Perhaps it’s time to rethink how you decide on the optimal vendor relationships for your company. Doing so is important, because information flow concerning campaign success or failure is nearly instantaneous today, yet inertia causes companies to run marketing departments much the way they did 20 years ago. This situation persists even though the media types under management are entirely different and the reasons for agencies and marketing departments being organized in their old forms no longer exist.
Marketers like to think the world is black and white. SEM (define) is in-sourced or it’s outsourced. Social media is part of search or it’s part of the PR function. In reality, with improved collaboration and information-sharing tools, new structures between vendors and marketers are becoming more commonplace — and potentially more powerful.
Let’s look at offline construction. The successful offline commercial or residential construction job requires a buttoned-up general contractor (GC) who understands the role every subcontractor plays, can assure that performance is optimal on an overall basis, and requires contractors communicate and coordinate with each other (or through the general contractor) when appropriate.
When it comes to marketing and media, someone has to be the GC. There are lots of pieces in a marketing plan and it’s nearly impossible to find vendors that are at the top of their game with internal resources in SEO (define), paid search, social media, online PR, e-mail marketing, online display media buying (direct response and/or DR performance), display media creative services (ad creation), CRM (define) messaging, traditional advertising, direct response advertising, package design, and so on.
When CMOs evaluate areas where the skill sets and media types are obviously very different, most CMOs determine that the marketing department should be the general contractor. You don’t see CMOs, or marketing departments for that matter, looking for a single vendor that does PR, direct mail, and outdoor advertising.
However, when the media types appear to be similar, there seems to be a lot of confusion as to which forms of marketing or media belong in the same vendor/partner relationship. Within the SEM industry, SEO predates paid search (I started my company doing search engine submission in 1996 then moved to SEO, evolving into what we are today). We chose not to push SEO as a service, but many SEO firms that got into paid search marketing continued to bundle the two services together even though the skill sets are quite different.
Regardless of whether you believe that SEO and paid-placement SEM should be handled by the same vendor or not, someone (a person or an organization) needs to be the GC managing the subject matter experts actually doing the tactical and strategic work. The role of managing a stable of resources could be played by an internal marketing manager on the advertiser side managing more than one vendor, or it could be an account manager at an agency handling either in-house talent or an external vendor. When an external agency or vendor handles the GC duties (as well as potentially doing some of the work itself), this primary vendor nonetheless takes responsibility for the quality of the work performed by any internal or subcontracted resources.
When marketers decide which types of marketing they want to manage themselves (as opposed to delegating the task to agencies), there are several primary factors to keep in mind:
- Need to know. Does the GC need to know the status of all projects simultaneously, or is the GC better off focusing on the bigger picture?
- Willingness to compromise quality. Often, when an agency is allowed to delegate some responsibilities to a subcontractor, it may choose a subpar vendor or hire an in-house resource on a freelance basis to deliver the service at the lowest cost, therefore retaining the highest profits.
- Appetite for risk. Forcing a vendor to take responsibility for larger elements of the overall advertising and marketing pie may simplify day-to-day management but may increase risk.
Hybrid solutions and the role of transparency have empowered some interesting structures you may want to consider. For example, if a marketing client wants to solve several online marketing problems simultaneously and make sure that process losses are minimized while leverage is increased due to better information flow, this marketer will have several choices. Assume for the moment a simple scenario where only SEO, PPC (define) search, retargeted display, and social media are in consideration:
- Option 1: If you ask me to be the GC, of course I’d choose to keep PPC search and auction-behavioral-targeting display in-house. I’d evaluate the SEO needs and potentially pick someone like fellow Search Engine Marketing Professional Organization board of director members Bruce Clay or Gord Hotchkiss to handle SEO (unless it has largely international challenges, at which point I might include Bill Hunt). I know lots of folks who are having significant success in social media marketing, but I’d start with SEMPO members because I’d be more likely to have had interactions with those folks. If I were managing the overall project, I’d be forced to scope the project, get a price from my selected subcontractors, and probably mark it up to cover overhead just like a construction GC would. Because my reputation would be on the line, I’d select people I know and trust. Not all agencies do.
- Option 2: I could manage it with an in-house subject matter expert (SME). The in-house SME would project-manage the data flow among vendors and make vendor selections regardless of whether these vendors knew of each other or not. This individual or team would need to be sufficiently skilled across all the areas being managed to know whether vendors were delivering against their scope of services.
- Option 3: I could manage it and select and negotiate the deals from subcontractors as well as be billed directly by each subcontractor. This would protect the client in the event that he liked the subcontractor’s services but wanted to terminate the relationship with me. I’d manage projects using collaboration software so that when data sharing among parties can improve results, the sharing can happen in a frictionless environment. For example, Google Analytics data for an account or even AdWords data can be shared across more than one login. The same is true for some campaign management technology.
Any hybrid of the above scenarios is possible these days. So if you’re a marketer and still think about your vendor and partner structures the way your predecessors did three corporate generations ago, I urge you to recognize that technology hasn’t just changed the way we market; it’s changed the way we do business as teams. You may find that the wrong team is acting as general contractor.
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