Updated: Oct 15, 2021
Let me guess. You needed some digital marketing help and hired a web agency hoping it would have solved your problems?
Well, let’s face the truth. Hiring a digital agency is one of the biggest mistakes you could make and now, I’m gonna explain why.
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AGENCIES ARE TOOLS, NOT CRAFTSMEN
Entrepreneurship needs a wide range of skills and if you don’t know how to do digital marketing, it’s totally fine. Because your only responsibility is to guide the business. You must be the entrepreneur and no one else.
If you outsourced your digital marketing, it means you have understood this concept.
Outsourcing web marketing activities, like the creation of a website, online paid advertising, lead generation, SEO and many others, can be very effective. But only if you know how to do it.
Let me explain it with an example.
Let’s say that you understand the importance of investments, but you are not savvy enough to undertake financial operations alone.
Where do you go?
Usually, you have two choices: you go to the bank or to an independent financial advisor.
Everyone knows that the first choice is wrong.
If you go to the bank, they may advise you for free, but the conflict of interest is enormous. Actually, the bank itself is paying for the time of its financial advisor and it is giving a free consultancy, because it expects you to purchase stocks in which the bank has an interest.
Instead, if you pay for an independent financial advisor, they will give you options that only match your own interests.
It’s the same for digital marketing.
You needed help, so where did you go first? Did you hire a digital agency or an independent digital marketing consultant?
In this article, I don’t want to discourage you from hiring a digital marketing agency, but I want you to open your eyes and recognize that an agency is a tool like a bank.
You go to the bank when you know exactly what you need and how to do it. You should do the same with a digital agency.
A web agency is just a tool, nothing more.
If you still think that an agency has the answers you need, I’ll prove you wrong.
Do you know what an agency business model is?
Keep reading and find out. After discovering how it works, you will change your mind, I promise.
DIGITAL AGENCIES BUSINESS MODEL IS A TOTAL BUST
Agencies usually adopt a matrix organization structure. As you can see from the image below, a digital agency team works for multiple projects simultaneously.
According to the size of an agency, there is a general manager who supervises department managers and several project (or account) managers who take care of the workflows, deadlines, clients and other activities for each project.
Department and project managers work together to coordinate technicians. They should be the real digital experts who get the job done.
A project is generally a paid commission from a client.
This is how an agency works internally, but how does it work from a customer perspective?
Clients don’t communicate with a digital marketing expert
Agency sales reps approach customers. They quickly analyze customers’ needs and match them with the agency services.
It doesn’t matter whether a service is the best solution for a client. The only objective is selling stuff. And it makes total sense. If they don’t sell, they can’t pay their bills.
Entrepreneurs think to receive a professional consultancy by talking with a sales rep or a general manager. These roles don’t have the necessary technical skills and expertise to provide an accurate solution, since it’s not their job.
Besides, they can’t be impartial.
They work for an organization which offers distinct services and employees with specific skill sets. If they want to survive, they must sell what they offer.
After the first purchase, a project or account manager is assigned to a client business. Among the other responsibilities, this employee will be the middle person between the agency and the client business.
This role doesn’t suit the purpose of consulting companies on digital marketing. They don’t have the necessary skills and expertise. In other words, it’s not their job.
At this point, customers enter a loop of inefficiencies and no sense advice.
I dealt with more than 26 different agencies. They will advise the customer only for the sake of selling additional services.
It’s rare that a client manages to talk with a technician. And even if they are able to receive a consultancy by a technician, is the latter really free to give impartial and accurate advice just for the client's own interest?
The answer is no. I was there. Before becoming a manager, I was a technician and if I didn’t want to lose my job, I had to advise customers by following the project manager’s guidelines.
Digital agencies are unjustifiably expensive
An agency’s business model is not scalable. The more they grow, the higher costs they have.
It’s well known that the average American employee is overpaid for the results driven. In 2009, The New York Times reported this huge worldwide gap in wages in the article American wages out of balance by Edward Hadas, Martin Hutchinson and Antony Currie:
American workers are paid too much relative to their foreign peers.
In 2016, a Gallup study revealed that 48% of millennials prefer jobs with higher overall compensation and they would consider changing their job for a 20% raise or less. As Amy Adkins and Brandon Rigoni wrote:
They [millennials] might continually chase jobs that lead them to bigger paychecks.
I don’t want to debate about whether American salaries are right or not. The takeaway from this data is that US workers are expensive.
Now, imagine the complexity of a web agency. Its organizational structure needs specialized and highly qualified employees. That’s why they charge ridiculous fees: they need to grease the agency gears.
And are you really sure that the agency employees that you are “renting” are skillful talent?
Agencies work with unqualified people
Agencies are aware of their costs and try to stay competitive by cutting their expenses any way they can. Even on skilled employees.
The Report: employer outlook 2018, carried out by Indeed, highlighted that the real issue faced by 41% of companies is filling entry-level positions.
The reason behind this number is that digital agencies list entry-level jobs which require 2-3 years of experience and technical expertise that freshmen can’t have.
They want to cut training expenses and hope to have their cake and eat it too. This approach limits both entry-level and qualified applicants. Qualified applicants will not accept an underpaid entry-level position.
In addition, LinkedIn Global Recruiting Trends 2017, pinned point that marketing roles have the highest turnover rate (17%) of any job function.
Digital agencies are not able to retain talent and their clients must face the inconvenience of dialogue with different representatives.
Real talent doesn't stay at a web agency. They are ambitious and continuously seek better opportunities. Usually, they leave to embrace more flexible freelance or consulting opportunities.
BENEFITS IN HIRING A
DIGITAL MARKETING CONSULTANT FIRST
A qualified web marketing consultant guides your decisions
Basically, you hired a digital agency, even before knowing if you actually needed one.
Sometimes, you can find very cheap and skilled technicians from developing countries like Philippines, Malaysia, Pakistan or India. You just need a highly qualified consultant who can guide them.
For example, an expensive SEO service from an American web agency can easily be replaced by a Pakistani who works for $3 per hour.
This is because the job is a technical one.
Guiding a digital agency requires the same effort as directing a professional on Fiverr, for instance. You just have to be careful and pick the right ones.
Let’s change the example.
If an agency offers to manage your social media, they are stealing your money
One of the most reckless choices an entrepreneur can make is to outsource social media management.
Social media represents a direct communication channel with a business’ target audience. It is the best and most effective channel to build trust. According to SproutSocial, in a 2018 survey called Brands get real: social media and the evolution of transparency:
81% of people believe social media has increased accountability for businesses.
If you go social, hiring an SMM (Social Media Manager) is the best choice you can make.
How can an external employee, from an agency, speak for your brand, create daily valuable content and interact, sometimes 24/7, with your community?