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Founder and CEO of Media Bridge Advertising®
“We’re looking for a national agency.”
“At some point, we want to work with a national agency.”
“When we enter our tenth market, we’re going to look for a national agency.”
A few years ago, a Minnesota-based company was having issues with its national media-buying agency. On paper, the agency’s media plan should have worked. It covered the DMAs (designated marketing areas) the company needed (and more). Radio spots delivered accurate information about the product on the highest-rated stations. But not enough people were calling or clicking. Why?
A local agency said they could do better by executing a precise, localized approach instead of a cookie-cutter national plan:
• They dug deep into the demographics and media environments of only the company’s target DMAs.
• They took the time to negotiate aggressively with each station in each market.
• They uncovered “sleeper” stations with modest overall ratings that performed well with the target demo.
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• They identified popular DJs who were familiar with the problem that the company’s product addressed, then enlisted them to deliver radio endorsements.
The result: The client got more leads in a week with the new agency than they usually got in a month with the old one.
In my two decades of media buying and selling experience, I’ve experienced countless scenarios like this one. Which is why I’m so confused when I still hear entrepreneurs and marketing professionals aspire to working with a “national agency.”
What is a ‘national agency’?
For too long, people have divided the advertising world into “local” and “national” agencies. As the conventional wisdom goes, while local agencies might buy media in multiple markets, “local” is seen as limited. National agencies have more physical locations, as well as more employees, overhead and fees. But they can presumably get better deals with their media partners.
It’s all a myth. Today, your agency’s headcount, revenues and locations don’t matter. If you want the most bang for your media buck, it’s about how they buy, period. In other words: There aren’t local agencies and national agencies. There are national agencies that buy lazily and national agencies that buy locally.
Does a ‘national’ agency save you money?
Unless you’re truly national (like an e-commerce company, McDonald’s, or a consumer brand like Kleenex), a broad, national media buy probably wastes money. Our analysis shows that a cookie-cutter national buy can waste up to 70% of your budget in overspill if you’re targeting 20 or fewer DMAs. Companies with huge marketing budgets can tolerate that. Most can’t.
Generic national plans can also include markets you don’t need, stations that won’t perform and time slots no one will hear — which is like buying an expensive gym membership when all you need is the pool. Plus, any discounts you receive might be paid two times over in fees and other markups.
A local approach is more efficient and uncovers new opportunities. For example, many “national” agencies don’t seek out endorsers or meaningful added value. It’s a lot of work, and they’d rather put money where the margins are: their creative. (Too bad, because endorsements work.)
Does a ‘national’ agency give you more reach?
You’d be surprised how often this isn’t the case. I know “national” agencies with multiple office locations that buy in only one or a handful of DMAs. A year of virtual work has also downgraded the importance of physical office space. My agency buys media in over 200 DMAs from a single Minneapolis location.
More importantly, it’s one thing to buy in a market; it’s another to truly know it. Buying a generic national plan is easy: You call a rep firm who looks at the budget and campaign goals, then pulls the same plan off the same shelf. This formulaic approach appears to achieve your goals on paper, so the agency calls it a day and moves on.
A local approach is higher maintenance — for the agency, not the client. It means customizing every campaign, negotiating every penny, applying actual thought and strategy to reach campaign goals, taking a “not all markets are created equal” approach, and making every dollar work as hard as possible. In other words, it means caring.
Does a ‘national’ agency give you more flexibility?
No. If a “national” agency buys through a large media company, your message might be restricted to, say, only NBC affiliates. What if the ABC affiliate is much stronger in Memphis? Too bad. You’re stuck with the one they want you to use. Similarly, a “national” agency might buy the Today Show in two markets, even though it’s the No. 1 morning show in one and doesn’t even crack the top five in the other.
“National” agencies also make it hard to mute DMAs in a pinch. Say you sell chicken in supermarkets across the country and there’s a salmonella outbreak in New York. You can’t just “turn off” New York. Either you stop advertising in every market, or you keep advertising in New York and open up a PR crisis. With a local buy, you can be more nimble and responsive.
Bottom line: Don’t fall for the “national” myth. It’s about performance, not optics.
A generation of marketers is still convinced that once their business reaches a certain stage of growth, they have to go with a “national” agency or approach. But that’s a relic from the Mad Men era.
It’s no longer about “how many points do we need in market X to hit gross rating point Y.” It’s about real-world performance: What’s best for each client in each market, in each medium, on each station, to deliver leads and sales. A localized approach is more work for the agency. But if you truly care about helping your clients, it’s the right thing to do.
Media buying is surgery. Some agencies use a machete; others use a scalpel. If you were going under the knife, which one would you want the doctor to use?
Forbes Agency Council is an invitation-only community for executives in successful public relations, media strategy, creative and advertising agencies. Do I qualify?
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Author: Tracy Call, Forbes Councils Member