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 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
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
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
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?