If you don’t understand the marketing chessboard your ad agency may be in checkmate. The marketing chessboard has been drawn up by clients and advertising agencies have watched it happen. The strategic side is where the real dollars are and where the real growth will be in the future. One good indication of this is that clients spend more money with consultants than with agencies on a revenue-to-revenue comparison. In addition, this high ground revenue stream is growing 30% - 40% each year. Is there any doubt where the future is? If you're looking for help on understanding the challenges this presents in growing your marketing firm please contact us. www.sandersconsulting.com

1. Marketing Chessboard
Understand the new landscape advertising agencies face
with the high ground often occupied by consultants and
the low ground covered by design firms and freelancers
who are thrilled to compete against agencies on the
basis of price. See why agencies are getting “middled,”
and why clients don’t care. It’s all explained in this
powerful outline. In one sweep, we will show where
agencies are now and the direction in which they’re
heading. Consider this a call to change and a warning
not to stand still.

2. Overview
 No longer do companies
battle each other in the
marketplace. The battles
are being fought on a
marketing chessboard.
 If you don’t understand
the marketing chessboard,
your marketing firm may
be in check.
 The marketing chessboard
has been drawn up by clients,
and advertising agencies
have watched it happen.

3. Ad Agency Situation Analysis
The Client Is Changing
 Clients today are looking for business-building
ideas, speed, and firms that understand how to
stay within budget.
 Now is the time to think more strategically to
determine exactly what your clients want – and
deliver it better than anyone else. It’s time to
generate exceptional creative, faster than ever,
while boosting profits and lowering costs.
The Consumer Is Changing
 The consumer today is exposed to more
messages than ever before and from all different
types of media. Great creative can make a brand
standout and generate that so important
conversation. Now is the time to rethink the
business and generate new ideas targeted to this
new consumer – to make your agency more
successful. Win awards. Attract new clients.
Boost staff morale.
 Time for more creativity from all members of your
team… and to have a creative process that is
faster, better, and more profitable… clients will be
more satisfied and loyal.
Marketing Is Changing
 Social media, conversations, listening to the
consumer and more are changing the way
agencies do business. Clients are demanding
more. Consumers are becoming smarter. Now is
the time to change how you view marketing – to
improve your agency’s social skills and get an
unfair advantage over your competition.
 It’s a time when technology can bring you inside
information, to make your creative more focused
and insightful…. speed up your operations, to
make you more efficient and cost-effective, to
make your agency more profitable and even grow
your business.
You Need To Change
 This is a fantastic time to be in advertising, full of
incredible opportunity for growth and success – if
you’re open to change.
 If you fail to change… you will be increasingly
redundant. It truly is “change or die” time.
 To change successfully, you must question
everything you do. And discover new ways to do it
better!

4. Introduction to the Marketing Chessboard
1. The battle for mindshare in the
boardrooms of corporate America are
being played out on a daily basis–
and with billions in fees at stake,
firms around the world are investing
to better understand the game.
2. Positioning yourself for success
requires a thorough understanding of
the players, environment and “rules”
of the game.
3. Most marketing firms fail before they
even start to play the game – they
don’t understand the rules.
4. The most common symptom of their
flawed approach is the all-too-common
assertion that the client
“Doesn’t get it!”
5. Reality check: The client “Does get
it!” The client understands the game
they are playing – a chess match
where the stakes for companies and
individuals are high, with little time
and few clearly distinguished options
for trusted-partners (players) in this
competition.
6. Positioning yourself and your agency
as a viable business-building partner
is vital – to do otherwise relegates
you to mid-level management as a
production resource.

5. Strategic
Internal External
Tactical
This is the Marketing Chessboard…

6. Strategic
Strategic up top – meaning the higher you
go the more strategic you are. This is
where the big decisions are made -
business decisions, brand decisions…
Internal External
The lower you go the more Tactical –
meaning the decisions are smaller and
smaller. At the very bottom are the
hundreds of small decisions to be made.
Tactical
Internal simply means you work inside the
corporate world. All the layers, roles,
responsibilities, organizational charts and
structure can be outlined on the left side of
the grid. Everything over here is the land of
clients and their staff.
External is the outside world that affects
the clients world. This is the land of
marketing firms, consumers, media,
messages and more…
How it all works will become clear soon…

7. Strategic
With the basic Marketing Chessboard outlined we
can place a few navigational landmarks:
The CEO is firmly established at the upper left –
deep inside the organization and is in a very
strategic position. With many direct reports we’re
only showing a few players in the strategic arena.
Internal External
Lower on the board is the rest of the organization,
again with only a few players represented. This is
where the marketing department works hard on
ensuring the strategy is implemented.
Tactical
CEO
A Few Landmarks …
The CEO has 5 primary
responsibilities they think about
all the time: finance/banking;
direct reports; a few key
customers; the board; and the
one they just discovered a few
years ago - the brand.
KEY POINT: Most CEO’s Feel they understand
their brand, and never see it as an issue. What
they may have is a “sales” issue, a “growth”
issue, a “competition” issue. These could all be
brand issues, but the CEO will miss that…
Until a trusted advisor informs them of this!

8. Strategic
From their roots of just sCellEinOg advertising space,
agencies evolved into full-service strategic
partners to clients – owning the entire right side of
the board. By the 60s and 70s ad firms were
titans in the world… able to shape brands,
markets, culture.
Internal Old Agency World
External
This was the peak of the traditional
advertising agency. Giants like JWT, Y&R,
Ogilvy & Mather, et al were firmly established
as leaders in the field.
These titanic ad firms fully occupied the
tactical side of execution and delivery to
media as well. Most of their revenue was
being generated by the media
commission…. and media buying is about
as tactical and external as you can get.
Tactical
Dominance of the Traditional Ad Agency…
Their strategic ideas created new
markets, transformed industries
and drove business growth.

9. Strategic
Internal Audit Old Agency World
External
Tactical
CEO
The Auditors Show Up…
Required by law, an outside group of
individuals investigated the client-side
business. Soon they became experts and
specialists in the various industries they
studied. Meaning, auditors soon discovered
each bank, as an example, operated
slightly differently – some were more
profitable than others. And the audit houses
started to grow…

10. Strategic
Management Consultants Form
Relationships With CEOs
Internal Audit Old Agency World
External
Tactical
CEO
Management
Consulting
Armed with inside knowledge and specialization,
the audit firms recognized there is value to what
they soon called “Best Practices.”
Management Consultants were born and were
soon growing faster then the audit houses.
Arthur Andersen, PricewaterhouseCoopers,
Deloitte Touche, Tohmatsu, Ernst & Young etc
soon owned the strategic high ground.
They were able to deliver operational insight that
improved the bottom-line: Tangible Results!

11. Strategic
Management Consultants Own the
Strategic High Ground…
Internal Audit Old Agency World
External
Tactical
CEO
Management
Consulting
(Trusted
Advisors)
The ad agencies ignored this growing threat
and continued to focus on their own industry.
As the large shops grew and expanded
around the world, mergers became the new
strategic playground.
After all, they were making tons of money with
the tactical execution (media), more so as the
number of media outlets continued to expand.
From three television channels to dozens and
later hundreds, each time the media grew so
did the commissions. Of course the traditional
agencies failed to notice that with each media
impression the net value of that media buy
was being reduced.
The introduction of the Holding Company model
(WPP Group, Omnicom, Publicis, Interpublic)
kept the merger mania strong and drove
agencies to go public. They needed the revenue
for more mergers. As a public company they
opened their books.
The clients started to notice how much revenue
the agencies were generating…
And asked themselves “were there any
‘Tangible Results’ from this expense?”
…As Ad Agencies Focused on Growth

12. Strategic
Strategic
Consulting
Marketing
Consulting
The Management Consulting Concept of
“Best Practices” Spreads…
CEO
Internal Audit Old Agency World
External
Tactical
Brand
Consulting
As the traditional marketing firms continued their
focus on mergers and maximizing revenue, they
took their eye off the strategic high ground.
After all, everything above the strategic line was in
essence given away for free – and did not
represent a significant source of revenue.
This vacuum was filled by a new breed of
consultants focused on the external world:
Strategic, Marketing, Branding, bringing the
“best practices”, expertise, and specialist into the
world of research, marketing metrics, branding.
They were getting paid for their ideas and insight!
Management
Consulting
(Trusted
Advisors)
The number of media messages continued to
explode and soon the value for any one
impression was almost nothing. The CEO
started to recognize that all the ideas agencies
generated resulted in more advertising for
the agency, and less results.
More advertising, more media buys, more
revenue for the traditional ad agency. Fewer and
fewer break-through ideas that could transform
the CEO’s business. Marketing was becoming
more and more tactical.

13. Strategic
Throughout the history of advertising, there have
always been the bastard children of marketing:
the small specialty shops, design, PR, direct.
These have also been known as Below-The-Line
(BTL) and are included as part of the full service
agency model. Small independent shops started
to grow as they were able to offer a lower cost
alternative to the full service agency.
Advertising Fragments
and Specializes
Internal Audit Old Agency World
External
PR
Promotion
Creative
Design Direct
Tactical
Web
Media
Specialty
CEO
Management
Consulting
(Trusted
Advisors)
Strategic
Consulting
Marketing
Consulting
Brand
Consulting
BTL
And with the advent of new technology (desktop
computers, etc.) that lowered the cost of entry into
this growing market, soon there was an explosion
of specialty shops competing for the client’s
marketing budget. Some of the specialists, like
the large direct marketing firm Wunderman,
became best-of-breed in their field.
The larger agencies and the holding companies
noticed this, and soon they were competing on
this new playing field. Creating or buying them up.
A very tactical playing field…

14. Strategic
Strategic
Consulting
Marketing
Consulting
Brand
Consulting
New Agency World Is Reduced
Internal Audit Old Agency World
External
PR
New Agency
World
Promotion
Creative
Design Direct
Tactical
Web
Media
Specialty
CEO
Management
Consulting
(Trusted
Advisors)
The traditional business of advertising was
larger then ever, more channels, more
opportunities, and bigger budgets. But their
world had been reduced – squeezed between
the new consultants strategically and a new
breed of creative shops tactically.

15. Strategic
Management
Consulting
Internal Audit Old Agency World
External
New Agency
World
Promotion
Tactical
(Trusted
Advisors)
PR
Creative
Design Direct
Web
Media
Specialty
Brand Mgr
CEO
Old Reporting Point:
High Up the Organization
In the old days, just a few short years ago, the
traditional agencies reported to a brand
manager – someone who controlled budgets,
who had been with the company for many years,
who knew and understood the agency world.
High up the strategic ladder this person was
able to recognize and act on true business
building ideas, shifting budgets and resources
as needed…
Strategic
Consulting
Marketing
Consulting
Brand
Consulting

16. Strategic
Management
Consulting
New Reporting Point:
Deep within the Organization
Internal Audit Old Agency World
External
New Agency
World
Promotion
Tactical
(Trusted
Advisors)
PR
Creative
Design Direct
Web
Media
Specialty
New Mgr
CEO
The new breed of client contact is now a tactical
manager: younger, less experienced in the ways
of agencies, handed budgets and deadlines,
and expected to only be in that position for a
short time before moving on through the
organizational chart. Today the average tenure
for a marketing manager is 18 months...
Strategic
Consulting
Marketing
Consulting
Brand
Consulting
KEY POINT: 18 months is about the average
client-agency retention rate today.
Brand Mgr

17. Strategic
Management
Consulting
Internal External
New Agency
World
Promotion
Tactical
(Trusted
Advisors)
PR
Creative
Design Direct
Web
Media
Specialty
Audit
New Mgr
CEO
•Results
•Fast
•Budget
What this new breed of client is demanding from
the market, the creative vendors she works with,
is “show me results (meaning something I can
put on my résumé), do it fast, and most
importantly do not go outside my budget!”
Strategic
Consulting
Marketing
Consulting
Brand
Consulting

18. Strategic
Management
Consulting
The strategic side isn’t worried
about incremental growth.
Internal External
New Agency
World
Promotion
Tactical
(Trusted
Advisors)
PR
Creative
Design Direct
Web
Media
Specialty
Audit
New Mgr
CEO
This is what we call the Bipolar Client:
The strategic side is focused on areas of great
import – where perhaps a “Big Idea” can once
again transform an industry...
The tactical side is focused on containing cost
and providing incremental growth.
Strategic
Consulting
Marketing
Consulting
Brand
Consulting
New Bipolar Organizational Focus
Crush the competition
anyway possible,
operationally,
politically…
And hope marketing
does NO HARM!
•Results
•Fast
•Budget
Provide Incremental growth
and do NO HARM!

19. Strategic
CEO Strategic
Management
Consulting
Internal External
New Agency
World
Promotion
Tactical
(Trusted
Advisors)
PR
Creative
Design Direct
Web
Media
Specialty
Audit
New Mgr
Consulting
Marketing
Consulting
Brand
Consulting
New Bipolar Organizational Focus
Crush the competition
anyway possible,
strategically,
operationally,
politically…
The line between Strategic and Tactical
was once open, fluid, where ideas, staff,
and agencies could freely roam up and
down the organization. Today we call it the
FREE LINE – much of the work done by a
traditional agency above this line is for
new business, or for free to win or keep
the account. Very little advertising
revenue is created above this line.
XXXXXXXXXXX FREE XXXX
And in the fractured and fluid market that all
creative services firms compete, this line has
become a barrier – IF you are perceived as being
“creative” or tactical in anyway, the
market/competition will push you back down, into
the world of tactical. Even if you have all the
strategic chops in the world – just ask Y&R (huge
branding experience) why their client Accenture
went to Landor (“strategic”) for their branding work.
•Results
•Fast
•Budget
Most of the revenue for creative firms/traditional
ad agencies is generated down here through
projects, mark-ups, media billings, and/or
timesheets (retainers).

20. Strategic
CEO Strategic
Management
Consulting
(Trusted
Advisors)
Internal External
PR
New Agency
Promotion
Creative
Design Direct
Tactical
•Results
•Fast
•Budget
Media
Web
Specialty
World
Audit
New Mgr
Consulting
Marketing
Consulting
Brand
Consulting
For Agencies That Don’t Change,
the World Gets Smaller…
Crush the competition
anyway possible,
operationally,
politically…
And hope marketing
does NO HARM!
XXXXXXXX – FREE XXXXXX
We’ve all seen the once great advertising
agencies - Cliff Freeman & Partners, DMB&B,
WRG, etc. – forced to close up shop.
Unable or unwilling to recognize the changing
Marketing Chessboard.
Revenue on the strategic side continues to grow at a
whopping 20-30% each year as more and more
companies strive to find that trusted advisor that can
give them an edge over the competition.
Revenue on the tactical side only grew at an anemic
2-4% over the past decade. Almost all of that growth
in the specialty disciplines, often at the expense of
traditional media.

21. 6 Ramifications For Agency Leaders
1. Understand that the Marketing
Chessboard will continue to get
harsher for agencies who don’t know
how to adapt.
2. Learn from the tactical firms and how
best to challenge them:
 Work with many points of contact within the
organization.
 Work cheaper and faster.
 Live on a project basis.
 Less emphasis on strategy and more on tactics.
 Dumb down account service to reduce costs.
 Offer more “face time” with project managers
running the work.
3. Create an action plan to adapt now:
 Take the best thinking from tactical firms and best
practices from strategic firms.
 Find your own trusted advisors.
 Understand how to manage change.
4. Build your business model so you
can prosper in this new environment:
 Your agency needs to be positioned and branded
properly – focus and discipline are key.
 Most of your competitors are operating without
any strong positioning other than a hazy label.
 There is little concentrated branding going on
among agencies, meaning few agencies have a
clearly defined brand.
5. The way forward is not clear, and it
certainly doesn’t resemble the past.
 The future belongs to those agencies that try the
most to see what sticks.
 Having a clear and easy to understand expertise
helps you survive and grow.
 Keep building your strategic skills and understand
the consulting methodology – those skills will
greatly help you adapt and grow in the Marketing
Chessboard.
Understand that to live in the past, you will die. Adapt to the present
and you can survive. Plan for the future and you can really prosper –
a Chess Grandmaster anticipates every move!

22. Strategic
CEO Strategic
GO TO THE TOP: Challenge the Management
Consultants with better processes, procedures,
methodologies and tools; build a consultancy
around packaging “Business Building Ideas” with
outstanding creative execution. Better reports.
Better communication skills. Better results.
Management
Consulting
(Trusted
Advisors)
Internal External
PR
New Agency
Promotion
Creative
Design Direct
Tactical
Media
Web
Specialty
World
Audit
New Mgr
Consulting
Marketing
Consulting
Brand
Consulting
Ad Agency Options…
Crush the competition
anyway possible,
operationally,
politically…
And hope marketing
does NO HARM!
XXXXXXXX –FREE XXXXX
GO LOW: Become a low cost
provider focused on speed,
efficiency, measurement…
•Results
•Fast
•Budget
GO VERTICAL: Cut through the free
line by becoming the “world leading
authority” (expert) on a market,
audience, approach, category, etc
GO AROUND:
Create a strategic
flanker brand – a
marketing
consulting firm
separate from your
agency.
GO DEEP: Develop your skills at all
aspects of communication, including
operational/internal. Become an
expert at improving teamwork,
communication, etc. For your
clients, streamline their operations,
help with internal branding, etc.
In a fluid and fractured market there are many options for
change – and many paths to successful growth
KEY POINT: You are no longer
limited to just being an “ad agency”

23. Leaders' Mission: Create Change
1. Adopt an agency vision (focus)
 Where is our agency going?
 How do we get there?
2. Get the agency staff change ready
 Review the “as-is”
 Discuss options
 Envision a future
3. Review your operational strategy and adapt
 Redesign processes to drive the structure
 Build a “to-be” structure supporting the vision
 Support the redesigned operations with all agency resources
 Align your employee programs with the agency’s new vision
4. Make the changes needed to support your vision
 Ensure that heavy duty training is an integral part of planning

24. One Last Reminder
The sign of a highly successful enterprise is its
willingness to move beyond methods that
are currently working well with the expectation of
discovering something even better.

25. Brought to you by the
Sanders Consulting Group
 Operating over 30 years, helping over
5,000 agencies
 Known around the world as the leading
new business consulting firm
 Working with some of the best managed
agencies on the globe
 Selected as the new business training
provider to the largest agencies in the world
 We show you how to win,
not just play the game
Visit www.sandersconsulting.com
e-mail: info@sandersconsulting.com
Call 412.897.9329
Bob Sanders
President
Sanders Consulting Group
New Directions For Agency Growth