Agency Economics, 101

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Sales organizations spend lavish amounts  of time, energy and capital pursuing business at agencies.  But once there, most of us ignore the elephant in the room.

We talk about marginal improvements to performance, brand “safe” environments, effective CPMs and a lot of other minutiae tied to successful stewardship of the latest plan.  We prattle on about our latest reporting dashboard, the premium publishers or content we represent, how we’re more “transparent” than the other guys.  I wonder if at a certain point of this litany the agency folks just see our lips moving and only hear “blah…blah…blah….”

We stay locked onto the marginal, temporary issues of media planning  (insuring that all we’ll ever have is marginal, temporary success) while ignoring the big economic issues that could give our relationship with the agency some much needed urgency and power.

It’s the Agency Economy, Stupid!

This week’s Drift is proudly underwritten by Krux, the Salesforce DMP.  Krux drives more valuable content, commerce, and advertising experiences for the world’s leading marketers and media companies. Clients include Anheuser-Busch In-Bev, JetBlue, Kellogg, L’Oréal, Meredith Corporation, NewsCorp, the BBC, and Peugeot Citroen. Learn more at www.krux.com.

My hypothesis is pretty straightforward.  We are living at a time of consolidation, in which clients and agencies are going to be dealing with fewer companies, not more.  (This trend is masked by the insignificant “testing” that goes on around the margins of planning.)  The winning media companies, aggregators and tech vendors will be those who frame their benefits and align their value with the core economic issues confronting agencies.  There are four:

Account Security: Senior agency executives live in perpetual anxiety over a major account going into review.  That’s a seismic event.  But the more subtle, persistent agita comes from the soft erosion of clients inviting other shops in on a “project” basis.  If you’re not talking about how your services and capabilities can help the agency drive interest and loyalty with the client, you are missing a big opportunity.

Budget Growth: The dirty secret is that margins on digital media buying are thin to non-existent.  The only way the agency stays healthy and profitable is to get its current clients to increase budgets.  Too many of us only stay focused on getting our share of existing budgets, instead of on how we can help the agency access and grow the dollars they get from clients.

Workforce Extension: It’s no secret that agencies are severely understaffed.  Most don’t have the FTEs (Full Time Equivalents — agency-speak for “people”) to do more than keep up with process.  How can your organization serve as an extension of the agency’s own workforce and provide core services — creative, aggregation, marketing, promotion — that allow the agency to drive more profit without more bodies?

Commoditization: And here we sellers thought this was our issue!  The agency — and most especially the planning teams — are swimming against the same currents of commoditization and automation that many of us do.  How can you effectively bundle your services into programs and add value to them so that they can’t be commoditized or automated? How can you help the daughter agency or the planning team hold onto the spending and influence they so desperately fear losing to the trading desks?

Are these conversations you’ll have with the media planner at the 11th hour of the RFP process?  Hardly.  But if you’re not engaging in them at an organizational level and allowing them to drive your strategic planning, then don’t be surprised when the RFPs stop coming and you find yourself frozen out of the agency entirely.

The core content of today’s Drift was posted in 2012.  Despite so much change, how little has really changed.

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Whole Selling.

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If you’re in sales today, there’s a simple three-word phrase that you might consider tattooing onto your forearm: Finish the Job!

Unless yours is the most transactional commodity-for-price type of selling (in which case you have an entirely different set of problems), you are finding that getting the customer to “yes” may actually be the easiest, most straightforward part of the job. Bringing the deal to fruition, fulfilling the terms and ultimately recognizing the revenue… now that’s another story.

This week’s Drift is proudly underwritten by Krux, the Salesforce DMP.  Krux drives more valuable content, commerce, and advertising experiences for the world’s leading marketers and media companies. Clients include Anheuser-Busch In-Bev, JetBlue, Kellogg, L’Oréal, Meredith Corporation, NewsCorp, the BBC, and Peugeot Citroen. Learn more at www.krux.com.

The name of the game is co-dependence.  To realize success in today’s increasingly complex, high-touch program and platform sales, the seller depends on finance, legal, account management and creative services.  As this side of the business and the predictable tension and friction grow exponentially, weak sellers acclimate themselves to a culture of blame:  “I sold it, but (at-fault department here) didn’t do their job!”

No more.  Motivating, empowering and rewarding other team members for supporting your deals is the new definition of your job.  Don’t think it should be this way?  There is no should:  there is only must.  Great sellers have always realized this and behaved accordingly.  They are the ones who other team members gladly stay late for.  The ones who inspire and share credit are the ones who win.  It’s not even close.  This is not just what defines excellence:  it’s what survival and relevance look like in 2017.

Maybe there’s someone on your New York team who embodies this definition?  Along with the New York area’s premier digital marketing organization, I’m very proud to announce the 212NYC Weaver Award for Digital Sales Excellence.  If you’re a sales leader or manager in digital media, ad tech or services, you can nominate your special team member for special recognition by his or her industry peers.  I’ll be participating in the judging myself, and we’ll recognize the top three finishers at the 212NYC Winter Gala on Wednesday March 22nd in New York.

Sales excellence isn’t what it used to be.  And it doesn’t just happen.  It’s high time we started calling out the deeper qualities of the great seller…qualities that are driving a renaissance in our business and our profession.  It’s time to celebrate the best of the best among us.

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Go to Their House.

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At the very beginning of my sales career I had to deliver a lot of bad news. My first ad sales job – back in the mid-80s – was at a small, specialty automotive magazine that was critical to many of its advertisers. I didn’t know when I took the job that the magazine was in financial trouble and that I’d have to tell many of our longtime advertisers that they’d face an immediate 60% rate increase.

As a 25-year-old ad sales newbie, I can say I was categorically unprepared for the shitstorm that ensued.  Heck, I don’t think I’d be prepared for it even now. Advertisers yelled, they threatened and more than a few pulled out of the magazine. We were snubbed at trade shows and our calls often went unanswered and unreturned.

This week’s Drift is proudly underwritten by Bazaarvoice. Reach and influence 3 out of 4 true in-market shoppers with Bazaarvoice Advertising. Bazaarvoice’s fresh first-party data comes from shoppers interacting with consumer generated content across our network of 5,000 leading brands and retailers, allowing us to reach your shoppers with advertising to influence their purchase decisions.

Fast-forward 12 months. Virtually all of the advertisers on my list returned to the fold. Some even increased their spending with us. Over dinner at a barbecue joint in northern Mississippi near the factory-headquarters of one of these comeback advertisers, I asked him how we got “from there to here.” How exactly did we overcome all the bad feelings, disappointment and rancor to get to such a good place? His answer was immediate, simple, and one that I remember to this day.

“It’s really pretty simple,” he explained in his gruffly-distinguished Southern accent. “You came to our house. That matters a lot to us.”

He went on to explain that very few of the salespeople they spent money with had ever taken the time to visit their headquarters, to walk the factory floor and see how their stuff was made. “They’ll call me on the phone when it’s time to renew and they’ll shake my hand at the trade show, but they don’t come here.” During the dark period when they weren’t running ads with us, I’d made two trips to Northern Mississippi and was now making a third.

Despite all the technology and the instantaneous communication, people are still people.  They take pride in where they work, where they build things. And they know when they’re being respected and treated like a valued customer. Often, there is no next best thing to being there. You just have to go.

Carry this principle a little further… to the internal constituencies at your own company that you need so badly to execute and activate the programs you sell. Have you “gone to their house” lately? Most sellers don’t ever go and sit at the desks of the people they depend on every day. You send them email when you need something, you have a beer with them at the sales meeting, but you don’t go there.

Maybe you should. Maybe we all should. Be the one who came to their house. You’ll find, as I did 30 years ago, that it makes you exceptional.

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Steal This Post!

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It may be just me, but the wind seems to be changing and radical ideas are afloat.

We’re now two weeks removed from the IAB Annual Leadership Meeting in Florida where President/CEO Randall Rothenberg blistered the crowd with a Jeremiad that was both bracing and very, very clear.  I’ll paraphrase:

This thing of ours has gotten pretty fucked up.  And if you’re not part of the solution, then you’re part of the problem.

This thing of ours, of course, is digital advertising and marketing.  And he’s right.  The very fact that the head of your industry organization is giving a speech called “Repair the Trust” tells you a lot.  Sure, we’ve had areas of disagreement and mushy standards for much of the last two decades.  But when the subjects were arcane things like terms & conditions, viewability and margin transparency, most of us just kept our eyes down and pushed our food around the plate.  Avoidance and obfuscation was a perfectly reasonable strategy.

This week’s Drift is proudly underwritten by Bazaarvoice.  Reach and influence 3 out of 4 true in-market shoppers with Bazaarvoice Advertising. Bazaarvoice’s fresh first-party data comes from shoppers interacting with consumer generated content across our network of 5,000 leading brands and retailers, allowing us to reach your shoppers with advertising to influence their purchase decisions.

But no longer.  Because now the issue is fake news.  Remember that kid sitting in his kitchen in Macedonia pumping out fake news stories about Obama’s love child or the Papal endorsement of the Trump campaign?  Turns out we were collectively paying him.  Ouch.

The rotten system that blindly rewards page views and ad calls and shares has become the intravenous feeding tube for parasitic monsters who may realistically render the concept of truth itself irrelevant.  Fake traffic and fraudulent video numbers were bad.  Fake truth and moral relativism are much, much worse.

Randall made it very clear when he said “It’s time to get out of the fake anything business.”   Yes.  We are only as good and as moral as who our system pays and what it pays for.  Without ethical clarity, the next $50 billion in digital advertising revenue will be just so much drug money.  And each one of us has a part to play in making sure it’s not.

You see, our business is really just an average of the behaviors of our best and worst players.  It’s time to bring back the concept of shame.  If you employ the highest standards as a publisher, talk about them.  If you demand the highest standards as an advertiser, pay for them.  And whoever you are, get off the line and pick a side.

The world is watching.

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Specificity.

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Checking to see the depth of the tread left remaining on this studded snow tire.

It’s a little corny, but here goes.  If you want to be terrific, be specific.

Sellers in our industry are plenty smart and deeply articulate.  They can talk for minutes on end about technology, market position, programs and tactics.  And they can do it all with a high degree of specificity.  So why, then, does it all get so soft and shallow when we talk about our customers and their plans and problems?

Ask the average seller to tell you about their company and you’ll hear volumes.  But ask about the objectives of the customer and you hear thin, tactical terms like lead generation, improved ROI and the perennially meaningless branding.  Most of us will grab the first and most simplistic description of client needs we’re given and then immediately start layering on tons of information, products, features and statistics.  It’s as if we’re worried about tarrying too long on the client stuff, lest we miss the chance to tell our whole story in its enormity.

This week’s Drift is proudly underwritten by Bazaarvoice.  Reach and influence 3 out of 4 true in-market shoppers with Bazaarvoice Advertising. Bazaarvoice’s fresh first-party data comes from shoppers interacting with consumer generated content across our network of 5,000 leading brands and retailers, allowing us to reach your shoppers with advertising to influence their purchase decisions.

If you want to be terrific, be specific.

The reps who stand out, the ones who find a permanent place in the lives of their clients, don’t rush through the client agenda.  Rather than accept a softball like branding or storytelling, they study the situation and talk specifically about exactly that part of the client’s story that needs to be told – and to whom.  When they hear about a need to move product, to encourage test-drives or to put butts in seats, they slow down and ask why these objectives are not being achieved.  By getting very specific about the client need, they identify the interim tasks and processes they can help improve.

We all say we want to be more consultative in our approach to sales.  What we don’t realize is that the difference between a thoughtful consultant and an average transactional seller is really quite simple:  the consultant just spends more time with the problem.  When a customer feels like their business and success are being fully analyzed and considered, they feel heard and understood.  And when they feel heard and understood, they’re fully prepared to accept and support your solutions.

If you want to be terrific, be specific.

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