Wednesday, June 04, 2008

The Realities of Business

The topic comes up from time to time -- local agencies doing work for local clients, particularly the larger clients that just so happen to be in the area.

Unfortunately, fairly or not, the fact of the matter is that the larger local clients do not always see the value that a local agency can provide.

Case in point: Blue Cross of Idaho.

Earlier this year, Blue Cross of Idaho chose the Minneapolis office of Weber Shandwick to help launch its new web-based health and well being initiative. The folks over at Red Sky PR first noticed this decision, and made comment about it on their PR Musings Weblog.

Another recent example: Balihoo.

In March, Balihoo named Affect Strategies as their Public Relations Agency of Record. Now, given Balihoo's focus on large-scale media planning and buying, I can understand this decision. It is in their best interest to work with an agency that can provide the best exposure possible, particularly to media buyers and agencies that buy in large volumes, and a PR agency out of New York is certainly a wise choice. The cynic in me has to wonder, however, how much of this decision was driven by the addition of Michael Browner to their Board of Directors two days prior to the announcement. Pure speculation on my part, but the timing just seems suspect.

So without laboring on too much longer with the same old 'poor us' mentality, I'll pose this question: What do local agencies need to do differently to either attract or retain these types of clients? Is it just a fact of life today's business environment, or are there there areas that local, or even regional shops can focus on to differentiate themselves?

Now, the same question to those on the client side: What do out-of-town or out-of-state agencies offer that local or regional agencies don't? Where are the local shops lacking?

Now that I've stirred the pot, I'm going to go ahead and duck for a while...

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13 comments:

Ron Baker said...

To support your comments on local and larger clients going outside the valley, our agency was recently competing for some business with Boise State. In the end we were told they had selected another agency. When asked who they went with, they indicated that it was an group out of Oregon. The agency they did select produces great work, but there are many agencies here in the valley that I believe are just as capable of producing great work . . . and more importantly are local.

Transit said...

Good thoughts Brian. On one hand I wonder if it's widely known and accepted, the variety and capabilities of agencies here to local big clients. I've lived here for over a decade, but only recently have I realized how many agencies there are around. On the other hand I truly wonder if local agencies have the talent and capabilities to handle larger clients with greater and more complex needs. From my dealings it seems that a lot of agencies here are a step behind the rest of the world in talent and experience - they truly seem "local" in every sense of the word, where as shops in larger areas (Seattle, LA, New York) generally seem more up to speed with new trends, seem to be more connected with the world as a whole, and have talent and creative that far surpasses most of what can be found here in the valley. A lot of the work coming out of local shops isn't necessarily impressive. One of the biggest frustrations I see here consistently is agencies that continue to muck about in traditional media - it seems like everyone else has come to terms with the fact that traditional media is no longer reaching the masses like it use to. That may not be the reason big clients are "leaving", but that's just my observation. I feel like a lot of agencies here need to catch up with the rest, and especially start to attract clients that aren't just local, clients that are regional, national, global in scale, and then maybe the big players will notice them more. That's just my opinion.

Leo A. Geis said...

There's a certain excitement to hiring someone "exotic." It's a lot like the "New Kid" effect in High School-they can be perceived as fresh and distinguished without suffering some of the implied liabilities of being local (which can be anything from political arguments to poor word-of-mouth reports by someone's coffee pal).

Idaho Airships, Inc. surfs that effect when we compete (and often win) big shoot assignments in Denver, Dallas, Phoenix, Las Vegas, etc., so I might respectfully submit that it works both ways. We compete for gigs against some major players from "The Big City" and win...and I will tell ya that there's a much larger harvest (and much more aggressive with their budgets) outside of "Local." I love Idaho, but Scottsdale is a larger market (for me, anyway) than our beautiful state...

We, however, do "Buy Idaho." Just bought Canon's top of the line camera from Idaho Camera in spite of a bit higher price and delay in delivery...and are about to order another.

Robert Deen said...

The points above are good. I'd like to add a few more. I've been on both sides of a coin, owning an agency for 14 years and working for a global agency as a managing director.
* Economic impact. An agency that keeps dollars local, or even better brings in dollars from outside the state, is making a significant economic contribution.
* You have to deliver. I wouldn't ask a client to choose a local firm over a better qualified national firm just because they were local. That would be a bad business decision for the client and sounds like begging. But being local should be a positive point in your favor.
* Locals are competitive. Maybe not in all situations, but I believe local agencies can be competitive against larger, national firms. They have to believe that themselves though.
* Give them a reason to choose you. I'm in the public relations industry, and local firms invariably have a better knowledge of local media, influentials, issues, etc. At a minimum, being 2 miles from your client's headquarters offers advantages over an agency 2,000 miles away. And I would rather be the biggest client of a small agency than the smallest client of a big agency.
* Big names will sometimes win out just because they're big. Call it ego, call it wanting to play with the big boys, whatever. Some clients will choose the Big Name Agency for reasons that have nothing to do with the services delivered.

I'm a Californian who happens to spend a lot of time in Idaho. As an outsider, it seems that Idaho does have a lot more talent and capabilities than one would expect. There does seem to be a bit of an inferior complex in certain quarters though, and it would help if more people held up their heads and said "yes, we are that good". Seems like there are some firms providing leadership in that regard.

Anonymous said...

The realities of business. That sums up half of the likes of Blue Cross to not choose local.

Maybe the other half is personal. Maybe (not just BC but others who do not hire local agencies) the decision maker(s) or their peers have dealt with personnel from local shops who may now work for other shops, a shop that would have been in the running, but personal opinion swayed the decision. I will admit not hiring an agency because so-and-so works there now, and while I'm sure the place is great, I couldn't fathom sitting through another bs business session if "that guy/girl" is going to be part of it. And whether you admit it or not, Boise agencies have a lot of ego, attitude that was born in Boise and attitude that came from Seattle and other metros but was forced out. Hey, let's take our attitude to little local Boise and win the world over. I bet I could help my new employer land a Blue Cross. Nah, doesn't work that way.

Or maybe it's the likes of Blue Cross decision makers writing a mental note to NEVER hire a local agency who would put someone in a position of authority, someone in charge of their $$$$, who feels its necessary to post a thinly-veiled crybaby blog posting ala RedSky.

Anonymous said...

Shoot. If Drake Cooper didn't get Blue Cross then no one is landing the gig. Or maybe the smarter, better agencies like Oliver Russell know how to allocate their resources and not waste their time on certain RFPs.

Josh said...

What??? Drake Cooper is wasting time on RFP's? Really? Let's see...

We spent a lot of time last on on Lottery - and won. We spent a lot of time on Idaho Dept. of Commerce - and won. We spent a lot of time on Sun Valley Ketchum CVB - and won. We spent a lot of time on Idaho Dairy - and - well, TBD.

As for Olvier Russell - I think they produce some great work. I'm not sure I feel like they are smarter or better that DC. I know I am biased, but at least I'm not anonymous. :)

They have lost a lot of talent over the last six months. James, Rich, those other Portland guys, Escobedo, and their entire interactive department - all gone. I'm sure they still have some great talent over there, but a lot of those recent casualties are very talented. Is that what you meant by "allocating resources" - they are allocated to no longer get paychecks from OR?

Josh said...

I just re-read my post and thought it might sound like I was bashing OR. That was not my intent. I really do think they are a great traditional agency. I really hope they manage to overcome what appears to be a bit of a tough time.

I also wanted to repost because I forgot to check the "email follow-up comments" box and I want to see how bad the DC-bashing gets this time. :) Hate away haters. Oh, and go read John Drake's post "Moving Through Hurtful Posts" - http://johndrake.typepad.com/advertising/2008/06/what-to-do-when-youre-mad.html

welcome to the web said...

Hurtful posts? Hot tip: thick skin.

adn said...

First // I would like to comment on the original post.

We handle a franchise type client in Boise that has lead to 45 other franchisees in the Western US. We were hired out of there local markets because we showed that we could take that specific business model and make it successful. In that respect, if you are very good at reaching a specific target market, than going outside of your community is understandable. Although it is great to be able to hire within your community and support the local economy, if your best results are somewhere else you have to best allocate your resources.

Second // I agree that some of the bigger clients want the excitement of having an agency from out of town. It could be because they are looking for the best at what they want, but it could also be because they want the feeling of being a big enough deal to have to hire an an agency outside of their market.

Third // As for the comments about RFP's. Certain RFP's are not worth wasting your time on because they are never going to leave the agency that they currently work with. RFP's are required by government controlled entities. If they are happy with the current situation and don't want to change agencies then they aren't going to. RFP or not. You can be mad about it or not. But imagine if one of your best clients that you have the best relationship was all of a sudden required to put out a RFP for advertising work. Wouldn't you hope they would continue to work with you. I would hope so If I had done my job.

Anonymous said...

Sensitive Josh.

Re: Shoot. If Drake Cooper didn't get Blue Cross then no one is landing the gig. Or maybe the smarter, better agencies like Oliver Russell know how to allocate their resources and not waste their time on certain RFPs.

That was worded poorly. OR is not smarter or a better agency than DC. I meant to say DC & OR are the better, smarter agencies who know how to allocate their resources.

But it's good to know how you react when running low on vagisil.

Chris said...

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Johnathan said...

Does anyone know who did the latest re-brand at Blue Cross of Idaho? I hope it's still not local talent that produced that.