One of the easiest ways to lose a lot of money is to select the wrong advertising agency. Selecting the wrong agency will waste your investment while raising false hopes and increasing your frustration. And yet it happens all the time.

Companies select the wrong agency because they are wooed by razzle-dazzle and dynamic presentations, by big names and clever ideas - rather than by a solid grasp of the true purpose of advertising. That purpose is to generate profits for your company - nothing else. And that purpose is achieved when you realize that advertising is simply a fancy word that means selling.

The first thing to realize is that advertising agencies are misnamed in the current economic environment. Instead of focusing on merely advertising, a truly effective ad agency focuses on marketing and knows that advertising is but one form of marketing. Beware of the ad agency that speaks only of advertising and neglects the many other functions of marketing. Because they are advertising agencies, they see their mission as advertising. But keep in mind that advertising is only part of the process of generating profits for you.

Selecting an agency means selecting a valued member of your marketing team, not simply a company that creates great advertising.

Beware of the advertising agency that speaks too proudly of the awards it has won. Instead, an agency should speak of the profitability and growth it has achieved for its past and current clients. Great advertising agencies become great because their clients have grown and prospered. Ideally, the agency that you select should be your agency for years, growing by helping you grow.

You must view your task as helping the ad agency you select. Your most significant contributions will come in the form of data and judgment. Supply data that advertising agencies can use creatively, knowing that the true definition of creativity is something that generates profits for your company. Use judgment in recognizing who is the advertising professional, and who makes the products and services to be advertised and marketed. Unfortunately, many companies set up an adversarial relationship, gently criticizing the agency's ideas and work.

I've spent many years working for advertising agencies worldwide, and I've spent even more years serving clients who hire agencies. So I've had the opportunity to view advertising from both sides of the fence. Based on that experience, I urge you not to select a big-name advertising agency if you're a small-name company.

The chiefs of those large agencies will make a presentation that will win your heart and your business. But they will not be the people who work on your business. Big agencies often assign the work to neophytes. They don't see a need to have their most fertile minds and highest-paid employees help your growing company when they could be helping their largest clients. Remember, they are as profit minded as you are, but frequently it is their own profits upon which they concentrate. Keep in mind that they earn enormous commissions by placing advertising for their large clients.

A rule of thumb: the smaller your business, the smaller the ad agency you should seek; the larger your company, the more services you'll need. A giant advertiser recently moved some of its business from its successful agency in a small city in the United States to a far larger agency in a larger city - because the larger agency had more global services, and this advertiser was thinking globally. But global matters might not influence your own decision in an agency. The services and the quality of the people who will be doing the work on your business should be your prime considerations.

Copyright © Jay Conrad Levinson 2000

Related articles by Jay Conrad Levinson:

10 Questions to Ask Before Choosing an Ad Agency
What to Look For in an Ad Agency