Agencies should be like family doctors

How marketing agencies are broken, and how to fix them.

Welcome to my first newsletter. I write Demand Curve’s weekly newsletter for 71,000+ founders and marketers. But this is where I do deep dives on startup and audience growth.

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I’ve run a marketing agency for 6.5 years now. We’ve worked with Microsoft, Ancestry, Tumblr, Pilot, Feedly, and many more.

Marketing agencies, in general, are broken. (And yes, ours was broken too.)

They don’t focus on what matters to their clients. They focus on what matters to them.

First, some context. Realities about marketing agencies:

1. They have high overhead. Their business is reliant on humans. To scale, they need more humans. Humans are expensive. Particularly if they have office space.

2. They want sexy logos. A well-known client is often worth losing money on. Having worked with a huge name makes closing clients easier.

3. They’re only good at a few things. Marketing is very diverse. It’s impossible to specialize in everything. At best an agency is good at a handful of things. They push clients to do those things.

4. They front-load value, then coast. Most agencies make all their profit with long retainers. A lot of the main value was delivered upfront. Then they coast with profitable maintenance work.

And here’s how a typical marketing agency works:

1. A company has trouble growing. They decide that they need to run Facebook Ads in order to fix their growth problem. (Perhaps a friend told them Facebook Ads is working great for their business.)

2. The company looks for a Facebook Ads agency. There are a lot of them. They read an article or get a recommendation and apply to the agency.

3. The agency, with its overhead, desire for sexy logos, and only being good at Facebook Ads nods its head and says “yes Facebook Ads is what you need.” That will be $15k/mo.

This is completely backwards.

Medical example