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Deborah Spector Barry
Highland Park High School
Smith College
Executive Editor,
six00threefive magazine
Need a speaker? Ask Deborah!
Programs from 15 minutes
to one hour.
TOPICS:
Why your advertising doesn't work
What is camera ready art?
Your media plan
What's in an ad?
You ought to be in pictures—broadcast media for small businesses
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How to choose an ad agency
When you are ready to take your business to the next level, you want to find the right partners for your (ad)venture. So do it right, and you won't have to do it over. Expect to spend about 10-15% of your overall advertising budget to leverage the advice and support of a professional advertising consultant.
In general, these days, agencies are compensated both my media commissions and on a time-and-materials basis. Remember that media commissions are offered to an agency of record by the media group to compensate the advertising specialist for fulfilling tasks and responsibilities that would otherwise fall on the media sales staff or customer service representative. You may be billed for time over and above the media insertion, especially if your overall media budget is modest. All such arrangements should be spelled out clearly in advance.
One common misconception is that an agency will work with new businesses at a reduced rate, out of consideration for startup costs. In a perfect world, this might happen. However, if you stop to think about it, the bulk of effort and expense is at the beginning of an advertising campaign—creating a logo, defining your point of difference, choosing your media, developing your creative and, above all, infusing your business identity with a unique media presence. Over time, the actual dollars spent on your advertising consultant will go down in relationship to your total budget.
For example, a small business—working with a micro agency—can expect to pay $2,500-$7,500 dollars to develop a logo and business identity package. However, remember that this cost is amortized over a period of years. Or decades, if things go well. We recommend dividing your startup costs by 5 to approximate an annual investment. Or you might think of it as front-loading your business identity, with the payback coming in later years.
Any up front agency will readily answer your questions about how clients are billed, hourly rates, markups and commissions. This will help you evaluate the advantages of an outside marketing consultant over the costs of assigning these duties to a staff member or adding an employee to your office.
So, now you've decided you want to go the agency route. How do you find the right fit? Here are some tips.
Ask the right questions
• Is the agency committed to your budget? Can they explain how to balance budget with results and time lines?
• Will the size of your account place you among the agency’s "top clients”? Will you have access to the senior level?
• Does the agency's portfolio reveal a broad range of content and styles? Is the work genuine and original?
• Would you trust the agency to act on your behalf and in your best interest at all times?
• Can you be frank about your own goals and how you would measure success? Is the agency’s estimation of short- and long-term results credible?
• Can you understand precisely how and through what sources the agency is compensated?
Ask their clients
• What has the agency done for you? In what media? Over what time frame?
• Would you hire the agency today? Have you recommended this agency to others?
• Have you had problems with their billing?
• Do you trust them to make decisions on your behalf?
• How well does the agency understand your industry, your profession, your client base?
Ask their vendors
• How long have you been doing business with the agency? Do you refer business to them?
• Are projects properly specified and prepared? Does the agency meet deadlines and pay promptly?
• Is the agency effective in resolving a problem, should it arise?
• Does the agency negotiate fees in good faith? Do they balance price with service?
Commit
• Be certain that all dimensions of the project to be undertaken are put into writing.
• Understand that advertising works best over time.
• Let the agency do their work; micromanagement is not cost-effective.
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