Big Fish, Little Pond or Little Fish, Big Pond? Regional Companies Need to Decide.

When it comes to agency selection, regional mid-market companies can be at a real disadvantage if they select the wrong agency.

Every so often, a small local company works hard and smart enough to become a large regional company. The owner focuses his/her attention to detail, service, special needs or another business niche’ which makes the company excel.

As the company grows the management is very careful to select employees that represent their company well, share their work ethics and values. The business continues to grow and now they have hundreds, possibly thousands of employees and millions of customers. A nice story, right? Then something happens.

Management wants continued growth so, they begin to look for subcontractors and affiliations larger than themselves. They believe growth is achieved by surrounding themselves with companies larger than themselves. It’s the same story when they begin to look for a creative or media agency. Bigger is better right? Often that is a terrible mistake.

Many regional and mid-market companies have large budgets but large is a relative word when considering an agency. $30MM may represent the major portion of receivables for a smaller agency’s portfolio while it may only be the staff’s coffee money when working with a conglomerate.

While they rarely admit it, a conglomerate often subs out its regional buying to a smaller agency or rep firm such as Katz or NCC Media. While these are good companies, they often add costs to the client’s bottom line and often the client is unaware this is happening.

Ask yourself this. How did your company become successful? Did it succeed by subbing out its work or were they personally invested in it? Remember when your company first started how important every account was to them? It’s no different with agencies, especially smaller ones. A single large account is extremely important to their success and they appreciate the trust instilled in them.

While they may not be able to boast about having hundreds or thousands of employees they also probably don’t have as much dead wood lying around in the office either. They can’t afford to. They need to run leaner and meaner, and they also need to compete and secure the best talent available because they need to do more with less …. and they usually do. Most importantly they need to service you well or you’ll take your business elsewhere.

When large conglomerates aren’t subrogating their regional business to a buying agency or rep firm, they are often buying in-house using inexperienced fresh green reps cutting their teeth at your expense. They lack knowledge, they’re overworked, under paid and often under appreciated.

Regional companies face specific challenges that national companies don’t face. Typically, a regional or mid-market company has a smaller budget than its national competitors and needs to be nimbler with their investment. In addition, regional companies are at a financial disadvantage when buying media because the industry was built for national and very small local companies. Regional companies need to purchase multiple markets but don’t receive the buying metric benefits of national advertisers.

Mid-size companies need an agency with large scale local buying experience. An agency that knows where the landmines are buried and will navigate their client’s media course around them. They need an agency willing to listen, think and then get busy doing the heavy lifting.

In the end it’s often advisable for a regional or mid-market company to be the big fish in the small pond than the small fish in the big pond. Their continued success may count on it.