Business Thoughts

Multiple Vendors vs. Single AOR: Which is Best for Your Organization?

Written By: Emily Capuano & Meagan Jubb

As companies begin to grow and scale, so should their marketing efforts, and likely this triggers the need for support. 

Branding agencies, design shops, full service advertising conglomerates; there are a lot of offerings to navigate. Some companies choose to work with several specialized teams, others want everything under one roof, and others still think it’s best to try and manage everything in house. 

What type of approach is right for you?

The answer as one might assume is, “it depends”. 

Key areas that influence a company’s decisions surrounding this topic include: company maturity and current state, budget and goals, and current org structure.

In this post we’ll explore the pros and cons of working with multiple vendors vs an AOR (agency of record) to meet your marketing needs. 

The “Everything Under-One-Roof” Approach

Having one agency of record allows for one focused strategy. They will have a deep understanding of your business needs and challenges. They will live, breath, and speak your brand without concern and should be heavily invested in your success. 

Pros Cons
All contacts in one place Assumes expertise in all the areas when it might be more like great in a few, okay in most
No concern of overlap or duplicative work Large line item on your marketing budget
Less Management = Less meetings, less emails, less confusion Limited negotiating power 
Data synergy and access to all the information in one place Limited flexibility = Often locked into quarter or year long strategy roadmaps with little wiggle room making quick pivots difficult 
Cost efficiency, single billing process Hard to move on from something being under one roof

The “I Don’t Want All My Eggs in One Basket” Approach

Having multiple agencies at your disposal allows for varying perspectives and additional resources that likely can allow you to accomplish more than you can with a single agency or a smaller in-house team.  

Pros Cons
Working with people that specialize in tactics/channels Multiple stakeholders can cause fragmented strategies
“More brain power” – different companies may tackle problems in different ways leading to unique solutions More wrangling = more meetings, more emails, less work
Likely leads to competitive rates Budget inefficiencies = lots of renewals and SOWs to review, invoicing
Serves as an extension of your internal team  Having to onboard multiple agencies – lots of “training” for clients to do 
If internal client is siloed, agency comms will be siloed – leads to inefficiencies, duplicative work, missed deadlines, disparate strategy 

 

How to Decide Between Multiple Vendors vs. Agency of Record

How do you decide what’s right for you? Consider the following:

Organizational Structure

Marketing departments should review how they organize responsibilities internally before bringing on an agency.

A few questions to ask:

  • What is the long term vision of the company in three, five, ten years? Is your marketing department equipped to handle the growth or could you use outside help and support? If so, where are you weakest internally? Use this answer to help you focus on your agency search and specialty.
  • Does your team have bandwidth and expertise to take on specific focus areas? Is your team filled with more generalists or specialists? 
  • Do you have multiple people doing similar tasks? Can those items be consolidated down to one person to find time savings? 
  • Does your team have the time to take on multiple agencies and stakeholders in addition to their day to day tasks? If you aren’t able to manage several additional calls and meetings each month from each agency, sticking with one partner might be the answer.
  • If you do have the resources, do you have processes in place to ensure silos aren’t being created?

Budget

Each option comes with costs both hidden and obvious. 

Agency fees and costs can vary tremendously by industry.

For paid media, agency fees are typically based on a percentage of ad spend. Are you a business that needs constant support but sees dramatic budget fluctuations throughout the year due to seasonality?

Perhaps a retainer or always on agency approach is something you might consider.  Oftentimes, agencies are willing to get creative to make the payment structure something that works for both sides especially if the fit is right. 

A few questions to ask yourself:

  • Are you looking to scale headcount in the next 6 – 12 months or are you in a hiring freeze? 
  • How complex is your procurement process? Some organizations are able to get a $75,000 contract approved more quickly than a new job requisition for a marketing specialist.
  • What would the internal cost be to hire one of these specialists as part of your own team? 
  • What are you missing out on revenue wise by NOT investing in one of these options? 

Understand ROI on Current Efforts before Making Decisions

Work with your internal stakeholders to develop a ROI formula that provides you with a foundation to measure your current marketing efforts.

Knowing this impact on the bottom-line will allow you to see where you might have additional budget to work with and could make a pitch for an agency partner more robust to your board or budget planning team. 

While we can’t determine the right answer for your company or situation, we hope this gives you the tools you need to start asking the right questions and facilitating the right conversations internally. 

If you’re considering working with an agency, ask yourself these questions to determine if if you should enlist some professional digital marketing experts.


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