Growing new business is vital for agencies looking to stay competitive and financially stable in 2018. But as the ad budgets get tighter, and the competition tougher, which new channels should agency directors and CMOs prioritize in 2018?
In this article, you'll learn which lead generation channels performed best for agencies last year.
The data and advice we'll share are based on a recent report from RSW, a lead generation firm. The report features survey results from over 5,000 agency executives and 10,000 marketing decision-makers across the United States and presents comparable stats from 2016-2017.
Are New Business Opportunities for Agencies Decreasing?
As even the biggest ad companies experience the slowest revenue growth since the recession, it’s a challenging time to be in the agency business. Agencies compete on tighter margins in the industry with a high rate of employee turnover. More often than ever, clients now choose consulting firms over agencies, or bring media buying in-house to protect brand safety.
Yet agency marketers are optimistic: 54% of those surveyed by RSW in 2017 expect new business opportunities to grow.
To succeed in 2018, agencies will need to figure out their unique positioning in the crowded market, hire and retain the best talent, and be extremely adaptive.
Lead Gen in 2018: the Battle for Your Prospects' Attention (and LinkedIn Conversion)
According to the RSW survey, 60% of marketers are getting 6-10 calls a week from agencies. Clearly, even with the growing number of opportunities, it’s harder to reach your ideal prospects and capture their attention.
Marketers are busier than ever. They juggle a lot of responsibilities and simply don't have the time to engage with a sales rep -- unless they're actively looking for an agency at the moment.
So what can an agency do to grow new business? Paid marketing channels -- LinkedIn specifically -- remain part of user acquisition strategy for most agencies. "LinkedIn advertising has proven to be the most effective channel in reaching qualified leads at the most efficient rate within our B2B manufacturing & software clients," said Eric Ramos, Director of Analytics at BusinessOnline. Last year, BusinessOnline quadrupled their LinkedIn spend as they saw great results on the platform.
But even though LinkedIn proves to be a great source of quality leads for many agencies, the RSW data shows that digital acquisition channels are not enough.
1. To Win More New Business, Take It Offline
Last year, most new agency business came from referrals (64%), networking (56%), and existing clients (50%). Paid online marketing came last with the same percent as direct mail (2%). Phone calls as a lead generation channel grew from 8% in 2016 to 12% in 2017, proving that offline channels could bring more return on ad spend. And in-person meetings are particularly useful, as more business this year came from speaking engagements, conferences, and networking.
2. Hire and Retain Top Talent; Set Realistic Expectations
Marketers cite “finding good talent” as one of the biggest agency challenges in 2018. In the age of automation, people who can solve problems and grow client relationships are a rare and valuable find.
The advertising industry has a higher employee turnover than related industries. For example, the turnover for the position of a New Business Director at most agencies, according to the RSW survey, is less than 2 years on average.
So why do agencies struggle to hire and then keep top performers? AdWeek called agencies' New Business Chiefs “the most dangerous job at an agency,” with the high expectations that are hard to live up to. And when things don't work out, according to RSW, agencies should try hiring more experienced people: “Bringing young kids that have ‘a lot of energy’ simply doesn’t pan out.”
3. Double Down on Data Analytics and Measurement
87% of marketers state that marketing data and analytics capabilities are an important factor when considering a new agency partner. This number is up 14% from last year, and growing as companies hope to close the loop of ad spend reporting and understand the real impact of their advertising, as well as master advanced segmentation for a more sophisticated personalization strategy.
Marketers expect agency partners to help them accurately measure the ROI, and say that most agencies can’t deliver.
And as you can see on the graph above, agencies and marketers disagree about the agencies’ effectiveness at measuring ROI. 38% of agency executives stated they are “very effective” at measuring ROI, compared to only 15% of marketers who felt the same way about their agencies.
4. Have a Well-Organized Methodology for Prospecting.
The number one reason outbound marketing fails, according to this survey, is lack of a well-organized methodology for prospecting. To set your team up for success, you need the tools and processes in place first.
From setting qualifying criteria to the first connection and discovery call, to evaluation and closing, a solid methodology also needs the software tools and strong leadership in place to implement the processes and drive the adoption.
5. Keep Ahead of the Technology with Automation
The reason to keep up with the changing tech (and automating what can be automated) is simple: you can generate more revenue with fewer employees.
At the end of the day, when agency employees spend half of their time on manual, tedious work processing the business they already have, how much time is left to work on new business or cross-sell?
Businesses looking to get ahead in 2018 will need to invest in PPC automation and other software tools to optimize workflows and save time for deeper, more meaningful work that will set your agency apart.
6. Be a Strategic Partner
To be competitive long-term, agencies will need to be skillful in both tactical execution and strategy. Clients no longer rely on agencies for just the keyword research or scheduling and monitoring paid social campaigns. The majority of marketers come to agencies for strategy (74%) and innovative ideas (84%).
AKQA’s general manager said in an interview to CMO.com that “the job of agencies today is to be somewhat of a future/growth hacker” and look years, not months ahead to devise solutions to make clients successful in the long run.
7. Find Your Niche and Own It
As marketing guru Seth Godin said, “fitting in is a failure.”
Whether it’s a category, an approach, or your technical expertise, finding a high-potential niche that will make you stand out in the competitive market will be key to relevance.
For example, B2Linked became the leading LinkedIn advertising agency primarily because of their focus on just one paid channel.
How do you find your niche? With new channels, social media platforms, approaches, technologies emerging at a rapid speed, advertising offers more niche opportunities than ever before. As Seth Godin said, “if you can’t find your niche, just wait, it’s coming.”