I have been doing online marketing on my own for the past 3 years since i left my last sales job at a advertising agency. The reason why i left is because i felt there was something wrong with the current agency model.
Current advertising agency model:
The current model of business that most agencies run on today is
- Agency acts as middle man between you and Google/Yahoo to run your campaign.
- Agency collects a fee that is either a % of your advertisement spend or a flat monthly fee.
- Agency runs campaign and gives you monthly report.
Now why am i against this?
The reason i am against such a model is simple. Say you spend 2k per month on Google. Most agency charges a maximum of 30%. Simple math, you are paying $600 a month to the agency bringing advertisement expenditure to 2.6k per month.
Yes spending 2.6k may seem a lot (maybe a little to some) but the key point to focus on is exactly how much the agency earns which is $600 a month.
$600 a month of earning
Now being a business owner yourself, i think we should ask a simple question. Just what kind of work do you expect to get by paying $600 per month?
- The agency has to pay the sales person (a basic + comm of maybe 4-10%?).
- The agency has to pay the admin staff
- The agency has to pay the campaign manager
- The agency has to pay their overheads and most importantly,
- The agency has to pay their owners!
Now think about how your $600 pay all this people and ask yourself if you are the agency what would you give your customer?