Clients have started asking “are there any ‘Tangible Results’ from this expense?”
Many advertising agencies are starting to hear more and more that they are too expensive. Having worked with many of them we know their rates are reasonable.
The question is how can our industry overcome this objection and convert more doubters into believers? The economic downturn has pressured clients to trim expenses and assess the value-added contribution of their agencies. Most agencies have had their fees questioned and many have experienced the discomfort of fee/rate audits. Often agencies are responding with examples of results achieved and service quality, and question the appropriateness of this examination.
But this view overlooks the client perspective.
While the marketplace has become more tactically driven and project-based, many traditional agencies have not adapted their organizations and services to match the needs of the client.
To be effective and profitable your agency needs to present itself in a manner acceptable and appropriate for the circumstances. Agencies in this situation must understand that they are in three separate businesses that are often non-complimentary – Strategic & Execution Management & Production. Many traditional agencies have acknowledged this and have launched separately branded consultancies (strategic) and/or separate design studios (tactical). This approach enables a tactical response to an agencies organization and fee structure.
Just one more thought on this ongoing dilemma.