What are you really paying for when you hire a marketing agency?
By Jenna Cyprus
As a small business owner, it’s nearly impossible to succeed without some kind of marketing and advertising campaign. Marketing and advertising are the tools that will increase awareness for your business, bring in new customers and revenue. Even if you operate a beneficial, service-oriented business, you can’t make money if no one knows you exist.
That said, most small business owners find it challenging to plan a marketing budget. They don’t have the expertise required to launch and manage a frugal marketing campaign on their own, but hiring a marketing agency often seems expensive — sometimes costing thousands of dollars a month for a running campaign.
Are these costs really worth it to support your business?
Let’s consider some of the alternatives:
- No marketing campaigns. It’s possible for a business to survive without a dedicated marketing and advertising campaign, but it’s extremely difficult — especially if you don’t already have a foothold in your community. Operating a business without a marketing campaign necessitates that you grow 100 percent by direct sales or word-of-mouth — a tall order, even for the most reputable businesses. It simply isn’t a viable option for most businesses.
- A self-run marketing campaign. If you own and run the business by yourself most of the time, you could try your hand at running your own marketing campaign. All it will cost you is time, and you may be able to make your brand more visible in relatively short order. The problem here is lack of experience; a bad marketing campaign can hurt your image more than help it, resulting in wasted time and a damaged reputation. This also isn’t scalable; as your business demands more of your time, you won’t be able to keep up with your marketing needs.
- Internal staff. You could also hire someone internally to handle your marketing, but this can quickly get as expensive as a marketing agency (if not more so). You’ll also have a limited range of expertise to call upon; rather than gaining access to an entire team of people, you’ll be relying on one or two experts to handle everything.
- Freelancers and contractors. You could feasibly save money by hiring a team of independent contractors and freelancers to do the work for you; they tend to be cheaper than hiring a full-time employee or enlisting the help of an agency, but you can gain access to a diverse skillset at the same time. The problem is freelancers aren’t always reliable; it may take you several attempts to find someone consistent enough to depend on for your needs.
Among these alternatives, marketing agencies seem like the best deal.
What You’re Paying For
So, what are you really paying for when you hire a marketing agency? Where is that money going?
Some of that depends on the marketing agency. Most agencies will have a dedicated account representative to talk with you, learn more about your brand, help brainstorm new ideas and measure how your campaign is going. You’ll also be paying for the right to access a full team of experienced staff members, usually ones who have varying fields of expertise in different areas. Some agencies specialize in one type of marketing, while others are full-service and are more diverse in what they can offer.
Your money may also go toward paying for the raw costs of your campaign. For example, your monthly rate might include $1,000 of ad spend with Google or Facebook if you’re interested in direct advertising, which are costs that marketing agencies can’t directly control.
Thinking About Return on Investment (ROI)
At the end of the day, the true measure of a marketing campaign’s success is your return on investment (ROI). How much money did this campaign bring you in excess of what you paid for it? The higher your ROI is, the better, and as long as it’s positive, you’ll be better off for whatever you spent.
Marketing agencies tend to be more efficient at securing a high ROI, in part because they have access to the professionals necessary to execute creative, effective campaigns, but also because they’re committed to retaining your business. They have a vested interest in your success and will do whatever they can to earn you benefits in excess of what you paid to hire them in the first place.
It’s up to you whether you hire a marketing agency for your small business, and of course, every business is different. But for the most part, hiring a marketing agency is one of the smartest things you can do with your money, since you’ll spread visibility for your business efficiently and have a much higher chance of seeing an ROI on your marketing budget.
Jenna Cyprus is a freelance writer from Renton, WA who is particularly interested in travel, nature, and parenting. Follow her on Twitter.