The financial impacts of COVID-19 have sent shockwaves through nearly every industry, from retail to defense contracting. Companies have been forced to make tough decisions, including hiring freezes, budget cuts and layoffs. Marketing organizations have been some of the hardest hit internal functions. According to the Gartner CMO Spend Survey 2020, more than 44% of CMOs reported budget cuts as a result of the pandemic — with more than 10 percent expecting to face cuts of more than 15%. And, although 73% of CMOs have a positive outlook on business performance in 2021, nearly 60% of CFOs expect their companies to be hit by a second wave of COVID-19-related financial challenges.
Now more than ever, CMOs and their marketing departments need to focus on cost optimization, ROI and team collaboration — especially if they plan to get on the same page as the rest of the C-suite. Evaluating your company’s ecosystem of marketing agencies is a good place to start. As McKinsey & Company points out, “the typical marketing organization maintains roughly 100 active partner contracts at any given time, including many of which marketing leaders aren’t even aware.”
Marketing skills redundancy is time-consuming, costly and deeply inefficient. Here are five surprising benefits of agency consolidation that will save your company time, money and headaches while still allowing you to reap the benefits of a strategic agency partner:
- Better brand consistency: 33% of CMOs cite brand strategy as their top capability, surpassing analytics and operations. However, with too many marketing agency cooks in the kitchen, messaging can become muddled and disjointed. Reducing your marketing agency pool will ensure your company maintains a consistent voice in the market, whether your message is delivered in an interview or written in a social post.
- Greater business agility: Business agility is at the forefront of most C-suites’ minds right now. A huge network of marketing agencies makes it difficult to move quickly — especially if you’re spending too much time educating new teams and reeducating current ones. Limiting the number of agency partners will help them become more integrated in your marketing organization, from knowing who’s who to understanding the technical specifications of your products. Plus, if an agency feels like a true member of your team, you’ll build a relationship rooted in loyalty.
- Streamlined workflows: This one is pretty straightforward; the fewer agencies your marketing department needs to manage, the easier it will be to get things done and hold the agency accountable. Office workers lose nearly 1/3 of their work time doing administrative tasks. Reducing your number of agency partners = more time back in your day. Think: fewer emails and meetings crowding your calendar, and billing and invoicing that’s easier for you and your accounting/finance team to manage.
- Skill set efficiency: McKinsey & Company found that a leading telecommunications company had “13 separate agencies all working on email marketing across only three business units.” Avoid marketing skills redundancy by auditing the services of each of your agencies — both what they’re doing for you now and what they’re capable of. If you’re working with one agency on social marketing, another on content and yet another on PR, an agency audit may help you find that one of those agencies can do all three functions.
- Reliable results: ROI — the culmination of benefits one through four. With a smaller marketing agency ecosystem, your company brand will be clearer; your agencies more knowledgeable; your time used more effectively; and your skill sets less redundant. You’ll produce better results with less fragmented decision making, making it easier to achieve the business you need to demonstrate to leadership.
Wondering if agency consolidation is right for your organization? Take our assessment.