I’ve added a bit more thinking about how you can start thinking about your advertising budgets in 2009.

What The Smart Advertisers Will Do

However, in such an economic downturn, when digital marketing is apparently gaining trust and significance, there is our chance to grow with advantages. There is surely the advantage of having a lower overhead. Companies are finally taking digital marketing seriously. And our knowledge and skills in using web analytics grow by experience.

It is still amazing to see how much companies used to spend (almost without thinking) in offline marketing compared to digital marketing. Maybe it is just a human nature that when you live in good time, you tend to live extravagantly. And when bad time hits you, you get your feet back down to earth. It is time to change.

Look on the bright side; even some good can come out of a recession. If some companies grow stronger it may help place us better enabled in the world market. The last 20 years has seen so much emphasis on the service industries there was/is always a dependency on external industry. It may be time to take a step back and review the economic strategies that are in place.

regards
George
(service industry worker)

While most larger companies scale down there efforts due to increasing loses, we have upped our advertisement’s by 100%. The lower overhead has allowed for this with a greater increase in profits. So right now I believe the smaller, even if not so well established companies have the advantage. As long as they offer quality work.

A 5-10 man agency can win over the bigger companies by proving value and ROI but my point is they’re never going to be able to compete on the same terms just because a large investment is too risky to do with a small business.

The smaller 5-10 man agency is never going to get into that playing field. It’s possible to grow to that point for sure but until the agency is a couple of hundred people strong with offices in multiple countries, publicly listed (and therefore accountable) the best you can expect is 5-6 figure deals.

The average deal for a smaller agency is 4 figures. The good deals are 5 figures. The superb ones are 6 figures.

In bigger agencies the average deal is 5 figures the good deals are 6 figures and the superb ones are 7+ figure numbers.

My experience (coming from an SME) is that only by partnering with larger agencies and filling competence holes they have can you get into bigger accounts.

I think Elliot is seeing the problem where a bigger agency is winning work (he called it bureaucracy and tradition). I think it’s less likely to be that an more likely to be that a large company can only give smaller deals to smaller businesses. They simply can’t take the risk that a small operation will go out of business while working on very important campaigns.

I understand the argument but larger accounts tend to be spread over a retainer or over a long term. So while on a deal by deal basis a smaller agency would be able to compete, as a whole (long term and safe) package they’re often seen as not being able to produce. Rightly or wrongly.

With one client I have worked with for a long time now, I started with them in the Aboavista days with a one day €2K deal. I never managed to get a deal with them again above €10K until we were acquired (and were publicly listed).

I used to own a small company in this field and now am delighted that I sold it in 2006. If I had to fight a ‘mediacom’ or ‘saatchi & saatchi’ for an account when I had a 5 man business I would lose every time. I had to partner with bigger agencies to get any foothold into the businesses that were our target market. One of the agencies eventually realized that we were a threat to what they wanted to do in Finland and even small as we were and bought our talents.

I personally doubt whether it’s traditional or bureaucratic reasoning that actually stops companies switching agencies though. There are always politics to overcome in the bigger companies and we all know nepotism and friendship gets a lot of business where it shouldn’t be happening if you based it purely on results.

My take is that people in marketing, in companies which are your target market are not educated well enough in the new media, the analytics, the processes and the pull versus push trend we’ve seen develop over the last 5 years. They look at people in our field like we’re all the same. I commented on Eric Peterson’s blog (linked to in my last post) that I believe in what I’m saying, but the skeptics you have to convince will not listen, rather they will say “It’s in your interest to say that”.

My feeling is though that the market is finally starting to grow up and because we can now prove what we’re saying they will only listen to the ‘traditional’ agencies for so long, if they continue to spout the same story that is.

@GoSolar;
Here’s hoping!