2009 Creative Services Budgets — Time to Tighten the Belt?Here’s an article I pulled out of my archives. It was originally written after the burst of the technology bubble completely hammered the PR industry. Alas, it seems just as relevant now.
Today, it would be hard for even the most die-hard optimist to say that the economic outlook for next year isn’t a concern. Many PR budgets will be cut and all of them will be more heavily scrutinized. As a corporate marketing or communications professional, the decisions you make today become realities your company will have to live with for the next several months. This makes now a great time to evaluate what you are getting out of your advertising, public relations, graphic design and interactive service agencies. Regardless of business climate and budget, the first and only priority of your agency’s account teams must be to ensure that every dollar they spend is used to contribute to the success of your company. In good times, this means having the discipline to stop themselves (and possibly you) before moving forward on big campaigns that make a lot of noise, but don’t get you closer to meeting your business objectives. In hard times, it means your agency might need to help you determine which programs should be scaled back, which ones should be approached differently and which ones shouldn’t be fiddled with. In extreme cases, they will let you know that a serious re-alignment of goals, results and resources is in order, and they will help you make this case to management. By sacrificing some short-term revenue, your agency is betting on your continued success and demonstrating a long-term commitment to your business as well as their own. They know that when you look good, they look good-when you fail, they fail. Understanding this principle provides the foundation for a long-lasting business partnership. Unfortunately, in good times as well as bad, there are other pressures that can cause some companies and their agencies to deviate from this course. They act first, think later and make some big mistakes in the process. When communications dollars are plentiful and business is good, some companies try to spend their way into a position of market leadership, giving little thought to how expenses map to results. Some agencies are more than willing to help clients spend their budget by promoting half-baked strategies or ideas. This approach usually generates nothing more than fat invoices. Conversely, when resources are tight, anemic communications budgets are often expected to yield unrealistic results. Adding fuel to the fire, some agencies attempt to bridge the budget-vs.-expectations gap by offering more for less through steep discounts as a way to win business. If you want to get stellar results with limited resources, you need a smart agency with the proven ability to do things right the first time. This isn’t the time to bargain hunt. When evaluating your communications budget and considering where to invest, consider these important questions:
- How long has the agency been in business and what is the health of the organization?
- What is the agency’s business model?
- How does management protect against market volatility?
- Has the agency operated successfully in strong and weak markets before?
- How did the team help clients weather the storm when times were tough?
- What processes does the agency have in place to manage your budget and avoid overspending?
- How are contracts and billing handled?