Agency Sourcing 101: How to Hire Digital Agencies Without Getting Burned

Don’t fall prey to the predators. Avoid the common pitfalls and traps of hiring a technical and creative digital marketing & development agencies.

The Problem
The first part of this post highlights the problem of digital marketing & technical agencies, as well as people in digital advertising sales taking advantage of many companies. The second half of this post will go over one of the most common ways people get burned. And the third part is some ways to protect yourself when sourcing marketing services.

The vast majority of my new clients all seem to have the same story. “I once hired a reputable, expensive digital marketing agency. I paid them thousands of dollars, and we barely had any results”. Or “I paid COMPANY X to do an email blast for us. They said they usually get big numbers, but we only saw a few sales. Can you look at what they did and tell me what you think?”. Or the most common, “I paid the company who made my website to run some Facebook & Adwords campaigns. I’m not entirely sure what they did, but it didn’t really work”

When I audit the company’s past efforts, I’m often shocked at how terrible the work of many 3rd party agencies is. Sometimes reputable, highly paid agencies. I see incorrectly configured campaigns. Completely wrong analytics implementations . Improper tagging. No targeting. No site optimizations. No testing. Wrong keyword targets. Wrong SEO. Really no thought or creativity or personalization at all. Just shoddy, half-assed “cookie cutter” campaigns running people to un-optimized websites.

A common part of my on-boarding process is breaking the news to clients that they’re getting screwed by their SEO company…their adwords company…their email marketing company etc. Or telling them that the guy they’ve been paying to do their social media or blog writing who they were raving about, actually has no clue what they’re doing. Or that their shiny new website they just paid a bunch of money to have built, is actually just a completely unoptimized generic template with a few words changed around…and they haven’t been collecting correct analytics data for the last 6 months.

And these agencies get away with it too, rarely getting called out. Sometimes the client even ends the partnership thinking they did a good job. Other times they keep the agreement going indefinitely. Why? Because many entrepreneurs (and even many mature businesses) aren’t savvy enough about any of it to know how hard they’re getting boned.

They never fully understand if their marketing efforts were actually effective, or why. Many of them even believe their terrible marketing agency was doing a good job. They think the bad results is their own faults. Or that marketing channel just won’t work for their business. And the agencies they hire don’t do anything to teach them.

Over-promising & under-delivering has become the norm among technical agencies across all channels. And they’ve gotten really good at it.

The tactics are usually all pretty similar. They use technical terms you’ve never heard of. They show you the best examples from their portfolio. They publish blog posts and press releases that give them notoriety. They throw numbers at you that sound great, even though you don’t really know what they mean. All to smokescreen the fact that they’re selling you gold-painted shit.

The Metrics Diversion

There are many ways various marketing service providers hook clients and suck their money. But the most common trap I’ve seen startups fall into is what I call “The Metrics Diversion”. Essentially, where a marketing provider will feed positive numbers that sound good, but don’t actually matter for your goals, in order to make themselves appear more effective than they actually are.

Digital marketing is rooted in metrics & analytics. Its about using objective numbers to figure out whats working and whats not.

In the origins of web marketing, almost all companies & advertisers focused on the same set of metrics for analyzing the effectiveness of their efforts. In the early days, they looked mainly at stats like “views” and “clicks”. They asked questions like Whats my “Click Through Rate?”, whats my “Cost per Click”, Whats my “View Rate”? How many “Unique Visitors” did we get? How many people viewed my video? How many people liked my page?

These were the days of “Spray and Pray” advertising. You may remember the wild west of obnoxious Pop Ups at every click. Banner Ads everywhere. Spam “domain parking” pages. Email inboxes flooded with shit (with minimal control from email providers). Search engine results pages filled with garbage sites with crap content. Basically, anything to try to “trick” as many users as possible into landing on their pages. And to a degree, it worked back then.

They didn’t really dig into what those people were doing after they clicked an ad, or viewed a video, or read a blog post or email, or saw a pop up. They cared about getting the most amount of people to their sites for the least amount of money.

Aside from the fact that marketers simply didn’t have the targeting & analytics capabilities we have today, the way people have used the internet was much different back then. The internet was new & exciting. Online competition within industries was at a minimum. Social media was in its infancy. People were more curious, less informed, & far more gullible. The same cookie-cutter approaches worked for pretty much any company.

But people have wised up, and so has the technology. Put frankly, people got sick of the shit they got bombarded with. They stopped clicking ads & started blocking them. They stopped opening spam emails. They pick and choose what content they see. They price shop and dig for reviews. They seek out quality content rather than just whatever is thrown at them.

New school marketing philosophy has adapted to these changes, and takes a different approach. Rather than just looking at “superficial” metrics like views & clicks, we now have the technology to really dig in to how users are actually responding to marketing across the entire sales funnel. And we can target exactly the right people who actually might want to see what we’re offering. Marketers finally learned that the quantity of the visitors to a page, isn’t nearly as important as the quality of the visitor, and the page they’re landing on. And they learned that if they don’t provide valuable content, someone else will.

So good marketers now focus on metrics like conversion rates, “Cost per conversion”, time spent on page, bounce & exit rates, average video view times, Return on Ad Spend, Revenue per Customer, repeat customer rates etc. Its about answering questions like, How does this campaign fit the brand? How can I get this campaign in front of the right people while avoiding the wrong ones? How can I make my site more enjoyable for users? How much did that customer cost to acquire, and how do I get them to come back?

New school digital marketing is about creating highly targeted, highly relevant content that integrates seamlessly into the user’s internet experience. Its about using data to test, analyze, and optimize every part of your company’s online presence. Rather than trying to force content into a users face, or trick them into landing on a page, its focused on providing a rewarding experience they’ll come to on their own.

The problem is, getting a person to your website or to click on an ad is easy. Getting the right person to your website, and convincing them to actually buy from you is difficult. New school marketing isn’t easy. It requires a breadth of knowledge across many technical channels, a deep understanding of analytics (and how it integrates into technology), and the ability to fully customize a marketing mix for each client’s needs. The cookie cutter approaches from years past don’t produce results anymore.

But lucky for marketing agencies, most of their clients don’t know the difference between new school and old school marketing. So they get away peddling the same shit from 15 years ago. They use the same “cookie cutter” marketing approaches whether they work or not. And they waive the easy-to-attain metrics in front of your face, while avoiding the ones that matter….so you don’t know any better.

They’ll send you reports that say, “We got you a 10% Click Through Rate, look how great we’re doing”, without telling you “Your conversion rate and return on ad spend are terrible”. They’ll say “Look at how many clicks we have on our adwords ads this month”…without mentioning they’re targeting keywords that are driving people who don’t actually want to buy from you.

Advertising sales people will try to sell you on an email marketing blast saying “We have an email list of over 1 million subscribers – a 20% open rate, and a 10% click rate”, without telling you the actual conversion rates on those ads are terrible, and those percentages were based on the best campaign they’ve ever run, not averages..

I’ve seen it time and time again.

In the social media marketing world, this is rampant. I could write an entirely separate post on picking a social media agency or “person”. Old school social media was focused on “follower counts”, “page likes”, “shares”, etc. Companies still spend thousands trying to get more “likes” for their pages. But none of that means jack shit anymore (unless you’re in the entertainment industry)…because social media algorithms will only let people see your content if you pay for it anyway.

I can’t tell you the number of times I’ve heard “we want to focus on building up our page likes & followers we do anything else on Facebook or instagram”. Then once they get some likes, they sit there wondering why their posts aren’t getting any traction.

This isn’t a problem isolated to entrepreneurs. Mature, multi-million dollar businesses fall into these traps too

Are all of these agencies doing this maliciously? Not necessarily. Many of them are just stuck in the past, and don’t have the capabilities to do better. They’re making money doing what they’re doing, and don’t have reason to change. Others don’t even realize the numbers they’re looking at don’t mean what they think they mean.

As an entrepreneur, every dollar you spend counts. And you definitely don’t want to waste time or money on ineffeffective marketing. This isn’t an exhaustive list, and it varies depending on what sorts of services you’re buying….but here are some general tips to avoid getting boned.

Be Informed This is obvious. But really important. Don’t take their word for it on anything, and make sure you understand everything a marketing company is pitching to you in depth. Don’t treat your marketing & advertising as something you just hand off and forget about. Don’t trust that they’re performing well just because they say they are. Don’t let yourself be fooled by big numbers that don’t matter.

You should shop around multiple agencies. Compare prices & deliverables. If the words they’re using sound like gibberish, and they’re not good at explaining it to you, find someone else who can. If they tell you your ads are performing well, but your gut is telling you that you’re not seeing results, dig into it yourself. Don’t be afraid to call them out on under performance, or hire a 3rd party consultant to audit their performance.

Know your real goals, and avoid “The Metrics Diversion”. This is the big one. Before you engage any agency, ensure you know what your exact goals are. Do you care about becoming profitable immediately, or do you care more about increasing exposure/sales numbers? Do you want more email signups? Do you care how many people read an article, or click on a link? Do you care more about brand awareness rather than engagement? Think about what numbers really matter for those goals. Thats what your marketing provider shoudl care about.

Ask the company/person how they track performance. Ask them for samples of past reports. If they focus mainly on metrics like “Click through Rates”, “Page Views”, & “Unique Visitors”, rather than “Conversion rates”, “Return on Ad Spend”, “cost per conversion”, or any quality-based metrics…like page speeds, bounce & exit rates, mobile compatability, etc…this is a major red flag.

They should be focused on optimizing your website and marketing around the goals which are important to you. If they’re pitching you “page views” when you care about driving revenue, theres a disconnect there. They should also be focused on metrics that enhance user experience, and provide quality content.

Avoid the social media trap A subset of the Metrics Diversion, social media marketing suffers this problem probably more than any other channel. Organic social media marketing is dead . Social media apps have made it almost entirely pay to play now. If someone tries sell you on things like getting you “Likes”, “Followers”, or any other similar social media metric as an integral part of their marketing strategy….or if they try to convince you that you can still be successful on social media without spending on paid promotion…thats a good indication they’re stuck in 2010. Run.

Be cautious of companies that offer marketing as an add-on service, or “We do everything” digital agencies The most common sales tactic I’ve seen are marketing agencies masquerading as web development or design agencies, or web dev/design agencies masquerading as marketing agencies. Almost every technical agency/expert now offers the full suite of design, digital marketing & SEO services. They sell you on a website build. Then they try to lock you into some long term digital marketing or SEO contract.

Just because they’re good at one thing in the digital world, doesn’t mean they’re good at everything. They may be perfectly good at building a website, or designing logos…but their marketing skills could be mediocre. Similarly, they may be decent at marketing, but really terrible at building websites (and good marketing is pointless without a good site to back it up). Its really easy to spread yourself too thin in this game, and offer clients too much.

Personally, even though I could offer full-suite digital services and have enough experience to do so, I don’t. Partly because I simply don’t like doing some of it, and partly because I wouldn’t be able to give each client the attention needed on each project. Its sometimes better to hire different providers for each marketing competency, managed by one central person on your team.

In my experience the best marketers tend to have a wide range of knowledge, but are more specialized in their service offerings around their best skills. Which segways into my next point.

Avoid using a small agency with too many clients. Many agencies boast about how fast they’ve grown and how many clients they have. They relay this as evidence of their success. But this is a red flag to me. Running effective marketing strategy takes personal attention. It takes little effort to sign on new clients. Many agencies get greedy, taking on more than they can handle, and the quality of work suffers. A lot of smaller agencies have one developer and one designer split between all of their many clients – and simply don’t have the experienced resources needed to effectively manage their load.

Ask them how many clients they currently have, and then ask them how many full time employees they have on their team in each role. Will you have a dedicated project manager? How experienced is their team? Does it sound like they have a ton of clients for how many skilled employees are actually in the company?

I recommend looking for a company/consultant who limits how many clients they take on so they can focus on quality.

Bigger agencies aren’t always better Conversely to the last point, the benefit of going with larger agencies is they typically have many more resources to work with, with good project management processes, and extensive combined experience in the space.

The downside is they tend to operate like a faceless machine, and its easy for a small company to get caught as a cog in their wheel. They are slower to adapt to changes in the industry, and are often less likely to put as much effort into customizing campaigns instead of recycling ideas. They find a “rinse and repeat” process, and jam you into it. They rarely go “the extra mile” to give you more than what you paid for. And they’re also likely to pass your marketing campaigns off to “the B team”, to be managed by some inexperienced kid fresh out of college.

Bigger agencies are often more expensive – but they’re often just using many of the same tools smaller guys are. And I’ve seen many clients surprised they didn’t see any results after flushing away thousands of dollars on a big marketing company with a ton of name recognition.

Don’t run any paid ad campaigns until your site is fully optimized This is another very common mistake I see. Marketers (especially those that get paid based on ad spend), will typically try to rope you into starting campaigns as soon as possible. They want to start showing you numbers asap.

But, if you’re running marketing that takes visitors to content that isn’t fully optimized for conversions, you’re flushing money down the drain. The first step before you spend a dollar on paid ads should be a full audit and optimization of your website & web presence. This should be done by either the marketing agency or a 3rd party consultant.

You should look for a marketer that shares this philosophy. Ask them about their process for getting started. How soon they want to start running ads? What things do they look at before running ads? If they want to just jump in and start running ads immediately, take this as a bad sign.

As a follow up to that. NEVER invest in digital marketing campaigns until you confirm you have analytics implemented correctly. You also should know how to read these analytics yourself. Running campaigns without being able to accurately track performance is a dangerous game.

Do you have Google Analytics or similar tracking set up? Is your Facebook pixel implemented correctly? Do you have event & conversion tracking set up? Do you know your conversion rate? Do these numbers make sense and match your sales numbers? Do you know your way around your analytics software?

Your marketing provider should care about this before they do anything else.

Don’t fall into the SEO trap. I’ve mentioned this in past posts. As search engines are getting smarter, SEO as a standalone service is dying a slow death. 10-15 years ago an SEO expert was like a magician. There were ways to essentially trick search engines into ranking your site at the top for any keyword you want, with tactics like link schemes and keyword stuffing. Today, search engines have evolved. They care about delivering high quality, relevant content to searchers, hosted on high quality websites. They’ve closed most of the loopholes to exploit the ranking algorithms.

So the game of SEO today has evolved into playing with the system, rather than against it. Its about making your site appear as relevant and high-quality to search engines as possible. Its become far more focused on content creation than anything else.

But many people still look at SEO as this magic “free money generator” tool. And many companies are paying WAYYY too much to sub par SEO service providers still stuck in the past…and still giving the same bs guarantees, with the same outdated tactics. You’ll end up paying $3k per month for them to spend an hour spitting out a report you could have gotten yourself for free.

If they guarantee you ranking positions. Run. If they promise you SEO results in any definitive timeline. Run. If they don’t have experience with “Rich Snippets” or “Schema” markup, run. If they’re trying to charge you a non-insignificant amount of money for general monthly “SEO Reporting” without content creation services, run.

First and foremost, your SEO agency should be focused on helping you get quality, relevant content on your site, and ensuring it meets technical SEO standards.

Beware of “Black Hat” Marketing These guys are a dying breed, but they’re still out there en masse. Black hat marketers are the guys trying to “trick” people into clicking to their sites. They try to exploit loopholes in search engines. They create dummy pages for backlinking schemes. They blast spam emails. They make those annoying popups you can’t close. In some cases they can get you impressive short term results…but they also put you at risk for getting your site banned from search engines & social media. They also piss people off.

If their tactics seem shady, stay away. Again, whoever you hire should be focused on creating quality content.

Focus on design & content – good marketing revolves around good creatives.

Check out their design portfolio. Does it look like something that would keep you interested? Check out ads they’ve run. Are they interesting and original?

What kind of content creation ability do they have? Can they make videos? Infographics? Can they copywrite blog posts?

Tests, Tests, and more Tests Good web development & advertising is based around testing. What works for one company may not work for another. What works for one audience may not work for yours.

Whether A/B tests, or some other methodology…a good advertising agency is always testing. They’re testing to find the perfect page layout. The perfect ad text. The perfect image. The perfect audience demographic. They should always be building an image of what works, and what doesn’t for your company company.

All too often I see companies launch campaigns with a single creative version, marketed towards a single audience, with no testing on the campaigns or the site.

Ask them if they A/B test their campaigns. Do they optimize your site? What sorts of things do they test? How do they analyze & track these tests?

Don’t pay for marketing services as a percentage of ad spend This is a more personal peeve. Many agencies will charge companies their fee as a percentage of how much they spend on advertising. I think its bullshit, and encourages the agency to pigeon-hole you into dumping money into ineffective campaigns.

You should be paying hourly, on retainer, or even a percentage of performance results.

Don’t lock yourself into a long term contract without a trial period/performance-based cancellation option. This is a big problem. Agencies will try to get you to sign onto a long term contract you can’t get out of. I’ve seen multiple clients end up in law suits against marketing companies they got sucked into a year long contract with, but realize they’re not delivering any results after month 3.

I personally always try to offer clients short term starting contracts of 1-3 months as trial periods, with the option to extend after a review. Look for companies that give you flexible options for your contract. Ensure theres some trial period built in where you can vet their performance. Alternatively, set some performance goals, and tell them you want the option to cancel the agreement if they don’t meet those goals.

Consider hiring an internal digital marketing expert or an outside personal consultant/coach. Digital marketing is really a full time job to do it correctly. Analyzing. Planning & executing campaigns. Writing content.

You need somebody dedicated to it. Even though they can compete with some of my services, I often still advise clients that the best approach is to hire a CMO or marketing director as a full time employee/partner of the company. They should be highly tech savvy, and already have experience across a wide range of marketing channels. You’ll get a lot more bang for your buck in the long run that way.

If that’s not an option, an outside individual consultant is a good substitute. A good consultant should be able to help coach you and your team to run marketing campaigns effectively yourselves, and guide you through it.

Stay away from paid “Influencer” campaigns & email blasts unless you know exactly what you’re doing. Seriously. I’ll write a separate post on this. But in general, don’t beleive any of the numbers influencer marketing agencies, influencers themselves, or email marketing companies are telling you at face value. If somebody wants to promote your company for free product (assuming your costs are relatively low) or even a referral %…go for it.

The “influencer” bubble is real right now. Almost as a rule you won’t make back what you pay for these campaigns unless you do it in exactly the right way….and most people don’t.

To summarize, a sucker is born every day…don’t be one of them.

Do your research & get informed. Look for a reputable agency who doesn’t seem like they’re just trying to lock you into a long contract without results. Don’t sign a long contract without a trial period or way out of it. Don’t pay based on ad spend. Don’t work with Black Hat marketers. Remember an SEO should be focused on creating content. Organic social media is dead. Don’t pay for social media “influencer” campaigns.

The agency itself should focus on quality-based metrics, rather than quantity. If they’re small, they should only have a few clients. If they’re big, they should make you feel important & give you personal attention. They should be specialized in their field. They should be creative & design oriented. They should be tech savvy and analytical.

And most importantly, they should be willing & able to coach/guide you to fully understand exactly what they’re doing.

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