Part 5: Are Agency Org Charts Undermining Client Alignment?
Posted on April 7, 2014
This is the last in a 5-part series looking at what I believe are fatal flaws in traditional full-service agency organization structure. When I use the term “fatal” I am referring to the ability of the agency to enjoy long-term growth and client stability. There are plenty of agencies pumping out brochure design, trade show collateral and broadcast advertising at a profit and there will always be a few industries that can get by with this. However, most industries are now facing a different reality and this is forcing agencies to reinvent themselves or be left behind.
Changes in Buyer Behavior Demand Changes in Marketing Strategy
The fifth fatal flaw is lack of client alignment as it relates to marketing strategy. Most B2C and B2B companies have now gotten religion: what worked even three years ago to drive sales leads no longer works. What’s more, CMOs are under mounting pressure from Sales VPs demanding even greater sales lead velocity. This has forced CMOs to reinvent their marketing team and processes to adapt while at the same time re-evaluate their agency supply chain to identify those that can adapt to this new dynamic.
So what does an integrated demand marketing team look like? The following represent the major functions typically inside a Demand Marketing team that reports to a CMO:
- Content marketing (curation, creation, syndication)
- Digital advertising (PPC, display retargeting)
- Email nurturing (lead nurturing, customer cross-sell)
- Promotion marketing (campaign design/execution)
- Analytics & testing
- Marketing operations (CRM data hygiene, marketing automation administration, campaign tracking code)
The following marketing functions are often shared services across the company but also support the demand team:
- Event marketing
- Public Relations
- Social media (including influencers)
The Content Marketing role is interesting as it typically has sat inside marketing but increasingly brands are realizing that delivering fragmented content into the market is not good for brand positioning, thought leadership point of view, or even sales enablement. As a result, Content Marketing as a shared service is the direction many companies are now pursuing.
Integration Leads to Collaboration
Because demand marketing teams are responsible for outcomes (sales leads) they must collaborate to build campaigns that include multiple marketing tactics, attribution tracking between touch points, and clear financial objectives. What’s more, the Marketing Director (or VP) judges the overall campaign performance as much as individual touch points within the campaign. This shared accountability for marketing performances forces the client marketing staff to work together toward a common goal. It also requires the team to be organized in such a way that collaboration is natural and this is typically done by having them report to a Director whose title (typically “Demand Generation”) reveals the outcome by which they will be judged.
Opportunity for Alignment
Full-service agencies could adopt a similar organization structure whereby instead of “Account Directors” they hire “Demand Directors” whose teams are built around one common theme: driving sales leads for clients. Each team could be organized by vertical market focus or horizontal business problem (e.g. subscriber businesses that want to acquire customers, reduce churn and increase LTV). Unfortunately, most full-service agencies structure their leadership teams in roles like “Creative Director” or “Digital Director” or “Director of Account Service” whereby their identity and accountability is tied to a production task, not a business outcome (such as demand generation).
This misalignment creates tension as the agency believes they are meeting the client’s need when they deliver a production task on time, and on budget. However, the client is most happy when the production tasks deliver a business outcome (e.g. sales leads). So with the agency focused on the “means” and the client focused on the “ends” a natural tension is created whereby one must convince the other to see things their way. Either the agency is justifying its worth via Addy awards, Facebook Likes, and improving CPC metrics or the client forces the agency to focus on the results of those efforts such as sales leads, cross-sell revenue, and increased customer LTV.
What’s the quickest way for agencies to bridge this cultural gap?
Hire more client-side (brand) marketers into Account Service, content, digital and agency leadership roles.