4 Reasons a Startup Should Not Hire an Advertising Agency...Yet

I realize this article is going to make enemies within the industry in which I’ve worked for the majority of my career. That’s okay. 

A couple of words of explanation. In this article, I’m not saying agencies are terrible by any means, although it has always amused me how many people in advertising seek to say they do something other than advertising. I can’t tell you how many meetings I’ve sat in, drinking copious amounts of Diet Coke and discussing how we are so much more than just an agency. Although, to be honest, that was rarely a true statement. 

There are four key reasons why hiring an agency for a start up is problematic:

1. Most agencies don’t do “minimal viable.” 

If you’ve read Lean Startup no doubt you realize the startup world is all about “minimal.” First and foremost, an entrepreneur thinks in terms of minimal viable product—that is to say, creating the simplest product that would effectively fulfill a core objective with no fluff and no muss. 

However, agencies think in terms of “big”: big ideas, big impact, big budgets and big campaigns. Trying to mix “lean” with “big” leads to frustration and disappointment. While the agency is thinking in terms of a Big Idea the startup, depending on the stage it is in, is often focusing on surviving till they get to the next stage. 

2. They don’t have skin in the game. 

The advertising industry has become deeply commoditized. It’s a time- and material-driven business. As an industry that gets paid for each hour it works, there isn’t a motivation to be efficient. I know, it’s hard for those of us in the business to hear, but the truth is the longer it takes us to complete tasks, the more money we make. I’m not saying we intentionally drag our feet, I’m just saying we are not highly motivated to do only what is absolutely needed. Because of that it’s in our nature to “go big.” We talk about the Big Ideas, campaigns and making a splash. We are taught how to grow an account, meaning convincing them to do more and more work. As a matter of fact, often account managers get a negative employee review if their accounts have not spent more this year than last. 

3. Their pace is inconsistent with startups. 

It’s not that agencies are slow. Agencies are designed to operate at the pace of a typical client. A typical client is an established company that is seeking to either move a current ad campaign forward or create a new one. If it takes a few months to go through a discovery and then a few more to move into a strategic process, their client will not cease to exist. However, to a pre-revenue startup, a few months could mean an end to the dream. 

4. Pivoting isn’t their strength. 

Agencies are process driven. They often use their process in a pitch as a differentiator. They train their staff in the process. They hire project or traffic managers to make sure the process is followed. But a pre-revenue startup is in constant flux, looking for the sweet spot that will ignite growth. This is an uncomfortable situation for an ad agency. 

So, what should a startup do? 

First, be intensely aware of the stage your startup is in. As a startup moves from pre-revenue to revenue to rapid scaling to sustained growth each of these phases requires differing levels of marketing support and should be approached appropriately. 

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