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Don’t Get Ripped Off by an Agency. Do This Instead.

Learn everything you need to know about marketing agencies and the steps you should take before adding a strategic partner.

ArticlesNik Sharma

A common theme I see among early-stage companies is that an overwhelming majority of them get ripped off by agencies, either recommended by their own investors or drawn in from "thought leadership" they discover through Forbes or on Twitter.

It's easy to talk about, but when it's time to put the work in, so many agencies drop the ball.

One of my MentorPass clients, a menopause-focused brand, was charged a 3x market rate for their website, and then told by their agency to deploy 6-figure marketing budgets into "reach and awareness" campaigns, only to then turn on retargeting campaigns a month later.

How could an agency filled with "digital marketing experts" possibly give this advice to a founder who just got funded, and blindly trusts the agency? It's criminal.

In this post, I'm going to cover how I would evaluate and work with agencies on digital marketing campaigns. These insights can help you avoid some of the biggest problems that DTC companies face with marketing agencies.

My advice to founders

Before you even consider how to scale your marketing, there are a few real-time questions you need to consider about your current offering and potential strategic partners.

Here's my advice: I give to founders I advise or invest in, who are looking to scale their marketing.

1. Think about your messaging, creatives, and owned platforms.

You just spent 12-15 months on your great product. You now need to spend at least half of that time thinking through the messaging, creative, and platforms you push your product on.

As the brand, it is your job to develop the strategy and use your agencies as extra hands to execute. Agencies are good for copywriting, PPC campaigns, web design, and some aspects of social media marketing and email marketing. However, do not rely on your agency to give you the strategy unless that is their sweet spot.

2. Understand how agencies work.

It's also important to understand that agencies make money (usually) off the media spend driven by the brand. Depending on how much you spend, it can be as low as 5% of media spend, all the way up to 15% of media spend, meaning their incentives are aligned around spending the most money they can (obviously with a goal to be optimized).

Knowing that, you also need to be aware of where you stand on their list of importance. If you go to a premiere agency, because it looks great on the outside, but they have clients like Nike or Pepsi, you can bet you're nowhere close to the top of their priorities. When the Nike CMO calls, they're rushing to answer that call and fix those problems...not yours. Don't be distracted by big brand-name agencies. Instead, look for the leaders of the industry in your own ecosystems.

Many larger agencies today have tried to replicate a "DTC-friendly" agency model, but it simply doesn't work. This is because the DNA of the team internally isn't aligned with your business model; it's aligned with a Fortune 100 business model. There is nothing wrong with any of these agencies. It's up to you to make sure you are finding the right one.

Criteria for agency consideration

Think you're ready for an agency?

By aligning your company with the right team of experts, you'll work with industry leaders to use best practices in your digital marketing strategy that will drive measurable results and long-term success for your business.

Here are some things to consider when evaluating your options and selecting the right marketing agency for your business.

1. How much money are you spending per month?

If you're spending less than $100k, make sure that you have found a product-market fit with your products before handing them to an agency. Again, strategy and testing should be handled internally and handed to an agency to scale up.

If you're spending less than $50k in advertising, you're definitely better off doing this internally: whether that means hiring someone or learning off a paid course from someone like Andrew Foxwell.

If you take the time to learn and invest in the right solutions, you can deploy tactical execution to sometimes get better results than the agency you may have wanted to sign on as a partner.

Most agencies that do great work start at an absolute minimum of $5k or 15% of spend, which is why if you're under $50k, it doesn't make sense to run with an agency.

2. Where does their expertise lie?

Most agencies are good at one or two things. Is it creative? Media? Website conversion rate optimization? Search engine optimization? Email optimization? Podcast media? OOH? Do they specialize in eCommerce? Make sure that you don't just find an "agency." Make sure it's one that has expertise aligned with your internal goals.

Don't be swindled by the promise of "outstanding service." It's rare that marketing agencies are the best in everything. The best digital marketing agencies double-down on their core competencies, making them leading experts in their specific vertical.

3. What's their DNA?

Are they used to running large top-of-funnel brand marketing campaigns? That's probably not what you're looking for here. Do they understand building brand equity off of your working performance media dollars? That's closer to what you want.

Look at the executives there. Do they have experience with brands like yours? Do they know the in's and out's of the platforms you use as a brand to advertise? It blows my mind how many times a dedicated Account Manager has never run a single ad on Facebook, Snap, or Search. They don't need to be an expert, but they should be able to get granular. That's how you nip problems quickly and efficiently.

Your Account Manager should understand your marketing plan and have technical expertise in at least one aspect of your digital strategy. Most are responsible for working with you to adhere to your ad flight timeline, ensure your campaigns are hitting the right audience, and execute strategic plans to get the best ROI and drive positive results for your business.

4. How well do they understand conversion?

If you're a DTC brand, you can bet the name of the game is conversion optimization. It doesn't matter if it's from your advertising media, creative, website, merchandising, or offers. If an agency is running traffic to your site but not talking to you about how to optimize the website conversion, that's not an agency partner to help with growth.

Any digital marketing company that isn't laser-focused on your desired KPIs might be leaving money on the table for your business. The agency's team should function as new team members in your organization, not just a vendor. This essence of a unified approach to your digital strategy will convert more potential customers for your business.

Selecting your agency partner

Again, this doesn't mean that the agencies who don't do the things you need are "bad agencies." It just means it's not the agency for you.

Every agency addresses the particular needs of various businesses. Make sure the agency you select has the resources to address yours in-depth.

The agency should be your one-stop shop for all things digital. They should be providing you with the latest updates on all the social media networks and explaining the various digital marketing events that are occurring within your campaigns.

Depending on your relationship with the agency, they also might assist with creative design, your web presence, newsletter, and even traditional media as well.

Moral of the story: make sure the DNA, past experiences, and the agency's current clients align with your business. You can't fit a square peg in a round hole.