As digital marketers, we always look for the next best thing to help our clients grow their businesses. Unfortunately, sometimes our clients are as well. You can lose sight of what is working for your company when that shiny new toy enamors you. It is also frustrating when you have to spend a good portion of your regularly scheduled meeting discussing new concepts that will not move the needle. The urge is to turn to your client and state, “I didn’t know that you perfected that?” “That” can be filled in with any marketing channels, paid search, SEO, direct mail, or even yellow pages.

When I began my career in marketing, I had the pleasure of working for the world’s first search engine, the yellow pages. This was at the time when yellow page usage began its steep decline. It became increasingly difficult to convince companies to keep the budget in the yellow pages. Our running joke was that the CMO was not holding court at a cocktail party discussing the effectiveness of his YP campaign. What we needed was a hook to explain why the yellow pages still mattered:

Nothing Replaces Anything

And with a few exceptions (8-track tapes, BetaMax, VCRs). The car didn’t replace the train, the TV didn’t replace the radio, and the computer didn’t replace the TV. The internet didn’t even replace the yellow pages. These channels’ effectiveness has changed, although they have not been replaced.

The marketing landscape continues to change almost daily and most definitely will continue to change into perpetuity. This is a good thing and forces us to stay ahead of our competition. It also brings me back to my yellow pages days and discussing a complete exit from the channel with clients. They all agreed that there were still leads being generated, although they were more expensive as the years went along. Every discussion ended the same way….Reduce the YP budget, and reallocate elsewhere. Not one was replaced entirely. As always, especially in marketing, Nothing Replaces Anything.

Digital agencies remain a crucial component for a company’s execution of an overall growth and marketing strategy. All major corporations rely on agencies to supplement their in-house marketing teams to varying degrees. This reliance will increase in the future as the digital landscape continues to change in volume and complexity almost daily. A prime example of this is the entry of big consulting firms into the digital arena. Deloitte, PwC, and KPMG have fully embraced digital as a standard extension of their current consulting practices.

Even with all this growth and momentum, the digital agency model is broken, and it is no one’s fault. It’s not an easy problem to solve.

Agencies Take On Too Many Clients – Agencies love clients, and they love to tell you who they work with more than they love clients. Every agency I’ve worked for has had too many clients,s and this puts too much pressure on your top clients. The 80/20 rule is pretty universal. 80% of your revenue comes from 20% of your clients. This leads to continually selling more to your top clients or under-resourcing them.

Account Teams Are Spread Too Thin – This combines taking on too many clients and not pricing the engagements correctly. Today’s agency has a tremendous amount of overhead that is not adequately priced and ends up as a detriment to the account team and the client by default. The client, however, is not without blame because they are usually unwilling to pay for these services. This leads to overpromising and underdelivering due to agency margin pressure.

Employees Are Promoted Too Soon. It is increasingly difficult to hire, train and retain your best people, and even your mediocre people are regularly being poached for more salaries and better titles. This never-ending cycle forces early promotion of your top talent. Unfortunately, your top talent is not ready for increased responsibility, primarily managerial responsibility. Clients, as a result, are paying for the title but not necessarily the experience.

Too Much Focus On Execution And Not Enough On Strategy – Agencies win new business on strategy and staff this new business with execution teams. This is typically due to where the client/agency relationship sits. The client day to day contact is usually too junior to worry about the higher-level strategic discussions, and client satisfaction then falls to more of the rudimentary tasks. Also, in most engagements, strategy isn’t broken out and paid for separately, so it gets lost in the overall execution. This devalues strategy as the critical component of why you hired the agency.

The good news is there are many ways to fix the agency model, and clients can undoubtedly assist. One is to have a clear understanding of why you are hiring an agency and to understand how to separate strategy and execution. Another is to only pay for services you need to improve your in-house team. It might be more beneficial to hire a consulting firm to set goals and structure your paid search campaign but to staff the execution team in-house. The firm can provide training, strategic oversight, and attend meetings as needed.

It would be best if you had experts.  People who get organizational strategy, marketing effectiveness, and how to orchestrate the choir.  People with these talents don’t come cheap; that’s where we can help.  We can help fill the holes in your marketing organization without having to commit full-time dollars to solve the issue.  Our team has been there and done that and are expert in marketing strategy, direct response marketing, and crossing the digital void.