LARGEST AGENCIES BROADENING CLIENT BASE
Compiled by Agri Marketing editors
Editor's Note: Agri Marketing magazine recently spoke with executives from the top five agriculture agencies to discuss the changes in agriculture and marketing communications and how their agencies are responding. The executives are:
What have been some of the bright spots in your agency over the past year?
But the real bright spot has been our team's continual passion for agriculture. Every team member comes to AdFarm with not only the desire to work in communications but with a passion for farming and ranching and all that surrounds the business of agriculture. The "passion" as expressed in our Web site says it well - we are "Crazy About Farming."
We also established a fourth office in Des Moines, Iowa. This is the agency's third expansion in four years. Des Moines is a strong market with many opportunities, and we've hired Joy Johnson, who has a strong background in the agricultural, financial services and telecom industries, to help us realize those opportunities.
Nickerson: It has been one of the most momentous years in our agency's history. Three examples: 1) We maintained our status as the largest agri-marketing agency in the country; 2) Bader Rutter won Best of Show at national NAMA; and 3) We were recognized as the top mid-size agency of the year by BtoB magazine. It'll be hard to top that string of honors.
Rhea: Seeing our company's billings grow over 27 percent last year, a period in which so many companies struggled. Last September, Crain's Chicago Business named R&K as the fastest growing agency in the Chicago area. Our ag business continues to outpace our other business segments. We're very proud of this accomplishment.
What is it about your agency that is winning over new clients and retaining existing business?
Barr: Osborn & Barr Communications focuses on a company's entire business picture, not just snapshots of specific areas such as marketing communications. The agency then develops plans that make the best sense for that company, whether it's looking at the brand positioning, improving the distribution channel or implementing different marketing tactics. Our approach has been successful, particularly in the brand management, business-to-business and channel marketing arenas.
Of course, we're also proud of our staff. These folks are dedicated, talented professionals, who are driven by a "can-do" work ethic. They're deeply engaged in all aspects of the client's business and/or processes, and work as a team with our clients to form strong partnerships. We pride ourselves on innovation and "out-of-the-box" thinking, and we're constantly challenging ourselves to improve our work and our clients' success.
Perrin: Since day one at McCormick, we have focused much more on retaining business than winning new business. The ag industry is so small and so tight, word gets around about which agencies put clients first and deliver real value. We believe our best new business tool is taking care of our existing clients, and we've renewed our commitment to creative and service to make sure we stay out front.
The other area we have focused on is cost control - clients are under more budget pressure than ever. And if we can be more efficient and pass those efficiencies on to clients, everyone wins.
How is consolidation in the ag industry affecting your agency? How have your business development strategies changed? Have you broadened your definition of ag?
AdFarm: Consolidation in the ag business sector has been a factor for many years. AdFarm as an agency has been working with a number of clients who have faced mergers and/or acquisitions. As a result of a very proactive approach, we have been able to grow through this consolidation period. We believe this has happened for a number of reasons. First, our dedication to agriculture - during the consolidation period other agencies turned to non-ag business in order to maintain and grow their agencies. At AdFarm, we had to focus and intensify our expertise in both "ag-ness" and "ad-ness" in order to increase our value to our clients and to grow. Second, we realized to serve larger consolidated clients, we needed to improve our offer. We developed a three-year plan to add four strategically located offices in the heart of the agriculture market. With this new expanded structure and added resources, we are better able to deliver on our "Going Deeper" philosophy.
For the majority of our years in business, we focused solely on helping our clients market to their farm customers. While this continues to remain our primary focus, we have broadened our base somewhat in the past two years to assist in the marketing of products one level up the value chain.
Barr: Like some other agencies servicing the agricultural sector, Osborn & Barr has evolved to deal with the effects of consolidation on our industry. Many great companies have been folded into larger organizations or have disappeared entirely. From a marketing perspective, that means fewer potential clients in the "pure" agriculture category.
To address that, Osborn & Barr is now looking at agriculture in a "bigger picture" format. For example, Michelin is not considered a pure agriculture company - especially in the United States. However, we won the business by demonstrating that we know how to reach agricultural and rural lifestyle audiences. The same premise holds true for our Propane Education & Research Council client. In essence, we're using our strengths as an agricultural agency to launch us into related fields.
Nickerson: Fortunately, we have not been affected in a significant way by consolidation during the last year. Certainly, the number of key players continues to decline and margins have been strained. That necessitates a very focused approach to getting the best return on communications investment. Among marketers, there is a very significant danger in letting short-term decisions unravel years of building brand equity.
Perrin: McCormick Company has been fortunate to benefit from ag consolidation in terms of existing clientele. On the new business front, the consolidation means fewer opportunities to win new business, so we're doing our best to drive our quality to an even higher level.
Four years ago, we expanded our approach to ag both upstream, such as biotechnology, and downstream, including food products and distribution. We define agriculture as everything involved with food and fiber.
In addition, we see a countertrend of expansion due to an influx of nontraditional ag companies entering the market in several areas, including technology and downstream marketing. These types of companies represent significant opportunities for agencies.
Rhea: Consolidation has increased the size, clout and opportunities for some of our clients and, at the same time, removed some opportunities for us to work with other clients in categories where our people have strong competencies.
Rhea & Kaiser's business model is in a constant state of change. We're learning to deal with change. We remain very flexible. We've been able to reinvent ourselves to meet the changing landscape. As an agency, we are getting better at working in categories that are in a constant state of transition.
Our strategy hasn't really changed, because we've always had a broad and very positive vision regarding the future of the category. Rather, we have taken a closer look at the business philosophies of potential clients to be sure that these are companies with whom we really want to conduct business. If a prospective client is a company that we think we would like to do business with in the future, then we apply every available resource to win that business.
How has your mix of services changed over the past year or so?
AdFarm: Our mix of services has remained the same, but the relative weight of various services has altered. Today consulting services represent a larger portion of the mix than in the past. And the types of online/interactive support services we provide are at a much higher level than the basic Web sites of previous years. Finally, we have been more involved in supporting all means of personal, one-to-one contact programs.
We have been very aggressive in recognizing the trends and staying ahead of the curve on these changes. We have also been actively increasing our resources in services not normally found within a traditional agency. Our expertise in channel communications, political issues and global agriculture are three areas where we are much more active with clients.
Barr: Osborn & Barr Communications is headed where we feel the industry needs to be ... toward true business and marketing integration. O&B has learned that in order to achieve the right results for our clients, and in turn, become successful and grow, we need to concentrate on their core business needs. From there, the agency can ensure our clients have the most appropriate marketing solutions to fit those business needs. This integration needs to happen from the very beginning on the business and account planning side and follow through the appropriate implementation tactics, such as brand management, advertising and public relations.
Nickerson: There has been a gradual shift away from mass media to more targeted disciplines such as relationship marketing. However, we believe that advertising is, and should continue to be, an excellent means of quickly building awareness. But with the flow of new product introductions dissipating, many of the brands in the market are somewhat mature and in a maintenance mode.
Perrin: ´´Our mix of services per se has not changed, but our weight per service component has. Database services, Web marketing and PR are carrying more weight, and traditional advertising is carrying less. Overriding everything, however, is our strategic consulting with clients. This is in more demand than ever.
Rhea: We changed our name from Rhea & Kaiser Advertising to Rhea & Kaiser Marketing Communications more than 10 years ago because our clients were asking us to help them in areas that really weren't defined as "advertising." Today, we offer a complete range of communications services - advertising, public relations, interactive, database, event planning - all integrated around strong strategic planning. Our job is to provide the right mix of services that our clients want and not just what might generate the most revenue for R&K. We're in this business for the long haul. To accomplish that, we focus on those services our clients value and provide them with value every step along the way.
What have been the big issues of your clients in the last year?
AdFarm: Mergers. Industry issues. GMOs. NAFTA. Market prices. Economy. Legislative issues. Harmonization. 2002 Farm Bill. Regulatory issues. Chemical registrations. EPA. Cost containment. All of the above have had an impact on our clients' ability to keep business moving with the farm customer. Much more effort takes place "behind the scenes" than many realize. Because of our depth of understanding in agriculture, AdFarm has had the opportunity to be at the table on many discussions related to these issues.
Barr: The weather, farm bill, Argentine crisis, war with Iraq, energy prices - it affects our clients. The trick to prospering despite the times is to be well positioned in your respective "channel" with a strong brand that delivers real value.
Nickerson: It's been critical to do up-front planning to efficiently focus and prioritize limited resources. We've taken a good, hard look at investing our dollars in the right products for the right market and geography. Another issue has been the pressure put on prices at the farm level due to the competitive environment, which has made it a very tough selling environment. Throw in war, a troubled economy, drought, world trade issues and guess what you have - great uncertainty. However, the resilient will survive and prosper.
Perrin: The biggest issue is doing more with less - almost all companies are stretched in terms of people and budgets. This translates into change, and we have tried to be in step and be change leaders. Fresh thinking is more critical now than ever. Doing things "like we did them last year" is likely the kind of thinking that will kill an agency in today's environment.
Rhea: Most of our clients have not only been dealing with tough competition and a rough economic environment but they have been dealing with mergers and acquisitions. Many are just wondering: will I have a job? We, along with our clients, are in this together. We have to help one another and be flexible. This year's business model isn't necessarily going to work next year. AM