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Building a Successful Agency Growth Strategy
David BloisRegional Director1st October 2007
• Share some insight
• Across the total Marketing Services landscape
• Understand levers for growth
• Immersed in developing Agency Business models
• Partners in transition and reinvention
Credentials2
Strategies for Growth?
Rare Species
Financial Targets and Vision
No Route map just imperatives from the Board room
Fundamental lack of own business intelligence
Doesn’t cascade or impact anywhere
Must result in an action
3
Levers for Growth
7R’s Business model:Measures Confidence at the heart of the Agency against
Revenue Growth
Relationships
Reputation
Resource
Return
Reality
Route
1
Reputation
Revenue Growth
Relationships
Reality
Reality
Realit
yR
ealit
y
Return
Resource
RouteCONFIDENCE
6
Four Deadly Sins
Margin Improvement
Positioning
Business model
Communication
(There are more but not for today)
Margin Improvement
Good management reporting
Address low client profitability
Fame or Fortune only
Fee negotiation/open dialogue
Commercialise your people and reward them
Margin Improvement – Fame or Fortune
% of Income
60%
25%
15%
Number of clients
1-5
6-10
11-15
15 Client Model
% of Income
68%
20%
12%
Number of clients
1-5
6-10
11-34
Example – Client Gross Profit Summary
1. Unilever
2. Nike
3. Tesco
4. Premier
5. Express
6. GSK
7. BMW
8. L’Oreal
9. Mars
11 – 34. Others
Margin Improvement - Client Mapping
Re-negotiate Golden 40%
Up or Out Lock and Load
200%
100%
0%Low Med High
Profitability
Gro
wth
Positioning
Strongest Commercial driver not fluff
“Creating and owning a territory in the minds of your people and clients that allows you to differentiate and dominate.”
Positioning Can Achieve:
Olympian Status Only Choice One overall offer; multi revenue streams / buying points Value Price Increase market share with clients Create new budgets Separate Thinking from Doing Gain real Client Intelligence
Adding Value
‘Think For me’
The Wider Perspective
Great Implementers
• Reliable
• Tactical
• Reactive
• Predictable
• Safe
• Nice people
• Project based
Business Partners• Outsource
• Align visions & growth strategies
• Align business models
• Share the prize
• Long term partnership
• Contracted
Passive Active
Positioning - CLIENT INTELLIGENCE
Service Partnering
Marketers• Challenge
• Inspire
• Lead
• Be demanding
• Measure
• Real Talent
• Retained
‘Do for me’
Doing a Good Job
‘Help me think’
The Client Agenda
Business Model
The way an agency is organised and structured…
..to deliver the best quality of service and profits.
Business Model Splendid Isolation
Lack of management control and measurement
Inefficient, linear, silo based
Scalable?
Running harder to stand still
New chassis , old engine
Understand the new models
Start to value time
Profit from people
Communication
Poor across the sector
Internal and external
Critical success factor in achieving growth strategy
Agencies still structured in silo’s, baton passing
Engage and empower every mind
Effects of a Successful Growth Strategy on Exit Valuation
Premium Values Strong reputation Intellectual property rights Strong management Distinctive positioning Long term contracts Sustainable business
model brand Timing ahead of curve Scale
Discount Values Low margins >10% Unsustainable profit
record Lack of succession
management Reliance on one client Narrow field of services Weak positioning- not
distinctive.
Proof of the Pudding.. Some Recent Transactions
If you’d like to know more…
Global Dynamics
One day Conference with an evening cocktail party
Friday, 2nd November 2007Hyatt Regency Istanbul, Turkey
Leading experts in the industry will provide insights into:
Acquisition and integration best practice Trends in gaining a digital advantage Developments in search & mobile marketing Routes to international expansion Obtaining private equity Funding growth and expansion Maximising shareholder value
Speaker SelectionKey Note Speaker- Richard Pinder, Chief Operating Officer, Publicis Worldwide
Thank you. Any Questions?
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