Before you read anything more, I want the following to be clear: I am a marketing consultant.
And as a marketing consultant, 90% of the time I will recommend working with a consultant over an agency, for the reasons discussed in this article.
Still, because working with an agency is a really attractive option for many private equity firms, I’ll do my best to lay out pros and cons of both approaches: working with an agency vs. working with a consultant.
But first of all, let’s level-set: what exactly is the difference?
Agency vs. Consultant
An agency is an outsourced marketing team that offers various marketing services (e.g. marketing strategy, content creation, website design, advertising, graphic design, etc.) that are usually executed internally with the occasional outside contractor.
A consultant is a person who advises on a marketing strategy and then connects you with outside contractors who will help you execute the strategy defined by the consultant.
The Pros of Working with an Agency
Agencies are highly efficient. When a project needs to be done, an agency will already have all the systems in place to make sure the various stakeholders finish their tasks and contribute their piece of the project on time.
Agencies help you offload marketing. In some ways, working with an agency enables you to step away from the marketing function (though never completely) so you can focus on other tasks.
The Cons of Working with an Agency
Agencies control both strategy and deliverables. Would you want your doctor to make a profit on any medications they prescribed to you? No, because then they have an incentive to overmedicate. The same holds true for agencies who design your strategy and get paid for the deliverables—they might recommend services that won’t actually help you but they’d like to charge you for.
Agencies are expensive. A lot of PE firms like that an agency can be their “one-stop shop.” In reality, you don’t need access to all their resources all the time. Especially in today’s gig economy, access to talent isn’t a huge issue, so you shouldn’t pay for talent you’re not using.
The Pros of Working with a Consultant
Consultants (should) only get paid for strategy, not deliverables. A consultant helps you create your strategy and then find the people to help you execute it. They shouldn’t be paid for the work of other contractors, just for designing the strategy. That way, the consultant has no incentive to recommend services that you won’t benefit from.
Consultants are not tied down to specific talent. If the agency you work with is a generalist in terms of who they take on as clients, the talent they have in-house will all be generalists. Working with specialists is better.
Because a consultant doesn’t have any obligations to specific talent, they can recommend the best people for the job. (Again, note that in our gig economy, access to talent is a non-issue).
The Cons of Working with a Consultant
Consultants have a “search for talent” step that can add a minor delay to projects. In cases where the consultant doesn’t already have talent in their network, they will have to take the extra step of finding contractors to execute your strategy. But unless you’re trying to run marketing at the speed of light, this short delay shouldn’t be much of an issue.
Consultants are not account managers. Agencies have a role that consultants do not: an account manager. This person coordinates all projects and deliverables to ensure they’re finished on time and according to spec. If you don’t have someone at your firm who oversees marketing, an account manager can make your life easier. If you do have a marketing person, an account manager is a nice to have.
Right-Sizing for Your Marketing Maturity
Overall, an agency can be the right move if you find yourself in a position where you simply can’t handle the creative demands of your company’s marketing function. But if your marketing program is fairly nascent, this won’t be an issue just yet, in which case a marketing consultant is a better fit.
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