What’s the Difference Between an Advertising Agency and a Marketing Consultant?

The simplest way to explain it is this: Advertising Agencies create ads. Marketing consultants help you determine what and how to advertise in the first place.

They also help you with other marketing issues such as pricing strategy, sales training, customer retention, referral programs, joint ventures, product development, database strategy and everything else involved in selling products to customers.

Many people instinctively believe that advertising agencies are adequately prepared to provide strategic marketing guidance in addition to making the actual “stuff”.” In some cases this is true but in our experience it is the exception, not the rule. And to be clear, this is not a slam on advertising agencies. They play a critical role in the marketing process and can be wonderful strategic partners. But you have to understand that most advertising agencies are built around art directors, graphic designers, copywriters and other creative types. Analytics, research, testing and tracking results just isn’t their thing.

For marketing consultants, advertising is just one of many tools used to execute a business-building strategy. A good marketing consultant will not just develop advertising campaigns, they will help you track them and optimize them for maximum effectiveness. They are more concerned with generating a positive return on investment than they are with winning advertising industry awards for the creative work. Marketing consultants  spend lots of time monitoring the key metrics of your business (daily foot traffic, average sale, incoming calls/leads, conversion ratios, web traffic, customer acquisition costs, profit margins etc.)  and looking for ways to improve them.

So how do you decide between hiring a marketing consultant and an advertising agency?

The first thing you need to do is to honestly assess the needs of your business. Are you attracting enough leads? Are you effectively converting leads to sales? Are you building and nurturing your customer database? Are you able to accurately track the results of your advertising campaigns? Are your profit margins where you need them to be? These are the types of issues that a competent marketing consultant can help you with.

On the other hand, if you have a good handle on the fundamentals, an advertising agency may be just the thing you need to polish up your image, enhance your brand and differentiate your business through exceptional ads and marketing materials. Advertising agencies are also good at coming up with clever positioning strategies for certain types of businesses – usually in highly commoditized industries – where unique advertisements are the primary differentiating element between brands. Examples include soda, alcohol, fashion etc.

What’s Your Ideal Client?

We’ll be the first ones to tell you that we’re not right for everyone. You don’t have to poke around this site for long to see that we operate differently from most of the other advertising firms out there. We have pretty strong opinions about marketing and share them openly and honestly.

We operate this way because there’s just too much B.S. floating around in the world of advertising and lots of companies waste unbelievable amounts of money because of it. It’s a big industry with a lot of legacy players that are either unwilling or unable to break free from outdated practices in favor of new ones that are more accountable.

We don’t have any interest in developing theoretical solutions for clients. We like to build systems that create revenue in a manner that is both reliable and measurable.

Our clients come to us when they are fed up with the wish-washy stuff. They are serious about not just sustaining their business, but growing it with ferocity. They are smart enough to know that they don’t know everything and are open to learning and trying new ideas. If that sounds like you, then you’d probably fit right in.

On the other hand, we’re probably not a great fit for you if you believe that:

• Focus groups are the best way to determine the success of an advertising campaign.
• Great brands and great companies are built on brand advertising.
• “Awareness building” should be the primary goal of an advertising campaign.
• Results and spending levels always go hand in hand.
• Advertising is largely a game of luck.
• Successful advertising is based on choosing the right media.
• Great marketing cannot dramatically transform a business.
• Marketing is little more than a necessary evil.

How Do Your Fees Work?

There are several compensation structures we offer clients based on the type and scope of work they need. Here are the common arrangements:

Commission Based

For clients that utilize traditional media i.e. television, radio, outdoor, print and other offline media, our fees are usually completely covered by the discounts we receive from our media vendors. The standard agency discount is 15%. Here’s how it would work with a hypothetical budget of $10,000:

• We purchase $10,000 worth of advertising inventory on behalf of you, the client.
• At the conclusion of the campaign, the media vendors invoice our agency for $8,500 (a 15% discount).
• The remaining $1,500 covers the agency fee.

Clients like this arrangement because they end up getting our services without spending any additional money. It works really well for situations where clients use us primarily to manage their media planning and placement.

Retainer Based

For comprehensive consulting services and/or situations where media commissions are impractical, we work on a flat monthly retainer. Depending on the scope of work, these fees range from $3,500-$15,000 per month.

There are also instances where clients prefer to hire us to work only on specific aspects of their marketing program. In these cases, we offer a reduced-rate retainer based on the scope of work. Typical examples of this would be pay-per-click marketing, social media consulting, email marketing management etc. The management fees for these services start at $1,500/month.

Retainer Plus Commission Based

For clients with full-service consulting needs and extensive media plans we often work out a flat monthly retainer plus media commission arrangement.

Project Based

Sometimes clients just need us to do a specific project i.e. build a website, design a logo, write a sales letter, etc. In these instances we are happy to quote a flat fee for the project.