The True Costs of Hiring the Wrong Digital Marketing Agency

Finding the Right Client-Agency Fit Series — Part 2

Digital Marketing
By Bryan Phelps | April 4, 2024 | 17 min read

Join in on the conversation about Client-Agency Fit here on LinkedIn

Dealing with FOMO (fear of missing out) is never fun. In the client-agency experience, the fear can be real—especially if you partner with the wrong digital marketing agency. What are the opportunity costs? In other words, what are you currently getting versus what you should be getting?

So in part two of this client-agency fit series, I’m here to shed light on this critical perspective and to help you know if you’re investing your money in the right agency and not missing out on lucrative opportunities.

I share my insights, based on a 15+ year run as founder and CEO of a digital marketing agency (an experience that’s 3x longer than most other agencies). I’ve even asked agency hoppers to share their first-hand experiences. They have some interesting things to say!

Table of Contents

The 4 Costs of Hiring the Wrong Agency [From the Agency Hoppers Themselves]

Don't rush hiring a digital marketing agency

Companies invest a lot in selecting and working with agencies, and it’s essential to understand the costs of the wrong partnership. In addition to my 15+ years of experience as CEO of a digital marketing agency and being a client myself, I tapped into other industry experts, HARO, and social media surveys to pull these insights from professionals who have experienced their fair share of agency hopping.

This first-hand information will help you better assess your current or prospective agency before the costs become too high.

1. Time Is of the Essence

Feature - Time Is of the Essence
What the Research Says…

46.7% of our survey respondents expressed that time was the most significant cost of hiring the wrong agency.

Companies invest much time selecting and working with agencies. On average, 26.7% of our survey respondents have used three different marketing agencies. When you hire the wrong agency, the time you invest in a campaign doubles—the first half is the time you spend with the current/wrong agency and the latter is the time you spend with the future/new agency.

For reference, my sales team reports that, on average, it takes 40-50 days to contract and onboard a new client. Then there’s the additional time required for any agency to get up to speed on a client’s brand—learning things like competition, unique selling proposition, products/services, and customers.

Connor Brown
After School Finance

Whenever we change our agency, the hassle and the stress of handing over documents and ongoing projects is really time-consuming and, of course, tiring. It is also disappointing that we could not get the result that we wanted right away, but it’s okay because there’s no instant way to success.

There is a hidden cost in switching to a marketing agency, which is your time cost because, with a new marketing agency, you must spend time pitching them on your marketing needs, target audience, and 4P’s of marketing.

James Lazar

No matter how good the agency’s onboarding process is, that is still a very time-consuming process.

Kathleen Ahmmed
Kathleen Ahmmed
USCar Junker

Switching agencies for us was difficult because while it was frustrating to see the time and money wasted, it was especially hard to come to terms with the fact that we were back to square one after what we initially expected would be a productive partnership.

2. Results Are at Risk When You Reset the Clock

feature - Results Are at Risk
What the Research Says…

Our research revealed that time and results are often inextricably linked.

A long-term, trustworthy partnership is crucial to positive results. For context, let’s take a look at some results my long-term clients have achieved over the years:

The table shows that the percentage increase in organic traffic grows the longer clients stay with us. This trend doesn’t mean partnering with an agency provides these exact results. It does, however, illustrate the lucrative results that can bloom from having a long-term relationship with the right agency.

Think Long-Term

SEO is a long-term strategy that merits consistent effort to win results. For more context, here’s how long our respondents said it takes to earn bottom-line results:

Timeframe for SEO Success Insights from Respondents

Regarding enterprise companies, testing new ideas and implementing strategies often takes significantly longer than usual. Your industry’s competitiveness is also a factor.

While the actual time to increase your ranking will vary, here’s a general ballpark on how long it takes to see results with properly applied SEO techniques.

How Long It Takes to See Results from SEO

1-3 months: Site improvements like technical SEO and keyword optimization help Google index your site and compare your rankings to others’ based on similar keywords. You might see moderate movement, but other sites that have been around longer will rank higher in search results.

3-6 months: You’ll start to see positive movement in search result rankings. By now, Google will recognize your site and notice you’re adding high-quality, accurate, and relevant content.

6-12 months: As early results continue to build traffic and new content covers a broader range of relevant keywords, you’ll likely see more significant results that impact your bottom line.

12+ months: Competitive keywords can continue to take 2-3 years to reach top search results. Many businesses build SEO into ongoing marketing expenses. It takes continuing maintenance and effort to dominate results and compete with other companies.

So when you’ve partnered with the wrong agency, you’re delaying the results required to move the needle.

3. The Costs Add Up

Even though our research participants didn’t choose money as the greatest opportunity cost, most, if not all of them, recognized money as a pain point in agency hopping.

Here are some critical costs in hiring and firing agencies:

  • Costs of Finding New Agencies: The time and money spent on research and resources during the agency search process
  • Onboarding Costs: This includes learning about the agency’s process, streamlining tools and resources between the parties, and discussing/negotiating contracts
  • Exit Costs: Breach of contract, cancellation, and sunk costs
  • Performance & Strategy Costs: Revenue losses due to performance and extra costs from having to do rework (e.g., site rebuild, strategy pivot)
feature - The Costs Add Up
What the Research Says…

6.7% of our respondents said money is the most significant cost of hiring the wrong agency.

What the Research Says…

When costs add up, it can make the agency-switching process discouraging. But as Kathleen Ahmmed points out, if you’re spending money on ensuring your team chooses the appropriate agency, then it’s worthwhile in the long run.

4. Morale Takes a Hit

Our research illustrates that the wrong agency can hurt your team’s morale. Partnering with an agency involves building relationships and trust. So if things aren’t working out, it doesn’t just hurt your budget, it hurts the entire team.

For example:

  • Your designated POC may feel their professional value is at risk. Being a POC comes with much pressure, and if the agency’s performance isn’t up to expectations, the POC’s reputation within the company may be on the line.
  • Investing time in an agency that isn’t a good fit is tiring. Check in on your team to see how the agency’s actions affect them. If the team is hurting, your bottom line likely is, too.
feature - Morale Takes a Hit
What the Research Says…

People tend to stay focused on the bottom line during significant transitions, yet they fail to look at those who are responsible for pushing that needle—the employees.

What the Research Says…

When Sherry Morgan from Petsolino noticed a lack of transparency with her agency, it hurt her team’s morale.

Evaluating Your Current Agency: Key Considerations

So, how do you know if your business and team are (or will be) casualties of the costs above? It’s all about understanding what you’re getting—and what you should be getting—from your agency.

Some questions to ask:

  • Does my agency possess the experience and expertise to strategize and execute our company’s goals and needs?
  • Depending on the marketing campaign results, do the outcomes justify the time and costs we’ve invested in them?
  • Does the agency’s perspective of good performance align with ours?

One way to assess these questions is to revisit the four forms of business value I discussed in my previous piece—Solving the Dilemma of Agency, In-House Team, Freelancer, or AI.

  1. Increase Revenue: Can your partner elevate your gross profit and increase revenue?
  2. Reduce cost: Can your partner help your team reduce costs in the long run?
  3. Cost avoidance: Will the time and money you invest in strategy yield the desired results?
  4. Insurance: Does your partner have a track record of staying current on the latest online marketing and search engine updates? Doing so helps your team mitigate online performance risks and declines.

Proper evaluation provides a sense of control over the company’s online performance and helps you feel confident that you’re pointing the business in the right direction. Remember—it’s not just the initial number of how much an agency, in-house team, or freelancer will cost. It’s about taking a step back and observing the opportunity costs of not hitting the mark.

Don’t Switch Impulsively

Yes, it’s essential to purposefully evaluate your agency to decide if they’re right for you. However, as mentioned earlier, digital marketing is a long-term strategy. It’s essential to avoid swift or impulsive decisions.

Friction Doesn’t Always Equal Failure

It’s tempting to run away at the first sign of trouble, but some friction points are a normal part of the client-agency partnership journey. As quoted above, getting the ball rolling and reaping results takes time. Leaving too soon could mean missing out on lucrative opportunities in the long run.

Additionally, some businesses are a bit more complex in the eyes of search engines. An agency that invests significant time and effort into ensuring your campaign succeeds is worth sticking with for the long haul.

But let’s talk about some challenges that come up. From my experience, I’ve seen these common friction points during the first 12 months and beyond from both sides—the agency and the client.

1–3 Months

  • Possible friction points: During the first three months, the client and agency learn each other’s communication and work styles to lay the groundwork for a successful partnership.
    • Communication issues. Many things must be communicated between both parties at the beginning of a partnership. For example, determining reporting cadence, who owns approvals during each stage of strategy/production, the types of data both sides will have shared access to, and preferred communication channels (e.g., email, Slack, Zoom).
    • Defining success. Solidifying a definition of a successful partnership and campaign can take some time. While you may have discussed these areas during the hiring and onboarding process, things may change once you hit the ground running. Campaign objectives can shift as a result.

3–6 Months

  • Possible friction points: These months bring challenges, mostly surrounding ROI KPIs.
    • Impatience due to ROI pressures from higher-ups. Digital marketing (especially SEO) is a long-term strategy, so a positive return may not happen at this point. However, POCs often feel pressured to prove to their leaders the ROI from the agency partnership.
    • Higher ROI is demanded from PPC campaigns. If you’re doing PPC, you’ll generally see results during this time. But you may want to see more of a return and desire to discuss new tactics.
    • POC changes may trigger communication roadblocks/issues. Our agency has seen client-side POC shifts during this time for various internal reasons. Thus, you might re-encounter the same friction points noted during months 1-3.

6–12 Months and beyond

  • Possible friction points: SEO results typically begin to manifest in this timeframe, but that doesn’t mean it’s all smooth sailing.
    • Dips in rankings due to algorithm and industry updates. Online algorithms and trends constantly shift. Performance dips may cause concerns.
    • Lack of substantial results. There’s often more than meets the eye. Poor performance merits a more careful evaluation to ensure all parties are on the same page with the proper expectations. Changes to strategy often result.
    • Reassessment of budgets. Depending on how the company’s priorities shift, there may be pivots in strategy.

Case Study: The Value a Strong Client/Agency Relationship Can Have On Your Bottom Line

A financial lending client has what Google considers YMYL (your money or your life) content. These site pages potentially impact a person’s happiness, health, financial stability, or safety.

Websites falling under YMYL often receive additional scrutiny from Google, manifesting in ranking and traffic drops. My client was no stranger to these declines amid the search engine’s algorithm updates.

You can see here that from July 2021 to October 2021, search engine rankings dropped by over 11K positions:

YML July 2021 to October 2021 search rankings

They also experienced some performance dips from July 2022 to February 2023, where rankings declined by over 17K positions.

YML performance dips

My client could have felt inclined to cancel during these declines. But they recognized SEO—especially in the YMYL space—ebbs and flows more than most. This mutual understanding allowed us to ideate and test new strategies together, enabling us to build trust and bounce back with positive results.

When you take a step back and examine the bigger picture, sometimes you find that despite the declines, quality strategies help you get closer to where you need to be, despite the changing tides SEO is known for.

Throughout our 10+ year relationship with this YMYL client, we’ve proactively managed online volatilities while leveraging conversions. If our client decided to part ways during those declines, they would have missed out on these results:

7 Red Flags It’s Time to Switch Agencies

So, how do you know when to move on from a bad agency relationship? It all comes down to using your best judgment. In my experience, if something feels off, it likely is.

I want to talk about red flags. If you experience more than one of these with your agency, it may be best to move on. The cost of agency hopping will be worth it in the long run.

1. The Agency Isn’t Willing to Learn Your Business

A good agency does its due diligence in conducting research and asking questions to understand your business better. They know this step will only elevate your strategy and results.

Not to mention, understanding your business demonstrates care. Without care, there isn’t a fulfilling long-term partnership in the works.

Justina Amerson
The agency doesn’t understand their business or take the time to understand their business. In conversation, this can be apparent through questions that are easily answered through the main pages of their website.
– Justina Amerson, Digital Marketing Director

2. Content Quality Isn’t Improving

Content is the butter to your SEO bread, to put it simply. It’s the fundamental tool that communicates and connects with your audience.

It takes time to finesse content. Suppose you’ve been with the agency for six months and the content still needs considerable edits (especially if you’ve repeatedly corrected the same mistakes). In that case, you may want to look for another agency.

Poor content might indicate that you need an agency with a higher skill set and a shallower learning curve.

3. The Agency Avoids Conflict

The wrong agency may only focus on vanity metrics to smooth over and avoid conversations regarding negative results. This avoidance tactic fails to get to the root problem of an issue and puts your bottom line on thin ice.

While conflict, vulnerability, and bad news are uncomfortable, a quality agency will set their egos aside and listen. More importantly, they’ll act upon the feedback to find tangible solutions.

4. The Agency is Disorganized

Consider that marketing teams “who document their strategy are 313% more likely to report success” than those who don’t.

Disorganized, red-flag agencies may:

  • Veer away from your key objectives and goals
  • Be consistently slow at responding to your questions and concerns
  • Be consistently late on deliverables
  • Lack follow-up after meetings

This red flag may feel like you’re babysitting the agency to ensure your campaign is on track.

Sam Cohen
The main reason we changed agencies was that our previous agency simply couldn’t keep up with the increasing demands of marketing campaigns. We were at a point where we were constantly asking them to deliver but they were not able to deliver.
–  Sam Cohen, MyFreeOCR
quote- The Agency is Disorganized

5. They Provide Poor-Quality Reports

You don’t receive regular reporting, or reports lack critical performance metrics. The reports may also include strategy recommendations that:

  • Are not backed by data
  • Do not align with your campaign objectives and metrics
  • Do not address the root cause of campaign issues
Storm Internet quote

6. The Agency Doesn’t Stay Current on Industry News

Change is one of the things that makes digital marketing challenging. Online trends and algorithms constantly shift. Google, in particular, is no stranger to releasing new search ranking updates.

Is your agency staying up to speed on the news and applying them to your strategy where appropriate? It’s a pivotal question that can make or break campaign results and competitive advantage.

Julie Snow
A client switched to Big Leap because their last agency kept blaming Google algorithm updates for lack of results. The agency wouldn’t take any responsibility for solving issues that actually were under their control. My client was tired of hearing excuse after excuse without offering any original ideas or solutions.
– Julie Snow, Content Strategist, Big Leap

7. There’s a Misalignment in Values

Your team values transparency and accountability, and you want an agency that shares those values. While initial conversations may put you at ease, your team will get a sense of how those values truly manifest over time.

In other words, how does the agency team embody those values? Do they walk the walk? Or, are there agency team members with egregious personalities that clash with your team?

An alignment in values and culture significantly enhances partnership quality and campaign performance.

Sam Cohen
I would put more emphasis on cultural fit when making hiring decisions. It’s important all team members share the same values and work ethic in order to create a cohesive team.
–  Sam Cohen, MyFreeOCR

Moving from One Agency to Another Without Losing Momentum

But of course, not all partnerships and circumstances will go as my case study above. After all, every agency and business is different.

Sometimes, things don’t work out as planned, and going back to square one isn’t ideal when time plays such a significant role in a campaign’s progress and success.

But no matter how time-consuming the agency hunt, onboarding, and campaign phases might be, sometimes the upheaval and transition are worth it—especially when your marketing performance and bottom line are in consistent decline.

So, if you find yourself in this position, these tips on hiring the right agency may help make the shift a little easier.

Anything related to project management should be shared right away (i.e., roadmaps, what’s been done, what’s liked/disliked, what needs to change). This conversation should happen before signing on so it’s a seamless transition without any downtime. Some agencies will sign a contract upon onboarding saying they will provide everything needed to a new agency should a change happen.
– James Straatman, Big Leap
Justina Amerson
One of our law firm clients worked with a previous agency for about 1-2 years. When their point of contact left and their movement plateaued, they decided to look elsewhere. The client became interested in Big Leap when our team walked through all the potential areas they can improve. They also felt more comfortable knowing we had the dev resources to help manage their website.
– Justina Amerson, Digital Marketing Director, Big Leap

The Agency Side: Signs It’s Time to Call It Quits with a Client

Occasionally, an agency may need to be the one to move on from a poor client relationship. Some of the red flags I discussed above also apply here, namely significant disorganization or misalignment in values.

Here are the signs an agency watches for in a partnership:

  • Unrealistic client expectations coupled with the unwillingness to adjust them even when presented with expertise or data
  • Refuses to implement recommendations or provide access for implementation
  • Won’t have discussions surrounding goals, strategy, and content
  • Not having the budget to support desired outcomes
  • Significant legal issues disrupting regular business operations
  • A sudden halt in invoice payments without communication

Did I Cover Everything?

If I’ve left out anything here, I’m all ears. In fact, I encourage you to reach out about any essential points I may have missed or any further questions you have.

The goal of this series is not simply to share insights but also to initiate a conversation. So, I encourage you to connect with me. What has been your experience?

Up Next…Part 3: Hiring and Onboarding a Digital Marketing Agency

Next, I use my 15+ years of experience to teach you how to hire and onboard a digital marketing agency. My team and I hope you can be a part of that conversation, too.

Leveraging 15+years of Digital marketing
  1. Solving the Dilemma of Agency, In-House Team, Freelancer, or AI
  2. The True Costs of Hiring the Wrong Digital Marketing Agency
  3. Hiring and Onboarding a Digital Marketing Agency
  4. The Inner Workings of a Powerful Client-Agency Relationship
  5. The Results of a Successful Marketing Partnership