How to promote an advertising agency in a small town - interview

Content

• Description of service
• Market analysis
• SWOT analysis
• Opportunity Assessment
• Organizational and legal aspects
• Marketing plan
• Calculation of projected income
• Production plan
• Organizational plan
• Financial plan
• Risks

Note: This business plan, like all others in the Business Plans section, contains calculations of average prices, which may differ in your case. Therefore, we recommend that you make calculations for your business individually.

In this article we will draw up a detailed business plan for an advertising agency with calculations.

Market analysis

The market for advertising services is quite large and is constantly expanding. How can you characterize it? The demand for services is constantly growing, and so is the volume of work provided. There is no seasonality in this type of business if we evaluate the entire sector. Seasonality of enterprises applying for advertising has little impact on work. The bulk of the market seeks advertising services on an ongoing basis.

Today, this market segment is the most promising among all available services. The success of almost any business today depends on advertising. Thus, we can talk about a high level of demand.

The advertising agency market is no more than half full. Therefore, entering the market is quite easy. In this type of business, it is very important to show flexibility, ingenuity, and creativity. The ideal option would be for the company to be headed by an experienced, knowledgeable person working in this field. It is difficult to regulate work in a niche about which an entrepreneur has no knowledge. At first, he can himself participate in the development of advertising campaigns.

The most difficult thing in this area is capturing part of the market. Today there are many advertising agencies. In addition, well-known media occupy more than a third of the market, which significantly affects the number of “free buyers”. The main competitors will be large companies engaged in both providing a wide range of advertising services and processing highly specialized market segments.

How can you fight such serious competitors? It’s worth being creative when developing your own ideas. Make special efforts when preparing proposals. The success of the business will depend on their quality. A low price is unlikely to attract large clients, but you shouldn’t inflate it either. The ideal option is to set the average market price or slightly lower.

All existing companies will be potential buyers. Today, the success of an enterprise directly depends on product promotion. It’s not for nothing that they say that advertising is the engine of trade. When choosing a mid-price segment, you must understand that the main clients will be small and medium-sized companies. Large enterprises, as a rule, turn to well-known advertising agencies. It will be very difficult to catch such a “fish”.

Sympathy sells better than Hype. Example of Raffaello advertising

Sex, humor, deviant behavior are what advertisers most often try to entice us with. But a study showed (about 300 people took part in the study) that empathy in advertising works much better and is more engaging than humor or anything else.

A striking example, although no, not a striking one... The nicest example that advertising needs to be built on empathy are two videos from the RaffaelloRussia channel.

The first one is called “Love Don’t Care” and it has 6.7 million views

Agree, the video is simply beautiful.

The second is less rebellious, but no less impressive. The video is called “What does it mean to love” and it scored 19.5 million.

The videos sink deep into the soul and give you tenderness after watching. Therefore, let's sympathize with each other more often. It's nice, beautiful and probably very profitable.

SWOT analysis

When starting to open your own advertising agency, you need to take into account internal and external factors that influence the success of your enterprise. External factors include the following categories:

1. Possibilities

• Changes in advertising technologies, the emergence of new ways to promote the client’s product.
• Wide range of suppliers.
• Possibility of rapid and low-cost expansion of services provided.
• Prerequisites for the development of the information industry.
• High level of differentiation in this business sector.

1. Threats

• A sharp change in the preferences of the service consumer.
• High level of competition.
• Price fluctuations.
• An increase in the number of unemployed, a decrease in business activity and, as a result, a decrease in demand for the service.
• There may be an increase in legislative restrictions and tightening of legal aspects in this industry.

There are a number of factors that the enterprise itself can influence. They are called internal. These include:

1. Strengths

• Opportunity to offer clients exclusive services.
• In-depth analysis of the market situation.
• Offering a wide range of services.
• Quality services.
• Clear advertising policy.
• Low cost.
• Possibility of developing a system of discounts, gifts, promotions.

1. Weak sides

• Lack of reputation, unknown company.
• Lack of experience in this area.
• Possible downtime due to delays in the supply of materials.
• Weak motivation.
• Lack of qualified workers, long search for them.

Opportunity Assessment

As mentioned above, the seasonality of individual enterprises has virtually no effect on the advertising agency. It can always find clients who need this service. Therefore, work will proceed as usual at any time of the year.

The organization will have a 5-day work week. The work schedule will be as follows:

Total: 40 hours per week.

This mode of operation does not violate labor laws. You don’t have to make up shifts, arrange part-time jobs, or pay overtime. One team will work as a single whole.

You can start working by hiring a minimum number of people. To provide a full range of services, the following specialists will be needed:

• manager;
• marketer;
• artist (aka designer);
• computer technology specialist;
• operator;
• Poster of advertisements.

Each of them will perform their functions and receive a certain salary.

The company will seek some services from other organizations (printing posters, banners, advertising in the media). The client will receive the final service. Once the company has developed, you can think about expansion. For example, about creating your own workshop for outdoor advertising or souvenirs.

Advertising agency staff

As for the employment of personnel, the choice here is entirely up to the manager. You can employ your own employees or work with freelancers. However, at least one agency administrator will still have to be employed. Its main task will be managing the workflow. There is no need to offer your employees a salary upon employment. They must be focused solely on results.

As your advertising agency develops, you will be able to hire the following employees:

• Managers who will be involved in the sale of advertising space and products.
• A designer who will work on ideas and creation of advertising products.
• An accountant who will manage all your company's documentation.
• Chief advertising manager who will deal not so much with selling advertising, but with developing advertising ideas.

The designer, accountant and general manager can be assigned a fixed fee, since they are not involved in selling the agency's products.

Organizational and legal aspects

1. First you need to register your company. This could be an individual entrepreneur or an LLC. OKVED codes for this type of activity will be as follows:

• 40 – Advertising activities
• 13 — Research of market conditions and identification of public opinion
• 81 – Activities in the field of photography
• 22 — Printing execution of advertising materials
• 25 — Other printing activities
• 40 – Activities of news agencies
• 20 — Activities in the field of radio broadcasting and television

You don't necessarily need all of these codes. First you need to decide on the range of services provided. There may be other OKVED codes; the most basic ones are listed here. Please note that here are new codes that will be valid from 2020.

1. No licenses or patents are required .
2. If you turn to the All-Russian Classifier of Services to the Population (OKUN), you can see that advertising services belong to “Other Services”. An entrepreneur can calculate and pay UTII or simplified tax system. The second tax is possible in two versions - simplified tax system “Income” 6% or simplified tax system “income minus expenses” 6-15% (the rate is determined depending on the region).
3. To use non-cash payments, you must open a current account.
4. Familiarize yourself with local legislation regulating the work of advertising agencies, as well as the procedure for providing services.
5. Placing advertisements in some public places requires permission to carry out this activity from the owner (for example, posting in elevators).
6. Notify Rospotrebnadzor about the start of your activities in order to avoid unpleasant moments.
7. Bring the premises into compliance with all standards developed by the fire department.
8. Remember that work on the simplified tax system can only begin after registering a cash register with the tax authorities. With UTII, KKM is optional.
9. Get a stamp with your own logo to sign contracts with your clients.
10. Remember that the lease must be official .

When choosing a location, you need to decide what functions the office will perform. If you will meet with clients on their or neutral territory, then you can choose a budget option. Otherwise, you should look for an office in an accessible part of the city.

In any case, it is necessary to bring the room back to normal. The office must be respectable.

Marketing plan

The main components of the marketing strategy will be:

• Using an integrated approach. This means that all intermediate actions are carried out by the company, including planning, market assessment, creation of printed products, work on the Internet and much more.
• Focus on medium and small enterprises.
• Offer average prices.
• High level of service provided.
• Advertising your own products (working through all stages).

Since the organization provides advertising services, there is no need to go anywhere to promote your own business. You can do this yourself. However, there will be costs here too. You will have to spend money on raw materials, various materials, as well as on placing contextual advertising on the Internet. A computer technology specialist will be involved in the development and content of the site .

The organization itself, when developing an advertising strategy, should pay attention to the following types of promotion of its own product:

• Own website. Your employee can work it out. It is important to create a website that is understandable and pleasant for visitors. It is imperative to update information, inform about promotions and discounts. It makes sense to share your successes with site visitors by posting photos, reviews, and video reports.
• Internet advertising. An important aspect, since many legal entities are looking for advertising agencies via the Internet. You can negotiate advertising with organizations that provide related services or those who are focused on working specifically with legal entities.
• Distribution of offers, price lists. This can also be done by an employee of the organization, namely a manager. He can also collect information about organizations, their contact details, and conduct negotiations.
• Advertising in the media. This is also a fairly effective method. It is best to contact local television, shoot an interesting, catchy video and put it on the air. Radio advertising is also great. You can send a ready-made advertising layout to newspapers or magazines, paying only for placement.

You can include other methods in your advertising campaign. But it’s still not worth posting cheap advertisements. It’s better to go around to potential clients yourself, leave them your offers, business cards, and perhaps talk to the people responsible for advertising. But there is no need to be intrusive either.

How Tide stole all the advertising

In America there is a Super Bowl day. This is the final of the regular US American football championship. To give you an idea of ​​how cool this day is, in 2020 the final attracted 165 million viewers (half the US population).

On such a day, all companies strive to get on the screens. 30 seconds of airtime can cost more than $5 million.

On this day, Tide released one of the most ingenious advertisements and at the same time stole advertising from all other companies. There are many different commercials in this advertisement. Each one begins as a typical advertisement for some product - a car, a deodorant, a gel. But every time David Harbor appears and gently whispers, “This is a Tide ad.” Watch and enjoy.

Calculation of projected income

In the first months, revenue will be small. It all depends on the activity of employees and the number of attracted clients. We calculated average monthly revenue for the first year.

We will make calculations assuming 59-60% load. Then the income will be 280,000 rubles .

Agency premises

As soon as you decide to start your own advertising business, you should take care of renting premises. What should an office be like? Its size depends entirely on whether you will have on-site meetings with clients, or whether they will come to you. If you travel to meetings yourself, you can get by with a small room where you and a maximum of one or two employees will work. If you decide to invite clients to yourself, then a small, modest office will not be enough.

Production plan

The office will require minor renovations to operate. Some landlords rent out excellent premises, already furnished.

The equipment includes the cost of purchasing specific devices. Namely:

• Set for printing and presentations.
• Photo and video equipment.

Office equipment includes 3 computers and an MFP.

The furniture you will need is as follows:

• chairs;
• tables;
• cabinets;
• chairs for clients.

State:

Total wage costs – 153,200 rubles .

I would like to note that the manager partially performs the duties of a secretary. Makes calls and answers phone calls. He is also actively looking for clients and maintaining a database.

The marketer conducts market research, identifies the most effective methods of advertising, and, together with the manager, draws up a plan for further action.

The artist is engaged in the development of layouts and layout.

A computer technology specialist works with graphics, photo and video editors. He is also involved in developing the site and filling it out.

The operator is engaged in printing the necessary attributes. If necessary, negotiates with other companies to provide support services.

Financial plan

Monthly revenue is: 280,000 rubles.

Initial costs: 414,800 rubles.

• Profit before tax: 79,800 rubles.
• Tax: 11,970 rubles. We calculated the simplified tax system (15% of the difference between income and expenses). Other calculation methods can also be used.
• Net profit: 67,830 rubles.
• Profitability: 24.23%.
• Payback: from 7 months.

How much money will need to be invested in the development of an advertising agency?

• You will need to spend from 15 to 60 thousand rubles per month to rent the premises.
• Buying office furniture will cost you from 15 to 40 thousand rubles. The cost of furniture will depend on whether you are creating an office just for yourself or will receive your clients in it.
• Purchase of computers and office equipment – ​​from 25 to 100 thousand rubles.
• Purchasing telephone numbers and paying for communications – from 2 to 5 thousand rubles.

If, some time after opening, you get the idea of ​​hiring your own staff, then paying them will be a separate expense item.

Risks

As you know, all risks can be minimized or avoided, regardless of whether they are internal or external. Let's consider the most important of them, and analyze methods of struggle.

Important: Remember that you can independently draw up a business plan specifically for your business. To do this, read the articles:

• How to draw up a business plan yourself - detailed instructions;
• Business plan structure and main sections.

Final request: We are all human and can make mistakes, leave something out, etc. Do not judge harshly if this business plan or others in the Business Plans section seem incomplete to you. If you have experience in this or that activity or you see a flaw and can add to the article, please let me know in the comments! This is the only way we can jointly make business plans more complete, detailed and up-to-date. Thank you for your attention!