Advertising Apocalypse – “The rise of freelancers & the fall of agencies”
The number of digital/ performance marketing agencies, experts and freelancers has grown extravagantly over the past 4 years.
During the initial days of setting up my start-up marketing team, when my ROI based questions weren’t met with guaranteed responses. I became skeptical, and started worrying about my marketing budget getting wasted. What I wouldn’t realize is the answers for those questions simply couldn’t be known at that stage in the process. I then sheepishly realized I was no different than my marketing prospects. Let’s focus on the marketing agencies trouble here.
Agencies trouble to answer these questions
The following are the most common question marketing agencies hear everyday.
- If we invest $5K/ Rs. 30,000 a month in marketing, how many new customers will we get this year?
- What if we need to increase revenue by 20% this quarter, how many campaigns do we have to launch and where should we run it?
- How much will be the cost per lead and conversion percentage?
- How many leads can you generate a month and what would be the quality of them?
It’s not that these aren’t fair concerns and questions, but they’re not realistic. Agencies are facing a churn rate of almost 60% because of it. There’s no way for me to know what a client’s results will be before implementing their marketing strategy. If I could promise ROI, prospects would be flocking to our door, knocking it down and begging AskJuno to be their agency. But it’s just not that simple. Just as the platforms couldn’t make promises to us due to unknown variables beyond their control, marketing agencies can’t either.
‘Fear of failure’ leads SMBs to invest low and expect quick returns in marketing
Then there is a classic suggestion. Most prospects suggest almost every agency by thinking as if they are the smart ones.
“Why don’t we start with a small budget? If things are working well I am ready to spend 5Xon marketing”
But the SMBs should understand that the first 3 months is where the businesses should really invest in marketing to understand their position in the targeted territory, the audience’s response in the platforms and analyze marketing metrics. Jumping from one marketing agency to another or hiring different freelancers with a small budget multiple times is not going to help you in the course of identifying the right marketing parent. This isone of the
The rise of freelancers (Agencies trouble)
A medium sized or big agency often guarantees only the deliverables, creativity, resources and the man hours they can put in. However, the prospective clients often don’t value them and they stick to the classic requirement of “Instant ROI”. Anyone with experience in online advertising will not guarantee the conversion in the first couple of months, that invites agencies trouble.
The upcoming digital marketers/ freelancers with minimal experience exploit this void of SMBs scared to work with agencies. This hunger of SMB is satisfied by most of the newborn freelancers as they commit themselves for whatever the prospect asks for like lead quantity & quality, conversion rate not just for product but the services companies too. Some freelancers even go to the extent of committing 3X/5X returns on their marketing spend from the first month.
Realist vs Optimist
Unlike freelancers; agencies don’t offer false promises due to their understanding & expertise in the industry. Also they value customer retention more than their new customer acquisition. Because churn is a biggest trouble for agencies. It seems that even most of the end users of the ad platforms are aware of organic posts and paid ads.
Almost all businesses have a common goal when it comes to marketing or advertising budget. They all need the return on investment (ROI). Only 10% of SMBs have the mindset to plan and allocate marketing budget for 6 months to 1 year and monitor the progression; rest of the SMBs want to invest in marketing only for a month or max 2 as they are depending on the income from the marketing to invest next month. Hence most of the SMBs are in need of instant gratification. But what they don’t understand is “marketing is not a guaranteed success
Four horsemen of advertising apocalypse
1. Business owners/ Decision makers
2. Marketers/ Advertiser who possess creativity & ad optimization knowledge
3. Platforms which host the advertisements
4. Viewers of the ads
Yes, the business owners or the decision makers are the ones too. Business owners usually don’t question their ability of sales or their teams’ (at least in front of a marketing agency). Ad platforms like Facebook, LinkedIn, Google and others who take the lion share of the marketing budget are not battered and sometimes not even questioned. No body is blaming the viewers of the organic content or the leads of the paid content for the wrong inquiries or submission. But every body blames the marketers and that the marketing agencies trouble.
But businesses who were able to track only the potential reach in Print/ mass media ads/ Billboards are now demanding online marketing agencies to promise results. Agencies can report various KPIs such as reach/ click/ page views/ leads/ conversion/ CPL/ CPM/ CPC/ CTR. But many customers demand conversions, which should be their task. Remember, reporting can be done from day 1 but optimization will take time.
What the SMBs should ask is, are they giving enough time and budget to a marketing agency or a freelancer? It is totally unfair to decide on continuing or breaking the marketing partnership within a month or 2. You can decide only after AB testing. If you are a business who wants to try online marketing, you should not consider that a cost function. You should start the marketing partnership only if you are ready to invest for the first 3 months. In this period you should be ready for trial & error when it comes to platforms/ objectives/ content and ensure whether your sales team is following all the procedures and putting a whole-hearted effort.
Hard truth
“Expecting marketing agencies to guarantee lead quantity & quality right from the first month or sales/ conversion to happen quickly is outside the realm of possibility” .
