6 Sneaky Things Agencies Do That Cost You Money

I can’t count the number of times we’ve sat in boardrooms with agency peeps.

They sit there and yammer on about how their latest “big idea” will “dimensionalize your brand.”

Most of the time, we leave wondering “what does that even mean” and “how the hell does that sell more widgets?”

The truth is the Agency of Record (AOR) model sucks. It’s not cost effective, and most of the time AORs are guilty of sneaky practices that cost an arm and a leg — and end up hurting your ROI.

It’s good business for them. Not so much for you.

So today I’m breaking the silence, and sharing 5 things your AOR doesn’t want you to know — and what you can do instead.


1. AORs Play To Their Strengths — Not Your ROI

Big agencies tend to get comfortable with the marketing mediums they use. So they’ll focus on what they have experience in — not necessarily the medium that would be best for you.

That’s why they’ll recommend you sink a zillion dollars into a new TV ad — even though you can’t measure the ROI.


2. AORs Outsource — and Charge You a Mark Up

Because AORs tend to lack expertise in newer marketing forms (like video or game-based marketing) they end up outsourcing work to boutique specialty agencies — and marking up the cost.

It’s cheaper for you to work with the specialty shops directly. You can usually hire them on a project by project basis — which means you’re not wasting marketing dough on an AOR that can’t produce what you need anyways.


3. AORs Sell With Seniors, but Deliver With Juniors

In the first meeting your boardroom is packed with experienced senior agency peeps who’ve got the chops to deliver what you need.

Next time it’s an army of junior peeps and interns, churning out billable hours and “brand building” projects that don’t drive business results.

Sound familiar?

Most AORs will sell you with senior people, then assign a team of juniors to actually execute the ideas. Once the sales cycle is over, those big-wigs are gone and you’re stuck with a team of people that can’t always execute what those senior folks sold.


4. AORs Will Almost Always Pitch You a New “Big Idea”

Your AOR will almost always pitch a new “big idea” instead of a way to reuse existing marketing assets. Why? Because big ideas = big bucks.

The trouble is, customers tire of marketing assets slower than marketers do. And the “shiny new thing” isn’t always the best way forward.

Annual campaigns can not only be a good cost saver — they can be a huge benefit to your brand.


5. AORs Lack Perspective

AORs typically dedicate a team to work solely on your brand, which initially seems like a good thing.

But what tends to happen is that team gets too close to your brand. They start buying into their own messaging. And that almost always leads to a lack of empathy for consumers.

It’s the same problem you see with a lot of in-house agencies. Like when Apple moved to in-house; their ads became less sticky and people stopped paying attention.

Specialty shops on the other hand work with multiple brands. They don’t get caught up in your branding because they only work with you on a project basis. And they tend to have more empathy for consumers because they work with a variety of target markets.

More empathy means more engagement — and that means better marketing results for you.


6. AORs Run Projects to Fill Retainer Hours — Not to Deliver Value

Because AORs are paid on annual retainer, you don’t always get the most bang for your buck. What can happen is your AOR will create projects that have low value to your brand to make up the difference between where they’re at with their hours and their retainer.

Hiring a specialty shop on a project by project basis ensures that you’re only paying for campaigns that will bring value. Why? Because a specialty shop is more committed to the project's success; if your project does well, you’re more likely to hire them again.


The Big Hold Up: Convenience

Yea, I know. Cutting your AOR loose sounds like it’s going to be a TON of work for you. But if you choose the right specialty shops, it doesn’t have to be.

Look for full-service shops who are experts in what they do. A good specialty shop will take care of most of the details your agency would have handled for you.

Yea, it might be a little bit more work than handing your AOR a big bag of money — but the results will also be exponentially better.

So take a deep breath and cut the ties. It’s time you got the best people for your project — not the best project for your agency.