Agency vs. Consultancy – What’s the difference and which is right for you?

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One of the things we love about our mission at Fox Consulting Group is pulling back the curtain on the industry itself, and helping our clients (and readers) make better marketing decisions by better understanding and utilizing their vendor relationships. Having worked on the client side, we’ve seen firsthand how confusing and opaque the agency side can be, and how it can feel like playing roulette when it comes to choosing the right partner.

In an industry where anyone can give themselves any title they want, it is understandable that the term “consultant” seems to have lost its original meaning, and is now a synonym for any contractor who wants to sound more elite than their competitors.

But here’s the thing – there is an actual definition, and we think it’s important!

All consultancies are agencies but not all agencies are consultancies

Agency - “An establishment engaged in doing business for another.”

By definition, an agency can specialize in virtually anything, and is a catch-all way to describe a company that does business with another business. You’re probably very familiar with this term, as “Ad Agency” has become the term most frequently used for a company that helps other companies create and launch campaigns and designs.

Consultancy - “An agency that gives professional advice or service”

As opposed to the catch-all label of “agency,” consultancies are all about the advice and expertise.

Thank you for bearing that incredibly boring trip down Merriam lane.

For us, there is a huge practical difference between a marketing agency and a marketing consultant: 

When you hire an agency, you enlist them to do marketing on behalf of your company. When you hire a consultant, you enlist them to bring advice and guidance, which you and your team use when executing your marketing.

So, when it comes time to reach out to the “agency world” for help, the first critical step is to answer the question: Do we want an expert team to develop and run our campaigns/projects? Or, do we want to run our own campaigns/projects based on the advice of experts?

The answer to that often comes down to the structure and resources available within your organization, and there is not one that’s better or worse than the other. 

  • If you have a fully staffed marketing team with project management, design, copywriting, and web development, you may not need a marketing agency to execute marketing on your behalf. But you may need an expert strategist to help define your strategy and workplan, to ensure your team’s efforts are set up for success. 
  • On the other hand, if you’re a one-person marketing department, you will likely need additional resources that can not only plan a strategy, but also provide the resources to execute the plan.

Can’t an agency just offer us consulting services?

Yes. At least they will tell you they can.

The reality is that the operations and economics of agencies and consultancies are very different. And we have seen many agencies that over-promise their strategic consulting capabilities, only to underdeliver and attempt to fall back on the upselling of tactical execution. (Real world scenario: A web development agency with 12 PHP developers and 2 consultants on staff cannot sustain the cost of payroll unless they are putting their developers to work. And by definition, a consulting engagement is *not* a development engagement). This type of "full service, beginning to end support" often turns the "consultant" role into more of an upfront sales person, rather than a true objective advisor.

Consultancies, on the other hand, maintain a staff of consultants and advisors who specialize in giving expert advice in the form of research, strategy, and coaching. When the time comes to execute a strategy, the consultancy will also provide guidance in handing off the work plan to the execution team.

So, there you have it – clear as mud, right?

If you're still not sure what you need, a diagram might help: 

Hire a consultant if: 

  • You have access to resources that can execute marketing programs, but aren’t sure you’re doing the right things.

Hire a marketing agency if: 

  • You have high confidence in *what you want to achieve*, but don’t have access to the resources needed.

Hire both if: 

  • You have a general inkling of what you may want to do, but don’t have the experience to establish a strategy or the resources to get it done.

Hire neither if: 

  • You know exactly where you want to go, and you have a team of experts to help you get there!

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SEMrush
About the Author
Justin is the owner/founder of Fox Consulting Group, and a lead consultant for strategy engagements.

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