Choosing an Advertising Agency: Why You Should Go Small

October 25, 2016 Advertising Questions

So you’ve made the decision to use an outside advertising agency to manage your advertising program. Now, the next decision is to figure out which agency to go with. This is where it gets dicey. There are many factors at work here, such as Small businessman hitting giant legs of another with hammer. Small business against big. Office confrontation. Disobedience.the size of your company, the type of advertising you want to do, and how badly you need to impress your CEO/board. The reason I mention this last point is that for some marketing directors, it’s an easier sell to pitch the big ad agency and mention their Fortune 100 client list than it is to sell the small, dynamic ad agency.

But there are some advantages to going with a smaller agency.

Flexible Creative

Big agencies have a certain way of doing things. They take each client and apply the same or similar strategy using the media mix that they use for every client. The reason is that they are beholden to meeting minimum net margin numbers each quarter. Therefore, they can’t really stray from the formula and do anything different.

By contrast, a small agency is flexible enough to look at each client independently and come up with a unique strategy that is tailored specifically to that client and their goals. Each of the agency’s employees routinely broadens their skill set to learn new advertising channels in order to meet their client’s goals.  This is often the case where a client’s budget necessitates getting the most bang for the buck.

Local Knowledge

Small agencies, especially ones with local clients, have intricate knowledge of the market. They have experience in knowing what works for the local demographic and what doesn’t.  From experience, they know that, depending on the product or service that their client offers, they’ll target news, weather, traffic, sports or local/special events. This ensures the highest live audience consumption and the best demographic fit.

Flexible Media Buys

Most agencies, especially large agencies, buy annually and they buy to reach certain GRP (Gross Rating Point) goals. They use SQAD (the industry standard media forecasting source) to look at local CPP (Cost Per Point) and then adjust down to find a decent rate. They also look at program demographics and product demographics to determine a good fit.

Smaller agencies, again focusing on local markets, don’t have to go by forecasts to determine rates. They know what a good rate is and can pass that on to their client.  They are also tapped in to the local stations. They have relationships with key people at these stations and are able to get the first information on whether there are opportunities for lower rates or special purchases.

The Bottom Line

Marketing Directors need to decide what is most important: is it making the higher ups comfortable by selecting a big name agency, or is it to focus on the creating brand awareness and improving market share. Most times, going with a smaller agency should be the obvious choice.