Hiring an Ad Agency? 10 Guiding Principles, Part 2

Turnover is risky, hugely expensive and wasteful. Nevertheless, within a few years of onboarding a new agency partner, the average marketer finds themselves dissatisfied and starts looking again.

Whatever the reason for an agency switch, too many companies are making their selection based on the wrong criteria. So what should happen before embarking on an agency search?

The first 5 of my 10 guiding principles to follow the next time you’re considering an ad agency search was posted in Part 1 on wednesday.  Here’s Part 2, for the balance.

To recap, 5 thing you shouldn’t necessarily do:

1. Don’t think a new agency will be the solution to your problems. Have you taken a close look at your current agency relationship and your own internal team’s performance?

2. Don’t do it alone. Seek expert advice. Never mind the risk, time and cost commitments, you can’t be expected to have the expertise, industry knowledge or protocols to ensure success. Handling a search internally without some professional assistance is a recipe for future dissatisfaction.

3. Don’t make industry experience too rigid a requirement. Looking for differentiation? Consider looking outside the box. The right agency partnership will put that learning curve behind them in no time.

4. Don’t ask for speculative work. Like steroids, the result of spec work is simply a beauty contest with unrealistic expectations. Agencies you want, don’t do it.

5. Don’t forget to see beyond the spreadsheet. The soft stuff matters. Remember to assess the qualitative results before making any decision.

(See Part 1 here for full details of the 5 shouldn’ts.)

So, how should you select your next advertising agency? Here are 5 things I think are important:

1. Do determine specifically what you need.
The worst thing you can do is hire an agency to do a job and then not let them do it.

Consider if you need an agency to lead, or simply to follow? Do you need a firm that can develop strategy, or be an expert at execution? Do you want a less ‘formal’ agency culture, or one that’s all business? Need a team to take orders, or a team who will challenge your thinking? Like we said in Part 1, there are literally thousands of agencies and they offer every possible approach and suite of services.

Carefully develop your requirements: objectives, needs, budget and success factors. Assemble your selection committee too. If you don’t know exactly what you want & need, well, you may need someone that can help you figure it out. They’re out there too.

2. Do think about an appropriately sized agency.
To ensure correct service levels, and to have access to the key thought leaders in the agency, you should ensure that your business represents at least 10% of the total revenue of the agency. On the other end of the scale, your business should not represent more than 30% of the agency’s revenue to ensure that your brand does not impact the agency’s culture (that you value).

Again, in this situation, an agency search and selection expert will have up-to-date knowledge and expertise to generate a list of appropriate matches.

3. Do initiate a conversation.
Send the agency partners on your ‘long list’ a letter or an e-mail, or give them a call. Ask them about the history of the firm, who the current clients are, what their principles are. Ask them if they’ve heard of your brand and are aware of its issues. Spend time to get a sense of chemistry and interest. Explore their initial, top-of-mind thinking.

Before you reveal what industry or brand you are representing, remember that you need to secure NDA’s to allow you to speak freely about your situation, share information and keep the search confidential.

Consider the time needed by your selection committee to properly assess agency submissions: when you request a formal response from agencies, it’s best to place specific, defined limits on the response format.

From there, have your selection committee shorten the ‘long list’ of agencies to a maximum of 4 or 5. Contact these agencies on your (now) ‘short list’ to offer them the opportunity to refine their approach. Be sure to supply each agency with a detailed request based on your requirements.

4. Do invite the agency to present in person.
Work to understand the thinking behind how they arrived at the solutions presented in their case studies. Learn about their process, how it works, and how it might fit your company and culture. Is it methodical? Inspiration-based? Involving? Inventive?

You want to imagine your brand at their agency and see how they would go about addressing your issues. Let the senior principals handle this part, and don’t initially insist on a presentation from the team that will work on your account—often agencies don’t know at this stage of the process. Like spec creative, spec staffing is a dangerous game to play.

5. Do narrow your list to two or three agencies.
Following the agency presentations when you get your list down to 2 or 3 agencies, spend time at their shop. Lots of time. Meet their teams. Experience their culture. Initiate conversations with people in each department. Inquire about their jobs. Ask to see what they’re working on (as long as it’s not confidential). Go out to lunch with them. See if you like them, and give them the opportunity to do the same.

Have them answer a handful of difficult questions. The point is to get honest insight, not quick comebacks. What was the last account you lost, and why? Who was the worst client you’ve served (without naming names) and why? Who is the best client you have and why? Describe a big failure or flop you’ve had, what happened, and how you responded. Where do you see our account fitting into your agency? What will we mean to you, now and in the future? Just like in any relationship, you’re probing to gain insight into the company’s personality and character.

When you’ve selected a good fit, be sure to discuss with them the best way to ensure a long and successful relationship. Come to clear agreement on your expectations for staffing, compensation and service.

Then fire the starter’s gun, and let them work.

The correct route to hiring an agency is not a simple task. It takes a lot of time and resources. But it’s better to do it right once than wrong twice (or three or four times). A bad agency decision can set your brand back years, plus it burns out your personnel and is a huge waste of resources. Go through the discipline and hard work of making a good choice. Then you can get down to the fun and excitement of inventing the future together.

Thank you to BusinessWeek for portions of the content of this post.

Mike Fyshe is a partner with Reynolds & Fyshe, the leading, independent marketing consultant in Canada, specialized in increasing the value delivery of marketing communications through related services such as MarCom Services Evaluation, Agency Compensation Negotiation, Relationship Management & Performance Evaluation, and Ad Agency Search & Selection. Reynolds & Fyshe adheres to best practices published by the Institute of Communication Agencies (ICA).