HubSpot (@HubSpot) recently released the State of the Online Marketing Services Industry report. Based on a 45-question survey taken by 750 agencies globally, it details revenue, service and organizational trends in the marketing services industry. Below are some of the report’s key findings, coupled with our own insight.
Agency Structure: Report Breakdown
The majority of survey respondents stemmed from single-person or small agencies (2-5 employees), at 35% and 36% respectively. The remaining 29% had more than five employees. HubSpot indicated that this data is generally comparable to the industry at large, which is dominated by independent consultants and smaller agencies.
More than 35% of survey respondents get 100% of their business from B2B clients.
Marketing Services Offered
At Marketing Agency Insider, we believe that hybrid agencies will come to rule the marketing services world, as they set the bar for what’s possible in terms of service convergence, talent, technology integration and measurement.
However, only 11% of agencies marked full-service marketing as one of their top service offerings, and most (67%) said professionals have specific functions within the agency, and are not multidisciplinary. The top five service offerings among agencies are:
- Web design (15%)
- Brand marketing (14%)
- Social media (12%)
- Search engine optimization (11%)
- Full-service marketing (11%)
According to the report, the majority of agencies perform most services in-house (73-89% depending on agency size). That said the most common areas outsourced were web development, design/creative and copywriting/blogging.
(Note: For key factors when evaluating and selecting partners, see Why Marketing Agencies Should Get in Bed with the Enemy.)
Top Agency Challenges
The top three agency challenges identified in the report all generally stem from ineffective sales or marketing processes, and include:
- Variable cash flow
- Not generating enough leads
- Difficulty signing up new clients
Agencies that shifted to a retainer model (i.e. a client commitment for a defined period of time) have minimized these challenges and experienced more growth overall than project-based agencies.
(Source: State of the Online Marketing Services Industry)
Retainer-based agency challenges are more closely tied to growth. Examples include: keeping up with client requests, and recruiting and retaining staff.
Traits of Successful Firms
So, how do you obtain more campaign clients over project-based work? The data indicates that firms with 70-100% of their revenue from retainers:
- Offer the right services—Top agencies offer services that don’t have a finite stopping point and that provide ongoing value and ROI. Example services include content, email marketing, social media and more.
- Have robust sales processes that include a documented process, lead qualification, customer relationship management (CRM) systems, forecasts, goal setting and more.
- Use business process tools to streamline operations, including CRMs, content management systems (CMS), project management, time tracking, internal social networks, wikis, etc.
- Report on ROI—They measure everything, including leads generated and customers acquired. This helps demonstrate the value they provide and their impact on the client’s bottom-line.
Where does your agency fit into the report? Do findings align with your expectations? What results shocked you? Share your thoughts below.