6 ms·

> The main issue with hiring an agency to do marketing is that your incentives are not aligned. The same could be said for IT and software development but for

by Rexxar 5y ago

> The main issue with hiring an agency to do marketing is that your incentives are not aligned. The same could be said for IT and software development but for a strange reason lots of people are doing it.

rognjen 5y ago
In general, when in-house capability doesn't exist, things are outsourced. But I don't think that comparison is entirely equivalent. I think for software it's easier to specify requirements that more closely relate to goals. Then you pay for the complexity they entail. For instance, you can say I want to replace this form with the objective of eliminating paper and improving efficiency. The dev shop might charge you more than the market rate but they'll still have to deliver you something that's relatively close to what you imagined. Furthermore, it would be in the interest of an honest dev shop to advise and build something really useful for the client so that they come back.
- libertine 5y ago
  So you're assuming that marketing agencies aren't honest? I'm struggling to understand what are the differences - why isn't the best interest of a marketing agency to generate good results to a business? What's not aligned in that? Like... it's cheaper to find clients, fool them into getting a chunk of their marketing budget, and dump them? I don't see how this is good business. Why can't a dev shop just do a bad job, hide behind poor requirements, and keep a infinite scope of work after you're too invested in them?
  - tluyben2 5y ago
    Well compare it with a big software consultancy outfit. You will pay and hardly get anything and yet they remain big and keep their name. Same goes for many big name marketing agencies: pay a lot, get nothing and they go on to business as usual. I am not sure it is not honest: it is, at least, lazy. I have seen it with so many software, marketing, investor relation, lawyers, accountant etc companies: they do the absolute minimum they can get away with, possibly just copying all from a previous client and charge the world for it.
    - libertine 5y ago
      That was kind of my point, it's a behavior across any industry, it's not specific to marketing, or dev shops, finances, law... The thing with consultancy it's kind of what you've said: they've built models/systems that kind of work with minor tweaks and sell it to other companies. It's done because the perception of building those systems from the ground up seem more expensive then to get it "installed"... which might be true for many scenarios, but for others, it might not.
  - rognjen 5y ago
    You're right about honesty. It's in the interest of both to be honest and do a good job. That wasn't a necessary segue. It's that specifying the meaning of a "good job" is much more difficult when it comes to ads. Good job in software means do what I want and do a great job means accomplish what I want but do it more efficiently. (And on budget ofc) For ads do a good job means give me most customers for my budget. And the measure of that is CAC. But I've yet to come across an ad agency that bases it's compensation on CAC.
    - libertine 5y ago
      >It's that specifying the meaning of a "good job" is much more difficult when it comes to ads. Well that's the crux of it: it's about people and people aren't input/output machines. One message (input) doesn't predict a behavior (output). That's why I think that anyone that promises specific results in marketing, you should step away from it. I think the best stance is that they will work with you to achieve something, and "work with you" means literally that - try to figure things out with you because your brand/product is it's own thing. >For ads do a good job means give me most customers for my budget. And the measure of that is CAC. But I've yet to come across an ad agency that bases it's compensation on CAC. Ok, now I think I understand you... From the moment you're dependent on a 3rd party, basing your compensation on their work it's just soaking up risk. This goes for both ways: it's the same of some marketing agency saying to a dev shop hey guys, our marketing is solid, don't worry, we will pay you in rev share until the bill is settled... why would you take this deal? Same goes for marketing: how can they know that you have a good sales dpt. to close leads? How can they know you have a good on boarding? Is the price competitive? They could be throwing you the best ads, getting top notch potential customers, and your product just sucks. Now what? Why should the agency pay for your bad job?
      - rognjen 5y ago
        This is true, they can't be dependent on how good your processes are. BUT they can establish a baseline CAC over the first couple of months and then work on improving it. Take a look at this comment as well: https://news.ycombinator.com/item?id=27645674 https://news.ycombinator.com/item?id=27645674
  - unknown_error 5y ago
    The digital marketers I've known typically just configure ads in marketplaces not controlled by them, plus use questionable (both in terms of ethics and impact) SEO practices and dubious statistical analysis of poorly verified third party analytics to fool clients into thinking they're doing useful work. It's a lot of smoke and mirrors with a sheen of respectability because it's backed by household tech company names. But there's rarely with a sufficient look at the funnel or actual user/customer/market research or weeding out confounding variables. They mostly just do the sorta stuff you can do yourself after a few hours on LinkedIn Learning. IMO doing this the right way takes someone who both understands the tech stack of it, including tracking prevention nuances, and the marketing side of it, and the statistics side of it, and the business side of it. People like that are rare to come by and don't typically enjoy working for advertising firms for small time small business clients because it's mostly just tedium and limited room for innovation and growth. Like managing the back pages of a local magazine, I imagine. I've spent years at the intersection of dev work, marketing, advertising, analytics, SEO, etc. for small businesses. Now the I know how terrible a job they usually do, I'd never pay a consultancy to do that work. I probably wouldn't even bother with it myself. It's mostly just faith based prayers to a few ad marketplaces who's interests are inherently in conflict with yours. It's a shitty marketplace all the way around. Dev work has a higher barrier to entry, for now, so it's less easy to bullshit your way through with clients. The resulting software either does what it's supposed to (with bugs, of course) or not. Whereas the successful or failure of many digital marketing campaigns are largely matters of faith and not evidence.
    - libertine 5y ago
      You'll find bad professionals everywhere you'll look. The difference is that a marketers job is more visible then a devs, because most of it is to get in front of people's eyes balls. That's why it's easy to perceive that marketing is mostly shit... because it is, and no wonder, it's not "hidden" in the backend or in some git repo. Ads live in public scrutiny. A lot of the dev work would probably just make you cringe just like many ads. You just don't see it. With that said, you're right that the barrier of entry it's lower, and I don't think the hard part of marketing/advertising is the campaign setups - that's mostly being reduced to a step-by-step wizard. Thankfully! But that won't make marketing any good, in fact, you'll just see more of the bad stuff.
- etempleton 5y ago
  I will jump in and add to this as someone who is in marketing and has worked in an agency. Marketing work is never ending and very fluid. There is always more you could be doing and you could always be doing something better with more time. It inherently doesn’t work well as spec work. And yet that is how marketing agencies operate. Agencies are best hired when you do need something very specific done that you don’t have the expertise to do in-house. A video, a new website, a very specific, time-limited marketing campaign. If the work is continuous, it should be moved in-house ASAP and it is better to wait then pay an agency to do it in the short-term.
  - rognjen 5y ago
    This is *exactly* my experience.

by Rexxar 5y ago

rognjen 5y ago

In general, when in-house capability doesn't exist, things are outsourced. But I don't think that comparison is entirely equivalent. I think for software it's easier to specify requirements that more closely relate to goals. Then you pay for the complexity they entail. For instance, you can say I want to replace this form with the objective of eliminating paper and improving efficiency. The dev shop might charge you more than the market rate but they'll still have to deliver you something that's relatively close to what you imagined. Furthermore, it would be in the interest of an honest dev shop to advise and build something really useful for the client so that they come back.

libertine 5y ago
So you're assuming that marketing agencies aren't honest? I'm struggling to understand what are the differences - why isn't the best interest of a marketing agency to generate good results to a business? What's not aligned in that? Like... it's cheaper to find clients, fool them into getting a chunk of their marketing budget, and dump them? I don't see how this is good business. Why can't a dev shop just do a bad job, hide behind poor requirements, and keep a infinite scope of work after you're too invested in them?
- tluyben2 5y ago
  Well compare it with a big software consultancy outfit. You will pay and hardly get anything and yet they remain big and keep their name. Same goes for many big name marketing agencies: pay a lot, get nothing and they go on to business as usual. I am not sure it is not honest: it is, at least, lazy. I have seen it with so many software, marketing, investor relation, lawyers, accountant etc companies: they do the absolute minimum they can get away with, possibly just copying all from a previous client and charge the world for it.
  - libertine 5y ago
    That was kind of my point, it's a behavior across any industry, it's not specific to marketing, or dev shops, finances, law... The thing with consultancy it's kind of what you've said: they've built models/systems that kind of work with minor tweaks and sell it to other companies. It's done because the perception of building those systems from the ground up seem more expensive then to get it "installed"... which might be true for many scenarios, but for others, it might not.
- rognjen 5y ago
  You're right about honesty. It's in the interest of both to be honest and do a good job. That wasn't a necessary segue. It's that specifying the meaning of a "good job" is much more difficult when it comes to ads. Good job in software means do what I want and do a great job means accomplish what I want but do it more efficiently. (And on budget ofc) For ads do a good job means give me most customers for my budget. And the measure of that is CAC. But I've yet to come across an ad agency that bases it's compensation on CAC.
  - libertine 5y ago
    >It's that specifying the meaning of a "good job" is much more difficult when it comes to ads. Well that's the crux of it: it's about people and people aren't input/output machines. One message (input) doesn't predict a behavior (output). That's why I think that anyone that promises specific results in marketing, you should step away from it. I think the best stance is that they will work with you to achieve something, and "work with you" means literally that - try to figure things out with you because your brand/product is it's own thing. >For ads do a good job means give me most customers for my budget. And the measure of that is CAC. But I've yet to come across an ad agency that bases it's compensation on CAC. Ok, now I think I understand you... From the moment you're dependent on a 3rd party, basing your compensation on their work it's just soaking up risk. This goes for both ways: it's the same of some marketing agency saying to a dev shop hey guys, our marketing is solid, don't worry, we will pay you in rev share until the bill is settled... why would you take this deal? Same goes for marketing: how can they know that you have a good sales dpt. to close leads? How can they know you have a good on boarding? Is the price competitive? They could be throwing you the best ads, getting top notch potential customers, and your product just sucks. Now what? Why should the agency pay for your bad job?
    - rognjen 5y ago
      This is true, they can't be dependent on how good your processes are. BUT they can establish a baseline CAC over the first couple of months and then work on improving it. Take a look at this comment as well: https://news.ycombinator.com/item?id=27645674 https://news.ycombinator.com/item?id=27645674
- unknown_error 5y ago
  The digital marketers I've known typically just configure ads in marketplaces not controlled by them, plus use questionable (both in terms of ethics and impact) SEO practices and dubious statistical analysis of poorly verified third party analytics to fool clients into thinking they're doing useful work. It's a lot of smoke and mirrors with a sheen of respectability because it's backed by household tech company names. But there's rarely with a sufficient look at the funnel or actual user/customer/market research or weeding out confounding variables. They mostly just do the sorta stuff you can do yourself after a few hours on LinkedIn Learning. IMO doing this the right way takes someone who both understands the tech stack of it, including tracking prevention nuances, and the marketing side of it, and the statistics side of it, and the business side of it. People like that are rare to come by and don't typically enjoy working for advertising firms for small time small business clients because it's mostly just tedium and limited room for innovation and growth. Like managing the back pages of a local magazine, I imagine. I've spent years at the intersection of dev work, marketing, advertising, analytics, SEO, etc. for small businesses. Now the I know how terrible a job they usually do, I'd never pay a consultancy to do that work. I probably wouldn't even bother with it myself. It's mostly just faith based prayers to a few ad marketplaces who's interests are inherently in conflict with yours. It's a shitty marketplace all the way around. Dev work has a higher barrier to entry, for now, so it's less easy to bullshit your way through with clients. The resulting software either does what it's supposed to (with bugs, of course) or not. Whereas the successful or failure of many digital marketing campaigns are largely matters of faith and not evidence.
  - libertine 5y ago
    You'll find bad professionals everywhere you'll look. The difference is that a marketers job is more visible then a devs, because most of it is to get in front of people's eyes balls. That's why it's easy to perceive that marketing is mostly shit... because it is, and no wonder, it's not "hidden" in the backend or in some git repo. Ads live in public scrutiny. A lot of the dev work would probably just make you cringe just like many ads. You just don't see it. With that said, you're right that the barrier of entry it's lower, and I don't think the hard part of marketing/advertising is the campaign setups - that's mostly being reduced to a step-by-step wizard. Thankfully! But that won't make marketing any good, in fact, you'll just see more of the bad stuff.
etempleton 5y ago
I will jump in and add to this as someone who is in marketing and has worked in an agency. Marketing work is never ending and very fluid. There is always more you could be doing and you could always be doing something better with more time. It inherently doesn’t work well as spec work. And yet that is how marketing agencies operate. Agencies are best hired when you do need something very specific done that you don’t have the expertise to do in-house. A video, a new website, a very specific, time-limited marketing campaign. If the work is continuous, it should be moved in-house ASAP and it is better to wait then pay an agency to do it in the short-term.
- rognjen 5y ago
  This is *exactly* my experience.