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Five Considerations Before Hiring an Agency

Written by Emily Bratton | Sep 25, 2014 4:00:00 AM

Whether you’re a growing company in need of its first agency or an established brand with a specialized business problem to solve, nearly all successful brands and marketing managers do better with an agency partner to help them succeed.

With companies counting every penny, there’s a lot riding on the decision to find the right agency. The five considerations below are critical steps in evaluating an agency before you hire them.

1. What are we getting from an agency that we couldn’t handle in-house?

Companies traditionally try to maximize internal personnel to create marketing programs. The reason established organizations and new companies with aggressive growth plans almost unanimously complement internal teams with outsourced marketing boils down to cost and expertise. Building an internal, integrated marketing strategy and execution team wouldn’t pass the filters of most finance managers.

Going outside means you have the opportunity to bring in the best-aligned expertise for strategy and execution. In a turnkey fashion, you pay only for what you need of this expertise.

2. Is this an agency of record or an agency of collaboration?

The fragmentation of information sources and audience platforms means varied marketing channels can be relevant for a single brand. Depending on the category within which you work, it may be viable for one primary agency to handle most or all of your marketing services as the lead agency of record (AOR).

A lead agency takes your business objectives and collaborates with you to build out your brand’s marketing strategy and execution across all channels.

If you already have an AOR, or if most of your marketing can be handled in-house and you have a niche service need outside of that wheelhouse, then you are looking for an agency of collaboration (AOC). Collaboration is an operative word; the AOC must understand their role and integrate with the AOR and internal resources effectively in order to provide real value.

Specialized expertise is a must for the agency, but you should also feel confident in their ability to integrate with other stakeholders for a complementary effort.

3. Does the agency have a track record in my industry?

By some estimates, there are more than 8,000 marketing service agencies in the United States. This plethora of options can quickly become daunting, especially if you’re not working through an agency-search consultancy. Search consultants filter agencies based on their category expertise and track record. If you’re searching for an agency on your own, make sure the agencies you engage in the process have experience relevant to your category.

Here’s where traditional advertising agencies differ from freelance resources. You’re buying more than execution. You’re buying strategic counsel and that knowledge should have ties to your business segment and the marketing channels through which you are deploying.

4. Do they use research?

An agency that operates on instinct to tackle your business problem is dangerous. Throughout the process of evaluating an agency, make sure their way of working includes research and customer insights. This should include knowing the product category intimately, knowing the various segments of current and prospective customers, including where they tune in and how they shop. Ask tough questions to ensure their work is based in research, but, if that’s their mandate, it will reveal itself naturally as you get to know them.

Not every agency has in-house research, but those who include this capability will stand out from the rest in their commitment to discovering empirical category and audience knowledge that will reveal the most strategic path toward growing your business.

5. How much will this cost?

Procurement and purchasing departments can get pretty worked up about signing deals with marketing agencies. There are certain comfort levels these negotiators have for a balance of what they may call working dollars (monies that go directly to market executions) versus non-working dollars (monies that go toward agency fees to develop the executions). The problem with these formulas is that they don’t account for the extreme variability of what the agencies are engaged to do. After all, outsourcing marketing is done because it doesn’t fit neatly into the capacities of internally allocated overhead. A nuance model some agencies employ is partnership pricing. The agency’s compensation, in part, is tied to specific success metrics you agree to in the scope of the assignment.

When you buy agency services, you are buying specialists. Specialty work doesn’t come cheap. But if your partner can prove that their success is tied to your success, you can feel confident that the investment will pay dividends.