As a business leader, the choices you make in selecting a marketing services partner can have a profound impact on your organization’s success, your own tenure, and your team’s ability to learn, do, and scale.
For as long as businesses big and small have sought a market advantage, a means to accelerate growth, a new direction, or simply a way acquire new marketing capabilities, they have relied on outside marketing agencies and consultancies for both strategy and execution.
Like the military-industrial complex, the “marketing industrial complex” is vast, opaque, and influential, with high stakes for stakeholders of all sorts: agencies, holding companies, client companies, and individual leaders alike. In 2018, some 70,000 different agencies and consultancies employed over 250,000 people generating over $52 billion in revenue in the U.S. alone. Worldwide, the media many of these agencies manage exceeds $1 trillion in value.
One would expect that at this scale, the industry would be in perpetual motion, innovating and evolving regularly. Yet, despite massive shifts in the talent economy, changes in consumer habits, the rise of innovation in adtech, and disruption across countless categories, the core of the marketing services industry has remained shockingly immune to even modest innovation or change. The big agency networks and holding companies, once darlings of Wall Street and bedrock partners of Fortune 500 marketers, are now seen as lumbering giants, best used as mere distribution pipes for content by marketers who need global reach and efficiency.
Meanwhile, lots of indies and domain-specific agencies have sprouted, and some are very good at doing one thing exceedingly well (brand strategy, or creative development, or CRM, or performance marketing, or social media, etc.) But the results are rampant fragmentation and massive headaches for clients trying to integrate their efforts across agencies and teams who often don’t play well together.
Further, big or small, full-service or single-purpose, most agencies talk a big game about innovation and disruption for their clients, yet their business models haven’t changed in a century: high fixed costs and fancy offices, tons of OpEx locked in full-time employees with narrow skill sets and low utilization rates, most of whom are lifetime consultants who hop from one agency to another but have never been accountable for results in an operating company.
Choosing an agency partner is among the most consequential decisions a CEO or CMO will make. Consider a few rules of thumb when next you choose a marketing partner:
- Hire People, Not Agency Brands – Many clients often gravitate toward “hot agencies” or known-quantity agency brands, without really understanding the profiles of the people who will be working on their business. Ultimately, the names on the door don’t matter, all that matters is the depth and diversity of expertise of those that you will be working with. Evaluate the people proposed as your agency team, just as you would if you were hiring employees for your business.
- Business Models Matter – In today’s talent economy, the world’s best expertise in any domain is often not embedded within an agency or operating company. Yet agencies with lots of FTEs must utilize them on their client projects no matter whether they are right for the work or not. And it’s often impossible to predict the capability and chemistry needs of a client in advance, thus constraining an agency’s ability to deliver the best talent for each project. Understand an agency’s business and talent model to know whether they really have the ability to deliver top talent no matter the need.
- Diversity is the Pixie Dust – It’s where the magic happens. While much attention is rightly paid to gender, racial, economic and ethnic diversity, diversity of thought and experience is critical too. Most agencies are comprised of people with single capability profiles: hire an ad agency, you get people who know how to create advertising, but often little else; hire a digital firm, you get bright, shiny digital things, etc. Insist on domain-agnostic thinking, brought to bear by an agency comprised of multi-dimensional teams with disparate experiences.
- Disruption happens at the fringes – At the center of the marketing services universe lies all the big, heavy objects and agencies, prone to complacency and protectiveness. At the fringes are the mavericks and upstarts and entrepreneurs, where orbits are fast and change is furious, where every client is important and every project’s an opportunity to challenge convention and defy gravity. Head to the edges when looking for a partner to help you navigate 21st-century marketing problems.
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Source: CEOWORLD magazine
Author: David Camp