11 reasons no sane person starts an internet marketing agency

Ian Lurie

This is the first of a 2-part series that documents 2 voices in my head. One voice perpetually says “You are an idiot for running an agency.” The other says “This rocks. It’s the greatest job in the world.” So fear not: I’m not having a mid-life nervous breakdown. Or, if I am, it’s not impacting my work. This is just the first half of an interesting pros and cons discussion.

I had an epiphany today. Sane people do not run internet marketing agencies.

They develop tools.

They sell training.

But agencies? No chance. Don’t worry, I’m not going anywhere. I haven’t been sane since I was 3. If you’re relatively balanced, though, you’ll heed these warnings:

  1. Online agencies are a weird hybrid of a traditional print agency and a ‘web’ company, combining the disadvantages of both: No real assets, undervalued services, 1,000 clowns all clamoring that they can do what you do, and a payroll to meet. We’re the Tromboon of the services world.
  2. Our income is at the mercy of services-based contracts which can be shredded at any time. Write any contract you want. If your client decides to break it, they can break it. Then you ask yourself: Is it worth it to go to court? In 16 years, I’ve never said ‘yes’.
  3. We don’t control the channels. When Madison Ave. agencies sprang up, they bought and sold the TV time and print space their clients needed. And the networks and publishers needed the agencies to sell it all. Not so on the internet, where anyone with a credit card can accidentally spend $35,000 on PPC ads, overnight.
  4. The channels compete with us. Google has an SEM consulting team. So does Bing. Most e-mail marketing providers have in-house teams, too. Sure, they’re all devoted to parting hapless clients from their money. They don’t provide a lot of value—most clients understand that. But it’s still a ridiculous situation. I bring Google, Bing et al business. In exchange, they compete for our business, and our staff.
  5. There’s no there, there. You’re constantly competing with morons who can’t even do SEO on their own sites, but “Dare you to compare my results to any other internet marketing consultant.” OK. How’s about I grab your top 2 clients and see if they rank in the top 5 for the first 2 words in their title tag? Oh, that’s not your target phrase? OK. Tool.
  6. You don’t get much time to work on intellectual property, training, etc. That’s because you’re too busy whining on your blog.
  7. You’re at the mercy of your vendors. All it takes is your web hosting provider, or your e-mail marketing provider, or your landlord to have some kind of total clusterf%$$ and you get to spend two weeks straightening it out.
  8. You’re always working in the business, not on it. I’m a crappy CEO, I admit. I’m too apt to dive into client work. But most agencies, including Portent, get stuck in this awkward in-between state: Not quite big enough to push the CEO out of day-to-day affairs, and not quite small enough to let the CEO comfortably consult with each client. If you figure out how to break that deadlock, let me know.
  9. Lack of legitimacy. 16 years in business and I still have companies asking me for my last 3 years of financial statements to make sure Portent is ‘for real’. Are you kidding me? I’ve been profitable more years than they have!
  10. The leeches flock. If your agency’s been around more than 10 years, you start getting calls from folks who want to ‘partner’ with you. In a few cases, there’s a good relationship to be had. In most, though, ‘partner’ means ‘Attach myself to your agency like a tick, suck out a few clients, then fall off, bloated and dead, after six weeks.’ Choose partners carefully.
  11. Your most valuable asset is hardest to sell. You know a lot of stuff. Your expertise is amazing. But clients want hourly rates. VC’s turn up their noses. Why? Because you can’t put knowledge in cans on a shelf. You don’t stock it or store it. It’s an invisible, intangible asset that you blurt out in a 30-second conversation. That one suggestion you just made probably increased client earnings by 15%. Billable value? $.45, and the CFO is going to call you on it.

Yep. If you’re crazy, start an agency. Then we can party together. If you’re sane, start a regular business, buy a nice house, and point and laugh at us poor souls.

Wait! Before you go slash your wrists! I wrote a follow up: 11 reasons smart people start internet marketing agencies.

Other stuff


Ian Lurie

Ian Lurie is founder of Portent. He's been a digital marketer since the days of AOL and Compuserve (25 years, if you're counting). Ian's recorded training for Lynda.com, writes regularly for the Portent Blog and has been published on AllThingsD, Smashing Magazine, and TechCrunch. Ian speaks at conferences around the world, including SearchLove, MozCon, Seattle Interactive Conference and ad:Tech. He has published several books about business and marketing: One Trick Ponies Get Shot, available on Kindle, The Web Marketing All-In-One Desk Reference for Dummies, and Conversation Marketing. Ian is now an independent consultant and continues to work with the Portent team- training the agency group on all things digital. You can find him at www.ianlurie.com

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  1. Ian – you darn well better write “11 reasons smart people start internet marketing agencies” tomorrow or I am going to be depressed for days.
    Actually I just look at the difficulty of this business as keeping the riff-raff out. Anyone can run a yogurt shop. 🙂

  2. Love this article, a lot. Gives me some peace of mind – its not just me.
    There is something in the time vs. value arguement too! It can be hard to judge what to charge when you have a 10 second epiphany that could revolutionise a business.

  3. Well. That certainly makes my new blog tagline make a lot more sense.
    … can’t really argue with any of these points, Ian. But sanity is overrated anyway.

  4. You left out all the angry phone calls that it has been two weeks and they are not on the first page yet. then you have to remind them that you never said to weeks it was more like 2-3 months lol

  5. Well said Ian and thanks for the great humor. Everyone knows that SEO comes in cans and boxes of Social Media Marketing can be had by the gross.
    So, why do we do it? I know my reasons and I’m looking forward to reading yours 🙂

  6. Oh my. Is it bad that this post actually made me breathe a sigh of relief? I am actually glad to hear we aren’t alone. I think my neck is sore from all of the nodding.
    We’re a young agency, but hey – we’re hangin’ in and one day maybe we can party!? You are on the West Coast right?

  7. This post is actually encouraging in that someone else sees how ridiculous this life is. #5 makes me laugh aloud.
    My other favorite is the “oh, you just build websites? my (insert family member/friend/neighbor) does that too” line.

  8. I find an amazing correlation between my attitude about running my company and our checking account balance. Spot on stuff Ian.

  9. @Chris I totally hear you on that. I’m not sure I care that much about money as a way to buy stuff, but it sure is an accurate scorekeeper. A healthy checking account really makes me feel more like taking on the world.

  10. Great post Ian. You are so correct. Lately I find myself explaining to business owners that the ROI on a yellow page ad is considerably less than online marketing.
    I even have a client who doesn’t want a google places page. Funny stuff. Thanks for the awesome read.

  11. Ian you crack me up! There’s no better place to learn from a true veteran than right here on this blog. I have some catching up to do to get Powered by Search to the 16 year mark, but believe me, agency pain points are universal. That said, I wouldn’t have it any other way. There’s a method to the madness and it is very possible to scale the business while having happy clients, positive cash flows, and staff kept busy with perks like an Xbox Kinect.

  12. I guess the fact that I am not sane should prompt me to setup a digital agency then. Thanks Ian you have convinced me.
    I guess as a testament to my lack of sanity, its not that I want to do this (I am trying to resist) I feel I have no choice – btw – your writing is inspirational as always.

  13. Great stuff Ian. Been at it myself for 15 years, and boy do I see a lot of underselling in marketing services. Let us all reread Alan Weiss, and remember his first lesson: NEVER sell time!! Insist, educate, and learn to walk away. And as for that phone call, answer only clients who are on retainer. Yes, you will still leave money on the table, but at least you won’t find yourself in a ridiculous situation where you bill 1/4 of an hour. Who invented that stupid thing? Lawyers?

  14. Hey – Have you been spying on us!!!!????
    No, seriously this is so, so true I just about wanted to give up and go do some sensible job like work in a Chemist Shop (which I think is a Pharmacy in your part of the world). Just about.
    Think I might just print this out and cuddle it when I need to know we’re not alone…..

  15. So true. @tricia Lol, just love what you said. A perfect summary of the situation. Especially when this family member/friend/neighbor made these websites full of flash on a old dreamwaver :).

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