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Performance Marketing: The Next Evolution of Digital Agencies

The relationship between businesses and digital agencies is one that’s transformed just as rapidly as the industry itself. So much so, that there are now several different types of agencies companies can choose from.

I had a great conversation on Digital. Done Right. about the revolution of the digital agency and how a shift in philosophy has led me to rebrand OCT Performance Marketing to better assist our clients in meeting business goals.

The discussion traversed through the pros and cons of each agency type and following along the progression, it’s plain to see that moving forward, our new approach is bound to yield better results.

Integrated Agency

An integrated agency works exactly how it sounds. A business has gaps in their workflow, they reach out to an agency, and an outside partner integrates into the existing marketing team to fill the bandwidth.

Maybe it’s blog writing or some web help, digital banners, graphic design – wherever they need help.

It makes sense. Now that digital marketing has expanded far broader than just advertising, it’s very hard for a single company to have someone in house who can perform all those different functions.

Where an integrated agency plugs into the organization varies depending on needs and in-house capabilities. Internal marketing teams tend to be better at some things than others. Social media, for example, is brought in house for obvious reasons, as full-time employees are more responsive and more in tune with the brand.

The advantage to an integrated agency is that it allows businesses to buy the exact function they need. To be super specific and only pay for one explicit role.

But the downside is that integration in theory doesn’t always match up with integration in practice. In my experience, outside talent tends to stay on the “outside” and no amount of meetings, updates and phone calls can replace being there in the office with the rest of the team. Project management systems don’t replicate water cooler talk and sometimes it’s easier to pop over to a team member’s desk to hash out a problem. You can’t do that when part of the process is now being handled by your integrated partner offsite.

I’ve found that integrated partnerships wind up going one of two ways. They crash and burn when communication issues lead to a performance drop or the business hires the partner away from the agency.

Specialist Agency

Here’s another approach. Instead of integrating a person to cover a function, you go a step further and outsource to a specialist agency.

Sure, you certainly pay a little more to tap into the specialization but now you’re getting a team of wizards instead of just one person. It works and in terms of optimizing each facet of your digital strategy, you’re getting quality output across the board.

The problem is that working with specialists means you might have to hire four or five different agencies to cover every function. With so many sailors on board, who is going to steer the ship?

Without a central project manager capable of guiding all the different agencies towards the same business goal, you wind up with a lot of great pieces that don’t necessarily converge into the whole you were hoping to achieve.

And face it, even when agencies are able to partner smoothly with excellent synergy, you wind up in a situation where companies need to make three or four different phone calls when they’d rather just make one.


I’ll keep this one short and sweet.

Consultants are incredibly good at seeing the big picture and employing high-level thinking to lead the company in the right direction long-term.

If what you need is a blueprint to success, a consultancy can provide that for you.

However, this blueprint loses its value entirely if you don’t have a team that can execute or if you’ve run out of budget to build what the blueprint outlines.

In House

There’s an interesting pendulum swing we see time and time again with big businesses, digital agencies and in-house marketing teams.

It goes something like this:

  1. Someone in upper management sees an easy way to cut costs by firing their digital agency and hiring full-time employees to cover digital functions in house.
  2. Up front savings look great and it’s all smiles.
  3. 18-24 months down the road performance indicators plummet. Fewer leads. Lower quality leads. Fewer conversions. Lost revenue.
  4. Seek outside help from an agency to fix digital – at least until the next CMO decides to take another whack and start over with step one.

Here’s why this happens:

It’s easy to see the up-front benefits of in-house digital marketing (lower hourly rates, better communication, intimate brand knowledge, synergy) but hard to see the long-term effects.

And the primary reason why agencies tend to bring home better results comes down to organizational structure. Internal teams tend to separate into pods that clock in, “do their job” and go home. There’s no thought leader and rarely an expert who understands how all the pieces fit together.

Agencies are proactive. Looking around the corner to see what’s coming next. Agencies are agile where large organizations aren’t. Agencies must innovate and produce to stay alive.

Performance Agency

Finally, we’ll look at the newest iteration of digital agencies. The performance agency.

For a long time now, digital agencies have measured success on KPI such as the number of impressions we serve, CPC, how much traffic we drove to the website, how many new leads we brought in, and so on.

And all this is good stuff.

But we’re at a time and a place where we now need to go a step further. To stop measuring success using digital marketing metrics and to start looking at the real impact digital is making on revenue and the bottom line.

Instead of being a vendor selling clicks, a performance agency is a business partner. Imagine a consultancy that also has the tools and manpower to build what’s on the blueprint.

A performance agency starts with business strategy and then converts it into marketing strategy, not just during the discovery phase but throughout the relationship. A performance agency also pays attention to the client’s industry outside the realm of digital marketing, to help executive make strategic decisions.

This is a real shift from how the setup has worked in the past, where the agency’s only job is to optimize digital.

Now we’re optimizing digital but going beyond focusing on lead volume alone. Now we’re asking if these leads are converting. Now we’re asking how we can transform converted leads into lifetime customers. We’re looking at margins. We’re measuring revenue. We’re tracking growth and seeking out opportunities to scale.

OCT Performance Marketing

Now that we’ve hit the crescendo, I can tell you how awesome my agency is, haha – and basically, we’re just going to continue on with the theme from the section above.

At OCT, you’ll hear us talk a lot about insights. Less about dashboards and more about how data is connected and how analytics can help a client reach their business objectives. Our goal isn’t just to drop new leads into the top of the sales funnel but to help move a potential customer all the way through to the end.

Here are three major differentiators that describe how we diverge philosophically from the pack:

  • Our focus isn’t on advertising but on marketing as part of business strategy. We integrate business strategy with marketing to influence advertising, not the other way round.
  • We look around corners to give clients a competitive advantage. We’re laser focused on moving beyond the native tools available to everyone and bringing new technology to market. This isn’t something agencies typically do.
  • We concentrate less on looking pretty and more on driving real business results. This is quite different from most agencies who emphasize the delivery of aesthetically pleasing campaigns. There’s a balance here but our overarching belief is to avoid overthinking creative and rely on more basic designs that drive more, better quality leads.

Our goal at OCT Performance Marketing Agency is to help businesses achieve their goals. Whether they want to decrease their headcount by outsourcing more of their marketing or keep everything in house and bring us in for support, training and necessary tools.

Tune in to the podcast here.

Listen to the full Digital Done Right podcast for a more in depth look at the things that go into running a performance marketing agency, thoughts on the future of boutique agencies, agency pricing strategy and how AI plays into optimization.

See what sound digital strategy and data-backed decision making can do for your business.

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