By all indications the business climate in 2016 will be slightly better than 2015. The economy will continue to improve, and marketers will see a little extra budget in their stockings. However, there will be more agencies competing for those marketers. Experts predict about 8 – 10% growth in new “ad agencies” and U.S. ad agency employment is at its highest level since 2001. To make 2016 a great year, agency owners need to refocus their brand around the things that offer the highest value to their best-fit prospects to solve their marketing challenges. Sound familiar?
More competition from more sides
The sluggish economy of the last eight years has taken its toll on advertising agencies. The industry has seen an unprecedented change to stay relevant in this new economy. Many new specialists have come onto the scene and continue to broaden their service offerings to attract new prospects. Generalists have added services to keep up with the evolving needs of marketers. Larger agencies are going after smaller opportunities to keep growing, and smaller agencies are aggressively seeking more business outside of their geography and expertise. Marketers are encouraging more competition to drive down costs, and procurement is undermining and undervaluing agency services and fees.
At the same time, ad spending is expected to increase only 3.3%. In 2016, more agencies will go after the business you want and a broader range of agencies than in the past. Last year I participated in an RFP with 40 – 60 other agencies, one that previously attracted 10 – 12. Imagine the marketer trying to find a new agency – look at all these new choices, so many different flavors, different services, different approaches – I don’t know which one to pick.
If you are planning to grow, you can expect the task to be more competitive than ever. You can also expect your funnel metrics to decline, response rates to dip, increase to wane. More competition from agencies looking to outsmart you means your target prospects will be getting more interest from an increasing number of aggressive agencies. How do you stand out and get noticed?
The agency brand is your best weapon.
The more competitive the market gets, the greater the need for a distinct agency brand. Adobe found that 75% of marketers believed the industry has changed more in the last two years than in the past fifty. Maintaining the status quo of a full service all things to all marketers agency will be increasingly tough to sell. Sure there will be a need but these trends indicate a declining opportunity without differentiation.
In 2016, more than ever, the agency brand must stand for something so that it will stand out from the growing competition of newcomers and peers. Agencies must rethink and articulate what they offer, what is unique or distinctive and differentiating from their competitors, in service offerings, and in verticals, by consumers and channels, that they legitimately have expertise in. That doesn’t mean you have to rebrand as something new or different. It means you have to demonstrate specific value to the marketer that is immediately relevant to their marketing challenge. You don’t have to be a tactical expert like a digital or content shop. You can be a category, customer, or business challenge expert – something you probably already are. Whatever your expertise, you have to make it top of mind as the expert she/he is looking for. You have to be the agency brand they are searching for.
What do agencies need to do in 2016?
It is not that hard. Agencies need to reassess what they offer marketers and focus on that rather than being all things to all people. It can be a tough challenge to separate what has worked in the past from what will work in the future but keep in mind, marketers are doing the same as they plan for 2016. They can’t do the same things over and over again. They are desperate for help from an expert; a specialist in what is challenging their business. They are desperate for you.
Marketers are looking for a better strategy to battle declining response from their consumers, and the shifting role consumers play in discovering, learning and selecting products and services. Marketers get fired when they don’t make their numbers and look to their agencies to figure out how. Agencies get fired when they don’t make their marketer’s numbers. Agencies have to innovate and evolve to be effective in a rapidly changing consumer world. Marketers know things are different. Do they know that your agency is different?
Get out of the agency, find a quiet place and ask these questions.
- What do I do that is in demand now
- What is the market buying today and tomorrow
- Does my brand (website, collateral, pitch deck, social channels, et al.) clearly express what they want
- Who are my best prospects
- Who are the marketers who value what I do
- How can I separate them from those who don’t
- How do I find and connect with them
- What are the best methods to discover, connect and engage them
- Can my prospects find me
Think about these questions for 50 - 100 of the best probability prospects rather than 1,000. Prepare high-value services uniquely customized for their needs. Engage them on multiple channels to demonstrate your understanding, your expertise and the value you alone can provide. Do whatever you must to be top-of-mind when any one of those 50 – 100 prospects begin their journey for a new agency.
2016 will be scary-good
The good news, there will be more money to fight over. The bad news, there will be more agencies fighting for it. As the economy improves, the feeding frenzy will only increase. Agencies who focus energy and resources on only the best opportunities will more likely escape the coming pitchamageddon. Lets Grow!
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