Marketing Agency vs. Consultant: What's Best for Your Online Shop?

29.07.2020, 8m

Digital marketing is the bread and butter for any successful e-commerce site. Whether your store is run on Shopify, Squarespace or the likes of WordPress and Magento, chances are there will be many similarities shared for your needs for digital marketing regardless of your e-commerce site engine.

The pertinent question remains to most Founders, CEOs, and Head of Marketing: “Should I hire a marketing agency or a consultant for my e-commerce site?”.

This decision is a tough one to make, especially since digital marketing is one of the most important functions for a fully digital business. Your choice of hire needs to be backed by data, experience, and be KPI-driven.

E-commerce companies spend as much as 40% of their revenues on digital marketing, such as Facebook Ads and Google Ads, and as such, even a 10% improvement in CPC (cost-per-click) can result in a massive difference in your bottom-line. Your marketing team setup is crucial for your e-commerce success.

In this article, we’ll discuss the advantages and disadvantages of hiring a marketing agency or a consultant to augment your current marketing function, depending on your company profile and marketing needs.

Marketing Consultant

Marketing consultants can provide crucial strategic advisory on your high-level marketing needs, by first undergoing an audit of your business processes, and then advising on the most relevant growth channels for you.

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Source: fizkes/Shutterstock.com

Advantages of Marketing Consultancies:

High-level Strategic Advisory: Consultants look at your overall objectives, and then provide you with the strategic insights to take action.

These insights allow you to then decide whether you should train an in-house employee on a new marketing function or growth channel, or to hire a specialist to help you execute that. However, before even making the call to hire a new talent, consultants help you evaluate the cost and benefits of this prospective decision. 

Keeping your e-commerce insights in-house: Working with a consultant and then running your own technical strategy means that your insights will not be leaked easily, especially with a private agreement with your consultant.

For e-commerce stores, while your competitors can snoop on your ads with the likes of the Facebook Ad Library, your optimisation settings and structure from your consultants remain internal. To document your progress with your consultant, be sure to build a knowledge base for your business using a tool like Notion or Evernote.

Brand awareness: Consultants typically work with the Founding team and the marketing team on a closer level than marketing agencies, and as such, it is easy for consultants to intuitively understand your brand identity.

This is especially relevant for e-commerce sites where the look-and-feel of your brand needs to align across all your marketing channels: from social media, to influencer marketing, to paid social ads and paid search ads.

Tip: Get our "Ultimate Guide to Instagram for Online Shops" whitepaper for free

More adaptable: Compared to agencies, which have more established, legacy work processes, consultants have greater flexibility and have to always adapt to the latest technologies. For example, with the advent of COVID-19, it is easier for consultants to develop a strategy for COVID-19.

Consultants are just that much faster in recommending new tools. For example, capitalising on last month’s launch of “Shops on Instagram”  for social media marketing and also using a URL shortener to track your social media link clicks.

Consultants also work more closely with you, and also suggest more ways to be more lean and suggest tools you can use to do your own marketing, such as Canva’s new features for producing videos, or using Trusted Shops as a seal of approval for your own site. 

 

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Jacob Lund/Shutterstock.com

Disadvantages of having a Marketing Consultant:

Lacking in Technical Execution: Marketing consultants might propose a useful strategy for your e-commerce site, but often still passes on the actual technical execution to yourself or your team. You’d still have to do-it-yourself (DIY) or hire an inhouse marketer to execute on the strategy.

Whilst consultants might know of the latest technologies and strategies, some might lack the technical expertise

Difficult to Vet Experience: For consultants, digital marketing and e-commerce is one field where you might prefer someone with less experience.

For example, an e-commerce consultant that has 4 years of experience with scaling successful e-commerce Shopify stores to millions in revenues will be more relevant to you than an e-commerce consultant who has scaled tens of millions of multinationals with 20 years of experience. In this case, the number of years of experience is not the best indicator to judge success.

Before continuing, we want to make you aware that we have a webinar for you to watch regarding trust and e-commerce:

Trusted shops webinar September 2nd

Marketing Agencies

Marketing agencies frankly seem to be a dime a dozen, commonly found, and all purported to be e-commerce marketing experts. In this case, how do you choose the right marketing agency for you?

Many e-commerce store owners have been burned by the wrong marketing agency, losing thousands of dollars in precious advertising spend. However, hiring the right agency can bring in extremely great results for your business.

We’ll outline the advantages and disadvantages of working with marketing agencies below. 

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Jacob Lund/Shutterstock.com

Advantages of hiring a Marketing Agency:

‍Specific, technical expertise: Agencies (as well as some freelancers) have more technical experience than consultants, as they tend to have specialist hires focusing on different marketing functions.

For example, having talent focused on Facebook and Instagram Ads, to search engine optimisation (SEO), to conversion rate optimisation (CRO). These agencies have the benefit of gaining experience from working on hundreds of accounts.

Efficient work processes: Agencies have more established workflows and processes than consultants, due to the repeatable nature of their work and their specialist natures. This includes work processes from on-boarding to implementation of campaigns, to setting up Google Analytics and weekly reporting functions.

More driven by hitting KPIs: Agencies are paid on a contractual, recurring basis, and because they are responsible for execution, they are held more accountable for results and KPIs. As an e-commerce store, you’ll axe an agency with unprofitable campaigns pretty quickly. 

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Disadvantages of Hiring a Marketing Agency:

Onboarding and negotiation costs: There is more work involved in working with agencies, with the need to onboard both parties, agree on work processes, negotiate specific action items, culture, KPIs and reporting methods.

There are also negotiation costs particularly in larger agencies, where the agency has more power in deciding the terms of the negotiation relative to younger e-commerce clients, simply by quoting often that “this is how it has always been done”.

Opt for younger, specialist e-commerce agencies rather than legacy agencies, who have demonstrated success in profitable campaigns for e-commerce stores in your niche.

Difficult to find a good agency: Very often, agencies provide case studies and cherry pick their best case scenarios. However, most of them do not provide examples of cases where things have gone wrong. State your case and ask each agency for specific instances where campaigns have failed.

If an agency fails to give even one campaign, it’s likely that the agency will continue to sugarcoat results along the way. To help you verify an agency’s true capability, consider using a pre-vetted freelancing platform like Traktion to hire pre-vetted marketing agencies.

Sensitive company insights: To reduce the risk that insights gleaned from your marketing campaigns will be applied to another competitor site of yours, it’s crucial to pick an agency whom you can trust. You should also ask the agency for names of clients they have worked with or are currently working with.

Agency vs Consultant: Not Mutually Exclusive

Having to choose between an agency or consultant? 

The truth is, it is not mutually exclusive. You might wish to hire a consultant to first delineate your marketing strategy, and then decide whether to bring your marketing function in-house, of which you can fulfil through the hiring of in-house hires (which also brings to itself high costs and problems), managing freelancers, or doing it yourself.

Strategy comes first. Seek advisory support for your e-commerce store for your high-level overview to identify where your relevant and profitable growth channels are before deciding your marketing team structure.

 

New in the world of e-commerce? Thinking about starting your own online shop? Check out our free guide:

Starting an Online Shop checklist

About the author

As CEO and co-founder of Traktion, Saher Shodan is passionate about helping businesses scale with the right growth talent. Having started his career as part of the Uber launch team in India, Saher has 5+ years scaling marketplace businesses across 3 countries. He is also the co-founder of P2P events platform, Lemonade.

 

Cover image provided by UfaBizPhoto/Shutterstock.com