DALLAS If the 150 people who attended the Dallas Ad League's luncheon yesterday were looking for a pep rally about the state of midsize agencies, they left anything but peppy.
The panel discussion about how local midsize shops, defined as 15-75 people with billings up to $65 million, are surviving only highlighted the struggles facing agencies of all sizes.
Sitting on the panel were Mike Sullivan, president of The Loomis Agency; Gordon Law, president of TaylorLaw Advertising; Shirley Ward, CEO of The Ward Group; Bill Hill, chairman of Levenson & Hill; and Jodi Shelton, president and CEO of integrated communications firm Shelton. Dennis D'Amico, managing director of Growth Strategies Group, moderated the discussion.
Sullivan summed up the past year with a sentiment the room reacted to with nervous laughter: "It stinks." He said the lack of requests for proposals and the pullback in client spending has led to "the worst year I have experienced in a long time."
Shelton agreed, saying last year the agency grew 15 percent, and is growing even less this year, which compares to drastically higher growth over the past two years.
Some expressed dismay that today's clients are different from those in the past. Hill said many are looking for "short-term gains rather than partnerships we can build together."
Law said he has found marketers are "not as strong or as smart as they were 25 years ago." He also said it is harder to build relationships as a "trusted, valued partner," which may be the fault of agencies that have "spent so much time figuring out how to make money instead of servicing clients."
That was not the only indictment of agencies. Ward said over time agencies themselves have "forgotten advertising really does work." A few agreed agencies have commodified themselves, largely since shops of all sizes go after the same accounts. "Clients have a growing lack of respect for agencies," Hill said.
To stand out, agencies need to find a niche, the panelists agreed, which has become harder since multinationals have their own assortment of niche shops. Shelton said to differentiate her technology public relations shop even further, she offers investor relations, which she noted is not offered by other local agencies.
Sullivan said to differentiate, it is better to show, not tell. "I think it's difficult trying to differentiate by telling people who you are," he said. "The place and time is during the pitch process when you show up and there are 8 to 10 agencies. That's the opportunity to brand yourselves and stand out."
Keeping talent was one other point of discussion. Sullivan said while smaller shops offer employees empowerment, midsize agencies could lose valuable people if its growth is stalled. "The biggest challenge is holding people who are 30-35 [years old], unless they have a significant upper-management positions. You need to grow to accommodate or you'll lose them."