The Fine Line Between Performance Marketing and Business Consulting
Whoever worked in performance marketing eventually came to realise that their job is not just about Google/Meta advertising. It starts simply: a client hires us to do Google Ads advertising for his webshop. At the beginning of our collaboration, we talk about goals, budget, and KPIs. Everything is simple, at least on paper.
But after a few weeks or months, the results are not as expected. So, the “witch hunt” starts to identify what went wrong. We analyze the data, spending hours of work to realize that our campaign is more than good, but there is a problem with the client’s webshop, or his prices are not competitive in the market. In other words, it is a problem on the clients’ side, not ours.
And there is a real issue. To explain what is going on, we need to do a free business consultation. It includes UX analysis, price comparison, or technical audit. And all that is not, in most cases, billable work. This consulting is out of the agreed scope, but if we don’t do it, the results of our campaign will not be good, and the finger will be pointed at us because it is much easier to blame the marketing agency than the internal team that manages the webshop.
Why is this a massive problem for marketing agencies?
The agency model of work doesn’t allow for a massive “buffer” in working hours. If the client pays us 20 hours per month to do performance marketing, we can’t work 40 hours and remain profitable. We need to charge every working hour to be able to pay salaries + overhead + and have some profit. If we work much more than 20 hours, this project is not profitable, and it doesn’t make sense for us to continue working for that client.
There is a financial issue, but also there is an “invisible work” syndrome. Client pays for campaign optimisation, ad creation, and results analysis, and those activities can be seen as part of our service. But when we spend hours analyzing clients’ website or sales process, those hours are not so visible. The client views it as a “small consulting” project, even though this consulting effort consumes a lot of resources and brings additional value to the client.
The third problem is an emotional trap. It is hard to say “that is not our job” when you know that all unsolved issues will affect your results and leave a bad impression about your work, even tho you did a fantastic job with Google or Meta Ads.
Where is the line between (performance) marketing and business consulting
Performance marketing, in a nutshell, is a process of creating campaigns and ads to bring measurable results for the client. Additionally, SEO and Google Analytics play a significant role in the story. Business consulting is something else – looking at the broader picture, sales funnel optimisation, user experience, prices… and even a business model.
The problem is that these two worlds can’t live without each other. Campaign results depend on many elements that the marketing department or marketing agency can’t control. You can have perfectly targeted ads and above-standard CTR, but if the website conversion rate is 0,3% and if the sales department is slow with communication, everything together won’t bring results.
Also, there is a problem with the employees. Our performance marketing specialists may not have all the necessary knowledge about the business to provide effective business consulting. They are amazing with Google Ads, but might not be UX experts. And we expect them to be so they can reply to a question: “The results are not good, can you check?”.
Some real-world examples
We did Google and Meta advertising for a client in the healthcare industry. They were never satisfied with our results and always blamed us exclusively. We needed to change our performance marketing manager on this account, but the new one had the same issue. The problem was their pricing, and they didn’t want to change it. Their prices were 20-30% higher than competitors’, but they said something like “it doesn’t matter, we are a premium clinic and we can’t give discounts”. Maybe, but their potential clients didn’t see that and went to other clinics. We spent countless non-billable hours trying to work with them and prove that their pricing is the issue, but without any luck. After 9 months, we decided to stop this project. Interesting fact: after we stopped working with them, we started seeing their ads promising 50% discounts.
Also, for one client in the IT industry, we did Google Ads management to bring new leads. We were tracking the number of people who contacted them using a web form and the number of people who downloaded their white paper. Everything seemed fine from our side. Even after their marketing manager left the company, we continued with Google advertising, achieving the same results as before. After a couple of months, their CEO contacted us expressing his concern about our results. During the call with him and his business partner, we asked, “Who is taking care of those leads we bring you?”. They looked at each other, not knowing what to say. At the end, they realised all leads were sent to some email nobody monitors (they made the website, not us), they sit in the inbox ready to be nurtured, but there was no process on their side on how to work with every new lead.
The third example happened recently. We started working with a client in tourism to work on their Google Ads account. The goal was simple: book as many rooms as possible. After a couple of weeks, we were told they expected more bookings and to check what needed to be done. After the analysis, we discovered a massive problem with their booking process: 85% of people who started the booking process left before completing payment. Whatever we did with Google Ads can’t help unless they solve that problem with their booking engine. Again, we couldn’t charge extra for this out-of-scope work.
How to avoid this trap?
The key is to set clear boundaries between the client and the agency. Some people call it a “service delivery point.” It is crucial to define what Google advertising means and which activities are covered by that service. Everything else (UX analysis, conversion rate optimisation, or any business consulting) is subject to an additional charge.
The other approach would be to implement a mandatory “discovery” phase before the start of advertising. In this phase, the sales funnel audit and all business processes audit are done. This audit is charged extra, but provides a clear picture for a client on what needs to be changed before any advertising. Unfortunately, in most cases, clients want to skip this part and not pay extra.
Two sides of the same medal
Marketing and consulting are connected, and it isn’t easy to draw a clear line between these two. But the fact is, both need to be valued and paid. If a marketing agency takes free consulting work, it risks quality, profitability, and team motivation. If clients expect marketing to solve all their problems, they will probably be disappointed.
The solution is not for the agencies to stop giving advice beyond their main scope. On the contrary, this expertise is often something clients need. The solution is to charge for all that extra advice, so both sides become happy with their cooperation.
