How to choose an advertising agency

Written by Nate Hendley

Advertising works — when it’s done right. Done wrong, it not only costs you a bundle, but can actually undermine the credibility of your firm.

However, finding the ad agency that will put your muscle in your marketing can be a daunting task. So PROFIT-X asked two industry experts: What should firms consider when hiring an ad agency?

Determine your needs — and your budget

Before looking at different agencies, you should have a clear definition of your needs, suggests Andrew Macaulay, a founding partner of Toronto-based ad agency Zig, whose clients include Holt Renfrew and Lavalife.

For example, are you set on a television commercial? Newspaper advertisement? Perhaps you’re looking for someone who can optimize your presence at tradeshows.

If you are unclear about your needs, then you should at least have a sense of “how serious your commitment is,” says York University’s Alan Middleton, professor of marketing at the Schulich School of Business in Toronto. Translation: know how much money you’re willing to spend.

Search high and low

How will you find an agency? There are several avenues to explore. Trade associations such as the Institute of Communications and Advertising (ICA) and trade publications such as Marketing or Strategy should be your first stop. The ICA runs a website at that offers information about advertising firms, including their size, accounts, areas of strength and history. Marketing ( runs an annual issue on the top advertising agencies of the year and regularly carries notices from freelancers looking for work.

Of course, word of mouth often works best: ask friends and colleagues about their experiences with various agencies.

Big vs. small, old vs. new: what to do?

Should you go with a well-known, national ad agency, or a local, niche firm? Consider the pros and cons. A big firm usually has more than one core strength (such as creative abilities, marketing skills and strategizing) and can produce a wide array of advertising (such as TV, radio, outdoor, subway, newspaper and magazine and online). As a client of a huge firm, however, you run the risk of being treated “as an afterthought,” warns Macaulay. Small firms are generally better at offering up-close-and-personal treatment, but have fewer core strengths.

New firms generally have “more enthusiasm and nimbleness” than older firms, continues Macaulay, while older firms have “depth and track record.” Still not sure? Talk to fellow entrepreneurs about what has worked for their firms.

Narrow it down

Once you have an idea of what’s available, make a shortlist of five or six advertising firms, suggests Middleton, and contact these firms over the phone to discuss your needs. Whittle your shortlist down to three companies, and ask them to make a presentation, including case histories of work they’ve done for previous clients. Judge for yourself whether there’s chemistry between your staff and their staff.

Don’t expect a free lunch

Be aware that most agencies won’t create freebie ads to win your business. “Speculative pitches” — mock ads created by an agency at their own expense in order to attract new clients — are frowned upon in advertising circles, as agencies view such pitches as akin to cheating, acceptable only when a huge account is up for grabs. (Note: this unwritten rule is not always followed.)

Cost considerations

Advertising isn’t inexpensive. Here are some ballpark prices for you to ponder:

  • A full-page newspaper ad in a big Toronto daily costs about $15,000 to produce, and another $30,000 for one-time publication
  • A radio spot costs about $10,000 to produce, and another $500 to $5,000, depending on when and how often you run it
  • A print campaign in a high end magazine with national distribution could cost $350,000 to $500,000
  • Just producing a quality television advertisement can cost about $250,000
  • Outdoor advertising is good value for your dollar because you can reach huge audiences
  • Unaddressed direct mail (a.k.a. junk mail) is cheap, at as little as 3.7 cents apiece

If your budget is tight, consider hiring a freelance advertising designer or copywriter over an agency, suggests Middleton.

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© 2003 Nate Hendley

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