Ad-agency Essentials: CEO Strategies

Advertising is a tool for growth — one reason that companies typically devote 3% to 15% of their revenues to it. Yet to accomplish your advertising goals, you need the right ad agency.Before approaching an agency, assess your needs. Start by asking yourself and your management team, “What is our communications challenge?” and “Do we know whom we want to reach?”

At this point, you may want to tap the expertise of a consultant who specializes in brand identity, public relations, direct marketing or integrated communications. (For more information, see the four-part series on branding in the September-December 2001 issues of The Edward Lowe Report).

Warning: Don’t expect an ad agency to create your brand, identify markets or interpret your company’s goals. Although there’s no hard-and-fast rule about when to hire an agency, some experts recommend hiring one as soon as you open your business. Others suggest waiting until your business has reached a critical mass. For example, you’ve landed a large account and want more, but need additional exposure to fuel sales.

Ideally, advertising follows on the heels of a public-relations campaign; once your message gains exposure in the market, use advertising to reinforce it.

Case in point: Indigo Wild, a manufacturer of aromatherapy products based in Kansas City, Mo., sent a press release and complimentary candle (its new product) to a magazine. Soon afterward, the publication featured Indigo Wild’s candle in its editorial pages, which increased the company’s credibility in a new market.

Time is money

In Indigo Wild’s early days, president Emily Voth produced a catalog in-house with the help of free-lancers. But this left little time for product development, so Voth delegated the catalog to an agency.

“I spent way too much time figuring out what sort of paper we’d use for packaging, letterhead or fax cover sheets,” she recalls. “I needed someone else to attend to that.”

Voth hired an agency after meeting its managing partner at a peer-networking event. Her most important selection criterion: finding a team that listened carefully and “figured out what was in my head.”

Though Voth knew Indigo Wild’s market and wanted to emphasize the all-natural qualities of her products, she wanted an advertising agency that would stretch her ideas. “You have to think about who you are and be able to communicate that,” she explains. “The agency can help you interpret that to an extent … they can draw it out of you, but you have to have the ideas there in the first place.”

Any agency team members who are working on your account should visit your facility and meet with your staff. “Only then will the flavor of your operation be integrated in the campaign,” says Voth.

Since hiring the ad agency to handle packaging and catalogs, Indigo Wild has grown about 200% to reach $1.25 million in annual revenues. Building a mailing list has been key to the company’s growth, Voth explains: “That requires more catalogs, which generates more sales, which requires more volume and more product development. Advertising got the ball rolling.”

Know your message

Tom Kacandes and James Taylor learned the hard way about the importance of honing a corporate message before enlisting an ad agency. Kacandes and Taylor, partners of Taylor Recycling Facility LLC, an $8 million company in Montgomery, N.Y., wanted to get the word out — quickly — about three major accomplishments:

• Expanding their facility.
• Winning a contract with the city of New York to sift through World Trade Center debris following the terrorist attacks.
• Donating 80% of funds needed to create a memorial for local victims of the attack.

Within days Taylor Recycling had hired a full-service public relations and advertising agency. But because Kacandes and Taylor didn’t fully develop a plan before hiring the agency, they couldn’t succinctly describe their business and markets. Although ads for the facility opening drew 500 people, creating relevant marketing materials involved many drafts — and some disappointments.

“I mentioned to them that we once saved a customer 40%,” says Kacandes. “Then I see in an ad that ‘Taylor Recycling saves customers 40%.’ That’s not true; I was just citing that one example.”

In addition, the agency made other factual errors; the firm confused Taylor Recycling’s markets and applied specific facts regarding niche markets across the board. When Kacandes called to complain, the agency said it wasn’t their fault — that was how the information had been explained to them.

As a result, the relationship has soured, and it’s unclear whether Taylor Recycling will continue to work with the agency.

Before moving forward with other advertising efforts, Kacandes and Taylor agree that they need to spend time honing their corporate message, explaining company goals and spelling out market differences to an agency. “We spent over $140,000 in a few months, but I was doing a lot of work in this crash program. You can’t approach advertising in a crisis,” Kacandes says.

Creating a consistent image

Catalogs are an important marketing component to Westport Corp., a $12 million manufacturer and distributor of gauges in West Islip, N.Y.

Westport previously produced its catalog in-house, but it became cumbersome and didn’t look professional. So CEO Rob Forbes hired an ad agency to improve catalog design and develop a consistent image.

Forbes wanted a logo that would be immediately identifiable to someone familiar with gauges — something that gave a sense of insider knowledge. So the agency created “Westy,” a cartoon character made of different machine gauges.

The agency gives Westport a level of professionalism uncommon to other industry players, says Forbes: “Our message is quality, quality, quality. Our logo, the layout of the catalog and the all-around consistency underline that emphasis.”

The agency also coordinates Westport’s ads in directories and manages the company’s Web site. Forbes pays search engines to prioritize his site and uses different toll-free numbers to monitor how calls were generated.

Advertising has made Westport appear proactive, adds Forbes: “When we became ISO-accredited, we made a campaign a priority. Advertising is integrated in our planning and makes us look like a leader.”

Writer: Rosemarie Buchanan.