How to Choose an Advertising Agency

Betsy Gallup

So your business has reached a critical point: you're experiencing a level of success that encourages growth, and you need to know how to choose an advertising agency to assist in your marketing efforts. Choosing an ad agency is like other forms of product comparison, only the product is the expertise of others and not, say, a vacuum cleaner.

Do I Really Need an Agency?

Maybe. Obviously, to get to this point, you've already accomplished some marketing.

Now examine how you spend your day. As the owner/operator, weigh whether your time or that of your support staff is best spent drafting text for brochures and electronic/broadcast media, learning design software, negotiating with printers, establishing a Web presence, placing media buys and staying current with statistics, trends, colors and styles - or focusing on the core of your endeavor.

Consider all the marketing you've done so far to use as a benchmark for your new advertising budget. If a single project was $10,000 or more, or your total marketing communications for the year averaged about $50,000, you're probably ready for an ad agency.

You've positioned yourself as the subject matter expert for your product or service. Choosing an ad agency to handle the nuances of marketing can only take your business to the next level.

Aren't Agencies Expensive?

Just as some people approach doctors at parties with "You know, I have this pain right here…" many have the misconception that marketing and the creativity involved should only cost X or Y, which translates to as "cheap as possible."

Advertising agencies are staffed with experienced communication strategists, writers, designers, Web developers and media planners who have made it their life's work to understand how to market your business effectively.

Utilizing their knowledge will not, unfortunately, be anywhere near cheap. By showing respect for their business, however, you'll not only buy the best expertise to get your advertising done, but also gain creative partners dedicated to increasing the success of your business.

Establishing a Budget

As you establish your advertising budget, keep in mind two things:

  • Agencies will charge by the hour or job for creative services.
  • Agencies also charge approximately 15 percent media commission above the hard costs of production, such as print services and electronic/broadcast development.

Agency and freelance hourly fees vary by city/market and are driven by what the market will allow. While these hourly fees can fluctuate based on market size, other factors that dictate fees include experience, reputation, client list and the size of the firm.

The creative hourly wage rate ranges from $40 to $200. The standard 15 percent media commission is the gratis media outlets provide to agencies for their business and rarely changes. You already know how much you've spent on advertising to date: calculate in these new numbers as a starting budget with which to approach the agency.

Any reputable agency or freelance creative will provide an estimate of project length and general costs. As a client, you have more control over the final cost than you think by being clear with your communication and wants up front and staying on top of the timeline so there's no need for rush jobs.

Know What You Need

Before you approach an agency, have a good idea of what your objectives and needs are:

  • Are you trying a new form of advertising?
  • Are you creating an entirely new identity or brand?
  • Is this just one project or one of many to come?
  • Do you want your agency to be a gateway to other clients?
  • How important is the agency's client roster to you?
  • Do you need to introduce a product?
  • Are you trying to boost sales?

These are just a few questions to consider. Remember, the agency wants to please you, so clear communication and outlined goals will help everyone produce the right materials to accomplish your objectives.

Interviewing Agencies

To find agencies to interview, ask around. Look at other materials you like, visit Web sites or contact some of your other marketing sources for recommendations, then base your selection on how many agencies you and your staff members want to consider.

Send a brief letter to the CEO or VP stating a request for a presentation and

  • Interest in their capabilities;
  • Your advertising objectives;
  • Samples of their work, expertise in certain areas and case studies;
  • Your timeline.

However, don't ask for free samples of what they "could" do for you. Speculative or "spec" work sometimes happens with existing clients but otherwise, it's not good form.

How to Choose an Advertising Agency

Once you receive proposals, schedule presentation times with each agency of interest and keep notes on what you like and dislike. A few sharp questions to ask during the presentation may include:

  • Strengths of the creative team
  • How will upper management be involved
  • How closely will you work with the creative team
  • What they consider "good" advertising
  • Can you talk with other clients

During the agency's presentation, you'll get a strong feeling of how you'll work together. Notice how they listen, if they really seem to be grasping your objectives. If they're coming up with solutions you can get excited about, you've found your new creative partners.

An In-House Option

It's quite possible that your business isn't ready for a full contract with an ad agency. Maybe the project - or your budget - just isn't big enough.

Consider the benefits of hiring an internal marketing manager. This individual might have enough writing, design and media placement experience or connections with freelance creatives to get your company started in a new direction. Later on, when your company is bigger, stronger and faster, that person can become your company's liaison to greater marketing efforts with agencies.

How to Choose an Advertising Agency