So, you decided to hire an agency...

This is the second of my three part "Working with Agencies" series. In the first part, I shared thoughts on what Marketers should consider when deciding whether to insource or outsource strategy and creative. In this issue, I'll share thoughts on what you should consider once you've decided to outsource to an agency.

I wanted to share more than a pros and cons list, so we'll look at this in a format most Marketers know well: a segmentation model.

Portfolio Segmentation Criteria:

I looked at two criteria in my four-box model: Disruption and Cost. Whenever I have chosen an agency, budget has always been a consideration. Understanding how much the agency will charge you for their services is important, but it's also critical to understand what size of budgets an agency is accustomed to having when activating the campaign. Does their vision of the split between working dollars and non-working dollars match yours? Are you aligned with them on production budgets?

Disruption is my other criterion, and my definition of this is a combination of strategy, insights, creativity, and how insistent the agency is in challenging you as the client. Knowing your open-mindedness or tolerance (depending on how you look at it) of agency challenge is important because it's one of the most likely issues to arise should alignment not exist.

Portfolio Builders (Low Cost, Highly Disruptive)

The Portfolio Builder agency segment consists of those agencies that are typically smaller, love to take risks, ooze with creativity, and are looking for clients that align with their values. They're independent, have low overhead, and can work on thinner margins than their competitors as they build their business portfolio. These agencies are typically started by Creatives or Strategists who made their name at a larger agency and decided to go out on their own or by a talented, young entrepreneur who launched their shop after working on the clients side for a spell.

I really like working with this segment of agencies because you can typically punch above your weight in terms of the talent you hire and get more creative work. The big question, however, is keeping their attention and holding them accountable for what they promised. I've found that Account Management with agencies like this can often be challenging, especially if your brand is in a less-than-sexy category.

Madison Ave (High Cost, High Disruption)

This segment is pretty self-explanatory: these are the biggest of the big agencies that work on the largest brands with the largest budgets. There's no debating the outstanding level of talent that these agencies offer, but very few Marketers can hire agencies of this size, and those people probably aren't reading this newsletter.

The Traditionalists (High Cost, Low Disruption)

This segment consists of those long-standing, tried and true agencies that have an impressive body of work. The agency is independently owned and probably dominated their local market at some point in time. They've worked on all of the glamourous local accounts and might have lost a significant chunk of business when a top local account moved its headquarters, merged with a new company, or simply outgrew them.

Although they're not as big as they used to be, they still have some great people on staff and know their way around a pitch deck and marketing plan. The challenge with agencies in this group is that they're typically a little stuck in their ways and not as innovative as some of the upstarts. Their hourly rates are attractive, especially given their experience level, but they may lean on higher production fees more than necessary.

If your brand is a bit on the conservative side and you need a reliable team that can provide some thoughtful counsel based on years of experience in your corner, I really like working with agencies that fit this profile.

Client Pleasers (Low Cost, Low Disruption)

The agencies that fit into this quadrant are usually small (less than 20 people), specialize in local brands, and although they claim to be "full-service," they really specialize in a few disciplines like graphic design, social media, etc.

Where the Client Pleasers lack in strategy and high-level creative, they make up for it in service. It's common for the Founder of the agency is involved in your business and they will always make you feel like you're the #1 priority - because you probably are. Along with their breadth of experience being a challenge, so will their creative horsepower. Smaller agencies have smaller, and probably less experienced, Creative Teams and may not support them with the depth of a strong Account Planning Team. When these elements are combined, it usually results in less-compelling work.

Not every brand or industry needs high-level creative or a huge dose of disruption. Some marketers have a clear vision of what they need and just need a resource to execute it for them. If you fall into one of these categories, a Client Pleaser agency that provides more attention and faster turn-around times might be the right choice for you.

What's the Right Choice for You?

Answer: It Depends! If you're on the hunt for a new agency, hopefully this model will trigger some good thoughts and help you drill down to the right choice. Choosing the right agency is a big decision and can be one of the most influential factors in the success of a brand.

In the next issue, I'll be talking more about HOW to manage your agency once you have them on-board.