Howdy Haveaclues!

Hope you’re having a great week and a solid start to August! I’m writing this from a lovely Airbnb overlooking the Hudson River, near Beacon, NY. It’s nice to get away and enjoy some fresh air (and beer!). I love the convenience and action in Brooklyn, but I also love the calm of being surrounded by trees.

Stick around until later in the newsletter, I have something new to announce for ugly ads fans!

Allllrighty, let’s dig to this week’s topic:

The marketing agency/client relationship world is broken.

I’m always hearing from different businesses about how their agency sucks and doesn't do enough for them.

Others tell me about how agencies they want to work with are too expensive.

I also hear from agencies complaining about overly demanding clients with impossible expectations of performance, communication, and education.

I hear brands build in-house teams to save money, but they either hire the wrong person who sets them back for months or they slowly stagnate internally and don’t realize how they’re not able to keep up with trends until it’s too late and they’re desperate for outside help.

So if you’re keeping track that’s:

  • Bad agencies suck

  • Great agencies are too expensive

  • Clients are unreasonable

  • Building in-house doesn’t perform as well over time

Do any of these situations hit home for you? Reply to this email and tell me which one! (If you’re reading this, I’d bet you’ve been on either end of at least one of these!)

Since you’ve probably worked at a brand who was unhappy with their agency or at an agency who was overwhelmed by a client, did you ever wish you had a better place to talk to others about this stuff? My problem has always been:

  • Twitter is filled with too much chest pounding and isn’t exactly the best place to hold civil, nuanced discussions.

  • Facebook Groups are too chaotic and often fueled/led by guru’s trying to sell their methods, and they’re always filled with spam.

That’s why I’m confident you’ll be interested in my first-ever newsletter sponsor: Foxwell Founders.

I’ve been a proud member of Andrew Foxwell’s community (and friend of Andrew’s!) for almost two years and I can easily say it’s my favorite online community I’ve ever been a part of. It’s where I go to talk and listen to others talk about ads, agencies, creative, landing pages, running businesses, and so much more.

It’s ideal place for business and agency owners/leaders, freelancers, consultants, media buyers, creatives, and CRO specialists who want a private place to talk about any and all of these topics.

There’s no spam, no selling, and no anonymous trolls (unless you count me as a troll, sorry!).

There is tons of information/experience sharing, intimate cohorts, group calls, supportive feedback, useful resources, and community events.

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If this sounds like it might be for you and you want to join me and the rest of the incredible members, click here to get started. You can always try it for a month or two to see how it feels. I’m sure you’ll get a ton of value out of it. If you’re still on the fence and unsure if it’s worthwhile, reply to this email and let me know!

Back to the agency/client ecosystem:

The entire ecosystem has been ruined by the intersection of over-ambitious agency owners and greedy clients:

Too many businesses expect the world from agencies buuuut don't want to pay for it.

Too many agencies are desperate for new clients (revenue) and say yes to anything.

It’s an awful but sustainable cycle that feeds and perpetuates itself.

Often the agencies that win client business are just the ones that over-promised enough or the right things. They then put a junior new hire on the account, under-deliver on their promises, and collect the fee until the client inevitably fires them or their greedy long-term contract runs out.

Even decent, respectable agencies fall into this trap. I’ve absolutely been guilty of this myself.

It’s common for that former client to go on to “hate” agencies and treat their next agency like crap, no matter how great they might be.

It's a crappy situation for smaller brands who need more help growing but aren't big enough to afford or take a risk on a decent agency.

There's no shortage of predatory agencies (or guru courses “teaching” the next batch of predatory agencies) to feast on smaller brands that don’t know any better.

The worst part of this whole ecosystem to me is how little loyalty exists from the brand towards agencies even when the agency truly helps the brand scale.

I've seen so many great agencies directly responsible for scaling brands get tossed aside because:

  1. The brand thinks they're big enough to deserve a "better" agency.

  2. The brand gets an unbelievable pitch from another bigger agency promising the world.

  3. The New marketing hire (or acquiring company) wants to bring in their friend's agency.

  4. The brand wants to bring things in-house.

  5. The brand poached an essential employee from the agency.

  6. Or some combination of these.

Instead of being thanked, the agency gets screwed and there's nothing they can do about it.

I don't really blame anyone here, it's just kinda funny/sad that the reward for growing a business to the point of being able to take it in-house is getting itself fired.

People wonder why agencies charge so much: it's because they (usually) don’t keep equity in what they've built/grown for their clients.

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Ok, so agencies are the problem, taking it in-house should solve the problem, right? RIGHT?!

Welllll, not exactly.

It’s really hard to find experienced talent that can excel in the variety of disciplines that agencies normally have staffed by multiple experts. Businesses often flail with bad hires too, especially for smaller businesses.

Too many marketers get hired because of the big brand name on their resume, despite having never contributed real value to the company.

These hires can be the most frustrating because when they fail or are lazy, it’s hard to know. Leadership might think “well, they came from _____, so they’re not doing anything wrong, it must be something else going wrong?” They never stop to consider how a junior media buyer from a brand might not have enough experience to lead a team or drive creative strategy and leadership doesn’t have the experience to know otherwise.

In-house teams are likely to stagnate over time. Without the inspiration, experience, and data from other clients’ successes and failures, an in-house team is rarely motivated to push harder, take risks, or try something new.

While decent agencies are typically motivated and incentivized to improve performance, salaried employees that are saddled with too many responsibilities aren’t the most motivated to improve performance as much as they are to do the minimum just keep their cushy job before they move on to the next bigger role at another brand.

It’s a perfect storm of complacency.

Alright, so then what can you do?

If you’re on the brand/client side:

  1. Align incentives! Invest in great partners and give them opportunities to be rewarded for scaling things they can control. Know you’re pay them “a lot” because you're keeping the equity. Orrrr find partners who might see the bigger picture and give them an opportunity to earn equity.

  2. Vet partners as best you can. Every agency has happy and unhappy current/past clients. Or hire an expert like me to help you find and vet the right agency fit for your brand. If you need help, reply to this email and ask for help.

  3. Give the agency some time to get settled. Rome wasn’t built in a day.

  4. If you are going to hire in-house, make sure it’s for the right roles and consider finding external consultants/partners or agency help to fill in the gaps and keep things progressing and scaling. I advise Adcrate.co and they’re a fantastic creative partner that’s like having an entire additional creative team producing high-performance ad creative in your account.

  5. Join Foxwell Founders to talk to fellow business owners, hear from experts, and learn about what other agencies can do, so you can do a good job holding your agency accountable.

If you’re on the agency side:

  1. Know what your team is capable of and don’t say yes to everything the client wants/expects in the sales process. In the long run, you’re better off losing their business if you can’t service them well.

  2. Make sure you and your sales person/people understand how to find potential clients that are the right fit and that they aren’t incentivized to close big deals at all costs regardless of fit.

  3. Make sure your incentives are truly aligned with the client’s business growth. If your agency’s profit hinges on using misleading numbers (like in-platform attributed revenue) you’re unlikely to help them scale and might actually bleed them dry rather than help them scale.

  4. “The day you sign a client is the day you start losing them” Roger Sterling (Mad Men). Know that no matter what, someday, you will lose that client.

  5. Join Foxwell Founders to talk to fellow agency owners, hear from experts, and keep your agency up to date with all the latest changes, trends, and tricks from across other brands.

That’s it for this week, I covered a lot of spicy topics here! I hope you find this valuable! If you have any feedback, don’t hesitate to reply, I’d love to hear from you. I’ll respond!

Hott regards,
Barry Hott

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