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This question has been closed, and points have been awarded.
Pros And Cons Of Full-service Advertising Agencies
Posted By: StarsDie on 7/27/2005 11:11 AM (CST) 250 Points
Hello,

At different jobs, I've been using some one-time services from the full-service advertising agencies, and I also have been using different services from creative, outdoor, btl etc. agencies separately. But I never tried to use the full range of services from one and the same full-service agency. For some reason, I like to choose the best service at the competitive price for every need. I like to work with a few companies, I can order their services again when I have the same need, provided I was satisfied with their services in the past. If there is some new way of advertisement needed, I make a tender and find the best company among a few again.

But my question is: if it is more convenient, more money-saving, or let's say - easier - to work with one and the same advertisement agency and receive the full service from them, or is it still better to work with several companies on different issues?
Is there anything to illustrate well all cons and pros of the full-service?

If you're working at the advertising agency (be it full-service, creative, promotion, media, etc.) - please illustrate your advantages/disadvantages.

If you're a marketing person and work with advertising agencies - please share your thoughts as to what types of agencies are more attractive in terms of partnership, judging from your personal experience.

Thank you very much.
Yaroslava

Posted by: amandavega Accepted Answer
7/27/2005 11:23 AM (CST)
Hi Yaroslava,

This question speaks to exactly why we are set up the way that we are in this space. We are technically a full-service agency, providing everthing from billboards to interactive. However; we only keep 10 in-house employees, more for the operations and internal marketing, as well as some technical work for things such as site design and email marketing.

When i set up the agency 7 years ago, I was coming from the same perspective that you are now. Hence the reason I followed a true consultancy model, such as McKinsey and Company, where we work with contrators, vendors, and employees to create the best mix for each client. When we engage with a client, we do a full analysis of their needs and then use our resources to pull together a team that then we manage internally.

For example, when working with Banana Republic on creating their email campaigns and tying them into their print ads, we knew based on their historical work that creative and artistic design was much more important to them than high-tech tracking (even though we gave them that as well.) What I'm saying is that we had to look at our creative resources and realize that there are some designers in our pool that have a much better eye for the high-end fashion stylings of Banana, and it made sense to use him rather than another designer that is better equipped for say software ad development.

For another client, we may call in a media buyer or a PR agent that we recruit from a competitor as well. That way, we have a head start on market intelligence and strategy. That seems to work really well for us as well.

So, I say that it's good to use multiple vendors if you can manage the complications will billing and creative strategy. When using multiple agencies, we find that the biggest flaw is that none of them communicate with each other and you end up with random messaging and confusing branding. The agencies all have strengths and weaknesses.

Have a great day! Feel free to contact me if you have any questions.
 
Posted by: HDuong Accepted Answer
7/27/2005 11:51 AM (CST)
We have a full service interactive agency but realize that at the end of the day it is all in the perception of the advertiser.

If the advertiser sees value in convenience than he/she would use the full service...if specific perception in quality is more of an importance to an advertiser than it is best that agencies work closely together to maintain consistent branding.

The advertiser needs to really be a leader in this case as he/she needs to continually manage the standard of delivery from multiple agencies. This may not be the most convenient situation to be in but the advertiser is really adament about this process than there is no way around it.

Amanda has many good points as the potential hazards of using multiple agencies. At the end of the day the advertiser needs to make sure that he/she is comfortable with the process and agrees with the results.
 
Posted by: jmueller* Accepted Answer
7/27/2005 1:02 PM (CST)
Okay, all ad agency owners will want to shoot me, but I think you may have an advantage working with a few different agencies-for now.

Keep in mind, I am the owner of a full-service ad agency!

The reason for my thinking is this-my agency is full service, but there are a few things that we do much better than others. We do tv, radio, print, direct mail,
web design, ect.. However, we are best a tv/radio commercials and direct mail.

We are generally the most competitve rate on these few things and we are recognized locally for our work. However, if someone were to want brochuere work done, we could do it-but we wouldn't be the least expensive and we wouldn't be the necessarily be the best. We frankly don't do them enough and would outsource some of the work-thus making us more expensive.

So, you gain an advantage by using an agency for what they do best and get the best rate, and using another agency for another need. Certainly there are price breaks assoicated with being a contracted client, but until you find an agnecy that can meet all of your needs with exceptional quality and creativity at a competitive price, than utilize a few. (3 at most). Frankly, A LOT of work is out-sourced anyways by small and mid-size agencies so you are just paying the middle man.

I say this hoping you keep this in mind...your ultimate goal should be to find one agency that can meet all of these needs. The single best advantage of finding one agency to do all of your work(it will take a lot of trial and error) is to find an agency who understands you, your goals, your direction and your desired message and style. This kind of relationship is only developed over time but will cut down on a lot of your time in the future.
You will be able to call your rep and communicate very quickly what you need. Because your rep will know you and your style so well, they will be able to communicate it to the rest of them to present you with a final product worthy of your approval. What "agressive campaign" means to one person mean something completely different to another. I have one client who claims to love funny, catchy ads-but in reality he doesn't. He just thinks he does. I presented him a lot of "funny" ads that he hated until I figured him out.

So, use a couple but keep looking for the "one."
 
Posted by: adammjw Accepted Answer
7/27/2005 2:09 PM (CST)
Yaroslava,

You have been given some really good points to consider.Let me add 2 cents to it and anwer your questions:
Is it more convenient to work with one agency-yes
Is it easier -yes
Is it cheaper- quite often not.
I think the issue mostly boils down to the question if this one selected agency can and will fulfill your expectations and offer real value you need.If this is the case than I see no point in splitting hairs.Of course you will parhaps pay a bit more for leaflets,gizmos or promotional materials but if it's the price to be paid for consistency of your campaigns-it's worth it.The case is to find a partner who will really understand your needs and values you want to put before your public.

Adam
 
Posted by: mgoodman Accepted Answer
7/27/2005 6:48 PM (CST)
The value an agency brings is a function of the people involved. If you have a great account exec and a talented creative team, use them for everything they can do for you. If they are only good at one or two things, then you'll have to use multiple agencies.

Remember that what you're buying when you hire an agency (or several agencies) is creative talent. Some agencies may have assembled people who are talented in almost every area. If you can find one of those, you don't need multiple agencies. Or you might find an agency with a teriffic account exect who has a comprehensive Rolodex, and he/she can bring in the best talent for each need. Great! Use that agency (as long as the account exec stays on your account).

Most of the time, you'll need multiple agencies. The folks who are great at television or radio advertising, or print, may not be the best at new media or direct response. An agency that's really good at PR may not be so good with traditional advertising, etc., etc.

If the convenience is more important to you than having the very best people working on every facet of your marketing program, then it may be worth hiring an agency that does B or B+ work on everything. If you want A+ across the board, you'll probably need multiple agencies.
 
Posted by: jwinsper* Member Response
7/29/2005 12:11 AM (CST)
I have run large agencies ($260M), worked at large agencies ($6B) and have started two smaller agencies ($0).

Full-service is a "fat word". In all cases, each agency was positioned as full-service.

Be clear on what you need for help, near- and far. In some cases the cost to switch or manage multiple agencies can be quite dramatic - including transfer of equity and knowledge between team members, integration of ideas, collaboration, and the learning curve amongst new team members. These "soft costs" do not show up on a spreadsheet, but can become ugly for any marketer.

The cost of hiring a firm is the cost of hiring a firm! If you only need 3-4 core members to get 80% of the work done, it doesn't matter if the agency is 10 people or 100. Look at the FTE costs in the scope. Because in either case, the larger agency simply taps into who they need for the 20% balance; and in the case of the smaller agency, they outsource the work. In some cases the infrastructure and operational costs at larger firms are so spread out, they sometimes can be as price competitive than a small one.

A few rules to govern by:
1) Are they focused on your business sector?
2) Is the team you are hiring REALLY the team that did past and presentation work
3) What % of the team you are hiring will be dedicated to the work (again, review FTE analysis)
4) Will you outgrow the agency - and if so, does the partners have the experience to staff up qucikly to have the agency grow with you?
5) Is the firm able to produce a big idea that can cut across all media channels --even if they do not have the in-house capabilities.
6) Do you really care if you have a locked fix fee and each agency is competing on the idea versus the cost?
7) Are you prepared for the pro's and cons of a project-baed versus a retianer-based model.
8) Large agencies are really made up many smaller agencies or departments
9) Be direct and honest with the partners - that's refreshing
10) Hold them as accountable as if your livehood depends on it, because it does.

Thank you for your time.

Jeff Winsper J. Winsper & Co.
 
Posted by: StarsDie Author Response
7/29/2005 10:06 AM (CST)
Thank you very much for your quick and valuable feedback, everyone gave his/her own viewpoint, and they are different, once again :)
I think I will use the model "use a couple but keep looking for the "one" introduced by jmueller, cuz for now, it seems the most appropriate for me.
Special thanks to jwinsper* for the rules.
I'm not closing the thread yet, just in case there will be some more posts to add.
Thank you all once again.
Yaroslava
 
Posted by: Shelley, MProfs Moderator Response
8/1/2005 4:21 AM (CST)
Yaroslava, when you close your question, please do NOT award any points to jwinsper. Jeff has cancelled his MarketingProfs membership, so he is no longer an active participant in this forum. Even if his answer was useful to you, the points will be unnoticed and unappreciated.

Thanks!
 
Posted by: StarsDie Author Response
8/1/2005 6:24 AM (CST)
Okay.

Since there are no replies anymore, I'm closing the thread to give more space for new questions.

Thank you all for your answers.
And good luck in your business!

Yaroslava
 


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