Choosing a marketing agency is a crucial decision for any company that wants to grow and thrive in today's competitive market. In this article, we will explore the different types of marketing agencies, associated costs, the pros and cons of each option, and provide practical advice on how to choose the right agency for your specific needs.
Without marketing, you can't build a brand. And without a brand, you can't grow any business using tools other than discounts and an immense sales network.
If you don't build a brand, you fundamentally lose the ability to create the so-called "leverage effect." The deepest meaning of marketing is actually all about this: not just increasing short-term sales, but above all increasing long-term margin, revenue, customer satisfaction, resource satisfaction, investment optimization, retention of top talent, more loyal and much higher quality clients. Doing marketing means doing branding, and doing branding means building a leverage effect. Pretty simple, right?
My name is Francesco Galvani, and I am the CEO of the agency Deep Marketing. Our purpose goes beyond that of typical agencies, as does our experience, since as former multinational managers, we are the first in Italy to position ourselves as a true outsourced marketing department -- extremely flexible, managerial, and one that dramatically cuts the typical costs of in-house staff. This is the crucial point, and it is very close to my heart.
In the following lines, I will analyze the pros and cons of every form of marketing and communications agency and "proto-agency" for you, combining aspects of cost, service, utility, and advice drawn from my experience.
In the image below, a map of the types of agencies and proto-agencies we will discuss.
But let's start with three classic questions that precede the choice of a marketing agency.
Can My Company Do Without Marketing?
Is it possible to survive without marketing, despite the premise about the importance of branding? The answer may seem paradoxical, but yes. It is certainly possible. There are small, established, long-standing businesses led by "old school" entrepreneurs who have an extremely excellent product and a capillary sales network that ensures a constant flow of orders and clients, along with a certain market security. Marketing clashes with these businesses because the owner does not feel the need for it and is not even sensitive to trappings like the concept of brand. These companies don't really have "brands" but rather "talking" extensions of their SKUs. In the short term, they are perfectly fine without marketing.
The problem comes over time, when aggressive competitors who do invest in marketing appear. As long as the competitor is young and has an average product, everything's fine. But when their product quality rises, the company that owns a brand under construction and invests in marketing, over a period of years, steals market share from the established business. For obvious reasons: it doesn't depend on acquired clients and sales agents alone. It has a brand that "pulses" and attracts new clients and new talent on its own.
In summary: in the short and medium term, you can survive without marketing. In the long term, in a market where new competitors can enter, you cannot.
Should I Hire People to Handle Marketing?
Having resources entirely at your disposal and dedicated 8 hours a day to you is always a great idea, if there is economic and organizational rationale. But for an SME, it is almost never the case. The numbers don't add up and neither does the activity management.
For two simple reasons:
- Even the most junior resource has a significant business cost. A marketing specialist with a few years of experience cannot earn less than 1,300 euros per month net. Which doubles as a business cost. To that we must add the 13th and 14th month bonuses, a computer, potentially an office, staff and indirect costs. We are comfortably talking about at least 3,000 euros per month in the best case scenario. For a resource with little experience -- otherwise we reach double that. With 3,000 euros per month, you can get a lot of services from an agency or an outsourced department like Deep Marketing!
- Even the most competent person does not have unlimited expertise. Modern marketing consists of a tsunami of channels to manage, offline and online media, mountains of operations, languages, skills, tones of voice, different software, different sensibilities, skills that are not compatible or comparable with each other. It is not realistically possible to equip yourself with a "minimum" quantity of in-house professionals to cover all the marketing channels a company needs, no matter how small. Five people wouldn't be enough, and there would still be gaps. Worse: skills must adapt to the workflow and market, not the other way around. And this changes rapidly. So it is necessary to frequently and quickly change the skills and roles in a marketing department. With hired staff, this is literally impossible, except for large corporations.
In summary: hiring is a sensible and recommended choice only if you can count on many different professionals and allocate their hours efficiently. Something only the very largest companies can afford.
What Are the Benefits of an Agency?
So let's be honest. For a typical SME or a non-giant company, it is often senseless to set up an internal marketing department. At most, you can hire a junior operative or a person who works in customer service. In some rare cases, an internal marketing manager makes sense, provided they are someone capable of getting their hands dirty and choosing their partners wisely.
In summary, the benefits of an agency are primarily three:
- Cost savings: With an agency, you only pay for the services you need, avoiding the fixed costs associated with an in-house team.
- Access to advanced technologies: Agencies have the latest tools for campaign analysis and execution, ensuring optimal results.
- Flexibility and scalability: Agencies can adapt their services based on the company's needs, allowing you to increase or decrease marketing efforts as required.
And now we get to the heart of this analysis.
How do you choose the agency? In the form of a communications agency, a marketing agency, a consultant, or a web agency?
Below is a list of what the market offers, starting with the "quasi" agencies.
And the market is chaotic, I can assure you. So I am sketching a list without any claim to being exhaustive -- it is simply a synthesis of my two decades of experience in the profession, both on the client side (for 15 years) and on the vendor side (for 5 years).
How Agencies Are Commonly Categorized
Marketing agencies can be divided into different categories, each with its own specializations and advantages. You will normally hear these definitions:
- Full-Service Agencies: They offer a complete range of marketing services, from strategy to creative, to campaign execution. They are ideal for companies that need comprehensive, integrated support.
- Specialized Agencies: They focus on a specific area of marketing, such as SEO, content marketing, or social media management. They are perfect for companies that need specific expertise.
- Boutique Agencies: Small agencies that offer personalized, tailored service. They are often chosen by companies looking for a more intimate and dedicated approach.
In my opinion, these groupings are neither sufficient nor particularly clear. For this reason, below, we will go deeper and create more practical subdivisions aligned with client needs.
Let's start from scratch.
The "Proto" Agencies
Let's start with the simplest and most affordable offerings on the market: freelancers, web agencies, performance agencies, and SMMAs. Let's take a look.
Freelance Collaborators
As expected, the definition of freelancer is no more complicated than it appears. A freelancer can manage any marketing channel for you, from Google and Facebook advertising, to social media, e-commerce, a website, magazine placements, offline advertising, and even public relations or events.
I wouldn't advise against this form of collaboration, partly because it would be hypocritical of me, since my first job in self-employment was exactly this: being a consultant.
But it is important to understand the limitations and which freelancer to choose: I had 15 years of experience as a manager when I went independent, so I positioned myself as a freelance digital marketing manager -- meaning I found all the collaborators needed by the company, coordinated them, negotiated, and was the liaison between the company and other professionals, interacting daily with the administration and the CEO. Despite having several clients, for each one I served as an external department head.
If you want to find a freelancer, I recommend exactly this path: look for an experienced consultant. You don't have the expertise to find marketing professionals yourself, manage them, understand their language, guide them, evaluate them. You have other things to do -- a business to run. If you think you can solve the matter by paying someone on an as-needed basis just to manage your digital campaigns or website, you are on the wrong track. It doesn't work that way.
Warning: high alert!
Don't fall into the naive temptation of thinking that a freelancer costs less than an agency. Not at all! If you are dealing with a consultant with extensive experience, prepare for a corresponding fee. Forget hotels below three stars, travel at their expense, and please don't penny-pinch on the non-compete agreement. It will backfire.
If this seems absurd, remember the concept of opportunity cost from your economics textbook. Your consultant-manager's time is capped -- it is a limited quantity. And as their seniority increases, it becomes a financial loss for them to dedicate that time to you versus having a bouquet of clients. Whereas an agency can balance the cost across multiple professionals of different levels and be more flexible. You need to build loyalty.
I myself was paid much more as a consultant than for providing the same services through my agency. And that's perfectly normal. No matter how attentive we are to clients and how we assign them a dedicated manager, the time given by an agency is much less "scarce" than that given by a single loyal, dedicated consultant.
Web Agencies
The next natural step for many companies is to replace a freelancer with an alternative form of freelancer under a different umbrella -- the web agency. They are attractive because they promise to manage "only the marketing you need" (meaning digital advertising and little else) and generally cost little, around 1,000-1,500 euros per month for a normal agency, much more if tied to a famous name.
With classic web agencies, we have two major problems:
- It is not true that in 2024 marketing can be limited to "digital advertising and little else" -- if only it were that simple. An agency must be able to accompany you across the entire spectrum of marketing channels, and there are dozens upon dozens, or you will lose market share. Otherwise, you'll end up with the usual guy who only knows how to use a hammer and convinces you he can build a house with it. And even design it.
- Too many web agencies in Italy rely on the "personal brand" factor of one or more founders. For some bizarre reason, the idea has spread that companies should pay for personalities, not professionals. So the former flood ads with their faces, give endless conferences, courses, interviews, pay for articles (has someone mentioned "Forbes"?) to be called the new gurus. And you believe them, get fleeced, and end up at the end of the month holding nothing.
This doesn't mean web agencies should be excluded outright. Heaven forbid! But they should be approached with common sense, looking with a bit of discernment for the serious ones where the professionals are competent -- just evaluate their LinkedIn profile and the quality of their communications. And -- for the love of God -- stay far from those where the founder's face comes before the services offered and the professionalism.
A very important note about web agencies is that this definition also tends to include large software development companies that have expanded into some marketing channels. Needless to say: they have nothing to do with the web agencies we discussed in this section -- there is only a similarity in name.
These are often companies that generate several million euros in revenue with top-notch programmers, account managers, meeting rooms, and representative offices. Their core business is creating programs and management systems, and incidentally some of these programs are portals, websites, and marketing tools. So they add other services on top. I know this well because during university I worked with one of these, and in hindsight they resemble traditional, structured companies more than marketing agencies.
My advice is not to exclude them outright, even though the cost can sometimes be anything but low and they are not truly "native communications experts." But it is always a positive thing to know serious players.
SMMAs - Social Media Marketing Agencies
Very peculiar creatures that are much talked about, SMMAs -- web agencies specialized in social media -- are often presented as the cure for all ills. They promise follower growth, visibility for a few euros, social media management, and perhaps a few advertising campaigns. They are tempting because they are cheap and don't require a large media budget investment (money to put into advertising), since theoretically you just need to pay the agency team to grow your visibility.
Unfortunately, it's just a pipe dream. 90% of SMMAs are made up of young people who found a way to earn extra income by selling services that appeal to the market. But with often unacceptable quality, and sometimes not entirely clean practices, such as buying followers. The real problem, however, is further upstream: these young people are first and foremost victims of swindlers who charged them handsomely for a course that borders on fraud, with pre-packaged recipes, second-rate templates, and manuals to apply for managing social media activity. There is no real competence or craft being taught -- just the mechanical transmission of qualitatively deplorable work methods, copy-paste posts and ad campaigns, often aesthetically unpleasant.
No marketing strategy based solely on social media can work. There is no evidence in the literature, and any marketing manager's experience will confirm how serious this illusion is.
In general, I recommend staying away from SMMAs. By doing so, you could paradoxically help many people, by taking money away from despicable methods of exploiting young people, who in turn often decide to drop out of school with the illusion of easy wealth in this type of agency.
Performance Agencies
Effectively at the top of the "proto-agency" food chain in terms of allure are organizations specializing in what is called "performance marketing." Beyond the big words, the idea is very straightforward: they don't really deal with marketing -- which, remember, primarily consists of building brand and leverage -- but with procuring short-term sales and potential client lists, through more or less reproducible methods.
The subject here is too complex for a single chapter, and we will revisit it. But suffice it to know that these are sometimes quite significant companies with multi-million euro revenues, which broadly split into two groups:
- Those that create a website optimized for local traffic and Google indexing for your area, and perhaps manage a few small supporting campaigns and minimal social media management.
- Those that bring you potential clients or are expressly focused only on growing your online shop sales.
Between these two groups, the tools differ, but the goal is identical: purely commercial.
On paper, it sounds like everything a company needs to win the market battle, but in practice, not even close. Both because these businesses are forced to work at scale and can't devote much attention to you, effectively using standardized approaches with you. And because there is a reason marketing exists and is quite different from sales work. Short-term oriented activities tend, over time, to bring second-tier contacts and clients, with more attention to quantity than quality.
In my experience, sooner or later a company realizes that it doesn't actually need lots of clients, but EXCELLENT clients. Clients who don't waste your time, well-profiled, who already know the brand, who don't negotiate, who don't "make trouble." Because they are pre-loyal to the brand (through marketing work), therefore loyal, faithful, delivering great margins, with whom you can build long, profitable relationships.
Performance agencies are honest about this: they promise to bring clients and leads. Period. It is not their interest and they are not structured for the quality of those leads or for growing your brand. Their philosophy is clear. In effect, they are salespeople using digital channels, rather than marketers.
Classic Agencies
Very well. It is time to look at the classic agencies, the textbook ones.
"Vertical" Communications Agencies
An interesting type of marketing agency is the so-called "communications agency" or "vertical creative agency." Having worked extensively in the fashion industry, I have known quite a few. These are usually highly structured organizations, always with many years of activity behind them.
And often, extremely expensive.
These are groups of seasoned professionals who are highly specialized in a particular market and specific channels. As I mentioned, they are very present in fashion and represent a large slice of the market because it is believed that this sector requires very specific and heterogeneous expertise compared to other markets. This is true, but only partially.
What is true: fashion is "image," so the aesthetic ability and mastery of contemporary visual messaging is a huge part of the job -- just think about what it means to organize a photoshoot, from models to backdrops, to the type of photos and meaning of the shots. An agency must know how to do this, case closed.
What is not true: all of this is now valid for almost every B2C consumer product. The communication needs of different markets are much closer to each other than one might think. That's why I am not a big fan of the approach of those who "encapsulate" themselves in a single sector, because I find it unproductive, risky for the agency's own business as it becomes a victim of economic cycles, and unable to transfer innovation across markets -- one of the roles of those who do marketing.
A prime example: we recently worked with a major brand of phone and computer accessories. I can assure you that the skills we leveraged within the Deep Marketing team and the results of the work are equivalent to what could have happened if we had worked for a fashion brand. From the photoshoot, to content writing, to advertising planning, to the obsession with visual presentation. Same process.
Let's be clear: here I used the example of fashion, but it applies to many sectors. There are communications agencies specialized in tech, food, education, and design. Wherever there is a large, important market, you will find a type of vertical communications agency. And they will charge a premium for said specialization.
I'll share a curious fact: the client cost for vertical communications agencies is correlated, far more than with other companies in this article, to their geographic location.
A specialist communications agency in Milan or Rome will cost significantly more than one in Parma or Viareggio. The reasons only superficially depend on different costs of living and salaries. In reality, they have to do with the supposed prestige and the potential connections associated with certain locations. I have always found this bizarre: if it indeed makes a lot of sense to pay more for a well-connected public relations firm -- see below -- what's the point of showering a communications agency in gold when it does something else entirely?
The truth is, we all know the explanation, and we must admit it to ourselves if we are intellectually honest. Just as it is easy to be dazzled by the founder's reputation at an ordinary web agency, we are not truly immune to the glitter of prestigious locations, especially for agencies that already base all their value on being associated with special market sectors.
Tres chic!
In essence: if you intend to work with these players, don't be dazzled by location, city, and loudly proclaimed specialization. Talk to their former clients and verify whether the agency in question is attentive to client needs, knows how to personalize strategy and creative, is present, and is not unnecessarily bureaucratic. Then evaluate.
PR and Event Organizers
A special type of communications agency is the Public Relations firm. Often a mysterious definition, they employ professionals who are perfectly embedded in the market segment where they operate and are in contact with journalists, influencers, VIPs, and stakeholders. This allows them to give their clients visibility through a constant seeding and relationship-building activity with these actors. There are obviously financial exchanges -- no one gives you visibility for free. But an excellent PR agency makes the difference and allows you to reach places that advertising alone might not take you. Public Relations firms are, in my opinion, the only communications agencies that can legitimately call themselves "vertical in a certain market," simply because their relationships are long-term investments directed at specific sectors. Deep Marketing, for example, has an absolutely exclusive and valuable partnership with PR professionals specialized in technology and personal care. While some less vertical services are managed directly by our team.
An even more interesting point: PR agencies often handle event organization. Something that scares many companies due to the very high costs and risk of failure. But it is something necessary, especially in the post-Covid era, when people are once again feeling the need to gather. Nothing replaces the emotion and human connection of "face-to-face."
Speaking of events, their organization is a crucial aspect of marketing and requires specific competencies. Here are some tips on what to consider when choosing an agency for event organization:
- Meticulous planning: Make sure the agency has a detailed plan for every phase of the event.
- Creativity and problem-solving: The agency must be able to handle the unexpected and find creative solutions for every challenge.
- Experience and competencies: Verify that the agency has proven experience in organizing events similar to yours.
If your marketing agency does not offer a PR service -- provided directly or through a partnership -- you almost certainly need to find someone on your own to support you in this area, especially if you are in a B2C business. Real marketing also includes Public Relations.
Full-Service Marketing Agencies
And we come to the end of our journey, concluding with pure marketing firms. Heirs to the legendary agencies of New York's Madison Avenue. Where you can feel content, art direction, absolute creativity, supreme quality, whisky, and neurosis. Their DNA is essentially the same across different versions -- what changes is only the approach to the client relationship and the cost, which in turn is correlated to their reputation and the seniority of their professionals.
They handle everything for you. Every possible service and channel in marketing and communications. That's why they are often called "full service" or integrated agencies.
Paradoxically, most of them do not have stellar revenues. Often much lower, for example, than "performance" companies. But don't be misled: the reason is the care they devote to a few specific clients. A true marketing agency is indeed capable of managing every single marketing channel at 360 degrees, most languages, media, creative, and technologies. This is a craft several orders of magnitude more complex than the players seen in the previous chapter, but it is what's needed to guarantee a total service to the client.
While Deep Marketing does not define specific channel coverage contracts with its clients upfront -- which means in a short time we can go from a simple online campaign to a strategy costing hundreds of thousands of euros across multiple media -- many marketing firms do. Because the agreement with the client is always dedicated to a specific project, more or less explicitly.
The very large, excellent, and extremely expensive marketing firms like Leo Burnett or Ogilvy can typically, for example, make agreements for advertising creative and visual media management. They will only get involved in PR or media planning with an explicit revision of the process and the client contract, and certainly after a specific analysis. This is because the strategy, the people involved, and the client accounts need to change. And the same applies to many smaller firms that follow the model of 1) project, 2) client account, 3) specific dedicated team.
Marketing agency costs have a practically infinite range. From 1,500-2,000 euros per month to 200,000. Precisely because they cover all possible channels and scenarios.
Map of marketing and communications agencies
Deep Marketing
Deep Marketing is a true marketing agency from the group just discussed, but with a different vision, simply because we don't come from the agency world, but from corporate management. Our clients don't have an "account" and a project at their disposal, but an experienced project manager and an external department. The project manager will therefore be the first to advise, as a consultant, on expanding or reducing communication channels, spending, analysis criteria, and types of creative and content to produce. And, upon agreement, it will be their responsibility to leverage the agency's appropriate resources.
Rapidly, with an almost instantaneous and fluid cost adjustment for the client.
These are philosophically different approaches. I wanted to give my agency what I demanded from my vendors when I was on the client side. Obviously, this means we must be "very good" at organizing quickly, having professionals who cover the entire spectrum of marketing channels, keeping track of the work, and maintaining a deep relationship with the client without being vampirized -- as always happens when important bonds of mutual trust are formed. But these are challenges we set for ourselves from the start, and that we keep under control.
Others don't have these burdens, but that doesn't mean it's the best choice for the market.
That's why our services cover every marketing need: branding, strategy, online and offline advertising, social media, corporate identity, commercials, events, photoshoots, PR, planning, press office, app development, websites and e-commerce, content management, mentoring, growth hacking, commercial space and store design, strategic location selection support, standard and funded training.
Our managers and professionals are in constant training and evaluation. Our model continues to evolve, as does our testing and adoption of state-of-the-art technology platforms. For example, we recently activated partnerships to help our clients sell via Alibaba in Asia and to manage subsidized finance in the form of courses, equity, and business credit.
If you are interested in having a chat to better understand the model and how we can help you, you can fill out this contact form with no obligation.
As you can see, we love talking about our work!
Bonus: Avoid the Fuffaguru!
Choosing the right marketing agency can make the difference between the success and failure of your marketing initiatives. Take the time to evaluate different options, consider costs and benefits, and make sure to avoid fake experts. With the right agency by your side, you can build a strong and lasting brand, capable of competing effectively in today's market.
But beware: in this article we have seen an ideal universe, but the truth is that in the marketing world it is easy to encounter fake experts or "fuffaguru" who promise miraculous results without having the necessary skills. And they are increasing in number, especially in agencies.
Here are some warning signs to spot and avoid them:
- Lack of demonstrable expertise: Beware of those who cannot show a solid CV or concrete case studies. If just a few years ago you were doing something else, perhaps your love for marketing hides a love for "money" more than anything, and a slapdash preparation, possibly via other gurus and their "magic methods."
- Excessive personal fame: If a marketer is more famous for themselves than for their clients, it could be a warning sign.
- Absence of concrete results: A true marketing professional should be able to demonstrate tangible results achieved for their clients. Without always citing the same 3 case studies out of thousands of students/clients.