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News & Views from Alchemis

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Call us for a chat on +44 (0)20 7836 3678 or email Amanda Francis


How important is agency location when pitching for new business?

In the “good old days” before the internet and when you could leave your front door open and nobody would rob you, you might have been forgiven for thinking that large companies with their fancy brands based in Central London wouldn’t ever consider working with a regional agency in somewhere like Bristol, Birmingham or Sheffield.

There may have been a number of valid reasons for this – notably, sending proofs and artwork backwards and forwards for a brand to approve, particularly near a print deadline, would be time consuming by post and expensive by courier. I’m sure you are all aware of how pernickety brands can be and with very good reason. Brand reputation always has been vital to the success of any company.

But as technology moved on and both accessibility and communication has become quicker and easier to virtually anywhere in the world, how much have attitudes changed towards the importance of where an agency is based? Is there still an element of snobbery, for want of a better word , i.e “we have to use a big name London agency for our brand or how will it look to the rest of the industry?”

At the moment, London is still the major UK hub for marketing communications agencies – one reason is simply because of the vast size of the population there. But with ever increasing property costs, business rates rocketing and staff salary costs higher than anywhere else in the country, regional agencies are in a fantastic position to take an ever bigger share of work being commissioned by companies and brands based in the capital.

Besides the obvious benefit of lower overheads, other aspects which may have formerly been seen as a barrier are being broken down. In years gone by it could be argued that “most of the best and brightest talent would gravitate to London.” But these are exciting times – major regeneration projects are underway in regional cities across the UK. Creative and digital hubs are springing up and attracting people with exciting  opportunities for both new and established agencies. Journey times to other major cities will be significantly reduced as projects like HS2 are realised.

What are the opinions of the decision makers that appoint marketing agencies?

 

Of course, everything I have talked about above could be taken as anecdotal, albeit based on our experiences speaking to hundreds of decision makers every week, a lot of whom are based in London. So, we thought it would be beneficial to undertake some research by speaking to marketing decision makers to get their views on this specific topic.
From our extensive database, we built a list of Marketing Managers and Directors at medium to large sized companies based in central London who regularly outsource all aspects of their marketing communications. These decision makers commission agencies across all marketing disciplines. They are from a whole range of industries including Financial Services, Travel, Leisure, Building & Property, Retail, Technology, Professional Services and Publishing to name but a few. We asked them for their opinions regarding agency appointment outside London.

This is what we found out.

• 82% of the marketing decision makers we asked either already use or would happily consider using an agency outside London.

• Leading on from that, 71% of the decision makers who did not already use any agencies outside London said they did not think it would matter if they appointed an agency outside London or there would be no significant barriers that could not be overcome when making this decision.

Now, whilst being a relatively small island on a global scale, it can still take a large chunk of time out of your day to travel between certain places within Britain. So we wanted to find out how this would affect the decision making process, if at all, when a potential client is considering agency appointment.
• Only 35% said there would be a limit to the actual distance they would consider acceptable if appointing an agency outside London.
But, as you are no doubt already thinking, the physical distance in miles between a client in London and an agency elsewhere is probably far less important than the time and convenience it takes to travel between these two places. For example, London to Bristol or Birmingham is only an hour and 25 minutes on the train. London to Leeds or Manchester is about two hours and 10 minutes.
• 41% of the people we spoke to said the location in terms of travel time to the agency they appoint may be a factor.
But how often did they actually travel to visit their agency rather than their agency come to them?
• Of the respondents, 54% said that their agency almost always comes to them – thus rendering travel time far less of a potential issue to a prospective client.
• 15% of marketing decision makers said they are likely to visit their agencies “a few times” but only during a specific project. The same proportion said that nearly all communication with their agency is done remotely (by phone, email or video conferencing for example).
As can be seen by the results above, concerns from a potential client about the location of their agency (if they exist in the first place) can be fairly easily addressed.
However, what about any other negative bias that may deter a decision maker in London appointing an agency elsewhere?
• A relatively small amount (12%) of respondents said that they tend to use agencies in London even if they claim no bias towards it.
Some reasons for this included comments like “there is a bigger pool to choose from” or “London is perceived as a more creative hub than elsewhere”. But at the same time a similar proportion said they were more likely to specifically choose agencies outside London due to a perception that they would get better value for money.
• The vast majority of respondents claimed to have no bias either way.
We then asked respondents to give feedback on what they thought are the main factors when considering agency appointment.
The most frequently mentioned issues were:
• The quality of existing work produced by an agency
• The reputation of the agency
• The knowledge and experience of the agency within the organisation’s industry
• The current and past client list of an agency.
Obviously there is a correlation between these points and they could be grouped into one category, with 64% of marketing decision makers spoken to mentioning one or more of these components.
• 15% of respondents specifically mentioned that the cost of an agency would be a key factor. This was a lower figure than expected, but given the size of the companies we surveyed, their marketing budgets are likely to be pretty large.
Other themes that were mentioned on several occasions included:
• The chemistry between the agency account managers and the organisation’s decision makers
• The way in which the agency responded to briefs sent
• The specialism of an agency within a specific marketing discipline or industry sector
• An understanding of the organisation’s specific processes beyond the understanding of just their industry sector
• Specific references from relevant clients

The final area we asked decision makers about was whether they thought the specific marketing discipline of any agency they appointed would have a bearing on how near they should be located to the client.
• 65% said the marketing discipline wouldn’t really be a factor to them in terms of agency location.


Of the respondents that said it may have some significance, the specialisms that were most frequently mentioned they would prefer to be located nearer to them were PR and Video Production, then to a lesser extent, Creative Communications and Media. However, it should be pointed out the some of these respondents use agencies on a global scale, so “locally” could mean “within the UK”. Conversely, several respondents specifically mentioned outsourcing to digital agencies further afield in Europe along with the fact that a fair number of agency staff they deal with work remotely compared to previously, so even if their agency is physically based locally to them, some of the agency staff carrying out their work may not be.

So, what does all this mean to your agency?

 

As you are aware, there are a huge number of large companies with their HQs based in London. Maybe you already work for some of them or maybe not. However, the outcome of our research shows that there are very few geographical barriers to winning new accounts from these organisations. The vast majority of marketing decision makers who appoint agencies are open to using regional agencies with the right skills, experience and disciplines. This is bringing ever-increasing opportunities to agencies across all specialisms rather than just those based in London. So, wherever your agency is based in the UK, if you want to work with London based companies, then give it a go. Your location is not going to get in the way…..

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