Question

Topic: Advertising/PR

Should I Be Using An Ad Agency?

Posted by Tracey on 1000 Points
My question is: Should I be using an ad agency or media buying agency, AND, what are the pros and cons to consider?

Here's the background:
I work for a very small CPG manufacturer. Compared to most players in our category, my advertising budget is tiny - around $1.5 million for next year.

We market to women. $1.5M doesn't buy much when you're looking at ads in pubs like Cosmo and Glamour. So instead I've chosen to focus on smaller and more regional pubs that target our demographics more specifically.

What advantages would using an ad agency give me, vs. just buying the ad space myself? (We have designers and copywriters already). And what are the cons?

Are agencies able to get much better discounts on ad space? Are they incented to drive you towards higher spend on fewer ads (working on commission on the ad buys)? And, typically do ad agencies take a strategic role in your advertising program, and if so, do they charge on top of the commission they're getting on the ad space (if they work on commission, that is)?

Thanks in advance for your insights!
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RESPONSES

  • Posted on Accepted
    My experience has been that a good media buying service, or a great media person at an agency, can often sniff out bargains that I would probably miss on my own. Their greatest value, in my opinion, is that they can often plan a campaign better than I could myself. The actual buying process is probably nothing special -- enough to justify their fees, probably not a lot more.

    The advantage of an advertising agency -- if it's a good one -- is the creative product. There's a lot more leverage in great copy than in saving 10% in media spending.

    When it comes to strategy, though, I wouldn't trust an agency or a media buying service. I'd either do it myself or find a consultant with demonstrated experience (and success) in CPG.

    Are there exceptions? Of course. But generally speaking you or your consultant need to accept responsibility for the strategy. Your agency should be charged with delivering brilliant creative that meets the specs in your Creative Brief. And the media buying service should plan and buy the media.
  • Posted by Tracey on Author
    Thank you both! I have a follow-up question - do media buying agencies get paid on commission by the publications? And, do they identify publications for you (e.g., I tell them all the demographics and regions I'm looking for, and budget, and they give me a list of pubs)?
  • Posted by Gary Bloomer on Accepted
    Dear Tracey,

    Do you NEED an ad agency?

    My gut says no.

    If you're happy with your in-house creative staff and their output, USE THEM!

    I've spent MANY years working as an in-house creative and there's always been some nonsensical notion that creatives in a "proper" agency are somehow better, somehow "superior".

    My take on this is that it's utter bullshit. NO ONE in the outside world knows your products and customers the way you and your in-house creatives do. NO ONE.

    True, "fresh eyes" and all that CAN add insight, but it's insight that can, at times, come with a hefty price tag.

    I vividly recall an outside designer producing a logo,
    the self same idea for which I'd put forward two years earlier. My idea died. But because the company was spending $16,000 on the outside designer, they were somehow seen as "better".

    This kind of thing happens to in-house creatives again and again and it seems it's only a good idea if a great deal of money is wasted, which again, is another example of managerial BS.

    Michael's comments above?

    "The advantage of an advertising agency -- if it's a
    good one -- is the creative product. There's a lot more leverage in great copy than in saving 10% in media spending.

    When it comes to strategy, though, I wouldn't trust an agency or a media buying service. I'd either do it myself or find a consultant with demonstrated experience (and success) in CPG."

    HEAR, HEAR!

    Gold!

    The key phrase in the first paragraph is "if it's a good one". I've worked with ad agency staff who were prima donnas and these you DO NOT want!

    In the second paragraph, the key phrase is "When it comes to strategy, though, I wouldn't trust an agency or a media buying service."

    As for your follow up question, you might not want to get too bent out of shape over who charges a commission for what. Forget about commissions, focus on RESULTS.

    What results have these people delivered for other people in your niche or in similar niches? Talk to THOSE people to see how they felt about the agency in question.

    If you're dead set on going outside, away from your in-house creative talent, when it comes to you spending your $1.5 million, you want to talk to the organ grinder (the CLIENTs of these shops), NOT the monkeys (the reps and the creatives).

    I've witnessed tales being spun to clients that simply were not and never were true. Over promised, under delivered creative work always counts on someone signing off on the creative work, which then bombs, which then raises questions as to WHY THE ADS SUCKED? At which point, the finger of blame is turned to the creatives, or the alignment of the planets, or at the time of the year, or at the focus groups, but seldom at the agency.

    As for media buying, there's an art to playing one publication's rate against another's that can, if it's pulled off with style, save you a bundle.

    But here's the thing about all this talk of agencies and whatnot.

    What will your ads say and to whom will those ads say it,
    and about what? How long will those ads ENGAGE your reader? THAT'S of far greater importance than the agency
    you shop with.

    All of which suggest to me that you might, just might be
    better off AVOIDING press ads altogether and going instead with a series of targeted mailings that talk to individual buyers about their specific needs.

    But that's a different answer to a different question.

    I hope this helps.

    Gary Bloomer
    The Direct Response Marketing Guy™
    Wilmington, DE, USA

  • Posted on Accepted
    To respond to your follow-up question, the media buying agencies with which I have worked do NOT get paid by the media. They charge the client a fee that is based on the total spending level.

    One quick example of the value of a good media buyer: I was acting as the CMO at a family-owned CPG company (not my family). We used both radio and TV for our advertising and had national distribution (in the US). (We also had an active online marketing person, but that's another story for another day.)

    The media guru looked market-by-market and region-by-region to find out where local cable tv is less expensive (against our prime target audience) than radio, and put together a very clever "patchwork quilt" media schedule that got us 40-50% more media exposure without spending an extra dollar.

    I'd never have been able to do that myself. And it increased our market share by 25% in less than a year!

    And the creative was quite effective/persuasive ... developed by a small agency using a freelance creative team who were really good. (They learned their craft at a large NY advertising agency.)

    I prepared the Creative Brief and provided strategic guidance and direction for the project. Our inside design/copywriting talent was great for packaging and merchandising material, but we didn't have the confidence that they could deliver A+ radio/television advertising, production, etc. Hence going to the outside agency.
  • Posted by Tracey on Author
    Thanks all, very helpful and timely answers. I plan on keeping the creative in-house; ours is a niche product and we understand it, and our customers, much better than an outsider could at this point. We will also be running online advertising as well as one-to-one marketing involving direct mails, sampling events, etc. That is our bread and butter.. but we are new to actual print advertising. Thanks again and have a great weekend!

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