The onslaught of digital has completely transformed the marketing industry in recent years. Emerging web technologies and video media have allowed new ideas to be brought to life.
Although digital has opened up plenty of new possibilities for creative agencies, it also brings new challenges.
There is a tendency for clients to focus on its measurability, putting return on investment and cost per click at the top of the agenda.
In this accountability culture it is harder than ever to persuade clients to make long term investment in the brand.
Digital has transformed agency logistics too. The days of walk-in couriers, employed to deliver films and bromides to overseas locations, are long gone, and with them the healthy mark-ups that were charged to clients.
This year I am a mentor on Nesta’s Creative Business Mentor Network programme. As a mentor, here are my top tips on how you can grow your business despite the challenges the market presents.
- Don’t be your own worst client
Small and medium agencies are often thinly resourced and so focus all their time and attention on their external clients, ignoring the need to practise what they preach in their own business.
Digital and social marketing techniques can be remarkably effective and cost relatively little in terms of both time and money - the key is to be very organised and also consistent.
- Think beyond borders
With recession, double dip recession and now potentially triple dip recession, it’s hard to thrive in the current economy.
Large agency groups have weathered the storm quite well, making up for lacklustre performance in the West through expansion in Asia. Smaller agencies lack the time and capital to grow their businesses in this way.
Much though can be achieved by building partnerships with likeminded agencies and suppliers overseas. These relationships pay off over time and it’s never too early to start.
- Keep crunching the numbers
I firmly believe that running an agency is all about doing great work and having fun - however the numbers have to add up too.
Owners of creative businesses sometimes have to be dragged kicking and screaming to forecasting and budgeting meetings.
Spreadsheets are certainly not glamorous, but keeping a tight control on the numbers is absolutely critical.
A mentor can really help with this sort of aspect of the business, putting in place suitable systems and controls and encouraging buy-in from the business owners.
Several years ago we had a mentor at Just Media in London who helped to instill this sort of discipline, and it had some very positive spin-offs, not least of which helped to facilitate the sale of the company.
It’s important to identify where time is being spent and where revenues are earned – these are often not the same places. I encourage agencies to adopt a green/amber/red classification system: green for nicely profitable clients, red for clients that are a drain on resource and amber for those in between.
Having identified which clients are in which category the goal then is to move amber clients up to green and red clients to amber, or out altogether. It can be quite cathartic to fire unprofitable clients; it can actually re-energise a business.
- Run the business, don’t let the business run you
When you first set up a company there is a lot of adrenaline in the mix. Energy and drive create a wave of momentum that can carry the business forward for the first few years.
Yet by year three or year four it is common for business growth to start to wane and business owners can lose their sense of purpose, especially if they find themselves in a place that they didn’t expect to end up in.
Mentors from within your industry can be particularly useful in this case, as they have probably been in the same position as you at some point in their career and can offer advice on growing a business.
Through the Nesta Creative Business Mentor Network programme, 30 creative businesses are paired up with experienced mentors - myself included - and over the course of the programme they are given the opportunity of one-on-one mentoring sessions.
Concepts such as the client stoplight classification are just the tip of the iceberg in terms of the value delivered by having a mentor, and why all small and medium sized creative companies should consider applying.
Nesta’s Creative Business Mentor Network is open for applications until 13 September 2012. Apply now at www.nesta.org.uk/cbmn for full terms and conditions.