Hiring a digital marketing agency can be a major investment of any company’s limited marketing budget. Is it worth it? And how do you find a truly good digital marketing agency?
According to a research report from the Society of Digital Agencies the percentage of companies not using outside digital marketing agencies at all rose significantly over last year (27% in 2015, compared to 13% in 2014). Many of those companies that do still use DMAs shrank the number they engage. In 2014, 21% of those companies employed four or more DMAs; in 2015 that’s down to 13%.
While the vast majority of companies surveyed by SoDA do still use DMAs, the survey leaves little doubt that there is a growing trend for companies to take all their marketing in-house. Of course, that means those companies believe they don’t need a DMA.
Does that mean that Digital Marketing Agencies are becoming irrelevant? Have they failed to provide value and so will soon be a thing of the past?
I don’t believe that’s true at all.
What I do think we’re seeing is a sort of “day of reckoning” for DMAs. As is the case for SEO agencies, the barrier to entry for establishing a DMA is low. So what we may be seeing is the inevitable culling out of agencies that could not provide real, measurable value for their clients.
I think that means this is actually the best of times for high value, results-producing agencies. Client companies are realizing there is a difference, and thus those agencies will be seen as even more valuable and in demand in the days to come.
6 Habits of Truly Good Digital Marketing Agencies
The SoDA report spurred marketing consultant Mark Schaefer to write “6 Reasons Marketing Is Moving In-house” for the Harvard Business Review. He reviews the trend toward in-house marketing, and then based on a personal survey of “several ad agency executives and marketing leaders in a diverse group of businesses,” he came up with six reasons why marketing agencies are seen as failures by their clients.
His six reasons are:
- Agencies are too slow.
- Agencies are stuck on advertising.
- Agencies favor campaigns over continuity.
- Companies don’t want to outsource customer relations.
- Companies want to own the data.
- Agencies don’t always have the best marketing talent.
My take is that these are six strikes against low value agencies, but the opposites of each of these then would be good signs of a truly valuable agency.
So here are my six signs, six characteristics of a highly valuable digital marketing agency.
Notice I used “nimble” here rather than the direct antonym of Schaefer’s “slow,” which would be “fast.” I do believe a great agency should be fast. That is, the agency should have a track record of meeting or exceeding deadlines, getting deliverables and reports to clients on or even ahead of time.
But I think it’s even more important that the agency be nimble. By nimble I mean two things.
First, the agency is able to shift quickly with changes in the client’s market, business, or marketing plans. Nothing stays the same in businesses or marketplaces for long, and the nimble agency not only knows that but has a culture and processes that enable it to bend with the changes and keep current with the client’s needs.
Second, and perhaps more important, the nimble agency is ahead of the trends in digital marketing in general and in the client’s business in particular. The agency keeps informed with the latest news on digital marketing. It is constantly testing its own assumptions. And it attempts to project where things are going, to “skate to where the puck is going, not where it is” as hockey legend Wayne Gretzky famously said.
The high value agency isn’t just aware of coming trends, it communicates those regularly to its clients, and is bold to make suggestions based on those projections, to keep the clients ahead of their competition.
I suspect Schaefer’s critique comes because many DMAs are actually advertising or public relations agencies that added on digital marketing in a desperate move to stay relevant. But if they haven’t really adopted or committed to the inbound mindset, it’s inevitable that they will fall back on advertising as the easiest solution.
I also suspect that by “advertising” Schaefer’s interviewees mean not just paid advertising, but also content that is little more than direct advertising.
Advertising and direct selling should remain part of any overall marketing program, but companies engaging DMAs want more than that. The concept of inbound marketing has become pretty well known: marketing assets that bring value to the audience and thereby build awareness and reputation in a way that draws prospects to the brand, as opposed to marketing that interrupts the prospect and tries to coerce them into buying or trying the brand’s products.
A top-notch DMA knows how to build strategies for content that a brand’s audience will love, and that will make them love the brand all the more.
Now let’s not throw the baby out with the bathwater: campaigns can be a perfectly valid and valuable part of marketing. But if an agency can only recommend campaigns, something is missing.
What’s bad about concentrating only on campaigns? At least a couple of things:
- It makes your marketing “herky jerky.” You might make some progress via a particular campaign, but then that progress comes to a halt while you’re building the next campaign. In the meantime, your competition may pass you by.
- Each campaign is a roll of the dice. If it succeeds, great! But if it fails to meet expectations, then it becomes more wasted time during which the competition could gain an upper hand.
- Campaigns take your focus away from your overall, long-term goals. Everything becomes about winning the campaign, rather than about building brand reputation over time.
So what do we mean by “continuity”?
Continuity involves an overall marketing strategy aimed at building long-term brand value in the marketplace. The best DMAs know how to help their clients build holistic strategies that get everything, online and offline, working together. They aren’t in it for the quick traffic hit. Top agencies know they only win when their client becomes top-of-mind for prospects in their vertical.
That involves strategies that are aimed at big goals for the brand. Then campaigns or individual tactics are put in their proper place. They are just tools (and not the only ones) used to help achieve the bigger marketing goals. Furthermore, with this outlook, the agency helps the client design campaigns that contribute to the bigger, long-term goals, not just to winning that campaign.
At Stone Temple, we call that building a sustainable competitive advantage.
Schaefer is absolutely correct here. Companies owning and nurturing real relationships with their customers and prospects is marketing gold. Too many agencies offer to take that off the company’s hands, not realizing in the long run they are hurting more than helping. (And in too many cases, even those agencies are outsourcing their outsourcing!).
Consumers have become savvy enough to sniff out genuine vs. canned customer relations. Great agencies teach their clients how to manage those relationships better, instead of doing it for them.
This is not to say there is never a time and place for outsourcing the work in marketing, but it the old dictum “give someone a fish, you’ve fed them for a day; teach them to fish, you’ve fed them for life” applies well here.
There is a useful middle ground here as well. At Stone Temple Consulting, for example, we often find and initiate valuable relationships, but always integrate the client into the process. The bottom line here is not so much about who runs what as simply that it is not good for the client to be disconnected from customer and influencer relations.
Low quality agencies want to keep the raw data hidden, and only parcel data out via dashboards or limited reports that may give the client a skewed view.
High quality agencies believe that they and the client benefit best when data is open and shared, and each can apply their expertise to gaining insights from that data.
Such agencies are also always willing to show the client the source data behind their reports.
Really, this section underscores a theme that runs throughout all these characteristics of great digital marketing agencies: Partnership. Truly valuable agencies always have a partnership relationship with their clients that works for the greater benefit of both.
In his HBR article, Schaefer shares an isolated anecdote from one client experience to back his claim that “agencies don’t hire the best talent.” While there is no doubt that this is true of some agencies (we’ve seen it too when we’ve taken over accounts!), this is a gross generalization.
In reality, a truly professional agency attracts and nurtures the best talent. Unlike an individual consultant, such an agency can offer the client the advantage of a team of multidisciplinary specialists, who can work together to formulate a holistic marketing strategy.
For more about why in-house teams can often benefit from partnering with reputable agencies, see Eric Enge’s “Why You Need to Complement Your In-house Team with External Expertise” on Search Engine Land.
How Do I Know Such Agencies Exist?
Because I work for one.
I wouldn’t write an article like this and publish it on this blog if I didn’t know that Stone Temple Consulting is an agency that exemplifies every one of the qualities I named above.
That’s why at a time when surveys show a growing number of companies abandoning agencies, I can say with confidence the reason is not because the agency model is bad, but because of bad agencies. I’m proud to work for a digital marketing agency that serves some of the top brands in the world, and where those brands consistently renew (and often increase) their contracts year-after-year.
Please forgive my very uncharacteristic bragging…but as Dizzy Dean once said, “It ain’t bragging if you can do it!”