Why Marketing Agencies Should Get in Bed with the Enemy

By | November 4, 2011
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My primary motivating force behind writing The Marketing Agency Blueprint (Wiley, December 2011), and creating Marketing Agency Insider, is to accelerate the formation of a more open and collaborative marketing agency ecosystem.

I believe that the future of the marketing services industry will be defined by a dispersed, yet unified, collection of nimble and innovative small-to-midsize agencies.

Rather than consolidating into conglomerates, as has been the way of our industry forefathers, there are unparalleled opportunities for these emerging hybrid agencies to remain independent and collectively transform, disrupt, and thrive within the developing marketing services ecosystem.

Why Work Together?

The idea of agencies partnering with other agencies isn’t new, but there are market forces dictating that a more sophisticated ecosystem must evolve. A system in which traditionally competitive firms, as well as niche firms that have worked within silos, will form partnerships for the good of their agencies and clients.

Change velocity (the rate of change, continually accelerated by technology innovations) makes it nearly impossible to stay at the forefront of every trend, and selective consumption (the principle that consumers are tuning out traditional, interruption-based marketing methods, and choosing when and where to interact with brands) is driving demand for a vast array of integrated services and expertise that most firms are not prepared to deliver on their own.

Until you can make a strong business case for bringing new capabilities in-house, either through an acquisition or hire, it’s best to focus on your agency’s core competencies and find great partners for the rest. Start by determining the service mix needed to plan and execute client campaigns, and then go to work finding the right partners.

Based on digital-services demand and selective consumption, standard agency competencies will include: brand marketing, website development, SEO, online advertising, local search, email marketing, social-media marketing, copywriting, video production, PR, graphic design, and mobile marketing. Services that require very specialized capabilities, software, or equipment are logical competencies for full-service firms to outsource to specialists and soloists. 

Marketing-Agency-Collaboration

PR 20/20 and Stream Creative, one of our valued partners (Boston, September 2011).

What Makes a Great Partner?

Like any relationship, trust and shared values are essential to building strong agency partnerships. Every time you choose to outsource, you are putting your brand, reputation, and financial success in another agency’s hands. Here are some of the key factors to consider when evaluating and selecting partners:

  • Services: Services must be complementary, with limited crossover between agencies. Crossover services can create confusion among clients and conflict among partners who have different styles.
  • Pricing: There must be transparency and consistency in pricing for partnerships to work. Ideally both agencies use similar pricing models, and are in the same general cost range. For example, an agency focused on selling $1,500 to $3,000 per month retainers will not work well with a graphic design specialist firm that charges $400 per hour. It’s also important to address referral fees and commission structures, as these can be sticking points early in developing agency partnerships.
  • Process: The most efficient and productive partnerships will share very similar project management and communications styles. As the ecosystem evolves, agencies will search for partners who use the same cloud-based management platforms, ensuring seamless integrations. For example, two firms that both use 37Signals’ Basecamp project-management system will more quickly achieve economies of scale in the planning, production, and delivery of joint services.
  • Performance: Partners have to deliver on budget and on time with the highest quality work. You must have complete confidence in your partners’ ability to perform at the levels you demand from your internal team.
  • Financial strength: Don’t be afraid to ask the tough questions about your partners’ financial health. Agencies that struggle financially often are under pressure to keep overhead costs down, which directly impacts the quality of their staff and their capacity to take on new projects. Be especially cautious with soloists and specialists who are more reliant on project work, and, therefore, generally less stable. You cannot rely on partners who are stretched too thin or are too dependent on you to stay afloat.

What Are Your Thoughts?

Have you had success partnering with other marketing firms? What challenges have your faced, and overcome? What criteria do you use to evaluate and select partners?

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