Wise old business sages often advise, “Look for how the money moves in a deal. If you can follow it, you will be able to truly understand what is happening.” Don’t look now, ladies and gents, but most of your clients’ marketing budgets have moved to areas other than traditional advertising. For instance, a lot of money is going to sales promotion. That’s not too bad when the sales promotion is made up of defined programs with beginning and ending dates, and structured to cover all the channel levels (end user, trade, and sales staff). These formal sales promotions generally yield high profits for advertising agencies through hours billed for planning and creative, and markups on outside buys like printing.
The truth of the matter is, many companies who profess to utilize sales promotion to jolt sales simply give money directly to the trade. It’s a real crime! Throwing money at the trade in hopes it will do good is a fool’s mission, unless you also include smart channel marketing and incentives, cross promote with targeted advertising, and build in lead generation, qualification and conversion programs—not to mention the fact that none of this trade-dedicated money is coming to the agency. A big percentage of client marketing budgets are put into commissions, travel, meetings, conventions, and other sales expenses, Much of that is not being spent wisely, either.
The point here is the flow of the money. Money that was once spent on advertising is now being spent on many other marketing tactics. That money is still there, but less is earmarked for you, and more of it earmarked for other, seemingly more direct, ways to market—digital ads, social media, email outreach, and so on. Some of those tactics will make more sense for clients. To move marketing money out of space advertising and into a planned public relations effort, for example, is certainly valid. But to take money from a structured, programmed marketing effort and give it to the trade as ransom money is absolutely ridiculous!
Knowing this, your job is to recapture some of that money.
We used to think the money was not there when clients cut their budgets. The truth is, the money was moving into other channels. It’s your job as an agency to find that money, and to redirect it to your agency with smart integrated marketing plans and strong ROI measurement. If your clients are peddling only project work while complaining that their marketing efforts that aren’t delivering, probe for the pain points and put together proposals that offer solutions. The money is there: follow it and grab some for your agency.
