Commentary

Why Startups Are Ditching Agencies, And You Should, Too

There’s an increasing need for companies of all sizes to be agile in today’s changing economy. Relying on an outside agency to complete critical projects takes longer and can cost around 20-30% more in markups alone, a luxury many companies can no longer afford. As such, many companies are starting to bring capabilities that would traditionally be outsourced to an agency in-house. 

Having internal expertise in areas such as consumer research, SEO and content development allows teams to iterate and bring ideas to market faster for less. It also means your company gets the full attention of those resources instead of waiting on an agency juggling multiple clients.

Startups have been some of the earliest adopters of this growing trend of ditching the traditional “agency of record” model in favor of bringing creative in-house. However, more and more large companies are headed this way or considering it. Tempted to try the DIY creative route? Here are some of our key learnings on how to pull it off. 

1.Start by bringing your competitive advantage in-house

For example, grocery delivery services driving interest with pictures of fresh ingredients and food should hire their own photographers and videographers. If you’re trying to make a complicated and boring category like life insurance more interesting and easier to understand, you should consider hiring content marketers and a stellar copywriting creative director and in-house editorial team to develop a compelling blog and syndicated articles to bring the concepts alive.

2. Focus on your biggest marketing budget item 

If you’re spending more than 20% of your marketing budget on a certain activity (e.g., paid search, TV advertising, social media, sponsored podcasts, etc.), you should have a dedicated resource internally for it. For example, because paid search became an increasing share of our growth and marketing budget, we hired an expert who had been doing paid search in the travel industry. This elevated our internal expertise — and saved about 10% by removing the agency fee.

3. Leverage freelancers for one-off projects

For creative projects you only do periodically or refresh once per year, like TV commercials, it doesn’t make financial sense to build out your own team. Instead, leverage the experience of year-round professionals. This way you get access to top talent but don’t have to pay for it every month in your team budget. There are also many freelance design and creative marketplaces that make it easy to source vetted, professional and affordable creative talent on demand.

Each business is going to make this work in its own way, and we know it takes time to build out a team with the skills and relationships you’d need to make it work, if that’s what you choose to do. But simply defaulting to outsourcing key marketing and branding elements to agencies is certainly becoming a way of the past.

3 comments about "Why Startups Are Ditching Agencies, And You Should, Too".
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  1. Thomas Pick from Webbiquity, June 29, 2018 at 2:19 p.m.

    At the risk of coming off as self-serving (since I'm an independent marketing consultant), this is possibly the stupidest advice I've ever seen on MediaPost. Startups typically need a mix of ongoing services (PR, SEO -- but not at a high enough level to justify full-time hires) and one-off projects (website development, various graphic design projects, a white paper or two, a video). There's no way to hire one or two people who provide all of these skills, and it's ludicrous to hire a team of half-a-dozen specialists right out of the gate. The first two marketng hires for a startup are typically an executive (to set strategy and oversee projects) and a coordinator (to work with events and email marketing). Everything else is most efficiently handled by agencies and consultants as the startup grows and gradually expands its marketing team.

  2. John Grono from GAP Research, July 3, 2018 at 8:17 p.m.

    Drat Thomas - you beat me to it.

    I also think that when the 'office manager' in a start-up begins to spend more than 20% of their time on, say, computer and hardware issues, burst plumbing, power supply problems, etc., then they should employ an IT specialist, plumber and electrician.

  3. Thomas Pick from Webbiquity replied, July 4, 2018 at 7:36 a.m.

    Well said John. Plumbing skills are rarely the source of competitive advantage for startups (unless it happens to be a startup in the plumbing space).

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