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Set to hire an ad agency? What to do before you start

Lorna Shepard

As you narrow your advertising agency choice or prepare for your first working meeting with your new agency, there are a few things that will help you get the results you want and will save you money and time while launching a positive agency-client relationship. You may not be able to provide all of this information to your agency, but if you can deliver at least a few, it will pay back in more effective work from your agency and results for your business.

1. An objective. What are you expecting your marketing/advertising program to achieve? “More sales” may not always be what your marketing program can accomplish. Consider this: If your business relies on a bricks and mortar store, your advertising no matter the medium or the message will not accomplish more sales. Your sales people will accomplish this. However, your advertising can increase awareness (harder to measure) and increase customer traffic to your store (easy to measure). Once new customers are aware of and visit your store, sales are still up to your staff.

Having at least one measurable objective that is directly connected to your advertising or marketing campaign’s impact will help your agency understand what it is you expect them to accomplish on your behalf. If you don’t have a clear idea of what your objective is or how it relates to your ad budget, your agency can help you define it.

Heads up: Objectives without at least a range of numbers (e.g., 5 percent to 10 percent more store visits in one year, 1,300 website visits/month) are not objectives. If you simply want more and your advertising gets you one more, you’re not going to feel great about your advertising investment.

2. A brand proposition. If you know what your product or service stands for and what sets it apart from the competition, you and your agency will have a head start on messaging. Your agency partner can help you define/identify your brand proposition, but if you know it and can prove it is distinctive (you are making a claim that no other product or service like yours can make), you’re ahead of the game.

Heads up: The brand proposition you and your spouse came up with over coffee may not be the brand that your customers know or value. A quality brand is discovered through research from within your company, among your customers and among potential customers even competitors’ customers. No matter what, you have competition even if the competition isn’t as good as your product/service. If you haven’t conducted some form of a multi-faceted brand discovery, be prepared to conduct one with your agency partner.

3. Target audiences. The good news is you don’t need to identify just one, but if you identify multiple audiences you think want or need your product/service, be prepared to prioritize them because I’ve yet to run across the advertising client who can afford to reach every target. Whether you have one target audience or dozens, the more specifically you define them, the more effective your agency and your budget will be.

Heads up: “Everyone” is not a target audience. If you’re not sure who your target audiences are, start with a good, hard look at your current customers. There are probably more people like them you could reach with your advertising. Profile your customers via demographics (age range, income, where they live, etc.) as well as with more qualitative, but useful behavior characteristics (e.g., what their unmet needs were when they discovered what you’re selling; what they were using or doing before coming to you). You’re looking for patterns and trends among your customers. One customer with a given profile doesn’t necessarily make for an entire target audience. If you collect any data on your customers, share it with your agency.

Identifying prospective customers (different than those you have or for a new product/service) is more challenging. This generally requires some form of market research of available data or your own survey. If you haven’t done this, your agency should be able to help you conduct this research. If you have ideas founded on experience or preliminary data, this helps your agency narrow its research focus.

4. A budget. Know your budget and tell your agency. Yes, it’s possible that your agency will come back to you and suggest that your budget may not afford to meet all of the objectives or reach as many of your target audiences; however, any agency worth its salt will tell you what your budget can accomplish.

It is reasonable to request that your agency recommend a plan that is within your budget and another recommendation that shows you what it will cost to accomplish all of your objectives and reach your priority target audiences. You and your agency might come to an acceptable middle ground that meets more of your objectives and is within your budgetary constraints.

There is no single formula for how much you should spend on marketing or advertising. If you know all of your costs to sell a product/service, you can identify how much you’re willing to spend per sale, then multiply by the measurable objective you’re trying to achieve. This is a pretty simplified approach to a complex and important expenditure. For small businesses, advertising budgets are often based on a percentage (anywhere from 5 percent to 35 percent) of average monthly sales.

Heads up: Some of the most effective advertising campaigns require a larger expenditure upfront, then level off to a more steady, monthly or quarterly amount.

Choosing an ad agency is an important decision. Start the partnership by providing clear direction on what you want to accomplish and the information they need to deliver a meaningful ROI for your company.

Lorna Shepard is principal of Red Dog Consulting, which provides research, brand development, marketing and communication planning and strategic planning services. Contact her at lorna@red-dogconsulting.com.