Roles and Responsibilities
Here we show the roles and responsibilities under these strategies:
We introduced a factor for “marketing effectiveness”. This means the extent to which the performance of the marketing channel can be maximised, all other things being equal. Below we show marketing effectiveness assumptions we made for a $10K (ie relatively small) marketing campaign.
We also assumed that as marketing spend increases, so would the complexity of the campaign – and hence the marketing effectiveness above would reduce. We fit exponential decay curves to measure this effect. As a campaign becomes more complex one person or small teams become less able to manage the complexity. The Agency would always stay at 100% effectiveness as complexity increases – because it can allocate more staff (and of course become more expensive) to combat the growing complexity.
If it is purely a numbers game – and the obvious takeout is that some teams are more efficient than others – but if we look purely at the resources involved – the more expensive a campaign becomes, the more complex it becomes. Therefore it becomes less efficiently managed by small teams.
The Results again
The graphs below show the results of our modelling.
- For cheap campaigns – the expected returns are not high enough for the cost of larger agencies to be justified.
- If a campaign is not expected to have a high ROI (maybe it is just an awareness campaign, or maybe the creative is just not that great, or the target audience is wrong) <- whatever the reason, the lower the acheiveable ROI of a campaign, the less agencies are able to utilise their competitive advantage of managing complexity and maintaining full marketing effectiveness. Small teams/one person operations will outperform in these circumstances.
- For large, expensive, complex campaigns, agencies perform better. As a rough guide over $150K.
- For campaigns that are expected to perform really well – agencies are better positioned to exploit this performance to its fullest extent. Obviously this can be hard to tell in advance – but if you happen to have a high performing campaign, an agency will get more out of it.
A little about TRIBALISM – how we are different
Compared to the above scenarios we are a hybrid consultancy. For smaller/medium sized campaigns, hire us for complete digital management. For the biggest campaigns hire us for tactical channel management – but for complete digital management of very large campaigns – go with the biggest agencies, not us. Our analysis above shows that this is the optimal strategy.
And his is the sort of opinion you’ll get from us. We’re not going to recommend something that is not in your best interests.
We are great at what we do and the only way to show that is by giving excellent advice. It is our opinion that it is all about content, creativity and strategy – but underpinning all of these is measurement. Our tagline is – harnessing data for smarter digital management – we are industry experts in marketing analytics, so you can rest assured working with us that your digital marketing will have an industry leading measurement platform to expand off.
Have a great day,