By Jesse Ocean  |   16th July 18


Internet Marketing Agencies Are Adapting to the Current Business Climate

Internet marketing agencies continue to grow, despite some increasing challenges. The job of helping clients get business online has become more complicated as the years go by, but there are more opportunities than ever.

For years internet marketing was primarily dominated by organic search. People were hearing about how significant organic search engine traffic was to their overall business health, so businesses invested heavily in getting their fair share.

The rise of social media networks taught businesses the need to diversify. They found that their internet marketing agency insisted on promoting across every platform so that the company didn’t have all of its eggs in one basket. For firms, the job of adequately servicing clients became tougher. Since there are so many areas that require expertise in digital marketing, many agencies have had to add additional workers to bulk up their competency.

Agencies Are Experiencing Troubles with Time Management

As internet marketing agencies expand to include interdisciplinary departments, their management requirements become more burdensome. The need for dedicated project managers and skilled department heads requires additional expenses, which could show a trend towards higher prices across the board.

Agencies can streamline their operations using cloud-based services that manage payroll and remote workers. Still, the added requirements for project management across a variety of networks and platforms means they must protect their downside. A majority of firms recently surveyed suggested that that was what they were doing. They are passing along higher costs in the form of setup fees to many of their customers.

Setup Fees Help Agencies Recover Expenses

One way that agencies are recouping higher expenses is by charging new customers a setup fee. For products like Facebook Ad Services and PPC, it’s a necessity. Setting up paid ads can take many hours, even with the help of a program. The setup costs defray the expense of the actual hours put in by workers to initiate campaigns.

Marketing Costs Are up for New Client Expansion

As an internet marketing agency, the main goal is to achieve growth, which means acquiring new customers. For most of them, they are using paid campaigns, which adds to their overall operating costs. Marketing costs tend to be constant so they won’t lighten up as time goes on. Businesses need to have consistent campaigns that run often enough to bring in fresh customers, who are their lifeblood. Setup fees are another way for these firms to pay for the upfront marketing expenses. Digital marketing allows businesses to fight for clients across the globe, which means the potential reach of ads is more expensive but more efficient.

The good news is that there is growth in nearly every vertical as more traditional businesses increase their digital ad spending. The more substantial amounts coming in from each sector represents a more significant pie for the agencies competing for business. Most agencies are showing high retention of clients, so offsetting initial customer acquisition expenses remains a mystery.

Product Mixes Are Stable

Most internet marketing agencies offer similar services centred around organic SEO, content marketing, paid search advertising, digital ads, and social media management. As SEO has become somewhat less reliable in recent years, the push for content marketing and social media management is making up the slack. The big area of growth is managing paid ad campaigns. Systems like Facebook Ads are proving reliable for delivering clicks and conversions.

  • Content marketing – Includes services like blog post creation and distribution.

Full-Service Firms Offer Everything

  • Social media management – This is the daily operations related to sharing through social networks like Instagram, Facebook, and Twitter.
  • Digital Ad Management – Servicing ads on platforms like Facebook
  • SEO – Handling on-page and off-page search engine optimisations for client’s main websites
  • Web and App Development – Actually building and managing the customer’s site or app.

The firm can handle every single one of these jobs for clients who are willing to pay the monthly service fees. Digital Ad Management is catching on with companies and clients because it allows for quick results. Organic SEO and content marketing involve a more extended setup before the returns come in. Paid Ads are the fast way to test ad creatives and conversion rates and remain a top choice for marketing firms.

The move towards Digital Ads is not slowing down. Many internet marketing agencies are charging flat rates instead of percentages for management. Clients can see fantastic results faster than if they were patiently building search engine marketing campaigns. This instant gratification comes with the price of a regular budget, but the predictability makes justifying the costs more manageable.

Profitable Campaigns Keep Businesses Coming Back to More

Agencies that are offering excellent service are having no problems operating in the current environment. They have been experts at passing on additional expenses to clients while keeping those customers happy. The key has been outstanding service that produces successful campaigns. Gaining new clients still requires a substantial marketing budget. Most businesses to business customers do not make “word of mouth” recommendations for marketing companies, no matter how happy they might be about the service. That means paid advertising will comprise the bulk of the efforts to acquire new business.

Client retention is the best way to keep profits high. Once an agency lands a customer, it’s always in its best interests to keep that customer coming back for more. That way, they maximize profits while reducing their overall costs for finding new business. Either way, eventually customers will leave for greener pastures. As long as the churn rate is reasonable, these firms should have relatively few problems paying for marketing.

If the market continues to heat up, some well-funded companies may decide to forego setup fees or lower prices to gain more market share. Internet marketing agencies have been relatively immune from this type of race to the bottom primarily because much of their work requires high skill levels and is resource intensive. As automation continues to become a more integral part of the practice, that could change.

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