Better Understanding Of Pressures Faced By Agencies and In-House Marketing

Author: Abhay Reddy

Most companies hire one or more agencies to run either individual campaigns or complete functions. My experiences with agencies has been extremely positive, but a conversation with multiple agency employees at a conference got me thinking about the varying pressures faced by them and in-house marketing teams.

The agency employees listed 2 main concerns:

• The dreaded ‘end of year’ budget and how all the KPIs they had worked on so hard were now out of the window.
• Some agencies felt that customers were not happy even after they showed them specific metrics to prove that their campaigns were performing great.

There were many more, but these two seemed to be their biggest concerns. Now, the concerns raised were all valid, but in-house marketing organizations have their own pressures that could have resulted in such differing realities.

My view of ‘end of year’ budget is slightly different, and I hope this may bridge some of the misunderstandings between in-house marketing and external agencies.

End of year budget is an absolute reality in most companies due to the following reasons:

• • Some marketing teams tend to spend conservatively at the beginning of the year before ramping up
  • Some programs may get shutdown resulting in additional budget
  • Unspent money from other teams can be moved to marketing
• Most companies follow a use it or lose it policy. ex: if the budget is unused by December 31st, then the $ are gone.  They do not carry over to the next year. It may also (in some cases) result in lower budgets the next year.
• Marketing leaders plan, budget and often pivot, but sometimes they end up with additional budget that must be utilized in a short duration. I personally like the ‘sudden’ incremental budget as it gives me an opportunity to experiment and pilot new types of content and tactics. While top KPIs such as leads and ROI (Return On Investment) continue to be important, they sometimes take a slight back seat to accommodate faster content creation and quicker execution.
• I would recommend that agencies consider this as an opportunity rather than a bane. It is one of the best opportunities for them to prove that they can be agile, scalable and innovative. Clear communication on revised KPIs and timing expectations are key.

In the second case, alignment of metrics is very important to show value. Many marketing organizations communicate vague KPIs (“I want 100 leads” or “We should get a lot of traffic” or none at all). Agency vendors generally track and report on KPIs, but may end up reporting on their interpretation of customers ask. In the end, customers are not happy as their objectives were not met. My suggestion is that agencies and in-house marketing have consistent definitions and be clear on the KPIs. ex: I want 100 marketing qualified leads that follow x, y, z criterion, and I expect 20% them to convert to opportunities”. In the absence of this level of specificity, the results may look great to the agency, but not meet customer objectives.