State ad agencies tackle changing marketplace with innovative strategies
Published: April 26,2013
Recently when Viking Range Corp. was bought by a much larger company, Middleby Corp., marketing campaigns that had been handled by the Ramey Agency were suspended. That type of merger of a Mississippi-based company with a larger company based in another state is a long-established trend that can lead to loss of work for advertising agencies based in Mississippi.
Chris Ray, CEO of The Ramey Agency, said it isn’t unusual for advertising agencies to be faced with challenges like the one with Viking Range.
“We went through a very similar situation in 1999 when Tommy Ramey passed away unexpectedly from complications from surgery,” Ray said. “At the same time a couple of clients, for one reason or another, were making some changes. We certainly understand what it is like to regroup and move forward.”
When a client either reduces spending or makes a change taking on another agency, what do ad agencies do to survive? This happens frequently not just in Mississippi, but throughout the country. Ray said there are three things their agency does:
*Second, they pull out all the stops to keep a good relationship with existing clients to ensure they are continuing to meet their needs and exceed their expectations.
*Third, they place a big emphasis on investing the right amount of time and energy in maintaining their internal esprit de corps.
“One thing I really like about our team at Ramey is there is a good sense of esprit de corps,” Ray said. “We help maintain that when we are going through uncertain times by making sure to communicate early and often. We celebrate when there is reason to celebrate. And we keep everyone focused on growth and the big picture.”
You might hear cynicism sometimes about advertising, that it is about pitching products that people don’t really need. But Ray said he and the other Ramey employees get a lot of satisfaction from doing campaigns that are critically important such as trying to prevent teen pregnancy, and encouraging school children to be more physically active.
“We also work with the Mississippi Development Authority on attracting businesses and increasing jobs,” Ray said. “It is nice to be focused on really big, important things, whether for our regular clients or pro bono clients such as Operation Shoestring that helps 900 families in Jackson rise up to their potential in a variety of ways.”
Ray said business is brisk. For example, right now the agency is working on five major video TV productions for clients. “That is exciting to see our workload and work level ramp up dramatically,” Ray said. “Everyone is juggling lots of balls, but that is what we would all prefer.”
Liza Cirlot Looser, CEO, The Cirlot Agency Inc., Jackson, has seen a lot of changes in the 29 years their agency has been around. She said in the late 1990s, ad agencies in the state took a hit when quite a few large corporations in Mississippi such as Jitney Jungle, Deposit Guaranty, and others sold or merged with larger companies out of the state.
“Nine times out of 10 the corporation either chose an agency in its home town or in a major metro market like Chicago, New York or L.A.,” Looser said. “That created a vacuum of available work and clients. We were looking recently at an old Mississippi Business Journal from the 1980s, and there were 50 advertising agencies in the state. Every major community of the state had one. Now, many have gone out of business or have reduced staff drastically.”
The advance of technology has also created less job demand. Looser said one person can do what three or four used to do in the 1970s or 1980s.
The Cirlot Agency’s strategy to compete was to specialize in one area, aerospace and defense, and open an office in Washington, D.C.
“In order to grow a business long term, you are going to have to step outside of the state of Mississippi and look at clients on a regional, national and global basis,” Looser said. “There is a of talent in Mississippi, and there is a ton of business out there. But being from Mississippi is a little bit of a hindrance because you aren’t from New York or Washington. Our opening an office in Washington has made a big difference in how easy it is to get in front of prospects. We do as much work as we possibly can in Mississippi. But if you want to grow an ad agency, you are going to have to go outside of Mississippi because we don’t have the multiple million dollar clients that we used to have.”
Lance Hopkins, professor of marketing practice at the University of Southern Mississippi/Gulf Coast, said mechanization that means far fewer people are needed to produce advertising campaigns is just one way that technology changes have impacted ad agencies.
“The fundamentals of advertising are still about the same, but what is interesting to me is all the media fragmentation,” Hopkins said. “It used to be you had three major television networks and PBS. Now you have all the cable stations, plus you have the issue with all the technology that allows people to record programs, and watch them later fast forwarding through commercials.”
That makes it hard to tell how many people are watching the commercials, and makes companies purchasing TV ads uneasy.
“The other big issue is all the Internet advertising,” Hopkins said. “I’m not seeing how you accurately measure the effectiveness of Internet advertising. If an ad pops up on me, I get aggravated. I don’t go to the Internet to look at advertising. I go there for a specific reason.”
With the advent of the Internet, newspaper readership and advertising are down significantly, yet the costs keep going up. Hopkins said it is hard to tell clients that they need to pay more money to reach fewer people.
“How do you think that goes over?” Hopkins said. “But that is the reality.”
Hopkins thinks small and large ad agencies in the state are doing well. The small agencies often have a good niche in their market, and a lot of the largest agencies in the state do really good, creative work that keeps them profitable. It is the mid-sized agencies that might struggle the most.
“The big boys don’t want to go after the small advertising contracts,” he said. “But if they are mid sized, the big boys can come after them pretty readily.”
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