How To Decide Between Outsourcing To A Digital Marketing Agency Or An Outsourced CMO

You?re getting ready to choose a digital marketing agency to help your company grow, but are you certain that an agency can provide the help you need?

You’re getting ready to choose a digital marketing agency to help your company grow, but are you certain that an agency can provide the help you need? 

We were recently asked how a marketing agency compares to an outsourced CMO (Chief Marketing Officer) advisory group. 

Both entities usually have employees that fulfill marketing tasks, and the staff of both companies can look very similar on their websites. Yet, both companies take a much different approach when marketing your business.

In this article, we’ll explain the differences between the two and their pros and cons so you can choose which direction is the best one for your business.

Differences Between A Digital Marketing Agency & An Outsourced CMO

The most fundamental difference between both entities is that the outsourced CMO focuses on increasing the lifetime value (LTV) of customers and decreasing the cost to acquire a customer (CAC), whether media is involved or not. They create benchmark KPIs (key performance indicators), then develop and execute strategies to accomplish those goals.

The outsourced CMO is usually an expert in digital and traditional marketing. However, instead of initially focusing on a media campaign as a marketing agency would, they strategize business growth with no bias towards any particular marketing channel. 

They initially focus on optimizing the channels that provide the most business for the least amount of time and money, as well as channels with the highest upside for success. 

This is the same approach a full-time, in-house CMO would take upon being hired. Once a CMO understands the company, its processes, employees, and other key relationships, his or her first strategic move is rarely spending money on media. Instead, they often focus their resources on areas of the business that align with increasing customer value. The outsourced CMO is no different, except that they’re employed on an as-needed basis.

In contrast, a digital marketing agency is usually hired to fulfill specific promotional tasks like media buying, branding, and web design. They are not usually relied upon for non-media-related marketing strategies. 

Due to their fairly narrow focus, marketing agencies can provide great value to companies that have optimized the majority of their marketing channels and are ready to focus on sourcing new customers through advertising and/or building positive brand awareness. 

Pros And Cons Of Hiring A Digital Marketing Agency

Digital marketing agencies are experts at client acquisition, which makes them invaluable to companies that are ready to scale up. 

Utilizing tactics like Facebook and Google ads, SEO, email marketing, and even traditional types of advertising, marketing agencies allow businesses to grow. They also keep in-house costs low by reducing or eliminating the need to hire a full in-house marketing department. 

The marketing agency business model has been very successful for 70+ years because it’s a mutually beneficial arrangement where both the agency and client share in the success of the campaign.

To learn more about the kind of success you can expect when partnering with a digital marketing agency, read the case study about our work with Kuykendall Solar. (TL;DR: 408% ROI on Google ads, 550% ROI on Facebook ads, 24% conversion rate with a new website, and 100x ad frequency within 6 months.)

Who Does The Work At A Digital Marketing Agency?

Agencies may use a freelancer for a small part of a project, but they prefer to use their employees whenever possible. 

This can be both good and bad. 

It’s great to have the consistency of all marketing services under one roof with one project coordinator managing the entire project. On the other hand, this can lead to communication issues and underwhelming execution. For example, the CEO or co-founders in most agencies are involved in pitching new clients. Once they land a large account, it’s often assigned to someone whose depth of experience is less than the CEO. 

This is the crux of running a marketing agency. 

To maintain a healthy profit margin, they have to strike the right balance between profitability and staff expertise. 

Sure, they’d love their entire staff to be experts in their own right with 10+ years of experience. But in reality, staffing an agency of 30 employees with that level of expertise would make their payroll skyrocket. 

Instead, agencies have a handful of experts who delegate strategy and tasks to capable employees. 

This method has worked for 70+ years, and it continues to. Yet concurrently, the modern era has given rise to an outsourced approach to marketing that connects you with a higher level of expertise for every aspect of your marketing campaign, producing exceptional results with (oftentimes) a smaller investment.

Pros And Cons Of Hiring An Outsourced CMO

When initially working with a client, marketing agencies will assess a handful of media-related channels to acquire customers. In contrast, an outsourced CMO considers over 20 acquisition channels, works with the client to create at least one viable concept for each channel, rates each idea, then puts them into a phased strategy. 

Upon being hired, an outsourced CMO often focuses on strengthening the channels responsible for the greatest amount of business, as well as uncovering new opportunities within similar channels. 

While SEO and Google ads may be a great fit for some companies, offline marketing strategies can deliver solid results for other kinds of businesses. This underscores the outsourced CMO’s value. They can assess any acquisition channel and create a marketing strategy that mixes the best of digital, offline, and guerilla marketing tactics into a connected, comprehensive marketing strategy.

When you hire an outsourced CMO, they usually explore the following channels, creating a viable idea for each one, then rating it based on its potential success:

  • Business Development Relationships – Swapping referrals with businesses, or paying businesses a percentage for successful referrals
  • Digital Marketing – Utilizing digital marketing to create brand awareness, trust, or new clients
  • Inbound Marketing – Creating content on the website and utilizing digital marketing channels to push traffic to each content piece, creating a gravitational force around your brand that leads to new customers
  • Press Features – Getting free press and online traffic in exchange for sharing your expertise
  • Email Marketing (Automation) – Targeting segmented lists of current and past clients with an automated email sequence can provide a huge lift in business and increase client lifetime value
  • Sponsored Content – Sponsoring blog posts and emails that will reach your target audience, often for very affordable rates
  • Affiliate Marketing – Incentivizing gurus and influencers to advertise your product or service in exchange for a percentage of the sale
  • Referral Programs – Incentivizing or encouraging previous clients or customers to refer you
  • Trade Shows – Attending industry trade shows and making connections with prospects, partner companies, and industry reporters
  • Speaking Engagements – Getting in front of an audience of your ideal clients and customers, whether a free or paid engagement
  • Meetups – Attending local events where potential partners and prospects are likely to be (much smaller scale than conferences)
  • Webinars – Using the rule of one to many, webinars help you reach more of your ideal audience, whether live or automated
  • Influencer Marketing – Compensating relevant industry influencers for blogging or posting about your product or service
  • Traditional Advertising – Radio, print, TV, and billboards are still big revenue generators for many businesses, large and small
  • Offline Events – Hosting local events or customer appreciation days can bring in new revenue
  • Product Marketing – Creating a free app or introductory product to bring in more leads

These are just a few of the more popular client acquisition channels, but the list above is certainly not exhaustive. 

This initial approach takes much longer than a typical marketing agency discovery meeting, but by assessing every available channel, coming up with a viable idea for each, rating each idea, then prioritizing them into a phased strategy, it provides clarity and a sense of direction for both the company and the outsourced CMO.

Pros & Cons Of Outsourced CMOs
Prioritizes marketing activities based on client LTV and CACDon’t always manage projects end to end (your staff may fulfill some tasks internally)
Expert at digital, traditional, and guerilla marketing tacticsCan mistakenly be seen as a threat to your current marketing staff
Not biased toward particular marketing channelsDelays in communication since they’re not in-house
Keeps your payroll expenses lowResults may take a little longer to achieve
Brings a fresh perspective and strategyYou have less control over the process and direction

Who Does The Work At A CMO Advisory Company?

Many outsourced CMO advisory groups are Google & Facebook Partners that have a few employees to fulfill the critical, everyday marketing-related tasks like managing digital ads, SEO, and web design. However, instead of hiring in-house teams of content writers, web developers, designers, and videographers, the outsourced CMO connects clients with a handful of seasoned experts to fulfill specific tasks. 

This approach is superior to marketing agencies in two ways: 

  1. The outsourced CMO hires only experts as their employees because they can afford to pay them top dollar
  2. For services the CMO doesn’t offer in-house, they involve a seasoned expert to fulfill them, while the CMO manages both their in-house staff and outsourced experts

You might be thinking “Well, that’s not a big deal, anyone can go to UpWork and find a ton of outsourced freelancers.” 

Yet, that’s where the outsourced CMO is different. They don’t just search UpWork for an email marketing expert, then cross their fingers that the freelancer does a great job. In most cases, the outsourced CMO has worked with their experts for years and trusts the quality of their work.

So, Who Should You Hire?

To choose between a digital marketing agency or an outsourced CMO, you need to fully understand your goals and desired outcomes.

If you’ve been executing a successful marketing campaign for years and are expanding into a new geographical area or are adding a new product to your lineup, then a marketing agency would be a great fit. They would assess your goals and create a cost-efficient media strategy to get you in front of your ideal target audience.

On the other hand, if your company hasn’t optimized its online and offline marketing strategies yet, then an outsourced CMO advisory group can invest the time and resources required to dramatically change the growth trajectory of your company within six months. 
Still have questions about which direction is right for you? Get in touch with us for a free, no-obligation consultation and we’ll help point you in the right direction.

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