Marketing a Startup vs. Marketing an Agency

This was originally published in Adweek, albeit with a much longer title

So, you’re considering taking on a marketing leadership role, perhaps as a chief marketing officer. You see two potential paths: rising the ladder at an agency or taking on a startup job. Each route has its peaks and pitfalls, and as someone who has held both kinds of roles, here is what both are really like.

Allow a few caveats before reading further, as my experience is hardly universal. My responsibilities at both agencies and startups have revolved primarily around business-to-business (B2B) marketing to reach business-to-consumer (B2C) brands. Still, having compared notes with scores of other CMOs, some recurring themes emerge. These are just a handful.

Departmental structure

At an agency, when making a new hire (especially in marketing), operations executives calculate what that will do for the revenue per headcount and the margins.

At a startup, when making a new hire, the executive team and investors calculate what that will do for the burn rate, which is how fast the company spends money. Startups seek to survive first and thrive later.

At an agency, the marketing department is one of the smallest. The same is true at startups.

Buyers versus sellers

Agencies are buyers and sellers. Brands consider agencies sellers, but tech companies and publishers consider agencies buyers. It’s relatively easy for agencies to call up tech vendors or publishers and ask to co-host an event, release co-branded whitepapers or book lunch and learn to educate the team.

Startups don’t have that luxury, barring the rare few that become household names. Most startups are considered sellers. When startups receive an email with the subject “Invitation,” it’s usually an invitation to pay for something.

Public relations

Agency executives are often invited to speak at events, either because of the leader’s expertise or because agencies are considered buyers. Startups have occasional opportunities to take part in events based on personal connections, but most event organizers treat sellers as pariahs. Usually when vendor-side executives are onstage it’s because their companies are paying for the slot.

At agencies, a couple of press mentions in known publications will impress the executive team, and some staff will appreciate seeing their firm recognized. By the next month, though, everyone will wonder when the next hit is coming. At startups, a couple of press mentions in well-known outlets will be featured prominently and used in every sales touchpoint for months or years. Startups crave validation to appeal to prospects, but more importantly to pacify investors.

Acquisition versus retention

At agencies, the primary goal is to retain clients through the work and service. Pitches for new business tie up a lot of resources, but there are far more resources put into account management than business development. At startups, the primary goal is to acquire customers through the strength of the product (which often includes hooks to refer customers) and cost-effective marketing. The acronym CAC (customer acquisition cost) comes up constantly. One seldom asks about CRC (customer retention cost).

From a startup perspective, agency gigs look cushy and relatively stable. From an agency perspective, startup gigs look like they’ll net executives a windfall as soon as they get acquired.

The grass does look greener elsewhere, whichever job you have. But another thing both types of jobs have in common is that CMO roles in either type of business are the first positions to get cut when a company hits a rough patch.

Still, with both types of jobs, there is so much to love. If you love the people you’re working with, the mission that you’ve helped craft or propagate, the product or projects your firm is working on or that rush when one of your experiments pays off, then it can feel like your true calling. You’ll feel like you can market anything. And you’ll find that the grass is greenest right under your feet.