Back in the late 1990s I was working for a major record label when Napster hit the industry like a doomsday asteroid. Peer-to-peer file-sharing was about as popular as the bubonic plague among label executives and yet consumers immediately saw P2P as an opportunity to acquire music they were passionate about in an efficient and (unfortunately for the labels) less-expensive manner.
A few years later I had landed at a marketing agency who was contracted by a major New York area newspaper to reinvigorate the brand. Craigslist had been systematically winning its high profit margin classifieds business and they were fighting hard to get it back. Consumers generally expressed an affinity for the newspaper’s brand, but when push came to shove the ease-of-use and lower cost of Craigslist had just too much appeal.
When you’re operating within an entrenched business model it is often difficult to realize when the ground has begun to shift beneath your feet. While technology can sometimes be disruptive, what has caused the most significant problems for the record labels, newspapers and other industries like it is their general lack of acceptance that their customers’ behavior has irreparably changed.
The same situation now faces advertising agencies. The nature of the economy has shifted spending patterns among consumers and therefore advertising and marketing budgets have also adjusted. The high premium that companies once paid to agencies to be at the ready at the drop of a hat with expensive brand building and market share winning campaigns have largely gone away. Its one thing if you’re an agency servering multinational brands that are willing to put up with inefficiencies in exchange for worldwide capabilities. But if you’re a boutique national agency or regional shop, unless you can generate real results in the near-term you will have a difficult time in the marketplace.
So, you get it – the agency business is not for the weak of heart. But for every struggle there’s opportunity; and for those agencies willing to shift their perspective now is a great time to win new business. Over the last few years brands have learned to live on limited resources and reduced staffs. While in the long-run they may increase the size of their internal marketing departments, for the near-term they’re much more likely to grow through outsourcing to agencies that can act as an extension of their organization.
Larger brands are also increasingly looking for new approaches that generate near-term results and are informed by data. Like in politics, these days its difficult to be an incumbent. Small and mid-size agencies are in a great position to win new business by being the smartest and most creative people in the room.
Lastly, technology has made it significantly easier to establish relationships with decision-makers. All sales opportunities occur at the interception of discoverability, credibility and timeliness of need – and social media, content marketing and other types of digital strategies have made it much easier for agencies to be on their prospects’ radar.
While the exact mix of strategies and tactics will vary depending on your situation, know that now is a great time to be in the agency business. The budgets are there and brands are spending. You just have to have the right business development program in place to get the RFP.