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February 22, 2012

Web Marketing: Integrated or Specialized?

February 22, 2012

Companies face a hard choice- should they hire an agency that focuses on doing just one thing really well (specialized) or one that offers a suite of services (integrated)? Also, agencies struggle with the same question- do we kill off stuff we aren't the best at and only do one thing really, really well? I can't claim I have all the answers, since these are somewhat eternal questions, but I did want to share my thinking on the subject.

First let's look at each type of agency:

A specialized agency can go deep, providing best-in-class expertise on their subject. Some great examples are our friends at Slingshot SEO, Hanapin or iGoDigital. Slingshot is arguably the best SEO company in the US. Hanapin is one of the best at managed Pay Per Click services. iGoDigital provides highly effective product recommendation software that integrates into some of the world's largest e-commerce sites including Amazon. These guys all do one or two things really well. Their clients are mostly national, sometimes international, and many rank in the Fortune 500.

An integrated web agency offers a suite of integrated services. This often means web design and marketing including SEO, email marketing, Pay-Per-Click (PPC), etc. Some even dabble in traditional media as well. SmallBox is an integrated web marketing agency. We can make and market. Do research, make recommendations, build the solution, market it, test it, create content, etc. What some would call "soup to nuts".

So what's the right fit for your business? Should you piece together a suite of specialized services from companies that are the best at what they do or go with an integrated agency that may not be best-in-class at every service they offer? I think the answer depends on your in-house team, what results you need, the size of your company and, sometimes, your industry. Here's my take:

Startup: on a tight budget? Find a freelancer who is a competent generalist and, hopefully, willing to help with marketing in exchange for some equity and/or a fixed fee. This usually results in the freelancer working almost as hard as a founder which has obvious benefits. Downside: most freelancers are pretty weak in some key areas- maybe a great designer who can't do SEO, etc- so that creates significant risk. If you can afford it, especially if this startup isn't your first rodeo, then an integrated agency scaled to your needs makes even more sense.

Small Biz: two good options; hire that freelancer fulltime until they max out which leads to option two, a local integrated marketing agency. Local is important in this case since you may need some hand holding which is hard to do via GoToMeeting.com.

Mid Market: this company probably has a small team of marketing people on staff, a solid marketing plan and good growth. At this point the choice is between an experienced integrated marketing team and several specialized teams- email marketing, PPC, SEO, etc. This is when the industry starts to matter. A business that is heavily reliant on e-commerce might want to work with the best e-commerce team they can find, regardless of location, for the website and then another for PPC, etc. On the other hand a business that is service based and needs a more holistic marketing approach would probably be best served by an integrated agency that can handle numerous web presences and may have experience in their industry.

Enterprise: these are the big dogs, publicly traded companies often doing international business. At this level most have robust internal teams. There may be cases where they go with a large integrated agency but in many cases they are best served by working with a number of specialized agencies to round out their internal efforts. Often an external agency manages a stable of specialized agencies as subcontractors. This can work, we've had good and bad experiences as that sub-contractor, but too often efforts are duplicated and too much money is spent on overhead and not on work getting done.

What about non-profits? For the most part they follow this model above- the larger they get the more they move across the freelancer-internal-integrated-specialized spectrum. Often they benefit from an agency that has extensive experience working with non-profits. Most non-profits have a different decision making process than businesses- more stakeholders. So an agency that may do great work with businesses may stumble when working with a non-profit. We have learned to work in both worlds but it has taken time, and many mistakes, to learn the respective ropes.

Why did SmallBox go with integrated and not specialized? That's a good question and to be honest it was something we struggled with for years. We have seen many companies experience impressive growth by focusing on a specialty service. But when we considered the pros and cons- including the increased risk that comes with a business model which is much more vulnerable to disruptive changes in an incredibly disruptive industry- as well as our culture which we felt couldn't be sustained with rapid growth we decided we wanted to build a suite of services and focus on ideas, problem solving and tools to create web marketing solutions for the right clients. As a result SmallBox has become something of an idea factory- for ourselves and clients. Our hope is that ideas that come out of SmallBox will become their own businesses and reach their own potential. My vision is to have by-product businesses that surpass SmallBox's size and revenue. They may also not have the same shelf-life as the mothership which we are building to last. But each business must follow its own star.

Marketing is critical for growth and profitability. Doing it right is more important than ever since marketing gets more complicated and diverse everyday. If you need help making a choice feel free to contact us. Even if we aren't the right home we can help you find it.

Hopefully this post is helpful in your decision making. I would love to have your input since my thinking is always evolving on this topic.

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