How to get the best ROI out of your Ad Agency

Confessions of an Advertising Man was originally published in 1963 by David Ogilvy, and 55 years later, his words still glisten. Since its original publication, Confessions has sold over 1 million copies, and is required reading for practically every advertising class in the United States. I encourage you to read this book immediately, not just if you are in marketing or are a business executive, but also if you are anyone who intends to do anything of consequence during your short stint on Earth.
There is little that can be said about advertising in 2018 that David Ogilvy didn’t already say over half a century ago, including Chapter 4, entitled ”How to Be a Good Client”. Nevertheless, I offer a modern adaptation to help you maximise the return on your advertising expense, via the proper care and feeding of your ad agency. Here it is in 10 Steps:

 

1. State a Clear Goal

 

It is stunning how many businesses, large and small, cannot succinctly articulate how they will measure the success of their advertising. Just like any other goals – keep them SMART (Specific, Measurable, Achievable, Realistic, Timely).

Acceptable Example KPIs:
• 100,000 new customers this year at a $100 CPA
• Move from #3 to #2 in our category in market share by the end of June
• Increase ROAS from $2.12 to $2.47 by EOY

Unacceptable Example KPIs:
• Discover new channels that deliver a $20 CPA on our $1000 product, just like the two affiliate deals we have in place that yield us four customers per year – but make it super scalable.
• Find new scalable acquisition channels that will achieve our ROAS goals, but make sure they are only places that match our desired customer profile, not our actual customer profile, and that have 99% overlap with the political and religious beliefs shared by our executive team, board, and friend circles. Also, make us popular in the South.
• We’re still discussing our KPIs internally, but we need to get this campaign started by the end of the quarter, whether we know our KPIs or not.

 

2. Share Data

 

Engaging an agency without data transparency is like asking your Uber driver to shut off their phone and put on a blindfold. If you want excellent planning, reporting, attribution – aka, good work – you must not hold back. Once you select your agency, finish the trust fall and share. Also, it helps if the numbers are
accurate. Marketing is expensive, so get your best people on this; the only thing worse than no data is the wrong data. You would simultaneously vomit and cry if you knew how many millions of marketing dollars go wasted on account of poor data management.

 

3. Set & Manage Expectations

 

Much of the burden here is on your agency to manage your expectations. They should never get a pass. But please, don’t expect mind reading either. If there are assumptions you make about things like risk tolerance, brand affiliations, time horizon on payback, you must communicate those early and often, so no one is ever surprised.

 

4. Make sure it’s a culture fit

 

Advertising is hard. You must invest so much of yourself, on top of the financial commitments, to achieve your goals. It’s ok to want to feel connected to your partners. Some people want nothing but facts and numbers; other people value the soft skills. Communicate those preferences to agency leadership early in the relationship because most of the time, they can find the right match to work on your account.

 

5. Demand Buy-In

 

You want your agency to be strategic. You want them aggressive. But first, they must believe. Make sure that your agency and your support team understand your mission, your vision, and your values. Make sure they know how the sausage is made. Invite them to events where they can meet your customers. Let them work your customer service line and sit in on company events. Your agency should be an extension of your team.

Your agency should also use your product or service if at all possible, and even if outside of the target demo, they should still be passionate enough to recommend to people they love. The passion they feel for your business will make them fight harder to make you successful when they are part of your story.

When Oxford Road was just a side hustle, we had the pleasure of launching Dollar Shave Club’s first Podcast test. Sadly, we were too early in our development to keep them as their business scaled and consolidated their marketing partners. Years later, I feel some sadness every morning when I shave. Even still, it is better to have loved and lost. I’d like to believe that deep connection played a small part in their now famous growth story.

 

6. Demand Leadership

 

We have a neon sign in our office that says “Here’s what we need to do.” If we are to be nothing but order takers, you should not hire us. A real agency should bring strong POVs even if they disagree with you. Especially if they disagree with you. Do not train your agency to be order takers. When they challenge you, embrace it. In fact, reward it. If they are too agreeable, speak up. The greatest asset your agency can bring is a strong recommendation, grounded in data, with the ability to execute.

 

7. Acknowledge Your Blind Spots

 

Don’t fight it. You have deficiencies. You need a strong agency partner who won’t let you backseat drive them off of a cliff. Maybe you are too in love with your brand, so you sacrifice performance. Perhaps you are too short-sighted and believe all performance happens in real time. Part of having a partner is trust, and to be successful in advertising, trust you must.

 

8. Manage Agencies Like Employees

 

Let’s face it; they have a lot in common. Often your relationship with your partners -agency and employees alike- represents jobs on the line. Many of the same rules apply. Give your partners clear expectations about how they are measured. Let them know periodically how they are tracking against your expectations. When they fall short, let them know. Coach and encourage them. Give them some freedom to fail. Don’t micro-manage. If they have performance problems that might threaten the engagement, tell them so, and in no uncertain terms. “I need you to do X, by Y date, or Z will happen.” Never blindside. If you fire your agency and they are surprised, chances are you failed in your management of them. And if you must cut ties, ask yourself, “Can I still use their services for work within their skill set, while giving other parts of our business to a different firm?” Many times your current agency will work comfortably and successfully in tandem with another shop as your needs change and will work just as hard, grateful for having not been discarded. Lastly, if you must cut ties, think about it like your employees. The longer they’ve been with you, the longer you want to take to wind them down. Remember, families depend on your business, so don’t quickly cut and run from a partner who has faithfully served you and your team.

 

9. Over Communicate

 

The best way to get what you want, and not have to go through an unnecessary breakup, is to be loud and clear. If your agency is falling short, don’t be passive-aggressive. Some advertisers may make snide comments or casual digs, but never actually address the issue head-on.
If you’re unhappy, give the relationship the respect it deserves. Call a meeting with the stakeholders, not just your POC, and state in crystal clear language where there are areas for improvement or relationship-threatening trends. Schedule time to revisit and benchmark progress against your concerns. It takes work, but you’ll get better performance, and feel better in the long run, knowing you were diligent about what you could control.

 

10. Follow the Golden Rule for their P&L

 

You want your agency to fight to the death for your profitability and growth. So why are so many advertisers so aggressive in negotiating the fees of those that serve them? Remember: a highly profitable agency is lucky to make 2 cents in profits for every dollar of media you spend. Many times it’s under a penny. Also, consider that a good agency can help you double the performance of a mediocre one. A great agency can double the performance of a good agency. The fruit of a great agency partner can help you take a market leadership position and cause sales to skyrocket, and profits along with it. So why be stingy with a partner who can help you earn 100X their fee? Why tempt a great agency to put their B-Team on your account because they’re worried that you’re putting them out of business while they serve you? The most reasonable but uncommon thing to do is stay focused on your goal. Be clear about it. Rather than grind your agency on their fee, be generous. When they surpass your goal, bonus them, just as you would a key employee. Service businesses are so easily kicked around. Be the one that inspires them as a partner to do their best work and stand shoulder to shoulder with you as you best your competitors and surpass your goals.

In closing, set goals, be clear, share information, make demands, over communicate, share the spoils of war – BUT FIRST, read Confessions of an Advertising Man.

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