Monday, January 12, 2009

Trade Down or Partner Up

I just talked with my buddy Tony Mikes, President of Second Wind Agency
Network (an association for small to medium size U.S. ad and marketing agencies)
and he told me the strongest trend he's seeing in his 800+ agency network: Trade Down.

In Tony's words:

Across the nation, larger clients are re-thinking what they're getting
from their big agencies and are starting to trade down to smaller, hungrier
shops that will do far more with far less budget.

Of course, I love hearing that since I run one of those hungry shops. My two-cents on this:

1) The smaller marketing shops are also more entrepreneurial. Many times, the big agencies are most like the mega corporations they serve. The right small shop can bring energy and fresh ideas at a lower budget.

2) Sometimes, a combination of both a smaller shop and large agency working together is successful, too. We've worked as a team with some big agencies and it's been successful. We carved out our portion and the big boys did their stuff. Client got quicker service, paid a little less.

Here's an interesting insight on #2 above. Many of the big agencies are uncomfortable doing the smaller, quick turnaround projects on tight budgets--sometimes they feel obligated and pressured to do them (they don't want to say "no" to the client). They're willing to lose those projects to a smaller agency IF that agency is a good partner (doesn't undermine them or their work).

Trade Down or Partner Up--either are better than the alternative.

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