$76B Revenue for top 50 agency companies
It wasn't that long ago that agencies were relied upon to lead most of a client's commercial communications. The alternative was a fully baked in-house agency for the client company.
As more communications tools get into the hands of folks on both sides of the marketing table (client and agency), it begs the question: Who should be doing what? The division of labor process is not as easy as you'd think. Social channels such as Instagram, LinkedIn, Twitter, Facebook, Vine and Pinterest provide an easy and seemingly free way to promote a brand. Sophisticated software enables in-house designers and coders to create marketing pieces and simple websites. And some companies' business plans demand that they go to market quickly, which they believe requires them to control all marketing efforts in-house.
I've long held that my agency should assess our clients' capabilities along with ours, and figure out the division of labor from there. Some companies just don't have the resources, or quite frankly the stomach, to manage marketing resources themselves. For those companies, a full-service shop (or stable of specialty advertising or PR shops) may make sense. For other companies that have some capabilities on their marketing team, a careful look at the talent and skills is the right next step.
For example, many client companies have junior- to mid-level talent on board with skills in design, social media and corporate communications. In these cases, I typically recommend that my agency handle scope including brand strategy, conceptual development of creative and digital, plus high-level and more complex public relations. In my experience, analytics and measurement are divided between agency and client more evenly, which is logical.
Case in point: One of our agency's specialties is branding for mid-size banks. I've seen banks in this size category have in-house marketing teams ranging from two to 50 people. No kidding. So the conversation about who-should-handle-what has an equally diverse range. At the end of the day, there are usually projects that are more efficiently done in-house, and not just for cost sake. Time and corporate culture often dictate what makes the most sense, as well. While we know a lot about generating loan demand for banks, our clients know how to get things through their system. So we divide and conquer.
Here are three things that ought to be considered when assigning scope to each side:
1. Avoid the temptation to put cost first. With limited marketing budgets, options are few. But making the right decision for your brand is even more paramount. I recommend evaluating talent and putting expertise and results before price. Who has the best people to get the job done? That should be your guide.
2. There's no such thing as free marketing. This applies to lunch, and now to our industry as well. I've heard many clients say they are considering cutting back on their marketing budgets to focus on using social media because it's free. I understand the thought process, but it is essentially flawed. First, social media is not a cure-all. It has its limitations in reach, and its efficacy is still being debated and measured. Social media is powerful for some efforts and audiences and less effective for others. In addition, social media is merely another medium that needs to be part of a marketing mix. We handle a lot of social media efforts for a wide range of b-to-b and b-to-c clients, and I cannot think of one for which I would recommend an exclusive plan of social-only strategies and tactics. Clients will likely need talent from their agency and broader skill sets internally to execute an integrated plan.
3. Now it's time to think about budget. It would be impractical to have overlap in skill sets between the agency and client teams. This is the time to determine who has the best talent, and assign the work there. This may not be an easy decision for a CMO; it could lead to saying goodbye to some long-time members of the team that were well-liked. Or it could be tough for the agency with a reduced scope of work. But the priority is putting together a high-powered, lean marketing operation that collaborates between agency and client seamlessly. If this is done properly, the results will make a lot of people look very smart.
I've often wondered why division of labor between agencies and clients doesn't get more attention. Perhaps this will start a meaningful conversation on both sides.