How to Hire an Agency

Small businesses can only grow so far without expert assistance. Marketing, ad and public relations agencies will help realise a company’s full potential. But how do you go about choosing one? And can you afford it?



Business Editor


There comes a point in the life of a business when its founders realise that if they are to maximise sales – and potential – they will need to raise their profile – through advertising, marketing or public relations.

Finding the right expertise in an outside agency, however, can be something of a minefield.

Finding an agency

Many businesses begin with their own networks, says Scott Knox, managing director of the Marketing Agencies Association (MAA). Looking at peers and even competitors whose marketing strategy or advertising campaigns you admire can be a decent first step, he says. There are also commercial intermediaries - Haystack and the AAR Group among them - who will find you a shortlist of suitable agencies for a fee.

Trade associations are an invaluable link between agencies and new clients. The MAA will identify agencies active in your sector – and its members will all have been vetted for financial soundness and adherence to industry best practice, as have members of the Institute of Practitioners in Advertising (IPA).

Big vs small

Smaller businesses tend to assume that the services of the bigger agencies will be beyond their means. But Knox advises that an integrated agency with a suite of marketing and communication services may bring you better ROI. Don’t limit yourself to who you work with, however. If you are a technology company and you admire the campaigns for Apple, Hewlett-Packard or Dell, you should still investigate their roster of creative agencies. A trade association may be able to help you do this, and you may even find that these big companies are using a smaller agency for some aspects of their advertising or marketing.

Knox argues that you shouldn’t rule out working with a well-known name either. Many agencies find it limiting to work with bigger brands and welcome the chance to work, perhaps more creatively, with entrepreneurial SMEs. Important starting points are experience in your sector, resources in all your markets and territories and a good affinity between your business and theirs.

Do agencies specialise in high-growth SMES?

The short answer is no. This can be a volatile sector. For example, many advertising, marketing and communication agencies will have had bad experiences in the dotcom collapse. That said, agencies still enjoy opportunities to be creative and may devote as much 30 per cent of their portfolios to newer, unproven businesses.

Your shortlist

Communications practitioners and trade associations will tell you that creating a huge shortlist and asking all the agencies on it to pitch is wasteful – both of your time and theirs. Instead, ask around 10 organisations to send you their credentials – case studies relevant to your sector, information about their teams, how they work and how they approach assignments.

Don’t miss out the crucial chemistry meeting stage – an informal brainstorming session between key people in your business and theirs - to see if you can work well together. Clients often say that the decision is all but made at this stage, says Knox. Knowing the key people on their team and that your accounts person can work with their accounts person is hugely important, too.

The brief

It is very important for companies to engage in positive introspection on what they are trying to achieve, says Knox. This should be focused on specific business objectives: driving up brand awareness, creating a detailed database of prospective customers, achieving a positive rating linked to a name or brand.

All of these are achievable ends. Deciding to devote £50k to marketing won’t get you anywhere.

Apart from being clear about what you need, you must also prepare a concise, well-written brief for competing agencies. You should provide the information necessary to complete the task and indicate the criteria by which you will judge agencies’ presentations.

How much will it cost me?

Costs and charging structures vary widely, so investigate this issue with the agencies you are inviting to pitch.

Traditionally, agencies will work on a monthly retainer for consultation and development work. Specific projects are charged at cost plus mark-up, which can range from 10 to 20 per cent.

However, Knox explains that newer agencies, especially those who working in the integrated marketing and communications space, eg, eventing and social media, may be open to payment by results – a 20 per cent reduction on the standard rate card, plus a bonus on reaching set targets. Risk and reward is shared.

Other agencies might consider leasing intellectual property (IP) to a client for a defined period – one year for use in the UK market, for instance. Extending the use of IP to other territories or for longer periods costs more.

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John Carroll - Helping businesses achieve International success. Head of Product Management & International Business, Santander UK