Checklist to see if your advertising agency is in trouble
October 20, 2009
We figured we would spill it out for people, because based on recent comments we have a sinking feeling that many creative types need things spelled out for them. So we have created a simple checklist to see if your ad agency is in trouble.
1 - Is your ad agency part of a holding company?
Why is this question relevant? Well most holding company owned ad agencies have some serious accounting problems, mainly the way YOU are accounted for. It’s not your talent, it’s your personal ROI for the agency as a whole. See the guy that fires you won’t actually be located in your city, or in many cases even your country. He’s looking at a spreadsheet and is working hard to see who he can fire that won’t cost him money.
2 - Do you have many Universities or Hospitals as clients?
Huh? WTF kind of question is that? Accounts like that don’t pay well, there’s no massive growth there, like most Universities and Hospitals have been there for 100 years.. if they haven’t grown by now they how can they grow in the future? I mean literally sitting there for a century is not growth. Those places have seen the great depression, World War I, World War II… uhh wait…
Like if I have a bunch of stable clients on the roster that means I have a better chance of keeping my job? uhh… I want those clients in this economy. May take some time for many people to realize it, but growth isn’t the same as stability. I don’t care if we hit the mother of all great depressions, The hospitals will most likely still be there. Unlike Government Motors or Lehman Brothers. Now this shouldn’t be the entire mix of clients that you have, but a stabilizing force like that with your client roster will help get though ugly times like now.
3 - The ad agency I work for, what percentage of digital does the total revenue come from, and how does my agency define digital?
This is a hot topic, sometimes agencies push out “30% of our revenue is from digital” but ask them to define it and then ugly starts to show it’s face. If what they are saying is that 30% of their clients spend is for Google Adwords that isn’t digital, that’s a media purchase. Because there is a digital divide in terms of what is called digital because until someone can answer that question, you can’t provide an answer.
4 - Recent layoffs have crippled our agency, or did they help it make it though this mess?
This is a painful discussion, recently in an unrelated industry (an automaker) they needed parts on the assembly line. Until about 6 months ago there was an individual in charge of the computer system to specially order those parts. This individual (let’s call him John Doe) that earned roughly $60,000 a year was laid off with the assumption that the software was running the show and no more human intervention was needed. Well about a week ago they had to break an order into 2 parts for the same assembly run. Since the software wasn’t able to audit it, the order was hosed. Normally John would intervene and fix the problem and this problem would be fixed. But since John wasn’t there, they had to stop the assembly line until the issue was resolved, costing the company roughly 3 million.
Sounds like that 60k saved cost them $2,940,000 . So the question is, did your agency fire a John? The lack of foresight in that instance shows a lack of understanding of the process overall. Hence If your firm fired too many individuals like John, you’re looking at not a cost savings but rather a disaster that will accelerate though this recession as the agency will continue to lose needed revenue to fix problems rather than with a master plan to grow the company.
5 - Has your agency had many recent wins? Or are you defending and holding your existing client base?
This is actually highly important, if your ad agency is holding it’s own against others that is good, but it’s not the same as landing new business. Talking to the same guy in and out every day at the client puts things into a rut, it means that both you and your client are happy about the relationship. People tend to trust people that they have worked with for years. That being stated, landing new business is harder, and it must mean that your services that your firm is rendering must be so superior as the be able to overthrow the existing relationship. New business is superior to existing, it proves your firm is still relevant to the changing market place.
Thoughts?
Comments
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