Why buy a five-bed agency when a two-bed will do?

Perhaps it’s New Year fever, but whatever it is, I have been struck by the number of rumours going around about advertising agencies within homebuilding coming up for review. You know the kind of thing, “time for a change”, “need a new direction” etc.

I have also been struck by the great sense of anticipation that you can see in the eyes of people making such statements. It seems that “Cometh the new advertising agency then cometh the new dawn in our company’s evolution.”

But finding a new agency is a stressful business and should not be entered into lightly.

Indeed, some have likened it to buying a new home. You start out full of enthusiasm. You meet one or two new prospective agencies; you get confused by their strange approach and their lack of understanding of your needs. After a while they all begin to look and sound the same, you can’t tell one from the other and you wish you’d never started.

Which brings us to the first two rules of choosing a new agency:

An old friend, David Wethey of London based Agency Assessments, gave these two rules to me. Agency Assessments specialises in matching clients with agencies. David will handle more pitches and fee negotiations in a month than most marketing directors will handle in a career. His personal top 10 list of the biggest mistakes you can make with an agency are shown in the box opposite.

Sue Little, managing director of McCann-Erickson Manchester - one of the UK’s leading agencies agrees. “Decide exactly what you want. Don’t necessarily get taken in by the glitz of the big league agencies - why end up with an expensive five-bed mansion of an advertising agency when a two-bed terrace will do?”

In Sue’s experience many marketing directors don’t understand what they want. They embark on a fairly random search hoping that along the way some divine guidance will be forthcoming from one or more of the visited agencies. They often end up disappointed.

When you have decided what you want, get it down on paper. An agency is only going to be as good as the brief it gets. Do put lots of effort into telling them about you. Most people seem to think that the process is all about agencies presenting their credentials. The most important presentations are the ones the client makes to the contending agencies.

And don’t just tell them about your product, brand, services, USPs etc. Tell them about your organisation and how you expect it to be serviced. If you are a national homebuilder with operating regions and you expect each region and its developments to be serviced by an account management team, then tell them.

If you expect to make changes on Monday to this Friday’s ads then tell them. In fact any builder that relies heavily on high volume regional press advertising should major on process issues at first and not get hung up on the creative side. Fantastic creativity will not make up for an advertising process that consistently fails to deliver ads on time, to cost, to specification and to the right newspaper. The world is full of great creative agencies - most of the best are right here in the UK - but in my experience there are few that can operate the kind of factory processes required to run a high volume national/regional housebuilder account.

It is amazing how some companies change agencies just because they have been shown one great creative idea. Deciding on a new agency is a financial decision as big as purchasing a piece of land, especially if you are looking for a long-term relationship. You must be convinced it is going to be a good investment. Can the agency show that they have been able to evolve their creative approach with clients over time?

Sue Little believes that more time should be spent obtaining references from current clients. She finds that very few prospective clients ask if they can contact current clients yet it is a simple process and most clients are happy to be asked. As Sue says, many companies put more effort into checking out one new employee than they put into checking out a new advertising agency,

You can build a great professional relationship with an agency that is doing a good job for you. But there is no point in making a big chum of a guy whose agency simply isn’t good enough.

Do look behind the scenes. How does the agency administration operate? Can you understand the invoices? Can they invoice to your specification?

There is frankly nothing worse than getting into bed with the agency of your dreams only to have your marketing departments constantly moaning that interpreting the invoices takes up more time than any other advertising function. Believe me, it happens.

If you want your agency to become a strategic partner helping you to drive your business forward then acknowledge that the relationship will have to be very open. You will have to allow the agency a fair amount of access to your business. If however you are only looking for an “execution-only” type relationship then make this part of your brief.

Finally two more sensitive issues – remuneration and exclusivity.

Be straightforward with regards to your budget and expectations before you go too far down the road. Remuneration these days is moving away from a pure media commission-only basis as most clients want to be sure that their agency is driven by what is best for them and not what’s best for their own remuneration or commission.

Sue Little suggests that you may not get all-encompassing advice from a purely commission-based agency. But again it depends what sort of relationship you want. If you are after a “do what I say”, execution-only relationship with your agency then commission-only might be the best for you.

Years ago clients wouldn’t dream of sharing any part of their agency with a potential competitor but today it is getting blurred. There is at least one agency handling regional car advertising with more than one competing client. As long as the account team is exclusive then this can be an attractive option.

You might worry that your competitors will copy your strategy but at the end of the day homebuilding is a very visible market and your strategies are out there every Friday in the local paper. You can be copied within a week.

Malcolm Pitcher is a director of PCL, a consultancy specialising in marketing strategy, brand strategy, culture change, change management, marketing research and customer satisfaction monitoring. Before starting PCL, he was marketing director for Wimpey Homes and held senior posts with Volkswagen and Honda. PCL can be contacted on 01666-510813, e-mail: info@pitcherco.com