The Regional Agency Tool for Survival

Winning hallmark accounts has long been a documented challenge for regional agencies, but a seismic shift is occurring. These agencies are becoming increasingly more valuable alongside their larger counterparts. While the media focus remains on behemoth agencies in major markets, the migration of talent, evolution of media and integration of platforms has leveled the playing field, arming regional agencies with the creativity and resources to make big brands think twice about whether Madison Avenue or Madison, Wis., representation is best.

The industry is experiencing a groundswell, and small to mid-sized regional agencies are invited to pitch and win national business from some of America’s most iconic brands. For instance, Hewlett Packard works with Burns Marketing based in Johnstown, Colo., and George Killian's Irish Red is represented by Jacobson/Rost, a Milwaukee-based agency.

Acquiring national business is just one step of the process. The path ahead holds excitement for agencies, but they must take the necessary actions to properly prepare account teams and, above all else, stay true to the promises made to the newly acquired client.

Bandwidth is holding regional agencies back

Bandwidth is a key challenge that regional agencies face when attempting to evolve and keep up with the digital world. Not only is the industry lacking quality talent with digital expertise at all levels, but owners and executives are faced with the realization that the number of full-time employees required to manage and scale digital doesn’t make dollars or sense.

As Reetika Joshi, principal analyst, BPO and Analytics Strategies of Horses for Sources says, “The operational set-up of these smaller firms typically makes it hard to plan and execute large digital campaigns. The issues are primarily the lack of scale and expertise in digital media operations that inhibit mid-sized firms from exploiting this game-changing opportunity.”

This begs the question, “How can regional agencies evolve to address these challenges?”

An evolution right in front of us

To address the bandwidth issues facing our industry, we’ll begin to see more integrated service-based platforms used in regional agencies. These platforms are designed to streamline the necessary day-to-day media tasks of any campaign, freeing up the account teams to spend more time on strategy and creative, thus the bandwidth issue fades.

This isn’t necessarily a new concept; other industries have seen success with this model. For instance, the film industry has been doing this through production houses for quite some time. As expenditures on equipment, software and overhead continued to rise, production houses were established to help contain costs.

A similar evolution is taking root in digital media. Research tools such as comScore and Kantar are out of reach for many agencies. The ever-increasing number of publishers, networks, exchanges and point solution companies is creating an unmanageable complexity. The cluttered solution space and expensive resources are posing challenges that trigger the need for integrated media logistics platforms consisting of data, technology and service.

Regional agencies come out on top

As seen in a 2011 Sageworks study, annual sales growth increased 11 percent in smaller, independent advertising agencies despite sluggish ad spending. “From our interactions, we see organizations increasingly seeking regional small to mid-sized agencies for niche campaigns that are more in tune with new media opportunities,” Joshi said, “Recent research shows the increasing use of digital marketing media, and in particular, the increase in interest in social media and SEO marketing. We believe that this has presented a tremendous opportunity for regional agencies to pitch for integrated marketing campaigns to large clients, directly competing with advertising majors.”

Recently, I’ve had the privilege of working in tandem with a talented mid-sized regional agency. The goal was to pitch and win, then manage and scale an effective digital media strategy across multiple publishers with various degrees of creative complexity for the advertiser’s iconic brand.

Through utilizing a media logistics platform, the regional agency won business and was able to scale proportionally, execute flawlessly, and most importantly, deliver an abundantly successful campaign. The advertiser's year-over-year sales are up 25 percent and individual sales day records have been broken. They are preparing to launch new initiatives, and the agency grew its digital media business by more than 4,000 percent with no additional overhead.

With emerging technologies and solutions designed to streamline digital campaign processes, there is hope that regional agencies will continue to grow, finding cushier seats at the table.