The Complexities of Managing a Modern Marketing Agency

Mitch JoelPaul Roetzer (@paulroetzer), author of The Marketing Agency Blueprint, recently joined Mitch Joel (@mitchjoel), president of Twist Image, on his popular Six Pixels of Separation podcast to discuss creating and managing a modern marketing agency.

During the 52-minute interview, the two agency owners tackle the complexities of service selection, pricing structures, revenue streams, changing consumer behaviors and more. Listen to the entire discussion (or in some cases, debate) on the Twist Image site.

Or, for the Cliff’s notes version, below are some of my favorite takeaways from Paul’s responses:

  1. Agencies need to focus on outcomes, not outputs.
  2. Defining the scope of a service and setting a price to it upfront removes much of the tension between agencies and clients around pricing and value.
  3. With set pricing, it’s possible to achieve economies of scale for services, similar to manufacturing, if you do it on a large enough scale. 
  4. The agencies of the future will profit from diversified revenue streams. They may be able to take lower margins on services, as they will profit through publishing, education, training, software licensing and more.
  5. It may not be possible for large agencies to make dramatic shifts in talent, revenue streams and pricing. This presents an opportunity for the smaller, more nimble agencies to do things differently and capture market share.
  6. There is a shift in how people are finding information, and as a result, how companies should be marketing their goods and services.
  7. A hybrid firm consists of four things: tech-savvy, diversified revenue streams, versatile talent and integrated services.
  8. Agencies need to understand how services (such as content, search, social, web, etc.) integrate together, even if they don’t offer all of them in house.
  9. Something is going to disrupt your agency; it might as well be you.
  10. The system is changing. Take into consideration HubSpot or Radian6. These companies have so much intelligence into our clients, and they are starting to build service divisions to keep their churn rates as low as possible.
  11. Being the best marketer in the world does not necessarily make you a good business owner.
  12. For existing agencies to evolve, they will have to make some hard decisions when it comes to staffing and services.

What Do You Think?

Is the agency model ripe for change? What will it look like in the future? Share your thoughts and experiences in the comments section below.

Image credit: Eva Blue

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