10 Reasons Why Ad Agencies Succeed
Earlier in my career I worked at 4 different ad agencies, two of which I was the agency’s leader. I learned a lot from those experiences (both positively and negatively). In my consulting career I’ve also worked with 20 more agencies. In addition, I’ve probably visited 100 more over the years. So I’ve seen the inside of many successful agencies, and also several who are struggling.
I recently wrote 2 Strumings based on reasons why some ad agencies fail: 7 Reasons Why Ad Agencies Fail and 3 (More) Reasons Why Ad Agencies Fail. These were unfortunately bummer topics focused on the factors of failures. I appreciated the feedback I received on those earlier Strumings.
However for a little balance, I thought it might be helpful to articulate the qualities of successful agencies. Agencies that do most of the following things well are generally very successful. So here are 10 reasons why ad agencies succeed and flourish:
1. They have a focus and a reason for being.
Too many agencies, large and small, want to do “everything” for “anybody”. An agency who knows who they are and delivers a focused product, service, etc. is far more likely to succeed
2. They do good work.
This is highly qualitative, but they are not satisfied with mediocrity. They are proud of the quality of their thinking and deliver it consistently. (But beware of thinking too highly of yourself)
3. They hire talented people and help them grow.
The team with the best talent wins. For an agency leader, there’s nothing more important than recruiting talented people. Talented people create opportunities and business and modest talented people are “arsonists”, they start fires where none existed, purposely or not.
4. They respect their clients and don’t look at them as the enemy.
Agencies who look down at their clients, and who have a know-it-all attitude become ex-agencies.
5. They have an ongoing and proactive business development effort.
They have a defined ongoing process of soliciting clients that they seek. But they do not “pitch everything”. In fact they seek clients whose size, kind of business and culture are a good fit.
6. They are known as a good employer.
One of the ways to retain your best talent is to be a good employer. Pay fairly. Offer appropriate benefits and develop a strong culture.
7. They have a longer term view of their business.
They do not react to the urgency of the moment. They operate their firm with a longer view of who they are.
8. They end bad client relationships.
They have the courage to end a bad client relationship and appreciate that a bad relationship can be a cancer in the agency.
9. They respect the value they bring clients and charge accordingly.
You respect what you pay for in life. There is little value in being the “cheap” agency. In fact there will always be someone who will be cheaper.
10. They are well managed businesses.
Some agency leaders are poor business people. They don’t know a balance sheet from a balance beam. And they don’t appreciate that cash flow is just as important as your P&L. Good leaders are astute business people. But they are not obsessed with the #s. They manage with wisdom and vision and the results are an outcome.
So there you have it. Ask yourself honestly, does your agency have these qualities? You may not get an A+ on every dimension, but on those where you are falling short, start working on improvement.
Good luck.
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