Gini Dietrich

Agency Specialization is Necessary for Success

By: Gini Dietrich | January 26, 2016 | 

Agency Specialization is Necessary for SuccessBy Gini Dietrich

Yesterday morning, I was doing some research about the topic for this afternoon’s guest blog topic and came across an AdAge article from last year titled, Specialization Was a Mistake: How Agencies Can Restructure for the Future.

It’s been rolling around in my head since then and I brought up agency specialization as a topic for discussion when we recorded Inside PR 4.34 yesterday (to air later this week).

Here’s the thing: I don’t think agency specialization is a mistake. Specialization that turns agencies into verticals is a mistake (social agency, content agency SEO agency), but being really good at one or two or three things is never a mistake.

Find Your Niche

When you start a business, you hear things such as, “cash is king” and “find your niche.” If you don’t follow those two mantras, you find out very quickly why you should have listened.

To try to be all things to all people is a gigantic mistake because that is impossible.

Thought, as you start your agency, you take on any business you can because, well, paycheck. But as you grow, you find the work that you not only love doing, but are really good at and can create process around so it can evolve as your agency grows.

That is agency specialization. And it is a necessity.

Agency Specialization Around a Vertical

That said, I was at dinner with a group of friends (the nerd dinner, as Mr. D. calls it) about six years ago. A friend had started his agency and they worked only on social media.

That’s it. No content. No media relations. No paid media. No events. No crisis work. No design. Nothing else. They handled only social media for clients.

Want a new Facebook page? They can do that. Want someone to tweet for you? They can do that. Trying to understand LinkedIn? No need. They can do it for you.

I remember telling him what a huge mistake he was making—to have only that one offering—but he smiled at me, showed me his profit and loss statement, and I shut my mouth.

In only a year of being open, he was making more money than I had in the previous two years combined. He caught the social media wave and was riding it. Big time.

Fast forward to today and he’s gone out of business. I’m sure you can imagine why. No one hires people just to handle their social media accounts anymore. And he never evolved to offer other services.

That kind of agency specialization is bad. Very, very bad.

But agency specialization around a discipline or, more importantly, a vertical? Not a bad idea at all.

Specialization Does Not Equate Silos

The aforementioned article gives a quick history lesson about how we got here that is important to read:

We went wrong around the year 2000. Until that time, advertising and marketing were quite simple. Even with media agencies spun off in the 1970s and the advent of planning in the 1960s, we had a structure that made total sense. We had PR agencies, media agencies, retail agencies and creative agencies. Around this time, a large client in one market with a couple of brands might have employed a handful of agencies, each with clearly defined roles.

When interactive agencies came along around the turn of the millennium, we did what we’d always done and created a new vertical. A few years later, our muscle memory mindlessly replicated the same additive process with any new form of marketing that came along—from SEO to social media, from content marketing to mobile advertising—and created a silo’d new vertical to act alone.

Of course, this is something we discuss in great detail in Marketing in the Round and I believe very strongly that creating silos like this is the very wrong thing to do, no matter if it’s an agency or inside a large corporation.

But that’s different than agency specialization. To me, a specialized agency is one that works only in medical devices or in agriculture or in software as a service.

Or one that does communications or advertising or web development and design.

Those disciplines are different enough that you can specialize in them—and should specialize—because it’d be far too expensive to bring all of that into one agency (unless, of course, you’re a global agency that is owned by a parent company).

An agency that does only one tactic isn’t a specialized agency; it’s a silo’d agency. It’s not a strategic agency; it’s a tactical one. And that is a big mistake.

image credit: shutterstock

About Gini Dietrich

Gini Dietrich is the founder and CEO of Arment Dietrich, an integrated marketing communications firm. She is the author of Spin Sucks, co-author of Marketing in the Round, and co-host of Inside PR. She also is the lead blogger at Spin Sucks and is the founder of Spin Sucks Pro. Join the Spin Sucks   community!

  • Wow, so much of this hits home. When we started SYDCON, we too took what business we could to grow. As we grew more confident and profitable we became more picky. Then as the economy started getting shaky and more things were going digital we rolled with the punches, kept up on the latest tech and just kept going.

    Fast forward to today, and we have long since lost the “”web development” from our name and focus on custom software solutions (albeit web based), but way beyond just “websites”. We can work in any industry and provide solutions to a plethora of problems.

    So, bottom line is we have a “niche” but that niche “custom software solutions” is immersed in a wide array of industries and technologies. A niche is key, so long as it is broad reaching is our experience.

    • And do you find you can be picky about your clients and charge a premium because of your expertise?

      • I would say yes, now at this stage we can. We have learned which potential clients come with red flags. We have learned what will potentially be a waste of time.

        • And, that, my friends, comes with specialization.

        • And that, my friends, comes with specialization.

          • Sarah Lafferty

            Can I have a “Hallelujah”? (ha ha ha!!!)

          • Hallelujah!

  • Travis Peterson

    Great post. Seems like with a changing marketplace there’s a tricky balance between being overly specialized vs. being too broadly positioned. Too much specificity and you become a commodity…too little specialization and the perception is you’re an expert in nothing.

    What we’ve found is if we can convince prospects and clients that we are strategists first – creating solutions that drive their bottom line, and producers second, we get a follow up meeting. At that point we’re in the driver’s seat to provide our own service answers that fit, and help the client find the other answers we don’t provide.

    • I have the advantage of knowing you and I would say you are specialized. You do really good work in politics and in the legal field. I imagine you can grow both of those verticals fairly well.

  • Sarah Lafferty

    TOTALLY AGREE WITH ALL OF IT! We specialise in enterprise software and are becoming a very trusted advisor in that space. We can genuinely help our clients because we understand the intricacies of the industry, especially who the real influencers are, how the buying cycle work and how the overall business model works. This gives us huge credibility and means we have a much lower cost of sale, we generally win more, we can choose our clients and we have a MUCH lower cost-to-serve because we don’t have to constantly ramp up. Also, we can do so much more than just ‘traditional PR’ – we can even help with things ranging slightly off-piste like recruitment to ‘high-value’ activities like CEO ghostwriting and strategic consulting. Deciding to specialise was the best business decision we ever made.

  • Aly

    You know I’m a believer in specialization. UPR went deep into BtoB tech, then even more niche with sales & marketing tech & security. We could kill it in those verticals and had the data to prove it. It wasn’t an overnight strategy though, it evolved. I’ll add the caveat (and curious if you agree Gini) that when you’re just starting out, it’s a good idea to test a lot of markets, unless you are striking out on your own with specific clients in a specific vertical and have a big enough network to get where you want to go fast. If you don’t, diversification isn’t a bad thing. You may think you’re all about consumer tech but learn you love hospitality. Plus, it’s nice having cash flow in the early days while you establish your speciality.

    One other thing I’ll add is that if you are going to diversify in verticals, have people on your team who actually have done PR in those verticals and have relationships there. Otherwise you may find your agency flopping in 10 verticals instead of succeeding in 1.

    • I do agree with you. I have a coaching client who started her business in August and, while she has expertise in a certain market, she’s bringing on some smaller clients to help her achieve her cash flow targets. And she’s killing it!

  • howiegoldfarb

    Yes you can be a one trick pony if you are the best at what you do.
    Like my sheep massage business. We massage wool better than anyone on earh and command a higher premium for massaging wool.

    • I have no words.

    • Aly


      • Shiatsu? Thai? Reflexology? Do sheep get to customize massage for their preferences? Do your massage tables have little holes in them so their legs can stick through, for a more natural sheep posture? Do you find some sheep have body image problems once they are shaved? All the questions!

        • I give up.

        • Hahaha

        • howiegoldfarb

          We use an ancient Taoist method with Sheep Chakra stones while they stand. The room is always kept at 73F with rose and hibiscus infusion misting.

    • Women do get wooly.

      • You’d better watch it, Friedensen!

      • howiegoldfarb

        i have been to 15 dead shows and i have been to chicago so i know.

  • As usual Gini makes sense.