Learning how advertising and agencies work can save you big money... starting today. If you run a Small Business or Home Office and you spend less then $500,000 a year on advertising, sales promotions and point of sale material, you should not be using a large full service advertising agency.

How To Work With an Ad Agency. . .
and Survive

Your ad dollars do not all go to your advertising. Too many will get consumed by the agency's overhead expenses.

On the other hand, effective advertising is not a job for amateurs. Too much is at stake to allow Martha in accounting, who paints by numbers on black velvet, to write or design your ads.

So, what do you do? Pay big bucks for a mega-buck agency or go on your own?

This is the dilemma facing most Small Business/Home Office people today. They, more than the big companies, need the extra professionalism and advice available from the major ad agencies. However, what the Small Business/Home Office operator's money often buys is simply the "prestige" of a big name. Small fish get eaten alive in the big agency pond.

There is a solution. Buy only what you really need from an agency and/or work with free lancers and consultants for everything else. For example, a large ad agency will generally excel at buying media space or time at good rates. Take advantage of that, but negotiate a major discount off the standard 15% media commission with which to pay your freelancer. Did you know that a media buying company will typically charge as low as 3% instead of the usual 15%?

The trick lies in assessing the services your business really needs. If you want someone to write marketing plans, submit numerous ad layouts in finished comprehensive art, develop your strategy, do market research and take you out to lunch as well, any agency will be only too happy to oblige. Of course, there won't be much money left over to run your ads in any of the media, but they'll look great framed on your office wall, and you'll be able to wow your buddies at the club with your knowledge of advertising lingo.

Learn How Agencies Work

First, it is important for you to understand and know the difference between the agency's job and yours as a client. If you do your homework, the agency will do theirs. Otherwise, it's the old garbage in - garbage out story. Only you are paying for the trash removal.

Do Your Homework.

So just what constitutes your homework? Communicating your knowledge of your business and industry to the agency is vital. There are many factors at work in your marketplace and you know them better then anyone else. Take the time up front to jot down a "background" briefing for your agency. It should cover things like your best estimates of market size, competition, trade practices and market brand leaders. If you don't supply this basic information, your agency will have to go out and get it . . . at your expense.

Why Should Anyone Buy Your Product?

What is important about your product and its competition? Who knows better than you? I like to ask my clients a simple question:

"You have 30 seconds to make a one sentence statement.

Now, tell me why should I buy your product?"

The answer often gives me what ad agencies like to call the "U.S.P." or "Unique Selling Proposition." This is what your advertising should emphasize, over and over and over again. Say one thing, say it well, and say it often. People learn by repetition.

Consistency Pays

Do not change the look and feel of your ads just because you are bored with them. If you do change, make certain you have a solid reason. Each change is like going back to the beginning all over again. It leads to confused customers and prospects.

Know Your Competition

There is a very easy and inexpensive way to track your market and competition. This, you should do yourself. Do not delegate it. Subscribe to all the trade magazines and clip out all of your competitors' ads. Send away for their literature. (Use your home address.) Don't just stuff the material in a file. Read it all. Analyze it. Your competitors' ads and brochures represent their marketing strategy and their current thinking. It is much easier to compete if you know what your competition is doing. You can bet they are watching you. As Ovid said,

"It is right to be taught by the enemy."

After a while, you will see patterns emerge. You may even be able to estimate their advertising budgets, which will assist you in setting yours. This intelligence is invaluable to you and your agency. While you're doing this, make sure your sales staff collects all available trade information , competitive deals and price sheets, displays and other pertinent items. These can also provide a wealth of information. And it is all free.

Share Your Knowledge

Do not withhold this information from your agency and don't make them dig for it. The more you teach them about your business and your industry, the better job they can do for you. The result will be much better advertising. The only advertising that is any good is that which leads to sales.

Ad Awards Don't Sell Product

Advertising that wins awards is a sign that the agency is more interested in their prestige than your business. Advertising awards are absolutely worthless to you as a client. If you doubt that, ask your bank manager. (By the way, yes, I have won advertising awards and I still say they are of no value in determining ability or selling product.)

Once you get past the homework stage, there are other areas in which large amounts of money can be saved. They tend to be a little more technical, but it is not difficult to come by a working knowledge.

The Key to Good Advertising

The most important step lies in deciding what your advertising should say and to whom it should say it. All you need to do is decide who buys and uses your products and why.In order to spend your media dollars wisely, you must know what they read or watch so that they will see your ads. Keep it simple. You can easily get into "paralysis through analysis."

Ignore Fads

Forget trendy mission statements and consensus building. That is feminist nonsense that has never sold a nickel's worth of product and never will. Stick to running your business.

Once you and your ad "experts" have decided what to say, it is time to move to the actual physical process of writing and designing, the actual developing of your print ads. This is the agency's job. But you can make it easier, faster and cheaper.

Many of the clients I have worked with belong to the "I'll know it when I see it." school and refuse to visualize from a rough sketch or layout. They insist on a complete set of ads with colour and type set in place so that they can pick and choose. Watching these clients at work is quite a show. It often goes like this:

It is far more effective and much cheaper to work from one or two rough thumbnail sketches at first. Desk Top Publishing technology now makes this stage much more productive. Later, when agreement is reached on the final direction, copy and layout of your ads, a comprehensive colour layout can be produced. But don't do this unless you really need it. It can be an expensive exercise in weaving a security blanket which you can live without.

Avoid Nit Picking

Once production starts on your material, changes to the initial ideas and concept are expensive. Do not nit pick at this stage. Any changes should be significant and of major material importance. Be hard nosed with yourself. Are you the only person in the entire universe who is going to notice that tiny detail? Remember, your prospects and customers will be sold on a quick scan of the ad . . or not at all.

At this stage, once your ads are agreed on, the agency will finish producing the material required by the various publications and other media you will be using. Insist on revised estimates at this point. If you don't you are handing the agency a blank cheque for a possible run on your bank account. Avoid overtime, rush work and revisions like the plague.

No Collateral

At this point, having locked up your advertising budget, any agency worth its profit loving salt will pitch you on producing a whole range of collateral material to augment your new ad campaign. They will argue that they know the creative concept best, so they should be the ones to develop the new brochures, displays, contests and such. Agencies will usually farm the work out to people like me and charge you a commission for doing precious little. Don't buy it. Go direct.

There are many jobs you probably shouldn't ever give to your agency. Printing, point of sale material, promotions, sales aids and the like will always cost you more if your agency produces them. Agencies will tell you that consistency of look and quality justifies their involvement in these areas.

Well, I say "hogwash" to that!

You wouldn't buy all your plant's supplies from one source. Why do you use one agency to supply all your communications needs?

There are armies of suppliers out there who, like me, are anxious to work with you. Use them. Just remember that each of them has a given product to push. You may not have all their special knowledge, but you have your common sense and judgment. Use it.

The Decision Is Yours.

Advertising management, however, is a science. It can be learned like any other skill. The best possible investment you can make to ensure the success of your company's advertising is to learn the basic skills yourself or retain a consultant or hire someone who has them.