Advertising Agencies

Using an Ad Agency to Put Your Business on Television

Here's the key to a successful working arrangement with an ad agency: the agency should only make money when you do. Ad agencies get a 15% "agency discount", or commission, from TV stations where they place your advertising. If you pay your agent $1000 for TV ads, the agent pays the TV station $850. So when your agency does a good job for you, you advertise more, and the agency makes more money from commissions.

Most agencies also make money by writing and producing commercials. Unfortunately, this can give them an incentive to overdo commercial production to increase their profits. In fact, some agencies and production houses make their money by convincing people to spend huge amounts to produce TV commercials or infomercials for products the ad agents know (or should know) will not work! Read this if you are interested in how this kind of rip-off can work.

I do not normally charge for writing and production, except for my actual studio costs. Since I make my money from commissions on airtime, I only succeed when my client succeeds -- when he or she makes money and continues to advertise.

OK, do you want an "agent" or an "agency"? If you want to be taken out to expensive lunches and have big meetings, then you need to find a big agency that will do that for you. But keep in mind, you pay for all the extras you get. If you have a restricted ad budget and you want someone you can work with on a more personal level to make your phone ring, you will be better off with either a solitary agent, known as a "one-man-shop", or a very small agency.

Spend some time looking for the right advertising agency. Ask around. Ask others who are currently advertising on TV. Ask TV station representatives to recommend someone. Or find a few prospects in your local creative directory, on the web, or even in the phone book. Talk to these agency people about their advertising philosophies, how they work, etc. Get the names of some of their clients. Call the clients and talk with them.

But beware! Ad agents are just as likely as TV station salespeople to feed you a load of bull to get your business. For example, one of the most common lies told by ad agents is that they "buy in bulk" from TV stations and can therefore get spots for you more cheaply. Another ploy from some agents is to say they will rebate part of their 15% commission back to you.

Actually, this makes sense if your budget is huge, but if the agent has to make up for commission rebates by charging excessively for production and/or providing poor service to a large number of accounts, it doesn't. If you can find a skilled ad agent who doesn't lie to you, let him make his commission; he's worth every penny of it!

Just because someone represents himself as an ad agent does not mean that he knows what he is doing. A while back, I received in the mail an offer to sell me "hundreds of effective TV commercial concepts & scripts."

"Have a new client?" the ad asks. "Easily select 5, 10 or even 15 creative concepts, copy onto your letterhead, and that fast you have a finished no-hassle proposal." So, most likely, there are some ad agencies out there responding to prospective clients by copying old commercials out of
a book rather than listening to the client's specific offer and crafting the best possible way of offering it.

A common ad agency pitch to a prospective client goes like this: First, you need to spend some serious money on commercial production. Then, you need to spend even more money on a monthly basis for a long time -- at least a year -- before you should expect results. This is because you have to "build frequency" with viewers over time. They'll tell you there's no point in "testing" your commercial because commercials never work until they've been running for a long time anyway.

The main reason they say this is so that, even if your commercial doesn't work and could never work, the agency will still make lots of money from producing your high-dollar spot and from the commissions on your year of wasted advertising while you're waiting for the "frequency" to kick in.

Some of the agency people actually believe that you have to have all this "frequency" because their ideas about TV advertising come from national "image" advertising as it is done by huge companies. But those commercials are really more like propaganda than advertising. They're designed to change the way people think, which takes lots of time and repetition. Apple Computer can afford that; you can't. What you want to do is reach people who need you right now, tell them why they should get in touch with you and how to do it.

What Your Ad Agent Should Do For You!

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Advertising Agencies

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