Choosing an Advertising Agency

How to Choose an Advertising Agency

Choosing an advertising agency is one of the most important decisions you can make for the future of your business.

A good choice can propel your company to growth and profitability it has never reached before.

A bad choice can result in a negative image and cash losses that might take years to reverse.

An agency's size and client list can be deceiving. Bigger isn't always better. Sometimes a smaller agency offers special skill and expertise in your industry, target market or geographical location

You'll also need to look at cost. On the durface, one agency may be more expensive than another. But the agency that costs more may also have a track record of giving its clients a higher return on investment, or ROI. In other words, you may spend more dollars in the short run, but make higher profits in the long run.

Of course, you'll need to look at advertising campaigns an agency has done in the past. Keep in mind, a campaign may look great at first, but the real key is: how well did the campaign work and what was the ROI?

Did you notice, we keep coming back to ROI?

Here are some basic guidelines for choosing an advertising agency.

Determine your advertising needs and objectives

This is probably the most important part of the process. As the saying goes, "If you don't know where you're going, you won't be able to figure out how to get there."

Two important questions are:

• How much can I afford to budget to get started?
• How long can I afford to wait for results?

You'll need to have a clear understanding of your goals. Are you introducing a new company? A new product or brand? A brand extension?

It's also important to know your industry and your competition. Is there little competition, or are you going to be taking on a product or company that is already well established and commands a large market share?

Your use of business intelligence can be critical to getting answers to these important questions.  

You'll also need to decide what you want an agency to do for you.

• Packaging, logo design, brochures, etc?
• Radio, TV or print ads (traditional media)?
• Website development, social media advertising, etc?
• All of the above and more

You'll also need to determine if any of your advertising needs can be capably handled "in house" rather than being outsourced to an agency.

Hiring a search consultant

If you've never used an agency before, and you don't know the advertising landscape, it might be wise to hire an advertising agency search consultant.

A search consultant might be used to

• Do initial screening
• Manage the search process
• Negotiate compensation

Researching agencies yourself

Of course, you can also perform a search yourself. If that's the case, it's important to consider 

• Marketing expertise and experience, range of services, research capabilities, success of previous creative projects, media knowledge and “clout,” PR capabilities, agency size and location.
• The agency's "communication culture."
• • Is there a single person who'll be your point of contact?
  • Will you have input in the creative process?
• Compensation (see below)
• How much oversight will you have?

Using Multiple Agencies

In certain circumstances, it might be appropriate to spread your advertising needs to different agencies that focus on specialized areas. See advertising agency types for an overview of these.

Advantages:

• Different agencies have different strengths, services and even personalities
• Geographical, cultural and language factors
• Competition can keep costs down, add value.

Disadvantages:

• Lack of "economies of scale"
• More need for oversight
• Lack of a "partnership" atmosphere
• May cost more

Agency compensation

As mentioned elsewhere, many agencies are moving toward a "partnering" model. In other words, you pay them a retainer and I give them a percentage of sales that result from their efforts.

Others will prefer to work on the "old" model: pay as you go, regardless of results.


Also see: advertising agency overview, advertising agency types.

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