes to the affect the placeholder hasn’t yet had time to contribute. Generally these are free services.

Conclusion

Testimonials, case histories, third-party assessments – When agencies are allowed to speak with clients, that gives the agency an opportunity to decide and show what content best represents their candidacy. In these areas anything collected and inventoried at a third-party site is generally minimalistic and can quickly grow old and obsolete. Don’t weigh down the front of your process with too much research. Decide what your criteria for selecting an agency is before you start any process. Then evaluate what the agencies show or send for your consideration.

Monetization. Each service has their own business model for how they make money. However, revenue should flow from either agency or client but never both. A “Chinese wall” is not enough to prevent the potential for ethical conflicts, so know who pays what and when before your proceed.

I wish you happy hunting!

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Guest Author, Tim Williams

You’ve just found $100 on the sidewalk. Should you put it under your mattress or buy a lottery ticket? What role does your tolerance for risk play in your decision?

In business circles, risk is almost always treated as something to be minimized. But can risk also be an economic positive?

The iconic Peter Drucker made a profound observation when he said “All profit is derived from risk.” Ponder that truism as you consider the nature of the compensation agreements you developed over the last 12 months. It’s likely you injected little to no risk in your proposals, which is in directly violation to the principle that if you want to make more money, you must take more risk.

Harvard’s Benson Shapiro offers this perspective: “Performance-based pricing is insurance. It insures that the seller does not undercharge the buyer.” In other words, introducing an element of risk in your compensation agreements not only holds the potential of making more more, but also making you a better pricer.

Who Bears the Most Risk in Agency-Client Relationships?

Now let’s look at risk from another perspective. Jack Skeels of AgencyAgile believes “The primary mediating characteristic of buyer-seller relationships is how risk is handled.” Says Skeels:

“When we ask agencies, ‘Who carries more risk in the relationship, you or your client?’ the answer is almost always ‘We do.’ Nothing could be further from the truth. Your client carries more risk than you do … by a million miles … Clients are completely vulnerable to your efforts (which they don’t see, understand or control), and when you fail, they can die.”

The method of agency compensation is an important factor here. Clients who buy hours are really only buying buckets of inputs that may or may not correspond directly with the needed outputs. But more importantly, these inputs may or may not produce the desired outcomes. Herein lies the risk being taken on by the client. The agency will work its hours and collect its fees regardless of whether or not the work is effective. While every good agency desires to do good work, there is no real economic incentive for them to do effective work.

True, the agency can get fired at the end of the contract period, but that misses the point. After nearly 30 years using the hourly rate system, smart clients have realized that this approach has a fatal flaw. Brand growth has been stagnant for more than a decade, and most major marketers have been slogging along in a low-growth mode, unable to generate the needed ROI on their marketing investment. These clients have now concluded that the hourly rate system does absolutely nothing to help this situation; they’re simply “renting people” in advertising agencies.

Accompanying this current low-growth cycle for brands is an understandable low-cost mentality. Hence the rise and power of procurement. The prime directive at corporations everywhere seems centered on efficiency and cost cutting.

But what are these client organizations truly buying? No company ever saved its way to success. My friend Tom Lewis, formerly of the IPA, observes that professional buyers of marketing services are now squarely in the habit of attacking the seller’s cost base, insisting on as low a profit margin as possible while purposely leaving workload ill-defined. This, Lewis says, results in a low seller’s profit and a low cost of purchase for the buyer. In return for a lower price, the buyer unknowingly accepts compromised quality and effectiveness.

So instead of complying with buyer requests to lower costs— which will not provide the client with what the results they’re attempting to procure — could agencies instead lower their client’s risk?

Three Things Clients Buy

One of the world’s foremost business strategists, Michael Porter, asserts there are three main reasons businesses buy the services of companies like agencies:

To increase their revenues
To lower their costs
To decrease their risk

While most agencies don’t know it, even the most hard-core procurement professional thinks in these terms. Former WPP head of procurement Tom Kinnaird emphasizes that cost is just one of four areas in which procurement professionals seek a “win.” They also seek to obtain value, maximize cash, and minimize risk. This risk can take the form of:

The risk of suboptimal performance by the seller
The risk of not receiving the promised features and benefits
The risk of the service provider not producing the agreed-upon results

Writing in the WPP publication Atticus, Scott Brenman proposes the idea of a “threat audit” to help identify risks your clients face. He then recommends including on briefs a section about risks and threats to keep both agency and client focused on ways to minimize them.

KBS+ co-founder Jon Bond believes that agencies aren’t really in the ideas business — or even the results business — but rather the insurance business. The best agencies, he says, embrace the idea that their essential purpose is to reduce risk for their clients. Bond proposes that agencies should proactively sell their services this way, which he believes leads not only to more new business wins (risk reduction is a powerful proposition) but also better pricing (the best insurance companies command the highest premiums).

In the end, Bond says, “Economics are more powerful than negotiation.”

Propulsion is written by Tim Williams of Ignition Consulting Group, a U.S.-based consultancy devoted to helping agencies and other professional firms create and capture more value.

By Judy Shapiro. Published In AdAge November 16, 2017.

Editor comment: The headline question “Is your firm ready for this challenge” is AgencyFinder’s. As Judy points out and as I suspect you know too, your agency is challenged like never before, to integrate the technologies and media alternatives. The question might be – when will you find the time?

In a recent Ad Age post, I heralded a new era for agencies where “quality scale” was new revenue created through the design of trusted user experiences that can be deployed at scale. This level of sophisticated marketing design is beyond the scope of ad tech platforms or management consulting firms with their limited executional, real-world experience; presenting agencies with a potent new growth area.

That vision set the stage so now let’s turn our attention to the practical details which will require, perhaps, challenging almost everything we think we know about how agencies are run today.

Align to clients’ new “trust” value equation
A staggering 60% of top 100 advertisers plan to review their agencies in the next 12 months, clearly reflecting clients’ radically changing expectations of their agencies. More than ever, brands need their agencies to be experts at creating trusted digital experiences while remaining operational and financially transparent. This complex dance of positioning, creative, data and technology is new terrain agencies must conquer.

Yet this requires highly trained people not easily monetizable via typical agency fee structures. The answer lies in disrupting old fee structures in favor of industry certifications of people, not technology, similar to certified engineers from tech companies. We have the foundation for standardized accreditation with strong leadership from IAB, 4As and ANA, among others. An added benefit of standardization is that the industry can be more transparent and comprehensible in tackling complex disciplines like programmatic, predictive modeling, AI and data.

Re-invent agency structure to excel at the art and science of modern marketing
It’s no surprise that the pendulum is swinging in favor of reintegrating tech, media and creative under one roof so that agencies can focus on contextual user experiences within an agile campaign architecture. Unfortunately, this goal cannot be easily achieved by clinging to the traditional agency structure that was built 30 years ago.

It’s time to rebuild the agency model from the ground up with an emphasis on agility, measurability and efficiency. In this vision, there are three competency areas making up a core team:

Progress planners. This is where the strategy and campaign planning responsibilities are. Within this is team are account planners; creative and technical campaign planning; experiential designers — translating experiential design into workable campaigns — and social engagement planners.
Performance planners. This new expertise will plan the performance of all marketing programs with a new set of tools and competencies; media planning (all platforms), campaign proforma modeling, fraud management and customer experiential journey mapping.
Platform planners. This is where agencies connect the dots between platforms, programs and business results. This team owns predictive modeling, audience data, privacy compliance, transparency and platform auditing. This is also where clients get support with their technology challenges such as data integration.

As campaigns become a seamless integration of online and offline experiences, this new structure allows agencies to operationalize this revenue-rich experiential vision.

Pick a tech “trust” side and own it
Traditionally, agencies were neutral arbiters of tech, refraining from owning or even advocating for specific technologies. But neutrality came at high cost, leaving agencies underpowered in understanding ad tech well enough to protect clients. The opportunity for agencies of all sizes to become guardians of clients’ budgets against fraud and inefficiencies by mastering all the science behind ad tech; programmatic, content syndication, social, etc. By taking the side of transparency, agencies have an opening to reclaim their role as trusted advisors.

Agencies lost a lot in the preceding 10 years; talent, tech edge, advertiser trust and huge profits that went from agencies’ pockets into the pockets of VCs and tech ventures. To avoid the next ten years looking like the last ten, agencies must disrupt themselves to become masters of the trusted experiential world.

Judy Shapiro is CEO and founder of engageSimply.

Guest Author – Blair Enns, Win Without Pitching

Agency business development has evolved over the years as technologies and media alternatives have evolved.  Most agency “business development” employees have little-to-no formal sales training, so imagine their frustration as they face many things “new” each and every day. To that, now add the seven-year chokepoint as Blair explains … Ed

In running a creative firm, everything appears to change around the seven-year mark. There’s a chokepoint at about that time that requires a change in strategy to get through. Some make it and some don’t.

The seven-year chokepoint was perhaps the first pattern I spotted soon after launching Win Without Pitching in 2002 (as a consulting practice, initially). So many of my new clients had been in business for seven years that at some point in my initial conversations I would venture, “Let me guess, you started the firm seven years ago?” I was correct far greater than chance would have predicted, and that pattern has held for 15 years. Even today, my guess is that more than 25% of the firms in our training program came to us somewhere around their seventh birthday. There seems to be something about being in business for seven years that precipitates the need for help in the new business department. But let’s back up.

In The Beginning
It’s likely that you started your career as an employee, working for someone else and thinking, “If it were my firm, I would do things differently.” Then in a moment that The E-Myth author Michael Gerber refers to as an entrepreneurial spasm, you went out on your own. There’s a good chance your first client was one you took with you from your employer, or perhaps it was your old employer, who used you as an overflow valve or chose to purchase your more specialized offering instead of staffing it in-house.

Level 1: Validation
Things went well and time flew by. One client led to another and another. You added people and capabilities, making it all look easy if a little harried. New clients kept coming in. And then they didn’t. Somewhere around the seven-year mark, your network just seemed to tap out, and everything slowed right down. This spawns an introspective moment for many firm principals. Where am I? How did I get here?

If you were to look back on your seven-year journey, you would see your path leading from your starting point to where you stand now. Along the way, you would see binary switches, like railroad switches, each representing an opportunity that came your way. They’re all switched to “On,” or “Yes,” leading to where you are now.

Those opportunities were random, arising from your reach or network. Some came to you easily and some you had to hustle for, but by saying yes to all of them, you ended up in a random place dictated by those random opportunities. That’s okay because along the way you learned a lot, including the confidence that you can be successful in business. Validation. But right here, usually at about the seven-year mark, the wild randomness that was the hallmark of the first level of your business needs to be replaced. That first type of success is not coming back, nor would you want it to come back. It’s time now for level 2.

Level 2: Life-Changing Success
Beyond the chokepoint at which your business quits growing organically, the journey, if it is to continue, must be more deliberate. From here on out you must set your course to a specific destination. That requires a visioning exercise of not only where you want the business to be at a set point in the future—perhaps another seven years out—but what you want the business to be.

Positioning the firm for this journey is vital. Positioning is the word we in the creative professions use for strategy, and strategy, according to Michael Porter, the Bishop William Lawrence University Professor at Harvard Business School, is the answer to the question, “How are we going to become, and remain, unique?”

Think of the primary components of your positioning as the answers to the questions, “What will we do?” and “For whom will we do it?” While keeping Porter’s definition in mind, the answers to those questions posed today should paint a picture of a global leadership position in seven years. My personal belief is that if you’re not aiming for global leadership then what’s the point? You and your firm can be anything in seven years, so why would you aim for anything other than the very best of something? If you cannot imagine being a global leader in this new area, then you must narrow either the discipline (what you will do) or the market (for whom you will do it) until you can imagine it.

Once you have your vision of global leadership, it’s time to pursue it steadfastly. The traits or tools of the first level of success are hard work and saying yes to everything. But these admirable traits are not the tools that enable the second level of success. Worse, once hardened into habits these traits work against you, because the tools required to get to the next level are saying no, and innovation, which I define as a combination of creativity and risk.

From Yes to No
“The difference between successful people and really successful people is that really successful people say no to almost everything.” -Warren Buffett

Saying yes to everything ensured your survival at level 1. It put money in the bank at a time when any dollar was a good one. But now you must view every new engagement as a strategic decision that will take you one step closer to your strategic vision.

Think back to your journey. Standing in the present, turn your attention away from the starting point 180 degrees to your new destination seven years ahead of you. You will get from here to there one step at a time, with each new client representing one of those steps. So how many steps do you think it takes to get from here to that future version of your specialized global leader firm? The answer is no more than 28.

For reasons I have covered elsewhere, your new business goals should be framed around managing a healthy churn of clients at a rate of about one new one per quarter. Every three months, on average, an old client fades away and, if your new business machine is working, a new, better one comes on board. Whether you like it or not, each client will take you one step closer to, or further from, that strategic vision of a global leader. So you must choose your new clients wisely. Seven years equals 28 quarters, 28 new clients, 28 steps away from where you are now. If you were to say yes to the next 28 clients that came along, where would that get you? The answer is somewhere that looks a lot like here. But few get to stay here, at the seven-year chokepoint, for long. They either figure out the next level, or they go out of business. There are exceptions—lots of them—that stay in this purgatory for years, decades even, but nobody wants to be stuck here, past the point of validation but well short of life-changing success. The first key is discernment: saying no to engagements that do not further your vision.

You must also bring the same level of discernment to your role. What functions does it make sense for you to hold onto, and which ones should you shed? And it doesn’t stop there. This ruthlessness of delegating, cutting loose, or otherwise saying no to things and people that do not advance the firm to its strategic target of global leadership needs to become the new habit, replacing the one where you would say, with a smile on your face, “Yes, we can!” Just because you can, doesn’t mean you should. And increasingly, in level 2, you shouldn’t.

From Hard Work to Innovation
My wife will occasionally observe that someone “is very successful. She must work very hard.” Recalling Peter Drucker’s observation on the source of all profit, I respond like a robot, “No, she must take a lot of risks.”

That is the second shift required for level-2 success—to no longer equate success with your own hard work, but with innovation, which I define as a combination of creativity (the ability to see an opportunity) and risk (the willingness to make large bets). Don’t misread that to think you should never work hard or that working hard is not a desirable attribute. As the principal, working harder may have been the answer to the question in the first seven years of your business, but it rarely is afterward.

The hard work habit becomes ingrained, though. Boxer was the noble ploughhorse in Orwell’s Animal Farm whose solution to every problem was “I will work harder,” even when the escalating crisis increasingly called for creative problem-solving or risk. The problem with hard work is it is consuming, and creativity—the ability to see new opportunities for your firm and clients—requires waste in the form of time to think. That’s why every firm that pursues efficiencies must trade some level of innovation to do so.

Entrepreneurship Is Risk
The propensity for risk is a highly personal thing, varying from person to person, but it is the one characteristic that defines entrepreneurs. They are always making bets. The size or frequency of those bets can puzzle or even terrify non-entrepreneurs. I need a certain amount of risk to make my life on earth meaningful to me, but I notice that the entrepreneurs I admire most tend to take more risk more easily than I do. I wish I could match them, but alas, if I want to sleep at night, I cannot.

We all find the risk-reward tradeoff that’s right for us, but some of us tend to settle into too comfortable a zone, and as a result, quit growing. Your firm needs to grow its way through this chokepoint. It’s delusional to think you will do so without taking more risk.

When creative firm principals at that seven-year chokepoint consider a new positioning to take them to the next level, some of them want guarantees. “How can I be certain this (the new positioning they are considering) is the right one,” they ask? “You can’t,” is the answer. There has to be some risk in the decision. Those seeking certainty before making the shift will likely find that game-changing success will always elude them. Their challenge is to push their own capacity for risk, which brings them closer to failure as well as success.

One Level at a Time
Business is a game with hidden levels. By succeeding at one level, you get invited to play the next. The common mistake is to bring those first-level tools to the next level. Not only do they not work here, but they also work against you. Many of the habits you learned you will now have to unlearn. Accepting this inevitable obsolescence of tools is the key to obtaining all the advanced levels of success.

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