Here’s How Indie Agencies Can Scale Despite Rising Labor Costs | Industry Insights | All MKC Content | ANA

Here’s How Indie Agencies Can Scale Despite Rising Labor Costs


Many indie agencies are now finding themselves as the dog that caught the bus. In the new efficiency-oriented market environment, they've successfully made the pitch to brands that a leaner and hungrier agency can deliver better performance with lower costs than the brand-name agencies that historically managed their marketing spend.

But those indie agencies now find themselves inundated with clients. Many of them are owned and operated by founders, some of whom may have recently gotten laid off by holding companies and started their own media consultancies. With growing client rosters, how do indie agencies themselves scale and help their clients do the same?

Going on a massive hiring spree likely isn't the answer. It will land indie agencies in the same place as the bloated competitors they left. Instead, both small and mighty agencies will need to take three steps to scale: accessing multiple media platforms, launching campaigns efficiently across them, and optimizing performance.

Why Agencies Need a Range of Media Buying Platforms

While efficiency is the ethos of indie agency owners, they can't achieve it by simply relying on one demand-side platform. Platforms have different relationships with media suppliers and boast distinct strengths. For example, Beeswax offers strong CTV offerings because it is owned by Comcast. Criteo excels at performance campaigns. Agencies need to offer brands the full gamut of DSP resources.

However, indies are at a disadvantage relative to big holding companies. A seat on each platform requires a significant investment of time, money, and specialized resources to manage. And every platform has its own UI, some of them unapproachable for those without deep expertise.

This is where the real challenge emerges: managing the complexity of campaigns across platforms without labor costs getting out of control.

How to Launch Campaigns Efficiently Across Platforms

The complexity of cross-platform campaign management tends to lead agency leaders down one of three paths.

The first is in-house hires. This gets expensive quickly. On top of the expense, in-house employees still need to learn different platforms. To be fair, though, highly experienced performance marketers have a role to play in the indie agency ecosystem. Agency leaders will just have to weigh precisely how many specialists they can afford to hire and how to balance those costs against the need for efficiency.

The second path is contractors, often offshore. While this comes with a cost-efficiency advantage, agencies still need to manage this decentralized workforce, and the lower costs tend to come with lower-level skill sets. Turnaround time suffers, as does the overall customer experience. This option, while having attractive cost savings, can lead to a dip in top-line revenue, calling net savings into question.

The third option is to lean on technology. A single platform should be able to provide access to different DSPs and allow agencies to manage media spend from one user interface. This approach eliminates the need to make commitments to each platform and simplifies the user experience. As a result, the burden on agencies to hire and train specialized staff diminishes, and automation handles a lot of the tasks that are error-prone and incredibly time-consuming for humans.

The option that's right for a particular agency depends on the culture and needs of that company. For example, if the agency is hyper-focused on sophisticated performance marketing, a platform meant to simplify media buying may obscure some of the controls that the specialist marketer wants. But if speed and simplicity are critical, a streamlined technology-enabled approach is likely a better fit than onboarding, training, and managing new team members.

How to Measure and Optimize Campaign Performance

The job isn't done when agencies have their campaigns up and running, whether via a platform or a newly hired workforce. The long-term task is to measure and optimize campaigns.

Reporting enables optimization, and in that area, a platform's ease and speed are paramount. Agencies should look for a normalized interface that enables them to get customized and straightforward views of data from all the angles they need. They should also look for flexibility in report scheduling as well as integrations with the other reporting tools in their tech stack.

On the optimization side, it's all about meeting and beating KPIs with as little oversight from the agency as possible. Agencies should be on guard against letting labor costs balloon to meet KPIs. Rather, a mix of people and technology should allow them to get the job done — with automation increasingly taking center stage.

A New Agency Model for the Efficiency Era

The decade-long party of growth at all costs, fueled by low-interest rates and easy-flowing venture money, is ending. Across every department and vertical, professionals, including marketers, are learning how to optimize profit instead of chasing revenue at any expense.

For indie agencies, that's a good thing. It's the tailwind driving many of their new clients from large incumbents to more nimble competitors. But it's also a principle indies will have to bear in mind as they themselves grow.

Indie agency leaders can't repeat the mistakes of the large agencies so many of them left. With the combined power of technology and (a reasonable number of) people, they will be able to deliver for clients and scale — without breaking the bank.

The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.

Mike Hauptman is founder and CEO of AdLib Media Group.