Digital Agency

It’s the (Agency) Economy, Stupid!

If you’re insulted or confused by the title of this post,  you’re either not a political wonk or came of age after 1993.  I’m of course paraphrasing Bill Clinton’s political strategist James Carville as he famously kept staff members in line and on message during the 1992 presidential campaign. It was this maniacal focus on the day’s most important issue that mattered most — or mattered at all — and any deviation from that message was an opportunity lost.

I think about this message a lot as I consider how digital sellers spend their time, energy and capital as they pursue business at agencies.  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!

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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 agida 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.

Have You Hugged an Agency Today?

Consider the plight of media agency executive today:  The holding company that owns the place is hell-bent on replacing your team with an automated trading desk.   Your clients (when they’re not taking dinners with the shop that wants to unseat you) are holding you responsible for getting them great deals on only the best websites.  In the next 18 months, many of the people on your team are going to (a) get poached by another shop, (b) take a job with a media sales organization, or (c) finally realize that grad school is where they belong.  There are 14 messages on your voice mail and 62 in your e-mail inbox from reps who just want to “check in” on this or that account or brief you on their new site redesign.  And all the while, friends and relatives who watch Mad Men think you’re doing nothing but gourmet dinners and courtside seats.

Madison Avenue needs a friend right about now.

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Some media sellers might think this is the perfect time to turn their backs on the agency.   They would be sorely mistaken, and they’d be leaving tremendous opportunity – and money – on the table if they did.  Now is the time for a new creative level of engagement with the media agency.  It’s something that the sales leader and the sales rep can commit to, measure and execute.  And if pursued consistently and well, it will lead to good things.  Here’s the roadmap:

  1. Focus on the Agency’s Relationship with its Clients. Every shop is trying to differentiate itself; every media exec wants a personal victory with her client.  Constantly challenge your team to consider whether and how you’re making a difference in these relationships.  But before you can do that, you have to…..
  2. Cultivate Those who Actually Talk to the Client.  Most digital sales teams spend countless hours and entertainment dollars currying favor with media buyers and RFP jockeys.  We don’t get to see the people at agencies who really own the client relationships because we don’t….
  3. Have a Point of View on Creating Value and Growing Budget. Face it:  Most of us are simply focused on helping agencies spend budgets.  We’re just a bunch of birds in the nest, all crying for the same worm.  All we usually ask senior agency executives is “help us get more.”  Instead we should be focused on how we can….
  4. Give the Agency a Strategy and Resource Boost. “We want to grow our relationship with this agency, help you extend your services and help you grow the budgets you touch by generating and fostering ideas.  But we can’t do that until you help us….”
  5. Get Off the RFP Crack Pipe and Get Greater Visibility. I know, this is bitter medicine. Working the RFP machine was a good strategy for many years, but it’s just not any more.   Many reps and sales teams are victims of their own past success, and can’t envision an immediate future where enterprise selling skills and long-term relationship incubation are needed.  The faint ringing you hear is your wake up call.

Take responsibility for your own behavior in the agency relationship.  Operate from a place of generosity and vision.  Teach your people to be 70% of the relationship that they want with the agency.  The shops you call on will define themselves based on how they respond.  Those that reject the fresh approach I’ve outlined above may indeed not be worth the effort. But if you reject it yourself, than you’ve got no one to blame.

Leading a sales organization?  Over 50 of your peers will be gathering in New York on March 16th at the Upstream Seller Forum, the only industry event just for sales leaders.  Request your invitation today or call us at 802.985.2500 to reserve your spot.