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:
- 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.
- 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’.
- 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.
- 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.
- 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.
- You don’t get much time to work on intellectual property, training, etc. That’s because you’re too busy whining on your blog.
- 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.
- 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.
- 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!
- 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.
- 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.
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