Agencies woo new clients by sprouting niche services

It's like dating. When a potential pool of prospects dries up, you might widen your search by joining a special interest club. On the other hand, you may decide to revisit the tried-and-true and give love another go with a past flame.

It’s like dating. When a potential pool of prospects dries up, you might widen your search by joining a special interest club. On the other hand, you may decide to revisit the tried-and-true and give love another go with a past flame.

When it comes to advertising, the agency approach to courting new business isn’t much different. As the battle for marketing dollars intensifies, many shops are chasing new opportunities through niche divisions specially created to serve emerging marketing trends. And some are doing so with the realization that they can squeeze a lot more work out of their current client relationships.

According to David Gibb, managing director of JWT Toronto, the quest for new work is an increasingly difficult one ‘from a couple of different angles. One, potential new clients are incredibly demanding in terms of hoops they know they can get people to jump through in order to get their business. Two, everyone’s competing pretty aggressively for the business that’s out there. Bottom line, I would say that it’s tougher than it’s ever been.’

One way in which JWT hopes to steam past its competitors is via Ethos, its new ‘social strategy practice,’ as the division’s VP Pamela Divinsky describes it. While Divinsky won’t share Ethos’ financial targets, she says her main objective is to become an integral part of JWT by filling a void in the market for this type of service at a time when corporate social responsibility is on consumers’ radar. ‘Most of our clients come to us and say: ‘We suspect we’re not getting the kind of social profile we could be getting and we know it’s not having a direct impact on the way we grow our business.”

So far, Ethos, which is the recent evolution of JWT Social Marketing, a specialist entity created four years ago, has 10 corporate clients, including Shell, HSBC, TD Bank Financial Group, Sick Kids and the MS Society. It employs six core staff, as well as a virtual network. In terms of recent wins under the unit’s new name and focus, at press time several new project contracts were in the process of being finalized. While reluctant to name names, Divinsky reported that a financial services firm, global consumer product manufacturer, and a retailer were all close to coming on board.

Similarly, Toronto-based ad agency Allard Johnson Communications and two partners – PR firm Veritas Communications and event planning specialist Integrated Health Care – joined forces to form Ingredients Nutrition Insights Group in March, a new shop that offers 360-degree expertise to food marketers increasingly challenged by nutrition trends and regulatory issues. All three companies already specialized in nutrition marketing and are members of Toronto-based holding company MDC Group.

Says Terry Johnson, president of Allard Johnson: ‘Consumers are more demanding about nutrition and the products they are consuming and the government is getting more involved in what can be put in those products. We believe there’s a significant future for this type of company, and not just in the short term. I think it’s going to get greater and greater as people become more concerned.’

Like JWT, the folks at Ingredients realized this was an area that was not only accelerating in importance within society, but was also one that remained relatively untapped by agencies. ‘I don’t think there’s anyone else out there right now who can provide this service with a single person leading it,’ notes Johnson. ‘Clients are responding extremely well. Most of those we’ve talked to have said: ‘This is exactly what we’re looking for.’ And we’re very close to two or three major opportunities.’

However, while he is optimistic that the shop’s future looks robust, Johnson says it’s hard to speculate on how much business Ingredients will actually devour. ‘It’s difficult to ascertain, because we’re not going in to clients and suggesting that they change ad agencies. We’re going in and suggesting that we have a service that crosses the entire board, and if they are looking for some outside consulting, we’re the people who can put together an integrated plan.’

He adds: ‘It’s not that we’re not looking for advertising clients, but this is our going-in position.’

Meanwhile, Toronto-based agency Capital C has focused on amassing powerful digital capabilities, a strategy that was accelerated by the purchase of Mississauga, Ont.-based data mining expert Kenna Group last fall, as well as the hiring of two digital marketing veterans – Glenn Chilton, who formerly ran JWT’s interactive practice, and technology guru Paul Quigley, who was president and CEO of iWorks in Richmond Hill, Ont. – to run it.

Capital C founder Tony Chapman says it was all made possible by the shop’s decision to join the Newport Interest Trust a year ago, an assembly of seven like-minded entrepreneurs from various industries. Joining the trust allowed Capital C to free up capital for the acquisition.

Adds Chapman: ‘We feel incredibly fortunate to be in an era when all these tools and technologies are coming into play. It’s a brand new day – and it’s a day that doesn’t belong to the mass media agencies like it used to, [but] whoever has the best ideas and whoever can amplify them in a way that can be measured. Our goal is not to become the biggest agency in the country. It’s to become the very best at helping clients physically and digitally enhance their brand.’

Chapman calls this a 360-degree approach – one that involves anything from picking up the product in the store, to entering a promotion, visiting a website, using a cellphone, and attending sampling events.

The acquisition of Kenna, which is currently being integrated into the agency, follows a twelve-year period of ‘organic growth,’ he adds. (The only other acquisition being Capital C’s purchase of a 50% stake in Montreal-based promo agency P2P last year.) During those six years, however, Capital C, like other agencies mentioned here, added divisions in response to emerging marketing trends, all while remaining in line with its own strategy. These included the addition of its Big Ideas Group in 2000, an event division in 2001, a retail marketing group in 2003 and a digital unit in 2004.

Particularly impressive are the new opportunities that have recently been presented to the agency by marketers interested in its Big Ideas function. ‘It’s a very important piece of our new business development – I would say about 75% of new business goes through this cycle, before we engage in work with clients,’ says Capital C partner Matthew Diamond. Incorporating a brand audit and ‘ideation session,’ the Big Ideas process can be used for new product development, new services, or even strategic partnerships. ‘It changes every time,’ according to Diamond, who says that it can take as little as four to five days, or as long as two to three weeks.

A company that recently approached the shop for its Big Ideas capability is Grimsby, Ont.-based Andrés Wines, which wanted help for the launch of XOXO, a brand geared at women searching for a vino that is approachable, fun and stylish, says Diamond. A national launch is seeing the brand hit store shelves now, and Capital C was behind the name of the product, which connotes ‘a hug of one grape, with the kiss of another,’ as well as the positioning, packaging, viral marketing and media partnership strategy. The goal, according to Diamond is to achieve top-10 wine brand status within the next six to 12 months.

XOXO follows Capital C having put its stamp on another of the vintner’s brands – Croc Crossing, which contains a combination of Aussie and Canadian varietals. Here too, the agency had carte blanche – and was responsible for the same breadth of elements.

Ditto for Dew Fuel – a new energy drink from Pepsi that aims to compete with the Red Bulls of the world. Capital C created everything from initial concept to packaging, online and viral marketing, and events for the brand, which is all about ‘explicit energy,’ says Diamond.

In all, Chapman reports that the agency has grown by double digits or better in the last five years. Interestingly, the majority of that growth has come from existing clients. ‘[With current clients], you’ve developed the relationship, you’ve developed the trust, and if you have a good track record, if you’re fair in your pricing and responsive to their needs, [you can get more work from them.] I have yet to meet a client that says I’ve tapped out 100% of their market share.’

For his part, JWT’s Gibb agrees. In fact, he believes the first place an agency should look for additional business is its existing client roster. ‘People often overlook that because it’s sexier to go after someone new, than to try to get more out of companies you’re already working with. Over the last few years, we’ve been tremendously successful in that area.’

For instance, he says, JWT has won the Nabisco and Delmonte business from Kraft, after having worked on a slew of their brands, including Kraft Dinner, as well as the Nicoderm/Nicorette business from Pfizer, after handling some brands in the pharmaco’s consumer health portfolio. He adds: ‘You always keep an eye out for a brand in trouble – places where the client isn’t getting what they would like from someone else – and if you’re doing a good job, the opportunity often presents itself.’

Agencies expanding stateside try brand-boosting aid from U.S.

Northern Lights gets response from RSW push

Want to travel over the border in search of new clients, yet not take your eye off the ball back home? One way to help get your foot in the door stateside is to seek help from within, from firms such as Cincinnati, Ohio-based business development and lead generation co. Reardon Smith Whittaker (RSW).

The company began offering its services to Canadian ad firms a few months ago, and has already signed Toronto-based DRTV shop Northern Lights Direct Response Television. With experience in CPG marketing from Andrew Jergens Company and SC Johnson, as well as stints at DDB Needham and AccuPoll Research under his belt, RSW owner and managing director Mark Sneider describes his operation as ‘an outsource business development group that either complements or acts as a proxy for an agency’s business development efforts.’

What specifically does RSW do? According to Sneider, he and his colleagues study their clients’ portfolios then suggest what tactics to use to penetrate different sectors in the U.S. ‘It works on two levels. First, [we consider] how we can most effectively take their offerings and create a compelling differentiating position. Then we [rely] on high-frequency contact, using multiple mediums to reach out to target prospects that make sense in terms of the work the agency has done.’

For Northern Lights, which joined RSW last spring, that translated into promoting the shop’s offerings as more profitable, less risky and as offering a higher probability of success. So far RSW has opened doors for the DRTV agency at a major publishing company and furniture retailer south of the border. Now it’s up to the Canuck agency to do the rest.

Sneider believes RSW’s services help agencies face the challenge of sustaining their expansion efforts in a consistent, high-frequency manner. The problem is they often get distracted managing existing clients, he says, adding, ‘We look at it as a regeneration effort, as well as an awareness and brand building game.’ LD