Q&A: Peter Levitan – How To Build A Kick-Ass Advertising Agency

“We know that clients, especially project clients will eventually walk out the back door, so it is imperative to keep the right new clients coming in the front.”

Every parent or authority figure, in some lingual formation or another, has at least once said: if you’re going to do something, “don’t do it half-ass!” Sage advice. But rather than not doing it half-ass, why not just go full throttle and do it kick-ass?

That’s the driver for advertising agency business development consultant Peter Levitan in his new book How To Build A Kick-Ass Advertising Agency. Levitan, who himself built an impressive resume prior to consulting – including running marketing at Saatchi & Saatchi Advertising Worldwide in New York and London as well as buying and selling three of his own agencies, also wrote the 2014 book The Levitan Pitch. Buy This Book. Win More Pitches.

For the new offering, published earlier this year, Levitan goes deeper into 27 agency management subject areas to provide what he describes as “a detailed glide path to winning the advertising game in the ever-expanding and highly competitive marketing universe.”


 

We recently caught up with Levitan for some insights from his long career and his new book. He spoke with us from his home in Mexico.

The intro to your book has you asking AI if the world needs another book about running an ad agency. Your answer to the question was obviously “yes”. So, what inspired you to write the book?

I wanted to build the definitive advertising agency book to cover the wide range of business skills it takes for large and small agencies to survive and prosper in today’s turbulent marketing industry. I distilled my 40 years of ad agency leadership, my client-side, digital start-up, and global consultancy experience into 27 chapters of action items.

What does the data tell us about new agency failure rates and what are some of the mistakes that new advertising agencies make?

I am not sure about finding accurate numbers on agency failure rates. However, for comparison, it has been reported that three out of five new restaurants will fail in the first five years. And 80% will continue to have low-profit margins.

Many of the reasons that cause restaurants to fail mirror the headwinds that affect advertising agency profitability. Poor business model and financial planning (I have a “one-page” business plan model in the book), lack of clear brand distinction in a highly competitive market, poor marketing, and rising labor costs. Plus, the agency “kitchen” better be serving great advertising solutions.


 

The book places an emphasis on two pillars of a successful agency: business development and client relationships/management. Can you talk more about that?

When I owned my Portland agency, I spent 50% of my time (and a good chunk of agency budget) on business development. Today I meet with way too many agencies where leadership has abdicated its biz dev role.

We know that clients, especially project clients will eventually walk out the back door, so it is imperative to keep the right new clients coming in the front. Agencies, from one-person to the biggies must make running a 24/7 marketing plan a priority.

Combine this marketing energy with a desire to be what I call ‘unignorable.’ This may sound obvious but too many agencies do not run smart, efficient sales programs that break through the clutter of competitive agency outreach. Unignorable programs consistently excite future clients and deliver high-profit leads.

“We know that clients, especially project clients will eventually walk out the back door, so it is imperative to keep the right new clients coming in the front. Agencies, from one-person to the biggies must make running a 24/7 marketing plan a priority.”

In respect to the client-agency relationship, a key reason that clients leave their agency is a perception of poor service. Here’s a wow! as reported in the 2022 What Clients Think report from the UK’s Up in the Light.

“Only 13% of clients stated that their agency “regularly exceeds their expectations.”

Agencies need to understand that a high-value client is the one they already have. Frankly, service the hell out of them, grow them. Use continuous staff training that is designed to build-out the interpersonal skills required to hold and grow a client relationship. Nurture, listen to and educate your clients. Be their marketing guru. Help them navigate their future. Believe me… they are worried.

Getting back to AI, as it is a hot topic across the ad world. What’s your take on where it will take the industry?

Now that we are months into AI mania, I am finding that the savviest agencies are starting to use the AI tools to increase automation and productivity to lower costs. Otter.ai improves meeting efficiency. AI chatbots help organize thinking. Notion organizes everything.  I use Opus Clip to create fast subtitled shorts from longer videos. Not perfect creative executions. But they work and save time.

“Of course, some people fear that AI will take their jobs. AI will do that if agency people do not begin to learn about how to use AI tools. A large set of agency art directors were displaced by the introduction of Adobe Illustrator and Photoshop.”

Of course, some people fear that AI will take their jobs. AI will do that if agency people do not begin to learn about how to use AI tools. A large set of agency art directors were displaced by the introduction of Adobe Illustrator and Photoshop. Digital tools have been disruptive for decades. To get to the promised land, agency management needs to take the time to plan and run AI training sessions. Be proactive and help your people. Hey, invite your clients to these sessions – be their guru.

You’ve had a varied and interesting career, what work are you most fond of and where do you see your career headed in the future?

I was a founder and CEO of the intelligent chatbot company ActiveBuddy. Our SmarterChild bot had 30 million Instant Messenger “buddies” and presaged Siri, Alexa and ChatGPT. Radiohead was our first client. That was fun.

I am currently starting a global video interview series with people from Wuhan to L.A. about their personal Covid lockdown experiences. Pre, post and the aftermath.

You’re giving a college commencement speech to the class of 2023 what’s your biggest piece of advice?

I was in India a couple of years ago and spoke with college students about their careers. My primary piece of advice was that each one of them needed to think through how to develop their personal brand. Just like an advertising agency, or a CPG product, creating brand distinction, or in the case of the students, human distinction, is a path to success. Understand who you are, your goals, your opportunities and design your own Me. Inc. to stand out from the pack.

What is your favorite piece of creative ad work of all time and of recent times?

I like longevity (in an age of throwaway ads). The Absolut Vodka bottle campaign, “Absolut Perfection” is, get this, the longest-running advertising campaign.

In over 1,500 print ads, Absolute made its bottle a hard-to-ignore superstar. The halo ad was brilliant.

Absolut

In respect to recent, I’ll go with Reddit’s 5-second Superbowl “Wow, this actually worked” interruption TV and social media commercial. Short, sweet, bold, informative, and hard to ignore. And, nice to see an advertising agency NOT use a celebrity.


Quick Hits:

Another book everyone in the industry should read: Re-read The Four-Hour Work Week. This 2011 book taught us how to escape the 9-5 work lifestyle.

Favorite show you’re watching lately: Watching Lionel Messi play for Inter Miami on Apple TV.

One album you would take to a deserted island: What’s Going On. Marvin Gaye.

Something you want to learn or wish you were better at: My very poor Spanish. I live in Mexico.

 

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