Working With an Agency

Media Agencies are the popular kids in high school. They appear really glamorous and put together. They dress well and seem to know exactly the right thing to say to everyone to be well liked.


But it’s just a facade and often times, popular kids lack substance to carry them through into a successful future. Similarly, agencies cannot and should not define the marketing strategy and path a company should take. Often times, they are inefficient and wasteful.


When I first started out in advertising, I myself was awed by advertising agencies. I interned at a media agency and worked on major client accounts. That internship showed me how siloed each team is at an agency and how toxic the work culture is and how little data was used to make major decisions for clients. I’d never seen so much petty behavior, back stabbing and throwing people under the bus as I saw at the agency.


The person who got ahead and was allowed to speak to a client was not the one who knew the data well but the one who knew the right thing to say to keep the clients satisfied and continue to spend money.


After that horrendous experience, I still considered taking a full time offer at another large media agency but I already saw hints of toxic culture and political rivalries merely in the team while I was interviewing.


I chose a smaller media agency in Jersey City with a better salary but more importantly, willing to train and teach me the analytics behind advertising. Working as a media analyst, I was able to see the shadiness of affiliate marketing and how we sold ourselves to be a great media buying agency but our inventory was very low quality.


When I went to the client side at my next job at a publisher, my strong analytics background allowed me to find multiple errors in the agency we had partnered with. I recommended bringing advertising in-house to my director and we not only saved thousands of dollars in media fees but saw our ad campaigns have more efficient CPA and scale further. The level of detail and care an in-house team can give is no match to an agency. An agency is incentivized to spend your money, even if it means wasting it on media buys that did nothing for your brand.


You cannot trust them to spend your dollars wisely and that’s why we see this trend of companies hiring media buyers and acquisition marketing managers in house rather than outsourcing it to an agency.


The only time it would make sense to have an agency is if you really do have millions to spend and you want to spend it as quickly as possible. An agency can find multiple ways to spend that for you and provide all sorts of pretty but mostly meaningless stats to present to your superiors. This works when the people you work for don’t know anything about online advertising but fails if they do.


It also fails if the agency calls their campaigns a success but the business does not see that success translate into revenue/sales. Then, there is a disconnect and the company loses faith in the agency. The agency loses its credibility, especially if it cannot provide any data to back up its claims. I’ve seen this happen multiple times.


When a campaign is run in house and it is unsuccessful, the employee can admit that it was since there is no reason to cover that up. But an agency fears being fired so they will be dishonest and never admit to a campaign being a failure.


Testing should be an aggressive part of a marketing strategy but with any testing, there will be failed campaigns (low leads, sales, high CPA). An agency will always lean toward presenting a test as a success, particularly if they are the ones suggesting the test.


Agencies also have a tendency to blow your money on programmatic or display buys that have close to no visibility. They twist the metrics and include views in CTRs and view through conversions but this is also extremely misleading.


Again, unless you have millions of dollars to spend and don’t care for actual results, I would not recommend putting most of your dollars toward display and programmatic buys. If you do, you have to consider viewability metrics, not count views and give more credit to display than search should receive.


Search will always get the last touch and often, it is believed display helped to bring that last touch search conversion but you can test this by shutting off display and will find it has a very minimal impact on your conversions like I did.


There are programmatic buys that can bring in real leads and conversions but there’s a lot of trash out there to weed through and a lot of vendors who want to mislead you. You have to be diligent and constantly analyze performance data on a daily basis to weed out the wasteful ad spending and fraudulent traffic that prevails in display buying.


If an agency is doing majority of your programmatic buys, they are very unlikely to admit to large amounts of fraud because it would show bad judgement on their part in any deals they made with partners themselves. Also, it is so easy for an agency to spend money on display. Much more so than search and social and that’s why an agency likes to keep that option in the mix. The last thing an agency wants is to lose budgets from a client.


Similarly, an in house marketing team may be incorrectly incentivized to spend dollars inefficiently so they don’t lose budgets. Or, a director may spend money on branding efforts that cannibalize organic search traffic but would make them look good. They can show how they were able to scale conversions and acquire users at a very low CPA but in reality, they just wasted dollars on users that could have been captured for free (organically) anyway!


The way to get around this distorted incentives dilemma is to keep organic and non-organic under the same management and not under separate teams or departments. Their goals should be aligned and not separate where they end up competing against each other and actually making decisions that are worse off for the company as a whole. A marketing manager should be able to take credit for driving organic traffic as well as paid. If he is only in charge of paid, he will be motivated to capture the organic traffic to seek self promotion at the expense of the company.


Agencies can be useful in major brand campaigns because they may be able to bring creative brand ideas to the table that cannot be produced in house due to limited resources or in-house lack of experience (tv commercials, radio, social ad campaigns) . The issue however is - does that agency fully understand the vision and brand as the people that work there do? In this case, you need an in house brand specialist/director who understands branding and can really direct the agency and not be misled as well.