Small Advertising Agency Business Strategies
Rockfish Interactive Cited for Its Creativity & Unique Business Plan
Sep 21, 2009
Small advertising agencies had to reevaluate their business plans when the 2008-09 recession forced their clients to cut back on spending, reducing agency fee and commission income right in the middle of the industry’s digital and marketing revolution. Even for those that survived, there had to be lingering questions about how to weather future downturns in the economy.
- Should they diversify their services to maintain a balanced source of income?
- Should they specialize to become the best in their field, particularly one of the newer digital fields?
Advertising Age Small Ad Agency of the Year
Rockfish Interactive of Rogers, Arkansas had already been doing both well enough to be named the Advertising Age Magazine “Small Ad Agency of the Year." According to Ad Age, Rockfish took in $4.6 million in 2008 revenues and was projecting $7.8 million for 2009.
“That's a growth rate of nearly 70%, impressive in any year, let alone during a recession that's knocked the wind out of many agencies,” Ad Age wrote.
Rockfish has succeeded by arming itself with an arsenal of digital services for giants like Wal-Mart, Proctor & Gamble, Hershey and Tyson Foods. Of course, it hasn’t hurt to be located in Wal-Mart’s back yard, in the same town the retail giant located its first store.
Clients of that size testify to the caliber of the Rockfish digital knowhow. But the agency has also distinguished itself with some entrepreneurial business of its own, using skills perfected in its research section to launch a coffee company chain as well as a successful website and specialized software programs.
"We don't want all of our cash flow and revenue to be 100% client-driven," CEO Kenny Tomlin told AdAge. Small agencies are especially vulnerable to economic downtowns because most of them rely on income from a few clients.
The Rockfish business incubator not only brings in additional revenue, but it also impresses prospective clients that it understands business.
Other agencies have added public relations or specialized marketing and graphics functions to strengthen and diversify their revenue stream. Others have invested in being the best in one specialized field, especially one of the new digital or social media fields.
Agency Consultant Michael Gass
There has been “a paradigm shift” in how small agencies acquire new business, according to Agency Consultant Michael Gass. He wrote in his blog:
“According to a recent CMO (chief marketing officer) survey, 80 percent of decision makers say they found the vendor (agency), not the other way around.” That’s a long way from the “cold calls” that many agencies made in the past.
It’s also a dangerous condition that might lull some agencies into waiting for business to come to them rather than aggressively pursuing new clients.
But to be sought after in today’s digital media, Gass said small agencies need:
- A working knowledge of search engine optimization (SEO)
- An active agency blog
- Presence in a social media.
That’s still strange territory for some small agencies, but an area practically all agencies will have to explore in the future, sometimes by adding people well versed and experienced in those fields.
References:
"Rockfish Interactive Named Small Ad Agency of the Year," by Rupal Parekh, Ad Age.com, 9.14.09
"Fueling New Business," by Michael Gass, fuelingnewbusiness.com
See also: "A Good Time to Start an Advertising Agency?"
Ad Agency Strategies to Develop New Clients
 |
 |
