How CMOs Integrate Marketing Agencies and Consultants

CMO-dilemna-graf1
Image by cleonleclerc

Consider how companies integrate agencies and consultants into the modern, multichannel marketing environment.

Contrary to today’s blogosphere conversation, CMOs, other C-level business executives, and their marketing lieutenants still drive marketing strategy in organizations. Agencies and consultants vary in role from strategic partner to tactical provisioning.

We live in an era of big agencies and small boutiques. On one hand, you have large national and international agencies that offer a wide variety of services. They acquire various talents to provide conglomerate offerings from traditional branding to social media. These super agencies win the business of large companies that need massive scalable marketing operations.

With each new decade, we see more and more small players that specialize in a unique custom area of marketing (mobile, local, infographics etc.). Because they are better than their larger counterparts within specialized niches, they pick off small contracts from the large enterprises, subcontract to larger marketing and PR agencies, and service small businesses and nonprofits.

Let’s discuss how companies use third party vendors, then the current landscape of agencies and consultants as presented by marketing bloggers.

Burn and Churn

The Current Picture

The above chart represents a CMO’s office in a small, but well established company. You have the CMO, and her/his lieutenants in PR, advertising, interactive and research/strategy.

Companies see agencies as free agent partners to execute tactical projects and tasks. When the partner no longer produces, their contract ends or is terminated.

It’s pretty simple. Burn and churn.

You can see the consultancies screaming right now: “We’re strategic partners!!! We’re not tactical.”

Yes, agencies and consultancies do drive periodic brilliance. But make no doubt about 98% of the time it’s still on the front line. Even if hired to hone marketing strategy, agencies and consultants still live by the sword. If their strategies don’t produce results, they gut cut.

Move Towards the Round

ModernCMO

The traditional model of line management presents inefficiencies for the marketing department. This second chart shows a more modern version of the marketing department as typified by the round theory in my new book Marketing in the Round co-authored with Gini Dietrich.

Instead of silos, departments are working together to achieve the central CMO strategy. Agency partners — while classified under their internal manager — sit in a larger unformed circle.

They are brought into formal discussions as situations demand, say presentation of market research to inform the larger round or to show a new ad campaign. As vendors become more trusted, they migrate towards the center of the circle.

Some would argue that agencies and consultants need to be brought into every marketing round conversation. In some cases — again, the trusted advisor — this is true.

But the very nature of agencies and consultancies prevents full integration. Charging retainers, project costs and hourly rates cause internal marketers to keep vendors at arm’s distance.

It’s business. And part of business is not letting vendor costs get out of control, including all sorts of unnecessary “strategy conversations” with your SEO and infographics vendors.

Agencies that Wag the Dog

Motion: Wag the Dog
Image by d.rex

Why does the dog wag its tail?
Because the dog is smarter than the tail.
If the tail were smarter, it would wag the dog.

Ever see the movie “Wag the Dog?”

It’s about DC PR spinners that trick the national electorate by inventing a war.

If you listen to most marketing bloggers discuss today’s communications environment you’ll notice how many criticize the average CMO. In fact, you’d think that a CMO was about as intelligent as Gomer Pyle.

Of course the conversation is unbalanced led primarily by consultancy and agency types who talk about how the new marketing works (my glass house included). They position themselves via blogs as experts to sell services.

If you actually talk to CMOs and marketers that manage agencies, you get quite a different picture.

I’ve been blessed with a couple tours of duty on the client side. In addition, I’ve worked with major brands like Google, Ebay, Ford, Procter & Gamble, AT&T, Verizon and General Dynamics and have seen first hand how they managed me in my various roles. All of these experiences make me think differently than the general blogger bravado.

I recently began talking with more marketing leaders about this topic. They reaffirmed my experience and feelings on the topic:

Companies want agencies to think they’re cutting edge. In fact, they rely on it.

One gentleman said to me: “I know they think they’re smarter than me. I want them to think like that so they produce.”

Agencies are hired to break through the clutter. Part of achieving that is having the confidence, the moxie to take risks with strategy, creative and tactical execution.

But make no bones about it, the dog gets put outside if it poops on the carpet too many times. Meaning, all prima donna posturing and no production pretty much guarantees contract termination in this business.

Let’s be clear: If a company really does rely on agencies to drive its business and marketing strategy, then you’re seeing larger problems than communications. A company devoid of leadership won’t have the vision to survive long-term.

If CMOs Blogged

Sunset Silhouette Waikiki Beach

It’s too bad the marketing blogosphere doesn’t benefit from the perspective of the CMO.

Inside companies the person blogging rarely sits in the C suite. Usually it’s a mid-level manager, and that’s unfortunate because we’re missing the CMO’s strategic point of view.

For example, CMOs do all sorts of crazy things to keep agencies producing. Some limit vendors so they have a small group of go-to players to rely on. Great work is rewarded with consistent and bigger contracts.

Some opt for “Pitch” like scenarios pitting agency against agency to duke it out, selecting creative and ideas on a purely mercenary basis. I know one Fortune 500 company contracts two major firms and has them duke it out on every project.

Some train their marketing managers to purely fill the role of vendor management. They become horse whisperers beckoning their agencies, pulling levers and strings to get the most production out of them possible. Part of that job is also knowing when an agency will no longer produce quality results.

One of my favorite people in my current marketing world is Karen Schulman, CMO of Razoo. Before joining Razoo Karen was an SVP at Electronic Arts and the co-founder of both the EA Sports and Pogo brands. She launched Madden football. She was a General Manager and Partner at Microsoft leading the Windows Gaming division.

Working with Karen has been awesome. I enjoy our weekly conversations and her insights. One thing I really admire about Karen: She’s a fantastic manager of agencies and talent. While she clearly offers strategic vision, Karen knows how to get other people to execute, and understands when role players aren’t performing. The other thing I admire about Karen: She intuitively understands the necessary rhythm of communications across diverse tactics to keep stakeholders engaged and activated.

I wish you could experience the conversations that I have with Karen and other high ranking marketing executives. Instead we get rants about how to blog or the latest Timeline post (again, my glass house included).

The marketing blogosphere/CMO disconnect both amuses and saddens me. What do you think about agencies, consultants and CMOs?

5 Replies to “How CMOs Integrate Marketing Agencies and Consultants”

  1. Ah, Geoff. My entire online presence has been validated with this post of yours. You’ve said ever more eloquently than I ever could everything I’ve been trying to say about the potential new role of agencies in the ever changing marketing world.

    The way I look at it, agencies can not only work as tactical/strategic partners, they can also serve as hubs. We have a lot of contacts with web designers, videographers, SEO companies, and more. It’s our job to evaluate all of these companies, so if someone comes to use they don’t have to go to every website to see who’s best. They know that we have gone to the trouble of making sure we work with the best vendors at the best possible price. What a timesaver that could be for CMOs willing to entertain the idea of working with an agency.

    But you are right – any role we come up with for agencies – any sort of partnership, a bridge between silos, whatever you want to say – all of it depends on there being a brain at the head of the operation. The marketing round that you and Gini talk about still needs to have a queen of the Borg whom everyone turns to for the final say, for direction, for initial ideas to get the conversation started. Without that brain, the circle will most likely just keep on spinning, agency or not.

    Incidentally, I refuse to watch The Pitch. Judging from what I’ve heard and from what the previews show, it highlights only what people want to believe about agencies, which is all of the negative stuff. Yuck. 

    Great post. 

    1.  I absolutely agree.  I know one of the primary benefits I bring to Razoo is relationships, contacts and introductions. I am very close to the core of the company right now, and it’s because I have become a trusted vendor over two years.

      All I can say about agencies leading strategy — and keep in mind I have done a couple stints as virtual CMO until someone filled the role — is that ultimately someone inside has to drive. If they don’t, the company has no leadership. Even if that driver is simply a great talent manager, they need to drive the marketing organization towards KPIs and outcomes. Otherwise things don’t go so well…

  2. This is the third time I’ve heard you talk about Karen…and now I’m dying to meet her and be part of these weekly conversations! I agree with you – it’s too bad the blogosphere doesn’t benefit from blogging CMOs. Can you get her to blog? Even just once in a while?

  3. You’re basically discussing the conundrum faced by any business; that is that the most qualified people with the most knowledge are not generally the ones interacting with the public. In this case it is about CMOs and blogging. The same thing is true in the retail world, in call centers or in restaurants. The best people interact the least with customers. The mindset is all backwards. 

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