This provocative piece by Shareen Pathak appeared in the May 14th issue of DIGIDAY. As you might imagine, I can’t go without comment, so I’ve posted my thoughts at the bottom. How do you feel? In some respects, this topic represents a turning point in our industry and it will affect your firm.

Agency search consultants long played a classic middleman role: They helped clients narrow the field of potential agencies in order to find the right fit.

But now, like most middlemen, search consultants are feeling the pinch, caught in a fast-changing agency landscape where penny-pinching clients are questioning their value.

“We’re all becoming a commodity,” said Lisa Colantuono, co-president at AAR Partners, one of the oldest consultancies in the business. “One big reason is because we’re all pitching on price.”

One major trend affecting the consultant business is the move away from agency-of-record models and toward project-based processes. Many brands like Best Buy, Mondelez and, most recently, Frito-Lay have moved to a brand-by-brand, project-by-project model that focuses on the medium rather than the agency. That means that for consultants, whose bread and butter has long been long drawn-out search processes that involve RFIs and longlists and shortlists and pitches, things just don’t look the same any more.

“It’s become incumbent on us to diversify our businesses beyond search,” said Meghan McDonnell, co-president at one of the largest search consultants, Boston-based Pile & Company.

To make up for the change — the search side used to take up as much as 99 percent of the business just a few years ago — Pile is diversifying, focusing more on management consulting, agency databases and performance reviews. It’s the same story at Ark Advisors, which is offering services such as agency-consolidation consultations.

“What we are doing is seeing ourselves less as managers of a process and more as consultants,” said partner Ann Billock. “We need alternate revenue streams.”

Another trend is procurement. One consultant said that his biggest headache is when procurement departments at clients lead the search. “It’s process-driven and rigid, and a consultant can’t differentiate themselves, and neither can the agency.” He recalled one process where it took around eight weeks until people from the marketing department were finally in the room with the consultant — a testament to how slow some clients can be to adapt.

How agencies feel about consultants can be a toss-up. Mention some of them and C-level executives are quick to admit that they’ll never even participate in a pitch if that consultant is involved. That’s because they may have a reputation for being unfair and, more commonly, for limiting client access. Billock is especially cognizant of that. “If clients want to talk to agencies, then we want to leave that unfettered,” she said.

One consultant said that the fact that compensation is going down for agencies has changed how the company charges for their fees as well. This consultant has instituted a system that charges the winning agency a percentage of the fee, for the first year. Others choose to go a different way: They’ll start asking shops to “pay to play.” “When you pay to be on a database, you pay for them to basically get to know you, which means you’ll get on a list,” said one CMO.

McDonnell said that her biggest concern is making sure the process is fair and objective. “If agencies don’t think we’re running a fair process, then we’re not going to be value,” she said. “We want to be fair. But we also know who our clients are.”

On the other hand, as one West Coast CMO puts it, he will prefer a consultant to a client-led pitch any time because “there’s an objective party we can consult with.” Consultants will also protect agencies from “outrageous” demands — requests for fully baked creative ideas in a matter of days, for example — and they can bridge a knowledge gap. At Ark Advisors, Billock said she spends a lot of time in pre-negotiations, helping agencies and clients negotiate fees so they’re fair.

Davis recalls one client who called her up saying he needed a review. After spending time asking him what the problem was — the work was good, the strategy was on point, the operations were smooth — she figured out it was a small matter of an account lead who just didn’t jibe with the client. “We do a lot of marriage counseling,” she said.

Another global CMO said she spends a lot of her time figuring out who the consultants are and what they are like. “Getting on their long lists is the most important part of my job, so people in my roles spend a lot of time building relationships with them.”

AGENCYFINDER COMMENTS:

A good way to get the ball rolling. More properly, agency search consultants started feeling the pinch long ago. That’s why they started providing a myriad of consulting options specifically for agencies. For years, clients had come to expect a search consultant to be an industry-experienced individual or firm having established contacts with a large field of qualified agencies; whose consulting business was funded only with advertiser fees; that offered no fee-based services to agencies; and that were to remain impartial in representing only the client’s interest throughout the search process.

Some of the “pinch” came as the result of many newbies putting their hats in the ring.  Just as there is no specific industry, State or Federal code or requirement as to what an “agency” is, so too is there no description for what constitutes a “search consultant.”  The changes mentioned here suggest violations of some elements of the long-standing 4A’s Rules of the Road (to which all consultants once agreed). Specifically as to conflicts – “Consultants who participate in new business searches, compensation reviews, or other assignments for advertisers should neither solicit business from agencies nor accept assignments requested by participating agencies.” Then to agency fees – “Agencies should not be required to pay a fee to a search consultant in order to participate in an agency review conducted by the consultant; similarly, agencies should not be required to pay such a fee for winning an account review.”  Note by definition the 4A’s are speaking of consultants under the old definition – the consultant’s fees came only from the advertiser.

In defense of the search consultant (as referred to by the 4A’s), there is no provision or option by which a search consultant can join and/or benefit from 4A membership. Yet the 4A’s apparently believes they are justified in describing, defining and regulating the business models of a collection of non-members, i.e. – search consultants. That’s a real reach!

Finally, some of the “pinch” had everything to do with what the author describes as “whose bread and butter has long been long drawn-out search processes” with emphasis on “long drawn-out.” Certainly doesn’t sound like an efficient or pleasant experience!

As quoted by a female consultant in this article “We need alternate revenue streams.”  Let’s hear it for the agencies – so do they!  I suggest a fair, ethical, experienced search consultant with a well-developed business model with fees coming only from the client or only from the agencies can see it work. Co-mingling or built-in conflicts-of-interest will not.

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We ran across this “opportunity” the other day. When you consider all the flak border patrol agents have been getting; when you consider they are constrained in how they actually patrol or apprehend, not sure anyone will want to touch this “opportunity” with a stick! But here it is …

US Customs & Border Protection (CBP)

Opportunity: Needs a agency to provide strategic marketing and advertising services, with the goal of pitching CBP as a top career choice, according to the RFP.

Work includes: but is not limited to: (1) develop and execute a branding strategy that distinguishes CBP as an employer of choice; (2) develop and execute innovative and cost-efficient targeted marketing and advertising campaigns to attract female, minority, disabled and veteran candidates; (3) develop and implement innovative and efficient targeted marketing to attract highly-qualified candidates from science, technology, engineering and math (STEM) fields; (4) conduct market research to determine the most effective means to attract qualified candidates who come from the intelligence community, are proficient in foreign languages and who have the necessary certification to administer polygraph examinations.

Like so many RFP’s, lots of work described but no mention of budget – range or approval.

 

From getting briefs approved by VPs to avoiding shootouts, CMOs can institute plenty of practices to get better work — and save money. The article in question appeared today (May 13, 2015) in Advertising Age. Well written covering good ground. One comment by Ms. Rieter caught my attention and I wrote this …

Interesting and well written article citing the obvious by both Ms. Reiter and Mr. Strachan to begin. As for agency procurement or agency search, we’ve always argued “you can’t find a ‘right’ among a group of ‘wrongs.’ A successful agency review deserves some of the closest scrutiny of the process at the onset – where a reasonable fat handful of qualified candidates are identified. In an AgencyFinder review, we share that list with the client’s CMO for examination and editing. The edited group is invited to participate in a fairly linear process, but not at the exclusion of initial telephone dialogue.

I’m interested in the AmEx process Ms. Reiter describes – “For many of those marketers, choosing the right agency for the right project isn’t always obvious. So AmEx procurement has an online tool that helps marketers do just that, including case studies from the agency and a button to reach the right person at the agency to get started.” Love to learn more, will you share? Offline if you prefer.

Can you believe it! Clients who come to us for help conducting their agency review often share a horror story – their difficulty penetrating the protective agency shield managed by the “New Business Coordinator.” Before coming to AgencyFinder, they tried to conduct a search themselves. By whatever process they identified their initial candidates, when they reached out and made contact they tell us of the off-putting practice by people they thought would welcome a new client opportunity. That might surprise you too, but even we experience that with some of our registered agencies who presumably came to us looking for new clients. Go figure…

Part of what we do that they can’t is penetrate that “shield.” Back when we started and continuing today, we use three different technologies to make each invited agency well aware of each opportunity we have for them. How? We start with a brief e-mail to the primary and alternate new business contacts identifying the client, their budget and their URL. Then we let them know we’re about to send them a “Fax” that will contain the entire Request for Dialogue (RFD). And if they don’t have a fax anymore, we ask for the number of a machine nearby. Yes the Fax is a dated technology but it does give us a way to defeat the “heavy duty” e-mail filters that agency IT folks have installed. If you think each agency would always be open to new opportunities, I share that thought but have trouble coming to grips with e-mail filters that isolate them. Even when we fail to penetrate with the fax, our final outreach is one or a series of phone calls. When we connect we test to learn what they received – and at that point we can take steps to share all the details.

Fax machines seem to bring either vacation specials to Cancun, Jamaica or Hawaii, funding for cash-flow or expansion or AgencyFinder invitations! A Brother IntelliFAX High-Speed Laser Fax Machine is priced at $170 at Staples and can be installed to share on an existing phone line. Small price to pay to vector in new business. Some might say that better than that is @eFax. If an agency wants to learn about every incoming opportunity from any source, I encourage an agency to invest in some form of fax service. Check websites for the branded agencies and you’ll often see fax numbers. If they think it’s worth it, so should you.

Helpful Tips for Our Agency Friends!

A proper approach to selling should be energy positive. It should be sustainable. And it should be fun – even when you lose. And that, to me, is the test: how do you feel after you don’t win an opportunity? Are you depleted or are you charged by the interchange and the progress you’ve made? Are you left mourning the loss and regretting the expense or are you left thinking you’re one step closer to being hired by this client in the future? If the engagement was a disaster waiting to happen did you walk away calmly and take some joy in the carnage about to be caused to your less discerning, over-eager competitor, or did you ride it out right to the messy end, all the way hoping the warning signs weren’t real?

Early in my agency career, when I was young, stupid(er) and full of energy, I loved the buzz of the chase and the thrill of the pitch. At least I loved it for a short period of time. In truth it was emotionally and physically taxing but the occasional win bought back some of the spent energy and allowed me to keep going for awhile longer. In moments immediately following those wins I would probably even claim that I was energized by the process. String together a few losses however or fast forward a few years and it’s hard to deny that the late nights, spent psychic energy and emotional roller-coaster of the pitch is ultimately energy-depleting and difficult to sustain.

As I think about it today I draw parallels to gambling. We’ve all met someone who regularly plays cards, slots or maybe the lottery and claims to be winning. They are winning, on occasion, and it’s that occasional win that keeps them going back to bet again. We know intuitively however that in the big picture and over the long haul they are almost certainly not winning – the system is rigged toward the house and the longer someone plays the more likely their results will revert to the mean, which depending on the game and the house correlates to a loss of between 2% and 20% of everything they bet, over the long term. (Yes, a small number of people have figured out how to beat the system but we both know your crazy Aunt Betty is spending way more grocery money on lottery tickets than she’s letting on.) Some of these ‘winning’ gamblers are addicted, in denial and approaching catastrophic failure. But I digress.

Just as hitting the occasional jackpot at the slots almost never equates to building wealth, the energy gained from winning a pitch only briefly masks the truth that over time a pitch-based approach to new business is expensive by any measure, including joy.

Selling should be fun – it can be fun – and I mean over the long haul, not in fits and starts that coincide with your occasional wins. If it’s not fun you’re not doing it right, and if you’re not doing it right, you’re not likely to last.

How to Do It Right
Here are three pieces of advice to help keep selling fun, and therefore sustainable, the next time you engage with a prospective client.

1. Remember: It’s a Game
As I’ve said many times, business development is but a game and the game goes by the name The Polite Battle for Control. The name describes the easy, polite jostling that you undertake at the very beginning of the interaction and as long as necessary afterward to claim the high ground in the relationship – the point at which you go from being seen as a vendor to being seen as a professional practitioner. (The moment you achieve this high ground is known as The Flip, which I wrote about last week.)

Games are meant to be fun. The Polite Battle for Control is fun because your game is trying to get the client to change the rules to their game. By affecting the buying process thusly you dramatically increase your odds of winning. If you can impact the process then you proceed; if you cannot you politely walk away in search of another game where you can get the rules changed. Walking away in this manner should enhance your desirability or at least mystery and preserve or even improve future opportunities with that client.

2. FOM
Focus On the Mission. Your mission, in each and every sales interaction, is to position yourself and your firm as the expert practitioner. You don’t sacrifice your mission for anything, ever. Not money. Not glory. Nothing.

While your objective in these interactions is usually to determine if there’s a fit suitable enough to move forward, it’s never achieved at the sacrifice of your mission.

A very successful agency principal once told me a story of her dream client that she had long coveted but had never closed. One day she got a call from them. “I’m calling from the marketing commodity purchasing department,” said the voice on the phone. Seeing the writing on the wall, the agency principal sighed, said, “Well then you’re calling the wrong firm,” said a polite goodbye and hung up.

Her focus was on the long view – being sure her firm, if hired, was able to bring their expertise to bear to create meaningful value for the client. She couldn’t possibly do this by beginning a relationship with her dream client by going in though the commodity purchasing door.

Let your mission guide you and you will be better off in the long run. Focusing on the mission gives you more freedom to play the game.

3. Don’t Over Invest
More than anything else, the energy drain you experience when losing a deal is born in your over-allocation of resources of all types. A pitch-based approach to selling is built around such over allocation, even when no spec creative is being presented. Doing unpaid research on the client’s situation, building decks, travelling to meetings, presenting, thinking too far ahead to how transformative the client would be for your firm – these are some of the ways we over invest in the sale, communicate to the client our lowly position of vendor, and set ourselves up for a crash.

All these forms of over investment can feel energizing and dangerously addictive in the moment and so the temptation to rationalize them as necessary is significant, but it only takes a few successive losses for us to see the waste they represent.

Playing the game begins with saying no to such investments (which are not investments at all but speculations) and offering alternative paths forward. The act of gaining such a concession is the act of improving your odds of winning. It is the beginning of The Flip.

In the end the games you end up playing are the ones where you are able to change the rules, where you value your mission over any tactical objective and where you don’t over invest in the deal. Use those criteria and you’ll win more opportunities and still have fun on the few you don’t win.

New Toys Equals a New Type of Fun
A few days before my oldest son’s tenth birthday we found him in tears. He was dreading turning ten, he finally said through the sobs, because he believed that getting older meant leaving toys behind. I smiled and agreed that as he aged his toys would change but I also promised him that the toys just got better and better. (He didn’t believe me then, but now, ten years later, I’m sure he wouldn’t trade his bikes, skis and electronics for his old Lego.)

When you’re young and trading on personality or your ability to command a room, the pitch can be a lot of fun, but the price you pay for each one catches up to you in the end. The good news is there are other ways to have fun – there are other toys. They are a whole lot more sustainable and even more fun than the pitch.

My friend Tim Williams @ Ignition Consulting Group posted this today. Worth reading and assimilating as you consider describing your firm to prospects.

“If every agency on the planet is a “full-service, integrated marketing communications firm” (like they say they are), why do clients chronically complain about the lack of integration from their agencies?

Unfortunately, just because agencies have a long list of disciplines doesn’t mean they have the discipline to make them all work together. It’s more likely they have sewn together a Frankenstein that is less, not more, than the sum of its parts.

Lee Clow of TBWA/Chiat/Day once raised a very thought-provoking question. He wondered, if agencies agree that the consumer decision-making process is complex and emotional, why is the process we use to develop our messages to consumers so structured and rational?

In other words, crafting a message that will speak meaningfully to that complex animal we call a consumer isn’t just a matter of going through the sequence that begins with opening a job and ends with emailing a PDF to the client. Yet, sadly enough, that’s how it works a lot of the time in a lot of agencies.

The process we use to develop marketing solutions needs to be much, much more interactive between internal groups in the firm. For one thing, this means replacing “meetings” with a more productive way of working together – like the daily “scrums” (brief, stand-up sessions) used by organizations that follow agile methodologies.

It also means finding a way to get everyone excited about contributing. Interaction is as important in agencies as it is in sports. Can you imagine a football game in which the game begins with a briefing by the coach, but then the team never huddles one single time during the entire game? The quarterback does his best, the receivers do their best, the front line does their best, but they never stop to huddle, talk about the game, and make changes to the game plan.

That’s what we agencies do all the time, day after day. We have a creative brief, but no briefing. Concepts, but no concept review sessions. We don’t stop often enough to huddle.

One more team member

Has this ever happened at your firm? After weeks of late nights and Chinese take-out, the creative team is finally ready to present their recommendations for the new campaign. Their enthusiasm turns to disappointment when the client approves the weakest idea of the bunch instead of the strongest. Should they have presented with more conviction? Defended with more courage?

Very often, the best ideas are lost because the client was involved only at the end of the process – not the beginning. Clients aren’t given an opportunity to feel ownership in an idea. Instead, they are kept at a safe distance from the rogue creative minds of the agency. They are barred from seeing the rough ideas pinned up in the agency’s inner sanctum, and instead are shown highly polished concepts in the sterile environment of a conference room. They have no idea how the agency got from point A to point B, and they have little appreciation for all the ideas that were considered but discarded.

Why? Because they weren’t there. They weren’t involved. They weren’t asked for their opinion, their perspective, or their feedback until the whole process was over. Is it any wonder that clients feel a lack of partnership with their agencies?

Many agencies also keep the client at an unnecessary distance through an unhealthy dependence on the client service team to get work and recommendations presented and approved. As long as the account manager is the sole ambassador of the agency – shuttling work back and forth – other members of the team will have little empathy for what the client wants to do differently and why.

Remember that true integration includes one other important team member: the client.

Integration is something you do, not something you sell

Let’s also define what integration is not. Being integrated doesn’t mean that your agency offers every agency service imaginable. Not only is this unbelievable (from a client perspective), it’s also quite impossible.

Agencies become famous by focusing on what they do best.  My friend, the talented creative coach Tom Monahan, calls this “playing within your game.” Tom observes that “Some of the best athletes in the world are great because they play within their game. Some of the best singers and musicians are great because they don’t try to do things they can’t do.”

Bartle Bogle Hegarty co-founder Sir John Hegarty says BBH owes a lot of its success to sticking to what it does best. “The trouble with agencies,” says Hegarty, “is they don’t limit themselves to what they’re good at.”

In the end, integration is more about how you work than anything else. It’s no coincidence that the A-list agencies are characterized much more by their ability to effectively integrate internally than by their ability to offer “everything” as a service. In fact, most of them don’t.”
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Tim Williams leads Ignition Consulting Group, a consultancy devoted to helping agencies and other professional services firms create and capture more value.

Here we are, just about 5 years since our last major website update. We continue our motivation and efforts to remain Number One in the field of advertising agency search and agency new business development. We staked our claims for those verticals, first in  late 1994 with Sales Marketing Institute, Ltd. and then in 1997 with AgencyFinder.com. Unless someone is prepared to challenge us, I don’t think there is anyone out there with our deep and combined experience in what it takes to mount and manage an in-house agency new business program and then on the other side of the fence successfully manage a complete start-to-finish ad agency (marketing firm) client search.

On that topic, there is one distinction of which we are extremely proud. Our business model has never been challenged to be double-dipping, unethical or in any way represent a conflict of interest. Our full array of services are funded by registered marketing firm annual fees and never, I say NEVER do we request or accept payment from those who search. For the more traditional agency search consultants who are compensated by searchers (clients/advertisers), as such, participating agencies should never be asked to pay them any fees – for any reason at any time for anything. Before any client/advertiser engages any agency search consulting service, do investigate to be certain they do not engage in any form of “double-dipping.” It’s almost illegal.

Whether you’re a Blue Chip client or a full-service integrated marketing firm (by any definition), you can trust our services to always be in your best interest.

Welcome V6.0 AgencyFinder.com!

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Our business colleague Mike Carlton struck a nerve with his piece today. It’s so important and such a critical element in the process of conducting an “agency search” that it deserves exposure here. Read to the end – there you will find my comments and suggestion as a result of performing thousands of agency searches for clients (advertisers) over 18 years …

Mike begins … What’s In a Name?

Juliet, in Shakespeare’s Romeo and Juliet proclaimed; “What’s in a name? That which we call a rose by any other name would smell as sweet.”

Not so long ago the American Association of Advertising Agencies announced that henceforth it would be officially called by its long-standing acronym, the “4As.”

In a stroke, the venerable industry association, which since 1917 has ably represented the interests of advertising agencies, was removing the words “advertising agencies” from its name.

Is this rebranding just an effort to simplify its handle? Or is it a reflection of more profound underlying changes in the marketplace?

Has the name “advertising agency” lost its relevance? And if so, by what name should they be called?

Definitions

My 40 year old desk dictionary has this definition:

“An advertising agency is a business that creates and issues advertising for its clients.”

That’s it. Pretty simple. And probably quite appropriate for its time.

Today, Wikipedia has an expanded definition:

“An advertising agency is a service business dedicated to creating, planning and handling advertising (and sometimes other forms of promotion) for its clients. An agency can also handle overall marketing and branding strategies and sales promotion.”

And then, continuing under the heading of Advertising Agencies, Wikipedia goes on for ten more pages defining; Full-Service Agencies, Creative Agencies, Specialist Advertising Agencies, Interactive Agencies, Search Engine Agencies, Social Media Agencies and a bunch of more kinds of agencies.

But, perhaps not surprisingly, they keep Public Relations Firms, Direct Marketing Firms, Branding Agencies, Design Firms each under their own separate headings. Not connected at all to the Advertising Agency heading.

And what’s more, Wikipedia does not have separate listings at all for Market Communications Firms, Media Buying Agencies, Digital Advertising Agencies, Creative Collaboratives, Integrated Advertising Agencies, Idea Factories or Marketing Architecture Firms.

Obviously, agencies have a big category mess on their hands. No, maybe it is more like a category train wreck. What was quite clear and simple a few decades ago has fragmented in to a whole bunch of disparate and often overlapping pieces.

No wonder there is confusion. The words “advertising agency” once represented a precise category. But it sure doesn’t look that way today.

The Difference between DO and HOW

That raises the age-old question; Are we best known by what we DO (what we accomplish) or by HOW we do it? (the tools used)

The answer to this question is important because there is a strong common thread among all of the above businesses in what they DO (what they accomplish).

But there is great difference in HOW they do it (the tools used).

The Common Thread

All of these firms (and their categories and sub-categories) exist for just one reason; To influence the behaviors of consumers (B to B as well) for the benefit of the client marketer, the consumer herself and society as a whole. That’s it.

When you scratch through it all, every one of these businesses is fundamentally in the behavior modification business. That’s the only reason why marketers pay for their services.

So ultimately, all are in the same big category. It just doesn’t have a generally accepted name.

Advertising Agency Etymology

That leads to the questions; How did the name advertising agency come to be? And how has its meaning evolved?

Let’s start with the word “agent.” From a legal point of view an agent is:

“One who is authorized to act on behalf of another (called the principal) to create a legal relationship with a third party.”

An agency is, of course, a business organization which performs on a generally larger and more complex scale the practical and legal functions of an agent.

So, where did agencies come from?

The first advertising agencies started about 150 years ago. They began as sellers of advertising space for newspapers (and a few early magazines) – really the only commercial media available at that time. And newspapers paid agencies a commission for selling that space and assuming advertiser credit risk.

They were in fact and in deed sales agents of newspaper advertising, thus being known descriptively and accurately as “advertising agencies.”

Creating the Ads

But there was a problem. Newspapers didn’t want the responsibility of creating the advertisements that were to fill the space the agencies sold. So, agencies moved into that void and not only sold the space and guaranteed the credit, they also created the ads that would fill the space.

A simple business proposition.

But developing the advertising strategy, the layout design, the copy and then producing the ad itself moved the agencies a lot closer to the marketer. And soon, in an unusual twist on agency practice, they became positioned as the agent of the marketer rather than the agent of the newspaper.

So, the marketer became the principal (the client) and the agency owed its primary allegiance to that marketer client, even though the agency continued to be paid a commission from the newspaper. Thus these young service businesses became advertising agencies for their clients.

The words “advertising agency” continued to be perfectly descriptive. And perfectly comprehensive.

But Things Change

As time went by, in their special relationship with clients, advertising agencies began doing things for those clients in addition to just media advertising. They created brochures and bought printing. They undertook sales promotion activities. Originated designs, illustrations and logos. Sometimes they performed public relations services, too.

In some of these services they acted as legal agents, like when they were buying media, printing, etc. for their clients.

But sometimes they acted as advisors or consultants, for which they were paid a fee for the services they performed.

And sometimes they just acted as vendors when they sold the client something for a fixed, all inclusive, price.

What had started out as a simple business model became increasingly fuzzy.

Fast-Forward to Today

Ways to reach and influence the consumer have grown exponentially. The advent of the internet and the wide range of new media employed have further complicated things.

While the literal, traditional, meaning of the words “advertising agency” apply for some of the services provided, in lots of instances the work is not advertising and the relationship with the client is not that of an agent.

And to confuse matters even more, a host of other kinds of firms have sprung up (many of which are owned or financed by agencies or agency holding companies) which don’t call themselves advertising agencies but provide related services designed to influence the marketer’s consumers. And in some cases, these new players create and place advertising itself.

And in doing so are actually acting as legal agents of the client principal.

Wow! The waters have indeed become muddy.

Umbrella Category

Wouldn’t it be nice if there were an umbrella category with a simple, descriptive name that all of the various businesses serving marketers could be under? One that embraced advertising agencies, PR firms, emarketing companies, design studios, and digital firms, analytics specialists, etc, etc. Wouldn’t that make it easier for marketers and the service providing firms themselves?

It sure would. But it is not likely to happen.

And as Dusty Springfield’s song goes, “Wishin’ and Hopin’ and Thinkin’ and Prayin’ will not get you there.” There has to be another way.

In The Eyes of the Beholder

But wait. Language is a living thing. And meanings are constantly changing. Evolving meanings come from the marketplace, not from learned authorities. And the power of the folks in the marketplace to shape those meanings is gaining strength every day.

After all, isn’t that what social media is all about, anyway?

So in light of this, what meaning do most marketers today ascribe to the name advertising agencies? And what might their understanding of that meaning be in the future?

Nothing is For Sure

Of course the problem with market driven meanings is that there is no specific, 100% agreement. Each person holds a slightly different view. Kind of like a continuum in which opinions at the extremes may be dramatically different but there usually are big, statistically significant, clusters scattered along that continuum. And while those clusters are usually slowly moving and constantly reforming they do provide some insight to current meanings.

So let’s explore the meanings of the words advertising agencies, as well as PR firms, digital and social marketing firms, etc., within the context of a big continuum populated by the opinions of marketing executives.

Now, it would be great if there was a reliable study to answer that question. One that is widely accepted showing where executives in this continuum stand on the meaning of the words advertising agency. But there isn’t.

So we don’t have a respected authority to look to for a definitive, statistically accurate picture of how that continuum looks today. Nor the precise shape, location or movement of the various clusters.

But there are some helpful tangential studies and, of course, lots of anecdotal evidence. Based on those sources here are some thoughts.

Beliefs

There is likely to be little argument to the belief that the majority of marketing executives view advertising agencies as providing many more services than just advertising. Most are not stuck in that narrow, literal view. They have a much broader perspective than that.

And that very few actually think much about the legal implications of the word agency. They view advertising agencies as providers of an increasingly broad range of helpful services. And not infrequently they use that dreaded word “vendor” when categorizing advertising agencies.

However, as a Forrester study points out, many senior executives consider advertising agencies excellent at creating and placing advertising but not as strong as they should be in big data digital and other forms of new media.

These important influences apparently believe that advertising agencies as a group have not embraced non-traditional ways of influencing customer behavior as quickly or effectively as they would like. And this has opened their consideration to providers outside the traditional advertising agency category.

Obviously, each agency is different. And the speed and effectiveness with which each has embraced new tools and techniques is different.

But the overall view that Forrester reflects matches lots of anecdotal evidence. Thus, the advertising agency category is frequently painted with this broad brush.

The Agency Conundrum

In addition, some agencies are caught in a trap. A trap largely of their own making. Much of their income comes from hourly charges for creating and producing advertising. And many have become addicted to the revenue that work generates.

At the same time many are not adequately paid for their strategic contributions to client success. Nor have they figured out how to effectively monetize the use of new tools and techniques, particularly in the digital and social world.

This is a tough spot to get out of. But not an impossible one.

A vanguard of progressive advertising agencies are demonstrating powerful chops in digital, social media and promotional PR. And in doing so are effectively and efficiently changing the behavior of their clients’ consumers and being fairly rewarded in the process.

And at the same time expanding the definition of the words advertising agency. At least as that category relates to their specific agency.

The Flip Side

Concurrent with the expansion of services from the advertising agency side, many PR firms, digital and interactive organizations (and other new media service providers) are expanding into the arena that was once the sole province of advertising agencies.

In fact, only a few years ago it was common for new media firms to be primarily technologically driven. While today, it is increasingly likely for them to be much more concerned with the psychological implications of how the user interacts with their technology.

A very significant and very unifying shift.

We Are One

Remember, regardless of what a firm in this broad continuum is called, we are on one unified mission. To change consumer behavior for the benefit of our client, the individual consumer and society as a whole. Often using different tools, but with the same outcome in mind.

We have more in common than that which separates us. And in that truth lies the way forward.

There is no prescribed solution to this category name issue. Nor will there be. Nor should there be.

The language and the business models will be defined by the marketplace. Success in that marketplace will determine the definitions that grow. As well as those that decline.

So, the meaning of the words “advertising agency” may continue to expand. Or it may change. Or just drift away. Same is true for the words “PR firm,” ‘digital agency,” etc., etc.

And, an umbrella category may never materialize. But that’s OK.

Whatever Works!

Every firm in this broad category, whether it began as an advertising agency, or a PR firm, or a digital shop, or a sales promotion business, etc. will be judged not by its category but by how well it accomplishes the objective of influencing consumer behaviors for its clients. The value it brings those clients.

What it chooses to call itself is less important than what it accomplishes. And the perceived value that marketing executives attribute to that firm.

When you think of it in this light it is a much simpler, and less parochial, way of moving forward. And it is certainly in keeping with respecting definitions determined in the free marketplace.

The Wisdom of Juliet

She reminded us that the essence of the rose is that it pleases our sense of smell. That’s what is important. How it does that or what it is called is unimportant. It works the same for your business, too.

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Now let me jump back in. I can’t begin to count how many times our “agencies” have asked us what they should call themselves. Surely there are some agencies that have adopted what they thought were clever names, seeking to differentiate themselves from the lot. Names like Flower Garden, Mighty Mechanics, Brain Teasers. I contend and have so all along that like Mike suggests, they are what they are perceived to be. When advertisers (searchers) come to us, they aren’t looking for an ad agency, an integrated marketing communications firm, a social media firm, a pr firm or a Yellow Submarine. They’re looking for a marketing partner who can help manage their marketing and improve their business. Seldom do they come with a preconceived idea how that should be accomplished, although many do know of the various services and media iterations.

We have chosen to blend them into one category – we call them ‘Marketing Firms.’ We try to use that language in our press releases and in general conversation and copy. With newly-registeted clients, we go for the jugular; we ask what services they think they might require, but most importantly, what do they want the “agency” to accomplish for them? That’s how we see it; how about you?

Sincerely,

Chuck Meyst, Chairman & CEO

AgencyFinder.com