Why read this? : We look at how you work out which type of marketing agency you need. Learn the pros and cons of using generalist or specialist agencies. And the key expertise areas where you usually need agency support. Read this for ideas on how to find the right type of agency.
There are many different skills in marketing. You can’t do it all on your own. At some point, you need help.
That could mean a specific individual. A contractor, a freelancer or a consultant, for example. They help you solve a specific marketing challenge.
Or, you hire an agency. They help you with broader, ongoing tasks. You get access to their team, their skills and their resources. You pay them. They manage projects and tasks for you.
The first step with the agency route is to work out what type of agency you need.
What you get from an agency
To start, let’s look at what you get from an agency. In simple terms, they help you manage projects you can’t do on your own. They help you with their expertise, experience and time.
You also get access to their resources and processes. They help you with things that’d be harder to do on your own.
Setting up focus groups. Access to graphic design tools. Media buying, or running in-store sales promotions. All usually easier done by an agency.
Define the type of problem
You start by defining the type of problem you need an agency to solve.
For broad and ongoing problems, you need a generalist agency. These offer a variety of services. For more specific, one-off problems specialist agencies are a better bet.
Let’s start with the generalists.
Generalist agencies
Generalist (full-service) agencies offer a broad range of marketing services.
They can be independent, or part of a network of linked agencies.
They typically manage ongoing work across multiple projects. These are usually bigger, more complex projects and tasks.
They’ll usually lead with one broad type of service e.g. advertising. But they then offer related skills such as graphic design or digital marketing.
Pros
Using a generalist agency means you have one main point of contact to access many different skills. No need to manage different relationships with different agencies. One agency organises the work for you. That makes your life simpler.
You also spend less on account management fees. Your lead agency organises everything. You pay them, and they handle all the admin, budgets and any extra agency services you need. They coordinate your marketing activities.
That frees up your time. The work should feel more integrated.
Plus, they’re accountable for delivery and business results. If something goes wrong, it’s solely on them.
Cons
However, this approach means you’re very reliant on that agency. You put all your agency eggs in one basket. That can be risky.
For example, you often have to sign an exclusivity agreement. You promise not to use other agencies while you work with them. But if something goes wrong, or you fall out, you risk being stuck with them.
Having a lead agency should reduce inter-agency friction. But it doesn’t always work out that way. You may find other agencies resent the power of the lead agency. They may not put in the same effort as they would working directly with you. That’s not good.
Generalist agencies can also be slower with areas like approvals. There are more people involved. More opinions to deal with. This slows down decision-making. The slower you go, usually the more it costs.
Specialist agencies
Specialist agencies focus on a specific marketing activity. That can make delivery simpler and faster. There are less distractions.
You use them for smaller projects. One-off projects, or work you do irregularly.
For example, you might use a specialist agency for logo design or packaging development. Areas you don’t update very often.
Specialist agencies are usually smaller than generalists. There are benefits to that.
Often you get better service levels. Your spend makes up a larger part of their business. Smaller usually also means faster. The fewer people involved, the quicker the work gets done. It makes things simpler.
Also, because the work isn’t ongoing, there’s no locked-in contract. You can switch agency if something goes wrong.
But it can be hard if you work with many specialist agencies. They may not always work well together. The work may feel less integrated.
You’ll spend more on fees too. Each agency needs separate budgets and resource plans. This takes up more time and is harder work for you. More update meetings. More reporting and dashboard sessions. Specialist agencies won’t have the same broad view of your business as generalists do.
Hybrid model
There’s also another option where you use both types of agency.
With this hybrid model, you use a generalist agency for ongoing work and major projects. Your advertising and promotions, for example.
And you use specialist agencies to run smaller, ad hoc projects. To update icons on your website, for example. Or to do quick photo edits.
For simple jobs like this, specialists are usually faster and cheaper.
Identify the type of expertise you need
Next, you identify the broad type of expertise you need. For example, you might need help with :-
- Customers :- e.g. market research; data and analytics, or behavioural science.
- Brand :- e.g. brand strategy and positioning, brand identity or innovation.
- Activation :- e.g. your marketing mix – promotion, product, place or price.
Then you define your more specific needs. You make a list of what you need help with.
Generalist agencies work well where you have many needs which sit naturally together. For example, a generalist digital agency could help you with SEO, digital media, websites and e-Commerce.
Specialist agencies work better where needs are more stand-alone. For example, if you need help with packaging or PR.
Type of agency - Customers
Agencies that help you understand customers are a good place to start. After all, marketing always starts with the customer. (See our importance of market research article for more on this).
The main areas of customer agency support are :-
Market research companies
Market research companies help you carry out qualitative (qual) and/or quantitative (quant) research. Some specialise in one or the other. Bigger research companies usually offer both.
Qual research normally runs as a project to answer a specific research question. You often use the same research company to run each project. But there’s not usually a specific commitment to ongoing work.
Quant research can also be project-based. But there’s also often an ongoing element.
You’d do a quant research project to validate an innovation idea’s potential, for example. But you’d do ongoing research for brand health tracking, or measuring the impact of advertising and sales promotions.
Working with market research companies gives you access to their research expertise. They do things which would be harder to do on your own. Recruiting respondents. Setting up questionnaires. Reducing research bias. Their expertise makes sure you get the most accurate customer feedback from your research.
Data and analytics
Some quant agencies also offer data and analytics services. But there are also agencies who specialise in this area.
You use them when you have large and/or complex sets of data to manage.
For example, companies with large CRM and loyalty programs often use this type of agency.
You also use them for more advanced analytical approaches. For example, to run an econometric analysis on your pricing and promotions.
They use their expertise to look for trends and opportunities in the data. Their analysis can show you what’s working. What’s not working. And what you could do differently.
This type of agency could recommend specific segments to target, for example. Or the best time to run promotions and what types of promotion to run. You use this expert analysis to improve the quality of your brand activation.
Behavioural science
The final type of agency in this area is fairly new. They’re agencies who advise you on behavioural science. (Some market research companies and advertising agencies also offer this service).
Behavioural science looks at how we make decisions. For marketing, it specifically looks at how we make buying decisions. The better you understand that, the more impactful your offer.
For example, they can advise how to make your copywriting more persuasive.
They can review your customer experience and recommend ways to make it better. They show you how customers make decisions, and tell you what to do about it.
These insights help you generate better ideas so customers are more likely to choose your brand. You use them a lot in creative thinking and marketing innovation, for example.
Type of agency - Brand
Customer agencies bring you an external view of the market. But you need to do something internal with that knowledge. That’s about brand building where you use brand agencies to help with :-
Brand strategy
You can use a brand strategy agency to help with your brand development process.
You brief them to create a new brand or update an existing one.
They usually work on strategic areas like your positioning and competitive strategy.
From there, they help you run workshops to create your brand identity intangible assets. For example, your purpose, essence and values.
At the workshop, you look at and discuss stimulus material. Customer feedback and competitor analyses, for example. You follow their process to build your brand.
Brand identity
Your brand identity is a mix of intangible and tangible assets. It’s your brand’s DNA.
Some agencies only deliver the intangible assets. You use designers to create the tangible assets.
But you can use specialist brand identity agencies who’ll do both intangible and tangible assets.
Doing both together helps your identity feel more consistent. Consistency reinforces to customers who you are. What you stand for.
For example, let’s say your positioning benefit is the high quality of your product.
Your values and personality would need to be consistent with that. For example :-
- values – craftsmanship and precision.
- personality – attention to detail and persistence.
But you’d also need your tangible assets like your logo, colour palette and typography to be consistent. It takes specialist graphic design skills to translate these intangible concepts into tangible assets.
Often, you also use them to show how to use your brand assets. How they should look on your packaging or your website, for example. You collate all these assets into a brand book. They help you create that. It sets the rules on how your brand looks, feels and acts. That drives consistency.
Innovation agencies
The final area of brand is innovation. You can find specialist agencies to help you work through this area’s unique challenges.
These agencies are experts in the innovation process. They provide expertise at each step to help launch new products and services.
For example, creative thinking experts for idea generation and screening. Product designers to build prototypes. Financial planners to build business cases and launch plans.
Each new launch is a separate project. They work with you until the launch, and then it’s handed over to an activation type of agency.
Type of agency - Activation
Activation is the most common area to find and work with agencies. That’s no surprise. It’s where clients spend the most money.
It’s because most activation needs are ongoing. You have multiple projects with this type of agency. They’re usually bigger and take more time to do.
The work you do with them usually relates to specific parts of the marketing mix.
Promotion
Promotion is how you persuade customers to buy your brand.
You use it to move customers along the brand choice funnel. It helps you build trust, awareness, consideration, trial and loyalty.
Key areas where you often need agency expertise are :-
- advertising.
- media.
- digital including social and CRM.
- public relations.
Advertising agencies
Advertising agencies work with you to :-
- develop the advertising idea.
- turn the idea into a compelling brand story.
- bring the story to life in your media channels.
Their team will have a mix of skills.
Strategists who do the planning. Creative teams for the visual design and copywriting. And account teams to look after your needs.
(See our marketing agencies guide for more on this)
Your advertising needs to have a positive impact on your profit and loss. That objective drives your briefs and the KPIs you use to evaluate them.
Media agencies
Your media agency gets your advertising in front of the right customers, in the right channels, at the right time and place.
That can cover traditional channels like TV, print, outdoor and cinema. Plus, digital channels like social, search and display.
You rely on them to invest your media budget wisely. Customers need to see your advertising in the right context for it to work.
Their expertise makes sure that happens.
It’s a weird area because they’re buying time and space for you. You can’t see or touch what they do. Plus, it’s not always clear how they get the best deals from media sales teams for you.
Overall, this type of agency helps you create a media plan with the reach and frequency you need. That should have a clear and measurable impact on sales.
Digital / Social / CRM agencies
We’ve grouped digital, social and CRM agencies as they offer similar services.
They focus on how to use marketing technology to connect with customers.
There are many different ways to do that. These types of agency help you manage these connections.
They’ll set up and manage your website for example. Or manage your social media platforms. They could even run your online store.
They’ll often also offer to run your digital media. That usually covers search, social and display advertising to drive traffic.
You can also use them to set up your digital data system. They’ll help you track your online performance. And of course, they’ll create content for you. Your product pages, social posts, online sales promotions and so on. This is all part of your online customer experience.
Public Relations (PR) agencies
Public relations is another area where you often need an agency. It has different challenges to advertising, media and digital. That’s why it’s common to use a separate PR agency.
You mainly use PR to get media coverage. They bring specialist expertise to help you :-
- influence key opinion leaders.
- connect with journalists and influencers.
- run trade shows and exhibitions.
- stage one-off events like new product launches.
Product
Most businesses create their own products using their own Research and Development (R&D) team.
But you may need a specialist type of agency for expertise the R&D team don’t have.
Take packaging development, for example. It’s got an important role to play because every customer interacts with it. But it has a lot of technical challenges which require specialist knowledge.
How different colour inks print, for example. If boxes are strong enough to support products in transit. If the packaging is sustainable and recyclable.
You often need expert help with these questions. Specialist packaging agencies have that expertise.
You can also find agencies who specialise in product development. They’ll have design and engineering experts who can create prototypes. They’ll often also have manufacturing and process expertise. They can help you build an operations plan to see if your idea is feasible. To see if it can be scaled up.
You might also use a specialist agency to help with your product’s sensory development, if relevant. Common examples include new food flavours or new perfume aromas. Anything that impacts how a product looks, sounds, smells, tastes or feels.
Place
Place normally refers to where you sell.
You can find agencies who’ll help you build your sales channel strategy and plan.
This can include building category plans to use with retailers. The outputs are similar to what brand strategy agencies deliver but with a retailer focus.
Some types of agency can also help you with in-store activation. You use them when you run sales promotions with retailers.
For a fee, they set up your Point of Sale (POS) displays and place shelf stickers. If relevant to your category, they can also run tastings or events in-store. This is very common in the grocery channel.
They’re more reliable than using the retailer’s staff to set up your displays. Their field teams will visit stores at agreed times. They’ll re-stock empty displays. You use this type of agency to maximise in-store presence.
Similar agencies exist for e-Commerce. They help you sell through online retailers. You can use them to optimise your product pages on the retailer’s product information management system, for example.
Price
Price is a less common area to use an agency. But there are some areas where you might need an agency’s support.
For example, there’s econometric modelling. You use this to analyse your price and price discounting approach. (Also to analyse sales promotions).
It uses statistical analysis to work out the historical impact of price changes and marketing activities. The model then predicts the future impact of your price and activity plans.
You can also find consulting agencies who advise on pricing strategy. For example, how to use price to :-
- improve your forecast accuracy.
- optimise your profit and loss.
- negotiate with retailers.
Service Ps - people, physical location, process
Service businesses often also look at 3 extra Ps – people, physical location and process. Specialist agencies can advise on how to improve systems, technology and ways of working in these areas.
Typically though, these types of agency come from outside marketing. A training agency to improve how your people work, for example. An architect to improve your premises. Or a management consultancy to improve your processes.
Most of the same principles we’ve covered in this article apply. You work out what you need first. Then you work out if their expertise helps you meet that need. That’s how you decide if they’re the right type of agency.
Conclusion - What type of agency do you need?
Agencies have a big impact on how your marketing works. Which type of agency you choose depends on the type of problem you have.
Bigger and ongoing problems usually mean a generalist agency with multiple skills.
They look after multiple projects and make your life easier. But they can be slower and more expensive. And there’s a risk you become dependent on them.
Smaller, specific problems mean a specialist agency. Their expertise focuses on a specific area.
They’re often faster and cheaper on smaller, less complex jobs. But if you have too many of these types of agencies, it’s harder for you to manage them all.
There’s also the option to use a hybrid mix of both.
Then you look at your specific needs and pick from :-
- Customer agencies help you with market research, data and analytics and behavioural science.
- Brand agencies help you with brand strategy, brand identity and innovation.
- Activation agencies bring your marketing plan to life. They help you deliver the 4Ps of your marketing mix.
Check out our marketing agencies guide for more on finding the right type of agency. See also our informal agency evaluation guide. Get in touch if you need help finding the right type of agency.
Photo Credits
Handshake : Cytonn Photography on Pexels
Three people pointing at laptop : Photo by John Schnobrich on Unsplash
Writing – Person writing near mug : Photo by Green Chameleon on Unsplash
Hands : Photo by Clay Banks on Unsplash
Man looking at ceiling (adapted) : Photo by Anton Danilov on Unsplash
Glasses : Photo by Josh Calabrese on Unsplash
Marketing Dashboard : Photo by Carlos Muza on Unsplash
Sprinkles : Photo by Almos Bechtold on Unsplash
Billboard (adapted) : Photo by Kate Trysh on Unsplash
Night time billboards : Photo by Joshua Earle on Unsplash
Marketing Technology – Laptops : Photo by Marvin Meyer on Unsplash
Confetti : Photo by Pablo Heimplatz on Unsplash
Sketchpad : Photo by Charlota Blunarova on Unsplash
Supermarket : Photo by Hanson Lu on Unsplash
Shop Window Price Discounts : Photo by Artem Beliaikin on Unsplash
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