Agency vs consultant – the difference between the two

When our team is discussing marketing hiring needs with people like yourself, we’re often told the kind of provider you want to hire.

Usually when this happens, the company wants to hire “a consultant” who can “run our strategy including doing the work” because “we don’t want the overhead of an agency”.

Today I am here to tell you that the scope of your needs is what determines the kind of provider you need. There often isn’t just one answer, but a few different options each with their own tradeoffs.

This chapter will cover cover a comparison of agencies vs consultants.

Descriptions

First, let’s define the difference between the two types of providers.

Agencies are multi-person entities that are often focused on execution of marketing strategies. Agencies can range in side from just two people to hundreds, though most agencies in the digital marketing world have between 10-50 employees, with 50 employees being considered a large agency. An SEO agency or PPC agency will be very good at running campaigns, but they might not be strongest or most cost-effective for an audit and strategy. Many will “offer” this as an onramp or even “for free” to get you to sign an ongoing engagement, but do not fall for this.

Consultants are individuals who offer their services to clients and are often focused on identification and diagnosis of issues, and then the strategy to fix and move the company forward. Most consultants do not do services, as the rates-to-time ratio required by consultants to make ends meet are often not feasible with offering services. And, most consultants are not multi-disciplinary. An SEO consultant should be very good at diagnosing SEO issues and creating a strategy for your company to rank better in the SERPs, but they are not a developer and should not be the one writing the code to fix certain issues on your site.

Freelancers and consultants are not the same thing. We will cover this in a forthcoming “Consultant vs Freelancer” chapter.

Strategy vs execution

When determining an agency vs consultant, the real question comes down to what do you need them to do?

Diagnosis and strategy – consultant

As stated above, consultants are best on diagnosis and strategy, along with consulting with internal teams who are executing on the work. If you need to figure out your strategy for a channel and have teams internally who will execute on anything (or you have the ability to hire) the consultant recommends, then working with a consultant can be very effective for you.

Some of the most common things that companies hire consultants for are audits (SEO audits or PPC audits), strategies (such as marketing strategy), and ongoing consulting that may be needed.

Another upside to a consultant is that you will know exactly with whom you are working. Instead of hiring an entity and then having a “consultant” or glorified account manager assigned to you, you’re hiring a specific person with a specific background to do your diagnosis and strategy.

Doing things – agency (or freelancers)

Agencies on the other hand are great at doing things or operating multiple channels. If you need someone outside of a full time employee to operate a channel, or to be doing specific tasks consistently such as managing ad spend or writing content, then an agency or multiple freelancers (which has major challenges) is the right choice.

Agencies are set up to scale and to be able to handle multiple accounts at a time and not let quality slip. They often do this with an account or project manager who is the main point of contact who then works with internal “doers”, often called Analysts or Specialists, to do the things for your company.

At the end of the day, an agency’s results for your company are what matters. If they’re getting it done and your results are good, it doesn’t really matter who the analysts or specialists are, though the best agencies will bring them into meetings to get them experience speaking with clients like yourself and so that they can answer in-depth questions that account and project managers are not equipped to hire.

I’ll end this section by saying that it is not uncommon for companies to use both consultants and agencies even for the same channel. They can complement each other well and give you multiple perspectives which helps in the pursuit of truth and finding the things that will work.

Just remember – consultants are usually best for strategy whereas agencies are best for execution.

Pros and cons

As with anything, there are pros and cons to both consultants and agencies.

Consultant pros

Consultants are experts in one channel. While this can also be a con, it is a HUGE pro if you need deep expertise in that channel and the right strategy put together the first time. They’re true subject matter experts.

Consultants have deep experience working with clients to not only help them navigate challenges with the specific issue (channel/whatever the consultant consults on), but also with managing issues internally and helping their point of contact actually get things done. This is often why a consultant is retained when the company has an agency as well.

Third, you know exactly who you are hiring when you hire a consultant. You know their name, their background, and what to expect from them. This usually does not happen with an agency, as you’ll be assigned the account or project manager or team that has availability.

And fourth, consultants will often work on shorter engagements than agencies. Most agencies make their margin by hiring juniors and retaining clients for a long period of time, because onboarding and front-loading a lot of work is costly. Consultants, on the other hand, can usually onboard you much faster and can work faster because they’re more agile (no or low operational overhead).

Consultant Cons

And here are some of the potential cons (they are not all real cons)

Consultants are most often experts in just one channel, thus if you have multiple channel needs then you will need multiple consultants.

Consultants are also best on strategy, as we’ve also discussed. If you use a consultant for your strategy, you will still need to hire an agency for the execution if you do not have teams internally to do the work.

Consultants also tend to cost more per hour than agencies, because the work is more knowledge work and doesn’t fit neatly into a set of tasks. Consultants also have additional overhead for themselves, and thus charge more per hour for their high value work than agencies charge.

Finally, consultants (and freelancers) are just one person. There is a chance they’ll burn out or get hit by a bus, but more likely they’ll take some time off and you may get frustrated that they’re out. Agency employees take vacations and time off of course, but they have a team supporting them. You won’t be left out in the cold without a team when you hire an agency; this could happen with a consultant.

Agency pros and cons

Agencies of course also have their pros and cons.

Agency pros

There are quite a few pros when working with an agency.

First, you basically get a marketing team for the price of one or two full time in-house hires. Of course this depends on the channels you need, but hiring an agency can actually be quite cost effective for this reason.

Second, you’re hiring a company that should have its processes figured out. Often times consultants and freelancers are a bit scattershot and trying to figure out how they deliver value. The best agencies have figured out how they scale value and deliver results consistently. This isn’t to say that they don’t have issues, but they’re more likely to have fewer issues.

Third, some agencies have the opportunity for you to hand off multiple channels to them. True full service agencies can hand multiple marketing channels, development, design, content/copy, and more. Now, there are specialist agencies out there who are very good at one or two channels, so know ahead of time what the agency is good at that you could also hire them for. You should also know the additional channels or services you are considering and take into account if that agency can handle it or if you’ll need to hire fresh.

Agency cons

There are of course some cons to agencies.

First, when you hire an agency you’re not picking who you’re specifically working with. You get assigned a project/account manager and they have a team supporting them. What’s important when hiring an agency is asking for proven results, not necessarily knowing who will be working on your account day to day.

Second, there is additional overhead for an account/project manager and there can be inefficiencies with meetings etc about your account. Factor this in, but also recognize that hiring an agency can still be a lot cheaper, easier, and more effective than hiring someone full time. Also, to keep your agency on task you should be aware that usually the biggest time sink and cause of meetings is the client asking for them or asking for new things that require strategy and the team getting on the same page.

Third, agencies will often want you to commit for the longer term. Of course, this makes sense when you consider that marketing (or any sort of ongoing service) takes time, and when you hire someone full time you’re hiring them for the long haul. You should be putting as much time into hiring an agency as you do someone full time.

What is right for me?

The right type of provider for you depends on your needs.

If you need strategy/diagnosis/consulting, a consultant is probably your best bet.

If you need the work to be executed on, an agency is probably the way to go.

If you’re hiring, get started here on Credo.

This page last updated on July 7, 2020 by John Doherty