What To Expect From Your Digital Marketing Agency

By Wednesday March 5th, 2014

While it may be daunting, marketing agencies should take responsibility for designing a strategy based on metrics, ROI and measurements of success.

A CMO sits down with a marketing agency executive.

Everything is peachy until the CMO drops the bomb– she brings up “ROI.” Suddenly, there’s a big purple-spotted elephant sitting in the corner of the room and the agency executive takes an awkward gulp.

I’m painting an extreme picture (with the purple spots and all), but this is a common occurrence.

Why does it have to be this way? Why aren’t agencies prepared to tackle this topic?

CMOs deserve more transparency from their marketing agencies and consultants– not promises, just good analysis and insight. “What’s my ROI,” and “How will I measure success,” are tough questions, but fair ones, and they should be asked before a contract is signed.

Better yet, agencies should initiate these conversations and not wait for the business owner or CMO to bring it up.

With the growing trackability of digital marketing and advertising, it’s easier than ever before to base marketing strategy around potential return on investment. Still, not many agencies have the courage to practice revenue marketing, talk about ROI, or lay out tangible goals. Doing so would create expectations that are measurable, and therefore, may shine light on their mediocrity.

Let’s Be Reasonable

Clients need to have reasonable expectations when discussing return on investment and measures of success. I’m an agency executive, so I know it’s a delicate dance. You want to set aggressive goals, but keep them realistic and achievable. I go by the rule that the client is always right, but I’ll admit their expectations are often out of whack (at least to start). It’s the agency’s job to discuss expectations up front, establish goals and metrics, and have an understanding of what success means for the client. It’s the client’s job to pay attention, ask questions and push their agency partner, all within reason.

Before You Go Asking Your Agency For A Complex ROI Calculation

Please understand, the type of ROI I’m talking about takes top line revenue and marketing cost into account to gauge general marketing effectiveness, but it is not meant to be a full and complex financial analysis. We’ll leave the complex financial calculations to the CFO. During our engagement with a client, what we strive to establish first is a positive ROMI, or Return on Marketing Investment.

Before engaging with a client, I like to discuss a tentative approach and identify where the biggest opportunities are. Digital marketing is like taming a wild beast– you have to embrace experimentation, and you don’t know what’s going to work best until you jump in and start. I refrain from making promises, and I don’t throw out hard numbers. I get a sense of what success will look like for them. If I think we won’t be able to deliver on a client’s expectations, I don’t take on the business. It’s that simple.

With so much to consider, I understand the frustrations of CMOs trying to navigate the many digital marketing platforms and vendors available to grow their business. Sometimes brands have to learn the hard way, hiring a bad agency or marketing consultant before they recognize a good one. In an effort to avoid a bad engagement, the client can push harder in the consultation phase, making sure their marketing agency is doing their homework and that they fit the criteria. I advise asking your prospective marketing agency what type of upfront research and consultation they provide.

Make Sure Your Agency Doesn’t Skimp on Discovery

When it comes to digital marketing, agencies sometimes leave the most basic research and analysis out of the sales process. The agency’s goal should be to learn how a business works, how the client makes money, where the “best” money is made and where the most growth potential exists. It’s our job to present insights to the business owner or CMO based on these core facts. If your agency isn’t performing some type of discovery before throwing pricing at you, take that as a sign of what’s to come.

I like to spend extra time with a client before jumping into a formal proposal or presentation to make sure I have a firm understanding of their business goals and challenges.

The Interview

Is your prospective marketing agency asking you the right questions? Are they focused on solving your problems and understanding a long-term vision? When I sit down with a potential client I begin with a few simple questions to get acclimated. I want to know as much as I can about the business and the people running it, so I can decide if we are a good fit.

How do you make money? I’m looking for a breakdown of products or services and the revenue or profit you make on each sale.

Who are you selling to?

For each product or service, tell me who your customer or customers are.

How much do they buy?

How many products do your customers buy with each purchase and do they come back for return purchases? How often?

What does a customer search for to find you? I want to see how well you know your customer, or more specifically, if you’ve ever done any keyword research. I compare your answers to my own findings.

What’s the best kind of customer to you? I don’t want to waste anyone’s time getting business that doesn’t move the company in the right direction.

Where are your customers located geographically? I need to cast a big enough net, and I need to know how many fish are in the pond.

What are you trying to do and how far do you want to go? I need to know your goals and expectations are within reason.

What’s the lifetime value of a new customer? This is very helpful but not necessary for a short term ROI analysis. Even a rough estimate helps.

Now, here’s the big question I get in return. The one I get all the time…

How can we spend so much money on marketing without any promise of success?

Going to college is a risk. Going into business is a risk. Investing in any type of marketing comes with the same kind of risk. Doing the research, looking at the opportunity and developing a strategy minimizes that risk. Proper analysis helps to ensure that marketing dollars are invested intelligently on an ongoing basis. Any marketing agency that tells you there is no risk is lying to you.

It’s the agency’s responsibility to analyze the opportunity, the cost to acquire customers and any barriers that may prevent you from reaching the established goals. The agency should be able to communicate the level of challenge, and a reasonable budget needed to reach a positive return. Then, it’s the CMO’s responsibility to evaluate and make a decision.

CMOs and business owners: Be pro-active and involved. Make sure your marketing agency knows your business in an out, and that they have a long term perspective. Don’t be afraid to push them to answer the hard questions. Even if they don’t have all the answers, the willingness, level of transparency and overall confidence exuded in their response are important factors to observe and consider.

Are you a CMO or business owner looking for help with your marketing strategy? Feel free to check out our digital strategy services. Maybe we can even schedule some time for an “interview.”


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About the Author

Jason is co-founder and CEO of Brolik, a digital agency in Philadelphia. As an entrepreneur, Jason is passionate about helping other business owners navigate the complicated journey of owning a business and developing marketing strategies to grow their brand.
Follow @jaybrew on Twitter or connect with Jason on LinkedIn or Google+