May 20, 2008

You Can't Be Everybody's Girlfriend

Running an independent ad agency is hard. That's why there are so few successful ones. The reason it's tough is that the market for independent agencies has diminished radically. Not long ago Y&R had the largest share of the ad market in the US -- 1.5%. Today, five global holding companies control over 75% of the ad market.

Big clients are constitutionally predisposed to big agencies. They believe the nonsense about global agencies providing global solutions. (On the other hand, anyone who's worked in a global agency knows that not only don't global "partners" cooperate with one another, they go out of their way to screw each other. If you haven't yet, you must read e by Matthew Beaumont.)

So what strategies should independent shops pursue? The most effective is to be the best creative shop in town. However, being the most creative shop in your city is tough because there can only be one of them. Also, these days clients are far more likely to go out of market than they used to be. So you have to be the most creative shop in the country. All other differentiators tend to sound like cliches, or are fuzzy and hard to adhere to.

Left with a diminishing market and limited positioning opportunities, most independent shops ignore the advice they give their clients. They don't clearly differentiate themselves.

The hardest thing to do in a new business pitch is to stand up and say, "Here's who we are, here's what we believe. If you agree, great. If not, we're not for you."

With competition as fierce as it is, if you don't stand for something different and original you have no chance. You need to have a POV, and it needs to be different from what all the other agencies are saying. You need to say something outrageous and be willing to stand by it.

If you're not being laughed out of 2 out of 3 pitches you're not doing your job.

As usual, David Ogilvy said it best:
"The essence of strategy is sacrifice."

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