The AgencyMarketer Chasm Non-Marketing Spending

The Agency/Marketer Chasm: Non-Marketing Spending

We’re creating a series of posts around our recent report, The RSW 2023 New Year Outlook, (which you can download here at no cost), with a focus on non-marketing spending to kick things off.

We’ve been releasing this report for well over a decade, and the goal is to provide small and mid-sized agencies and PR firms of all types with a series of guideposts entering the New Year, primarily to help prepare from a new business standpoint.

In a series of posts, we’ll hit the key stats and provide some perspective around each.

First, we look at the following question we asked agencies and marketers in our survey:

How would you characterize the most likely investment action YOUR marketing agency will take in 2023 (for NON-marketing activities like people, equipment, and technology)?

The Agency/Marketer Chasm: Non-Marketing Spending

The Agency/Marketer Chasm: Non-Marketing Spending

In last year’s report, we saw two disheartening situations:

1) Just when we thought marketer enthusiasm couldn’t drop any lower (than we saw in 2020), in 2021 it went even lower, with only 21% of marketers saying they would “somewhat” or “significantly” increase spending on non-marketing activities as they roll into the new year.

2) We saw a stark contrast in the respective temperaments of marketers and agencies.

In 2020 agency enthusiasm for spending took a dive, with only 64% of agencies indicating they would be spending at higher levels for non-marketing the following year, but last year was a different story, with 79% of agencies reporting they planned to “somewhat” or “heavily” invest in non-marketing activities.

Moving into 2023, however, we see a strange synergy that we haven’t seen in this report since 2018:

59% of agencies and marketers said they would invest somewhat to heavily in their business (non-marketing spending).

Marketers Are, Apparently, Optimistic-Agencies, Not So Much

So that’s a 38-point increase for marketers, which is positive given the strange economic climate we’re in!

Agencies-time to kick new business into gear with that kind of increase, right?

Well, it’s not all roses.

On the agency side, we’re looking at a 20-point decrease in agency investment expectations from 2021!

What does it mean?

The AgencyMarketer Chasm Non-Marketing Spending

Explaining Both Sides Of The Chasm

Non-Marketing activities on both sides encompass investment in new hires, technology, R&D, and travel, for example.

After falling to basement levels over the past few years, this 38-point increase in investment on the marketer side would seem to be a course correction, for lack of a better word.

After several years of uncertainty, it simply wasn’t a positive trend for business viability and healthy growth to continually decrease investment levels.

So, there’s positive potential here for agencies in the form of stronger pipelines of new product and service
launches for marketers, which would impact their agencies’ ability to drive more organic growth.

Turning to agencies, with investment intention at an all-time high last year, it would seem they are also expecting a course correction.

59% is still a healthy number, but agencies need to be careful.

You’ll see as you delve into our report, there are many reasons for agencies to be optimistic, for example, in-house trends are favorable to agencies, as is the perception that agencies are on top of trends.

On the flip side, our report also explores the top reasons why marketers start new reviews, playing into the need for continued investment in agency non-marketing spending.

Of course there’s a bottom-line that can never be ignored, but agencies need to be careful not to pull back too much on this type of investment.

The pull-back on non-marketing investment does make some sense, and a certain level of caution on the agency side is warranted, but along with taking precautionary steps based on the economy, agencies can’t ignore the need for an ongoing new business, organic growth, and client retention plan. 

One thing we saw affecting small and mid-sized agencies in the back half of 2022 was an overall slowdown in ongoing client-work, it took a lot longer to get projects going, or started. 

As part of client growth and retention strategy, agencies must specifically convey investments they’re making in the business, to both their clients, and in their prospecting, to show they’re ahead of the curve.

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2023 RSW/US New Year Outlook Report

This is the 2023 RSW/US New Year Outlook Report, our first ad agency new business report of the year.

We’re an outsourced ad agency business development firm that works specifically with ad agencies, marketing services firms, and PR firms to find better qualified new business opportunities and get you closer to close.

RSW/US is headquartered in Cincinnati, OH, with experts in lead generation, targeted prospect list building, and content creation driving our ad agency business development programs.

More about our advertising agency new business strategy and outsourced business development programs here.

Be sure to visit our YouTube channel and Agency New Business Blog for further insights and breakdowns on key stats from this report.

(And to download this report, head down to the bottom of the page.)

2023 RSW/US New Year Outlook Report

About The 2023 RSW/US New Year Outlook Report

The 2023 RSW/US New Year Outlook survey was completed by senior level Marketers and Marketing Agency executives during November/December, 2022.

The purpose of the survey was to glean insights relative to marketer and agency perspective as they each headed into 2023.

Topics explored included “biggest challenges facing marketing agencies” as seen through the eyes of marketers and agencies.

Also probed were topics related to spending and investment expectations, how important an agency site really is in the eyes of marketers, in-house agencies in flux, the impact of remote work on culture, and how Marketers are finding new agencies today.

The agency sample came from the RSW/US database of over 5,000 marketing services, advertising and PR firms in the U.S. and Canada, ranging in size from under $3M in capitalized billings to over $75M.

The disciplines of each agency spanned full-service, digital, PR, and marketing consultancies, to name a few.

The marketer sample came from our RSW/AgencySearch database of 30,000 marketing decision maker contacts. Company size, location, and category varied.

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To view please fill out the form below

While we offer the resources found on our site at no charge, we do ask for your assistance in maintaining a certain level of knowledge about who is accessing our valuable assets. We will never sell or distribute your information to any third parties.

Sales Automation Has Replaced Any Sense Of Understanding
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Sales Automation Has Replaced Any Sense Of Understanding | 3 Takeaways: Episode 100

Welcome to episode 100 of 3 Takeaways, with a focus on sales automation (also our 5th Halloween episode, although Lee says 4-no, no).

There is nothing wrong with your device.

Do not attempt to adjust the picture.

We are controlling transmission.

Business development for your advertising agency has been subsumed. 

Humans no longer control strategy or execution-technology is all- automation has replaced any sense of understanding. 

Ominous opening, right?

Well, we don’t have much time-the sales automation overlords are watching. 

But we’ve jammed their signal for a few minutes.

I can’t take credit for that last sentence in our opening. 

It comes from an agency principal, discussing the high volume of sales outreach being vomited, copiously into our email boxes, on LinkedIn, and, occasionally, on our phones.

With little sense of targeting, lack of research, and a reliance on volume to the detriment of any relevant message, he said, and I quote, automation has replaced any sense of understanding.

It’s become pervasive-you get the same emails and messaging I do-there is rarely any sense of understanding of prospects or their companies in most outreach today.

If there were, I wouldn’t be getting these emails, because I’m not the right-fit prospect in most cases.

But these salespeople wouldn’t know that, because they haven’t taken the time to do the homework.

So in this episode, we bring you 3 Takeaways to make sure your agency isn’t subsumed by the hivemind that we call, Extreme Automation Reliance. 

 

Your first takeaway is paramount and simple:

Don’t let technology take over your business development process.

Let’s not kid anyone, technology is essential in making your process more efficient, but here’s a critical stat:

76% of agencies get more than six sales emails a day.  And almost 90% of those agencies said only 9% of those are effective.

Some salespeople are content with that. 

Perhaps they are one of the 9%. 

But great salespeople know that reliance on one platform leaves potential opportunities on the table.

Yes, use email, but how many of your competitors are picking up the phone? 

Are using traditional mail?

Do what your competitors are not.

With all this, the message here is not that you should never incorporate automation into your business development strategy.

Sales automation, whether through an automation platform, or using CRM tools that automate certain tasks, can be effective, but, and this is your second takeaway:

If you’re going to automate, make sure you are targeting the right prospects. 

A different agency principal, in an initial conversation about our services at RSW/US, told me about a meeting coming up their new business director had set. 

This business director relied on simple automation via email blasts and his network. 

This principal told me, they had no business taking this meeting-it wasn’t a fit.

Many alarm bells went off.

It . . .does not compute.

So many business development failures can be traced back to going after the wrong prospects. 

You have to take the time to nail those parameters down and make sure everyone involved in new business is on the same page.

We’ve now come to our final takeaway, time is short-they, are watching. 

We’ve established that automation isn’t inherently ineffective, however-your third takeaway is this:

Make sure sales automation isn’t THE strategy.

Since automation occurs through email, when you do use it, it is, of course, vital that those emails actually reach your prospects, which means your sender reputation must be up to par.

But 60% of agencies do not monitor their email sender reputation.

There are many tools, from Google, Microsoft and others, to ensure your deliverability is not impaired. 

Alright, I must go. 

Thank you for watching our 100th episode of 3 Takeaways! 

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Marketer’s Edge Interview With Dan Klopp: Space Technology
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Marketer’s Edge Interview With Dan Klopp: Space Technology

In this episode of Marketer’s Edge we’re talking space technology with Dan Klopp, the Director Of Marketing And Business Development for Space Systems Division at ILC Dover.

If your agency pursues clients in the space technology, aerospace, or tech space, you’ll want to watch this episode.

A bit of background: ILC Dover is a world-leader in the innovative design and production of solutions for biopharmaceutical, pharmaceutical, medical device markets as well as a leading supplier for the (aero)space industries.

Our customers will attest to our relentless dedication to high value products, advanced technology, and responsive service, as our visionary solutions have improved efficiency while safeguarding people, product, and infrastructure in hazardous conditions through flexible protective solutions since 1947.

Why Advertising Agencies Should Watch This Episode-Dan talks:

  • What he likes most about working in marketing & tech– particularly space technology.
  • What it’s like being one division of a well-diversified holding company, and the degree to which it proves difficult to get corporate resources Dan’s division needs to accomplish its goals.
  • The toughest challenges in marketing products in the technology space and how he’s historically overcome them.
  • ILC Dover’s involvement in the production of the next gen space suit and, unlike the suit created during the Apollo era, they’ll actually get to brand these suits with the ILC Dover name/logo.
  • His strong belief in the “Servant-Leader/Theory Y management philosophy.”
  • Advice he would give to marketers thinking about bringing a new agency on board.
  • And lastly, if an agency attempting to win business from him, the advice he would give them.

A little bit about Dan:

Executive with consistent record of profitable growth in a range of technology markets.

Market experience includes; Aerospace, electronics, chemical analysis instrumentation, and semiconductor processing equipment.

Skilled at leading teams of professionals capable of distilling diverse information into a sustainable growth strategy.

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Marketer’s Edge Interview With Angela Campagnoni: Intimate Apparel

Marketer’s Edge Interview With Angela Campagnoni: Intimate Apparel

In this episode of Marketer’s Edge we’re talking with Angela Campagnoni, North American Brand Director for Elita Intimates.

If your agency pursues clients in the fashion, intimate apparel, or ecommerce space, you’ll want to watch this episode.

A bit of background: As a leading Canadian brand of ladies intimate apparel, Elita Intimates strives to design garments that appeal to all women.

Their dedicated design team located in Nova Scotia Canada has spent years cultivating styles that fit into their moto that “Every woman is an Elita woman”.

Elita is designed for modern women who appreciate luxurious, natural fabrics, with superb feminine design, fit and comfort, offering smooth lines and a natural feeling fit. Innovative fabrics, such as modal, cotton, bamboo, seamless and microfiber have signified the Elita brand for 30 years.

Why Advertising Agencies Should Watch This Episode-Angela talks:

  • How she stays on top of the latest trends in the industry and advice she’d give to any marketer (in any industry) looking to do the same.
  • Her work as an accomplished Children’s author of the book “I Want To See My Papa”, a book meant to help children deal with loss and grief.
  • Any advice Angela would give to marketers thinking about bringing a new agency on board
  • Why she decided to pursue a career in fashion and design.
  • The positive changes she’s seen in the industry over the last few years and where she sees the industry 3-5 years out.
  • Her founding of Atlantic Fashion Week and what gaps she saw in the market that warranted its creation.
  • And lastly, if an agency was trying to knock down Angela’s door attempting to win business from her, what advice she would give them.

A little bit about Angela:

For over two decades, Angela Campagnoni has been keeping the fashion industry in style in Halifax, Nova Scotia. The founder of Atlantic Fashion week, her signature flair and creativity have been at the forefront of her accomplishments.

Angela currently sits as the North American Brand Director for Elita Intimates, the signature ladies’ division of Canadian titan Stanfield’s.

Her tenacity and innovative thinking have been assets, but her true strength lies in her belief in herself and her own abilities to achieve her goals.

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Your Prospects Have Digital Fatigue

Digital fatigue-it’s a thing. 

Our inboxes are full to bursting and our eyes glaze over with ubiquitous digital ads. 

Forrester Consulting released a study based on insights from 158 business-to-business (B2B) marketing leaders in North America on analog versus digital touchpoints, and although not technically, directly related to your business development efforts, it’s critical you pay attention to the key takeaways. 

Kicking things off from a Business Wire summation: 

. . . the majority (80 percent) of respondents recognize that the pandemic has increased their reliance on digital touchpoints. Resulting from the overdependence on digital, 76 percent agree that engagement with digital tactics is dropping, while 78 percent of respondents report that analog touchpoints such as direct mail have seen a performance boost. 

 80% recognize the pandemic increased digital reliance 

This applies to your agency business development effort as well, although it was happening well before the pandemic. 

Sending an email is easy, versus making a phone call, for example.  

You click send and there’s no personal interaction. Fear of rejection is minimized. 

But the pandemic, as this study makes clear, and we can most certainly all agree on, has increased our digital dependence from a business development standpoint and increased your prospects’ digital fatigue.

It was understandable as the pandemic really kicked in, or at least many agencies told themselves that. 

You can’t reach anyone by phone, everyone’s working from home.

 I heard that a lot, and it was 100% not true, not after those first few months. 

We actually set more meetings by phone during the pandemic. 

 76 percent agree that engagement with digital tactics is dropping 

We’re awash in sales emails, and they’ve gotten progressively more ineffectual, ineffective, and voluminous. 

As a company, we’ve been fortunate in that our process has always involved multiple touchpoints across multiple channels: phone, email, social and physical mail. 

Another quote worth reading from the Business Wire summation: 

 Since the onset of the pandemic, businesses have significantly over-rotated on their use of digital engagement strategies to reach audiences. Unfortunately—but not unexpectedly—the reliance on digital channels alone has led to increasing levels of fatigue. The new engagement challenge for B2B marketers revolves around establishing authentic, personal relationships with audiences to counter this fatigue and forge connections that drive business value.

 The word “authentic” in the prospecting/outreach context has become patently overused, but the point still stands.  

Your outreach has to be personalized (to an extent at the top of the funnel) and personal in it’s messaging-meaning it doesn’t read like a bot or an ad, but rather that another human being wrote it.

78 percent of respondents report that analog touchpoints such as direct mail have seen a performance boost. 

 Here’s an example of a mailing piece we created and sent out to our agency prospects recently. 

Your Prospects Have Digital Fatigue

 This one was a little silly and a little different, with the message on the front, “Thinking of You”, meant to be a throwback to a greeting card. 

And so far it’s working. Although we’re in the early stages, we’ve seen it just in the amount of meetings I’ve set with agency principals.  

4 key takeaways I’ll leave with you as you look to increase new business amongst all the digital fatigue: 

  1. You don’t know what’s going to resonate with a prospect, so you have to give yourself every opportunity, by using multiple methods/channels in order to stand out 
  2. The study gets into the use of SaaS platforms to track and accompany your direct mail campaigns. While that’s great, that probably isn’t in the budget, and it doesn’t have to be. Simple QR codes will work, for example. 
  3. Email is still valid, but it’s all about the messaging. Most sales emails are not written well and are not informed.   
  4. It’s not about any one channel/method. Our tech stack is also critical to our performance, for example.

I’ll often send a simple letter on RSW letterhead, that I personally sign.  

It’s about mixing up what you’re doing, and most importantly, following up. 

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Don't Send These Emails | 3 Takeaways Ep. 99

Don’t Send These Emails | 3 Takeaways Ep. 99

In this episode, we continue with one of our most popular new business themes — don’t send these emails. 

Comin’ at ya!

Welcome to “3 Takeaways”, your agency new business video series where we focus on one new business category and give you three takeaways to help improve your new business program. 

Over the course of making this video series, we’ve done several episodes on ineffective sales emails, and I’ve mentioned that I keep most of the sales emails I get in two folders: good emails and bad emails.

I learn from both, and I now have multiple agency principals (thanks to each of you) who will send me the worst of the worst they get. 

So, as we’re one episode away from our 100th episode, we bring you three more examples of emails you shouldn’t send.

 

And your first take away:

For the love of all that is holy — keep your initial sales emails short.

The email I’m about to show you — the only way I can really convey how long this sales email is, is to have Craig filming me scrolling through it. 

(You’ll have to watch the episode starting at 1:19 for the full experience.)

I realize you may be thinking: well, you’re talking about it, Lee, and you actually read it, didn’t you. 

Fair, I did, but it was out of morbid curiosity. 

I don’t remember what that person was even selling, just how long it was. 

And by the way, that same person has sent 3 more, giant emails. 

Wow.

OK, second takeaway:

Don’t tell me you’d like to learn more about my business if you don’t mean it.

Getting a sales email that starts with “I’d love the opportunity to learn more about your business” is not new, but I’m either noticing it more recently, or some new overly-used email template is floating around.

Many salespeople use this line because they can’t think of anything else at the moment.

But some salespeople genuinely mean it, in which case, actually show your prospect you’ve done even a little bit of homework on their business.

Remember, LinkedIn and Google are your friend.

OK, our last takeaway is this:

Don’t start an email to your prospect with “I reached out to you a few days ago, and never heard back”. 

This also isn’t new, but it’s become a greatest hit — I’ve also never understood it. 

Is it supposed to guilt your prospect into answering you, “oh no, I didn’t respond to your ineffectual sales email? 

Let me get right on that!” 

That may have worked the first year email became a thing in the business world, maybe, but it certainly has no place in today’s prospecting world. 

It’s a waste of time and real estate.

Thanks for watching 3 Takeaways — lots of new business content our site to help you at rswus.com, just hit the resources drop down 

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Marketer’s Edge Interview With David Dirks: Credit Union Marketing
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Marketer’s Edge Interview With David Dirks: Credit Union Marketing

In this episode of Marketer’s Edge we’re talking credit union marketing with David Dirks, Vice President of Marketing for the Hudson Valley Credit Union.

If your agency pursues clients in the credit union space, you’ll want to watch this episode.

A bit of background: Hudson Valley Credit Union is a full service not-for-profit financial cooperative, 300,000+ members strong. They extend membership to their neighbors who live, work, worship, volunteer or attend school in Albany, Columbia, Dutchess, Greene, Orange, Putnam, Rensselaer, Rockland, Saratoga, Schenectady, Ulster, or Westchester Counties.

The company started in October 1963, when a group of IBM employees had a vision—to create a financial cooperative for IBM employees and their families, where the needs of the individual would be placed before profit.

Why Advertising Agencies Should Watch This Episode-David talks:

  • Some of the more unique things he’s doing to bring the credit union and its community closer together.
  • Predictions on what the banking and credit union world will look like in the future.
  • The relative importance of calling out the differences between credit unions and banks – today, as compared to a decade ago.
  • How they effectively kept engagement with their customer base strong during the pandemic.
  • Any advice David would give to marketers thinking about bringing a new agency on board.
  • And lastly, if an agency was trying to knock down David’s door and attempting to win business from him, what advice he would give them.

 

A little bit about David:

David’s career in marketing & sales management spans the course of multiple industries including financial services, advertising, professional services, and the food industry.

He has worked with companies to help them blend traditional data with “big data” analytics to provide a strategic framework translating data into a tactical framework for developing marketing campaigns that drive business results.

Creating and executing marketing campaigns & programs built on a foundation of solid data (marketing) analytics is what he delivers. Focusing on revenue growth AND profitability.

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The Top 3 Reasons It's Harder For Ad Agencies To Get New Business
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The Top 3 Reasons It’s Harder For Ad Agencies To Get New Business

Driving new business for small and mid-sized agencies is particularly difficult because clients must come first, and the average new business director at an ad agency last 18 months.

The top 3 reasons it’s harder for ad agencies to get new business: 1) tougher to break through to prospects, 2) 39% of ad agencies said there are fewer opportunities, and 3) they can’t find the right hire to drive new business.

The Top 3 Reasons It’s Harder For Ad Agencies To Get New Business

1. It’s Harder to Break Through To Prospects

55% of agencies told us the main reason it’s more difficult to obtain new business is that it’s harder to break through to prospects.

Interestingly that percentage dropped from 59% last year to 55% this year.

One would have thought the opposite would be true, given the 15+ point increase in agencies finding it harder to get new clients.

So agencies are actually finding it a bit easier to break through to prospects than last year-that’s good news.

Looking at the second-highest reason agencies gave, last year it was “prospects that went dark after a first meeting” at 32%; however, that’s not the second highest this year.

In fact, that came in fourth, at 27%!

So agencies are having a slightly easier time, or doing a better job, with prospects that go dark.

Both are good to see, but it doesn’t really jibe with that 15+ point increase in agencies finding it harder to get new clients.

The 2nd and 3rd highest reasons agencies gave for why it’s harder to obtain new business in this year’s survey do coincide with that increase and should give agencies pause.

2. Fewer Opportunities

In 2022, 39% of agencies said there are fewer opportunities out there.

In 2021 that number was 23%.

While not overly alarming, that’s a 16 point increase.

I’ll throw some tough love out here:

Are there fewer opportunities, or are you just not actively looking for them?

Another stat from this same question:

The percentage of agencies who say they have no process in place is 25% this year versus 5% last year.

With no process, it is, in fact, harder to find opportunities.

3. Can’t Find The Right Person

The third highest reason was, “can’t find the right person to drive the new business program” at 31%, whereas it was at 0% in 2021.

Agencies have always had trouble finding and keeping the right person to drive new business, but that’s quite an increase.

These stats paint a picture of agencies experiencing a fair amount of organic and existing growth, coupled with referrals throughout 2021.

To quote our 2021 Agency New Business Report, “the current influx of new business is not coming from actual business development on the part of agencies.”

And that looks to have played out for many agencies, who understand there needs to be a balance that includes some manageable form of outbound prospecting for new business.

Within this question was an “other” option, with the opportunity to provide open-ended responses.

Given the variety of responses, we wanted to give you a sample from your agency peers as to why it was harder for them to obtain new business:

• Hard to find prospects with significant budgets
• For pitches, Clients are still hiding behind video conference
• Uncertain we are targeting “right fit” prospects and/or it’s harder than ever to break
through to them if they are right fit.
• Hard to hire people necessary to build bandwidth to take on new clients
• We’re more sharply focused on ideal client prospects and that takes more time right
now to break through.
• Turnover and inexperience on the client side
• Economic uncertainty/headwinds

Those are your top 3 reasons it’s harder for ad agencies to get new business.

More posts to come from our report.

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Ad Agencies Are Finding New Business Harder To Drive in 2022
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Ad Agencies Are Finding New Business Harder To Drive in 2022

Ad Agencies Are Finding New Business Harder To Drive in 2022, and you can look into the reasons why in our latest RSW/US report.

Download it now at no cost: RSW/US 2022 Agency New Business Report: Perspective On The Agency New Business Environment.

(And you can read the Adweek feature on it here: Obtaining New Business Is More Difficult for Agencies, Report Finds)

Our first question to ad agencies:

How Difficult Is Obtaining New Business, Compared to Last Year?

After an unprecedented 2021 survey report, where only 28% of agencies reported obtaining new business (compared to the previous year) as harder or a lot harder, this year we see the cyclical nature of the ad industry rear its head again.

In 2022, 43% of agencies report that obtaining new business (compared to the previous year) is harder or a lot harder than it was in 2021.

Ad Agencies Are Finding New Business Harder To Drive in 2022

Looking at the responses from this question dating back to 2008, 2021 was a high point for many agencies, with only 28% saying it was harder to obtain new business that year.

Following the lockdown, budget freezes, and the overall extreme uncertainty of 2020, agencies needed that respite–and thankfully many firms got it.

But as you’ll see in our report, business is inevitably becoming harder to acquire again in 2022.

Looking at the data from another angle, only 17% of agencies said it was easier or a lot easier to obtain new business in 2022, versus 38% in 2021.

And in a follow-up question, “Relative to last year, have you seen the number of opportunities for new business decrease, increase, or remain the same?”, we saw that-

32% of agencies said the number of opportunities for new business increased, versus 51% last year.

As if agencies weren’t already exhausted from managing the pandemic and workforce disruption, the remainder of ‘22 and ‘23, with inflation and recession concerns, reaffirms
the need for agencies to make sure they have an actual new business strategy in place.

We’ll have a series of  posts on our report, covering each major stat, and what it means for new business moving forward.

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