New business agency blog

2010 has been interesting for a number of political, sporting and other factors. However, Alchemis is focused on advertising and marketing and the Guardian article (July 12th) was a great sanity check as it mirrors our experiences over the first half of 2010.

The article focuses on the recent Bellwether report, published by the Institute of Practitioners in Advertising. It has found that one in five companies cut annual advertising spend between April and June. This compares with 15% that said spend was increased.

It was as recent as Quarter One when the report announced that more UK companies raised their marketing budgets than cut them for the first time in two-and-a-half years.

Advertising took a knock, although big events such as the World Cup meant the dip in this area was not as significant as it could have been. Sales promotion was hit very hard, with the report recording “the third fastest downgrade to spending on the sales promotion sector in the Bellwether survey’s history”

It is not all doom and gloom. For those in the digital sector spend went up, although at a very slow rate. Internet advertising continued to grow, with social media remaining a major focus. With ROI crucial, digital media’s measurability is very appealing to company bean counters.

Despite all of this, as a new business agency, we (and our clients) should latch onto Rory Sutherland’s (IPA President) comments – “Although this indicates a less optimistic picture than previously thought for this year, marketing spend is still set to increase.”

In fact, we are optimistic at Alchemis. As I mention above, our experiences have mirrored the positive first quarter followed by a slower second quarter with the digital sector remaining the growth area. We, and our clients, entered 2010 with a bang. New briefs were plentiful and outstanding proposals suddenly got the green light. We had a record quarter for clients converting business in all disciplines. The feeling from the market and our clients felt positive. Companies and marketing departments had stuck two fingers up to the recession and the combined efforts of Alchemis and our clients over the last hard 12 months were paying dividends.

Quarter Two did see a dip, although in fact, there were and are still lots of opportunities out there for small to medium sized agencies and results from the second quarter still smashed the figures from 2009. I am not an economist, but there is no doubt in my mind that the uncertainty both before and following the election was a factor. Those are out of the way now and the one thing that has not waned is the number of marketing professionals who have wanted to meet new agencies. We have set record numbers of meetings in May and June. If times are tough, you need to look at quality, cost-effective solutions. I’ve waxed lyrical about it before, but our client base of small to medium sized agencies offer exactly that and the market is really open to approaches from them.

There is still much uncertainty out there and whilst commentators will have their opinion, what happens next is anyone’s guess. However, we know that you will need to be prepared for both a down or upturn. If your current clients cut their budgets, you need to have irons in the fire with new business. If, as we all hope, the second quarter dip is short lived, you want to make sure that you have got the introductions out of the way before those budgets are released and allocated.

The Lib-Cons will be there for a while yet, Germany has beaten us again, but who knows what the rest of 2010 will bring? All I know is that everyone in agency land needs to be prepared for any eventuality.

From a customer’s point of view, I had a certain amount of satisfaction reading about the outcome of the “Pinocchiogate” court case this week. I’m sure you would have heard it in the news, but the topline is that Ryanair ran some advertising in the press featuring Stelios Haji-Ioannou with a long Pinocchio nose and implying that Easyjet flights are usually late which is why they had not updated the “flights arriving on time” statistics on their website.

Having suffered numerous delays and other perceived injustices at the hands of both of these airlines more times than I would care to remember, the publicity surrounding this case made me smile for the following reasons:

Firstly, Michael O’Leary had to apologise “unreservedly” to Stelios for the slander (and pay him £50K plus court costs). That must be the first time Mr O’Leary has said sorry to anyone who has been wronged by Ryanair without adding words to the effect of “we’re the cheapest airline and Europe, so like it or lump it”. Must have been pretty hard for him to get those words out of his throat without choking I would imagine.

Secondly, even though Stelios won the court case, there may be a certain amount of negative publicity generated by the whole affair with people thinking “no smoke without fire” concerning Easyjet’s punctuality. My personal experience with them is that if you get the first flight of the day at 6am you’re generally going to arrive at your destination on time. If you get a flight in the evening though, well that’s another matter.

I’m now eagerly awaiting the next stage of their public relations war with bated breath.

I was at a meeting yesterday with a really interesting agency (genuinely imaginative, innovative and pioneering; they’ll know who they are if they’re reading this) and one of the most common objections for outsourcing business development to an agency like Alchemis came up.

The objection is similar to the emotional response of passing over your child to someone else (something most parents experience when their child first goes to a childminder or to school). Most of our clients are small-medium sized agencies and are owned and run by a founding partner, therefore handing over responsibility for contacting prospects and articulating their proposition on their behalf can initially prove unsettling. How can I entrust my child to another person? How will they able to put across my offer to prospects when they haven’t grown up with it? See how easily the experiences can get blurred…

The rational response to this is that someone from the outside can add great value to your business/child. We all fondly remember a teacher who made a difference to our lives by pointing us in a direction we hadn’t previously considered or opening our eyes to an author we hadn’t previously read. Run with the analogy and you’ll rationally understand that an outsider (with 23 years experience in this market) can add enormous value to your business, helping to refine your proposition to work in this current marketplace for example.

However, it’s the emotional objection that is the most difficult to overcome, which is why we always insist on our prospective clients meeting our team of New Business Managers prior to appointing us – the only way they will ever truly feel comfortable with handing over their child is by spending time with the childminder.