Choosing Outside Marketing Resources: The Client’s Toughest Decision

Are you on the client side?  It’s not easy being in your shoes these days.  The three-martini lunch went decades ago.  Marketing departments have been chopped in half or worse.  Budgets have been cut with a meat cleaver.

There’s that recently annoying chant – ROI! ROI! ROI!  (Do you think it’s really a coincidence that “roi” means “king” in French?)  A short time ago, Wharton School of Business released a new report showing that the corner office is starting to worry about marketing metrics. CEOs are paying closer attention to advertising and marketing expenditures as well as the return on those expenditures.

The question of the decade is “Who, is going to help you get the job done under these conditions?”  Or, maybe, “Who is going to help you keep your job?”  And it’s not an easy question to answer.

It’s not that there is a lack of choice.  Here are the three basic routes you can take –

  1. Brand name agency/network with global resources;
  2. Small, independent agency;
  3. Freelancers

Disclosure before you dive into the detail:  I’m the head of a small, independent agency.  So although the logic here is unassailable, the choice clear, the editor correctly required that I let you the reader know that I am unabashedly, unapologetically biased.    

The Cheap Route?

Let’s start with the third choice.  Many look at it as the least acceptable route.  Certainly, there are a lot of talented free-lancers — writers, designers, media specialists — on the loose.  Many are willing to work for relatively little money.  By using several, you’ll get perspective.

The big problem is that few managers and executives with serious ROI pressures have time to recruit and manage free-lancers.  Worse still is that unless you intercede constantly, the team is heavily tactical that they’re not aware of strategy erosion.  Direct response writers and design freelancers may be so focused on their specialty that they’re not capable of delivering brand value in their quest for response.  Even media specialists don’t understand the hybrid world – they either plan with direct response principles in mind, or with general advertising’s focus on reach and impressions.  They can’t think both ways.  With free-lancers, you get individuals speaking in their own voices, not in your company voice.

Free-lancers are not the cheap route.  They cost you time you should be spending on strategic issues; they cost you program cohesion.

The Safe Route?

In my days on the client side, I remembered how great it was to work with a brand name agency.  Your account was courted by a smart, slick new business team that spared no expense. Just the fact that you had retained them gave you and your company status.    You felt safe knowing how much total billing the agency had – “They must be doing something right for a lot of people.  It’s direct response – they’re measured.”  They could pour people onto your account at crunch time – give you a smorgasbord of creative choices, keep you awash in media plans.  And you knew they were there to execute.

The problem with them, if you look through a direct marketer’s (or CEO’s or CFO’s) eyes, is that they are prohibitively expensive from a cost-to-acquire and cost-to-retain standpoint.  If you factor in their fees, you’d be hard-pressed to deliver a return on your investment.  They need those fees to amortize their new business effort and other overhead.

And you know all those smart people on the new business team may disappear from your sight forever.  You may be working with “learners.”  The more experienced agency people may be trying out on your business “big idea “ theories they can publicize later.  They believe the sheer weight of their agency’s name and of media dollars will make the big idea work.  Well, truth be told, the big agency’s big ideas don’t often lead to big response.  And on ROI, they just can’t compete.

Big agencies also tend to lose track of smaller projects. Because they’re small to the agency, they go on the back burner. But they could be really important for you – in terms of either being a necessary part of your program, or simply politically important to get done.

Is brand name agency/global network the safe route? Not when ROI is being scrutinized all the time; not when “bigger” and “better” are no longer synonymous.

Is “Small” Beautiful or Just Small?

Small agencies as a category make many clients nervous. There’s the image of dealing with an agency that doesn’t have posh headquarters, the fact that when some C-level types ask, they always want to know a) what other big companies the agency works for and b) what the billings are.

Then the more practical considerations: can they really be any good if they’re small? Will the agency be able to give you the firepower you need? What about your needs overseas? Don’t smaller agencies tend to specialize? Does your work go on hold if the art director gets sick?

Here’s the thing about the RIGHT small agency – it can get your work done, it can think big, and it can deliver improved ROI or reduced acquisition cost. Effective small agencies are often run by direct marketers (rather than “agency guys”) who could not abide the politics (and sheer waste) in larger agencies. The good small agencies tend to have great account people who are hands on (you don’t get passed down to junior juniors). On staff creative personnel also want to avoid the politics of larger agencies and to do more real work. While small agencies don’t carry enormous creative staffs, they can expand rapidly, pulling in and managing free-lancers to give you a coordinated program that’s on strategy.

Of course, choosing the wrong small agency can be a disaster if they have no track record of performance and no clue about servicing your business. But the right small agency can add beauty to your bottom line.

Are There Other Routes?

For whatever the reason, you may be working with a big agency now. They’re not exactly delivering the numbers you’re looking for, and you know your wasting a chunk of your budget on inflated fees. But politically, you’re stuck. What do you do? Think about a smaller agency on a project basis. Bring them in on projects that the big agency can’t move fast enough on… on the programs that you have to test and hit a home run, yet have very little money to do it.