Ad agencies specialize because it establishes the agency as an expert in a given vertical, or verticals.  92% of marketers say expertise will be very/moderately important when considering new agencies. Specialization also helps establish a strong agency brand, and aids business development efforts by making it easier to find new, desirable clients.

Stats below are taken from our 2023 RSW New Year Outlook Report (download here at no cost).

Why Should Ad Agencies Specialize: Specialization Myths

(I don’t know that “myths” succinctly applies here, “misconceptions” is probably the better word, but myths fits into a subject line better than misconceptions.)

It’s often groan-inducing when an agency hears “you need to specialize in order to get the clients you really want”.

We’ve certainly talked about it before (right here actually: Don’t Be Scared Of Specialization.)

But any groaning aside it is important:

92% of marketers say expertise will be very/moderately important when considering new agencies in 2023.

Horizontal and Vertical Positioning Definitions

Before we get to the myth, if you will, it’s important to establish the forms that specialization, and your resulting positioning, can take.

And to do that, I’ll refer to David C. Baker, who wrote an insightful post on the subject for us a few years back and still holds up quite well.

From David’s Pros And Cons Of Positioning Your Firm Vertically Or Horizontally:

A vertical positioning is centered around an industry category, such as NAICS 541430–Graphic Design Services.

Or it could be very broad, like marketing for manufacturing, but it’s usually narrower than that.

So it might be credit unions, specialty physicians, non-profits, or high-growth tech.

A horizontal positioning defines your target in another way by spanning most of the verticals.

You could define your horizontal by a demographic segment, like millennials, Hispanics, women, or even around employee alignment.

It could be as specific as helping B2B leaders at disruptive transitions. You could also define it by a practice area, like investor relations.

The Ad Agency Specialization Myth

So let’s get to the main myth, if you will, about specialization: specialization doesn’t mean you have to focus on just one vertical.

David’s initial definition begins that explanation.

Agencies, understandably, don’t always take the time to think through the nuances of positioning, and what specialization could look like in reality for their agency.

If you’re struggling with this, I suggest reading David’s entire post, but here’s further, helpful explanation from it:

The most powerful positioning combines both, in something like a crosshairs, but you always lead with a horizontal or a vertical focus.

So you might target credit unions but with a particular focus on social media.

That would be a vertical positioning, primarily, but with a bold narrowing on top of it.

Or you might be a public relations firm specializing in investor relations with a particular strength in tech.

That would be a horizontal positioning, primarily.

Ultimately, it’s important for you to remember, your prospects are looking for expertise, and a certain level of specialization, but it doesn’t mean you have to paint your agency into a rigid corner.

Another related stat from our report:

72% of marketers say an agency’s site is important/very important in helping determine whether they’ll entertain an initial meeting.

Ad Agency Specialization-Make It Clear On Your Site

A final note on specialization: if you do the work to craft your positioning and specialization, it can’t end there.

And that may sound glaringly obvious, but too often agencies nail the positioning down, but leave out an important step-updating their site to reflect it.

In one of our new questions in our new year outlook survey, we asked marketers, “How important is an agency’s website in helping you determine whether you’ll entertain a conversation with an agency?”

The agency site is typically the first thing a prospect sees, right?

But how important to your prospects is it really?

As our stat above points out, it’s important.

This is probably not a great shock to agencies, but it should be something of a wake-up call, or at the very least a reminder.

Your agency’s site is a visual elevator pitch, yet many agencies don’t consider this when creating or updating their sites.

Your site is typically the last thing you get to because it takes time to update it, but here’s further proof you must attend to it.

Even if that means an initial copy update to reflect your updated positioning, and/or updates over time.

To help drive more new business for your firm, look at it as soon as you can and make a plan for those updates.

And if you need help, that’s what we do.  Contact us here.

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. 

 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. 

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.

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.