Why You Should Use an Advertising Agency

Let's say you're a small business. If you want to become a large business (and a profitable one), you need to grow and reach new clients or customers.

Typically with small businesses, owners and managers are caught up in the day-to-day operations, and advertising often becomes the lowest priority; even though it is the most obvious and accessible tool for communicating your offerings to potential clients.

So you have four choices. You can do nothing and experience little to no growth. You can "wing it," which means throwing some dollars into various media and hoping for the best. You can spend some serious time on your own figuring out your target markets and how to use the plethora of media opportunities to reach them. Or you can hire an advertising agency who can take the burden off your shoulders and, if it's a good agency, should become an integral part of your team and deliver results.

So how do you begin to find an agency? One approach is to notice ad campaigns that seem effective to you. Contact the advertisers and ask for the name of their agency.

Another plan is to ask your various media sales representatives for recommendations. Reps are always interested in helping clients find a good agency because it simplifies their work.

A third option is getting a list of agencies and writing to each of them asking for their information packets. Once you have leads, you should explore some basic areas with each.

The first is to determine the experience an agency has in solving marketing problems similar to yours. This does not mean that the agency necessarily has expertise in your specific industry. Sometimes it's far better if they don't. But if you are a high-end operation, look for an agency who's handled upscale high-quality companies. If you are a discount company, look for someone who's been familiar with discount stores. The strategies and approaches are very similar.

The second area of concern lies in developing a comfort level with the people at the agency. You need to establish a solid relationship built on trust, respect, ability to communicate, and confidence. You will have to reveal details about your business in order for the agency to understand your unique needs and help you establish your directions. If you're not willing to share this type of information, then perhaps an agency would not be a good idea for you.

Advertising agencies serve a variety of functions involving market research, ad production, and media buying. But the agency must integrate these pieces of the puzzle into a total marketing plan that brings the advertising together with your on-site sales, operations and philosophies. The "campaign" needs to carry through into every aspect of your business. However, in order to accomplish this, the agency needs to be given appropriate information from you about your business, its goals, and its future directions.

One major thing an agency will do is professionalize your approach to selling your product or service and the good agencies will use your advertising dollars more effectively for more tangible returns.

The media strategy is a critical area and one that an independent business has difficulty understanding. It's the agency's business to know the segmentation of the various media. Radio stations are constantly merging, changing formats, and developing new niches in the listening audience. Magazines and newspapers have also become less general-interest and more specific in their targets. Buying time or space is very complicated. The good agencies know where your dollars can be invested most efficiently to reach the audience you want.

So what does an agency cost? This may vary depending on your needs. If you are contracting for "full service" and are using all services including creative, media buying, production, and trafficking, you will obviously pay more than if you are only looking for creative services and not any media placements. In any case, you may pay on a standard commission basis or on a retainer fee or a combination.

Standard commissions run 15 percent of the media budget. In other words, let's say we, as an agency, place $1,000 worth of spots on television for a client. The television station bills us $850 for the spots because we are an agency eligible to a 15-percent discount. We bill the client the $1,000.

If the client were to place the spots directly, the cost would be $1,000 unless the business established an in-house agency. However, with some clients who have very small media budgets, an agency may establish a retainer fee in combination with a commission in order to better service the client. The bottom line is to select a means of payment that is mutually compatible to both client and agency.

One of the bonuses of working with a reputable results-oriented agency is that you will be made to be more serious about your approach to selling your product or service. The agency's expertise can help focus your attention by asking provocative questions to understand your business better and to serve you better.

Sealfon & Associates is a full-service advertising agency in Naples. If you have any questions about advertising or marketing, contact us at PSealfon@aol.com, and we'll be happy to answer them in future columns."