I think it is important to address my background before
delving into this very important topic.
Before founding Ahlfeld Media Inc. in 2012, I had worked at many of the
large, multi-national agencies. I have
first-hand experience and knowledge about the inner workings of agencies of all
sizes.
The large vs. boutique agency question is one that comes up frequently
with small and medium-sized advertisers (ad spends between $1MM – $10MM). It is
vital to understand how both operate to ensure the best decision is being
made. The points below lay out some
reasons why a boutique agency may be the way to go.
- Care for YOUR business
Boutique agencies are led by senior veterans who are entrepreneurial
by nature and who have a lot of stake in your business. As opposed to a large agency, a medium-sized
advertiser represents a significant portion of revenue, and as such, is a huge
focus to ensure advertiser needs are fully met. While large agencies are driven by their own
quarterly reports due to stakeholder demand, boutique agencies focus on their
client’s performance, not their own success.
- Low Overhead allows for 100% Senior-Level
Support (and often 24/7!)
A large agency carries significant expenses including rent,
salaries, utilities, accounting and media buying software. If they are going to stay profitable on a
medium-sized advertiser, they have to ensure that both the salaries and the
hours on the account are managed and accounted for down to the dollar. As a result, often times, the person on the
account managing the day-to-day communication as well as strategy and
execution, is someone with as little as 2-5 years of experience.
A boutique agency is able to save on many of these high
expenses, so that they can still remain profitable offering almost exclusively,
top, senior-level support. As
entrepreneurs, there is no such thing as “9-5”.
Operators of boutique agencies are generally available for response any
time. Even on vacation.
- Little to No Staff Turnover
It’s no secret that there is excessive turnover at large
agencies. Not only do employees move
around the agency circuit (when I was starting out in the industry, I was one
of them), but they also move around internally, when resource needs arise.
Staff turnover and learning curves are counter productive. A
boutique agency is far less vulnerable to “the revolving door” because in many
scenarios, it is the operator/owner of the company who is managing the
day-to-day communication, strategy and execution.
- It’s true – Boutique agencies can negotiate
even BETTER rates than large agencies.
There is a myth that large agencies have the buying clout to
offer their clients better rates across all media. This is not the whole story. In many cases, the buying clout can actually
work AGAINST them. Particularly in media that are fixed inventory (i.e. radio and OOH) a vendor negotiating rates with a large agency
would have to be willing to offer that same discount to all clients within the
agency and this would gobble up too great a share of their limited avails and
having a negative impact on their ROI.
When offering a similar discount to a boutique agency, the portion of
inventory being negotiated is smaller and the potential for being handcuffed by
the agency’s other clients is also reduced.
Moreover, many of the operators of boutique agencies have
been in the media industry for 20+ years, and have developed strong vendor
relationships along the way. A boutique
agency is likely able to get you as good, if not better rates, than larger
agencies.
- Collaborations
One little known fact about boutique agencies, is that we
often help each other and/or collaborate together. For example, Ahlfeld Media is part of a
collaborative of Senior Media Directors who meet quarterly to discuss key
industry topics, share experiences, and even work together on accounts. Many of us have complementary skills and
knowledge, that when working together, offer our clients well-rounded
expertise. Many of us are also on boards
such as IAB, CMDC etc.
——–
If you are thinking about new agency representation, it
always makes sense to explore different options. Do give boutique agencies a chance. They are nimble, work in the trenches, and
will value your business like it is their own.