I have wasted over $1m on digital marketing staff

I'm writing this post to help anyone out there who is thinking about hiring digital marketing staff or is already having performance problems with their marketing staff for their ecommerce business.

There's few places where I can talk about things like this without being viewed as being very negative or them turning it around on me saying that I haven't done things correctly.

As the title says, I have wasted a huge amount of time and money on digital marketing staff over the last 7 years, the figure is probably closer to $2m and it's had a serious effect on my mental health.

I'm specifically talking about digital marketing staff; Social media, SEO, writers, paid traffic, email marketing, PR, brand etc. The other parts of the business; finance, customer support and operations are much easier to hire for and the people in those roles are happy doing what the job requires them to do.

I run a direct to consumer ecommerce business that has been going for around 10 years, it turns over around $8 – 11m a year. I have nearly 20 years of digital marketing experience, I put my own money into the business, got it going myself and did everything apart from design and development for the first 2 – 3 years.

Over these 7 years I've hired people at all levels in marketing roles, juniors, mid-level and senior, with experience ranging from 1 – 20 years. When we've had problems with poor performance, we've supported them with good managers and HR professionals, for the senior staff that I had problems with, they were supported by outside business consultants. This went on for many years because I was listening to all these business professionals who say that it's all about good management and hiring, they were wrong in this space, it doesn't work.

I won't go into the detail but here's my summary of MOST staff working in digital marketing:

  • They are not adding any value and are just costing the company money, or in an agency, just costing the client money
  • They are happy to continue to pour money and staff resources into paid traffic, PR and social media, even when it's not working
  • Many of them have the mindset that doing any digital work leads to success, just putting things online is enough for them, they don't see performance as their job, even when they are hired in a performance role and told that it's their job
  • They are just working on the surface, they have very little skills. They are just like any other low skilled office worker, they could easily switch to another office job, many of them do
  • They do not develop themselves, they just rock up at work and expect to learn on the job
  • They've never learnt the basic principles of marketing, they don't even know the difference between benefits and features
  • Most mid-level and senior people and above have a narrow skill set and do not have a desire to broaden their skills, they only want to work on one channel or even just one part of one channel, often they have a high view of their skill set, even though they can barely do anything
  • Supporting and helping poor performing staff very rarely works, they don't want to develop themselves and do difficult work, they either don't want to work or want a very easy job, you have to get them out
  • Paid traffic staff are generally better and are more commercially aware, but this isn't always the case, often they are going after brand traffic and making it look like they are bringing in new business
  • Most managers are not good people managers and don't have a desire to manage people, they've progressed too quickly and moved up because that's their only way to a pay rise and progression
  • It's easier to find good junior staff, they can be keen and are willing to learn a wide variety of work, but you've got to find the good ones

My theory on why most people working in digital marketing are so low skilled is because of agencies and big companies – where most of the digital jobs are.

In an agency they can sell services that makes them money, often the client doesn't know if what they are doing is working or not but the staff get rewarded because it's bring in money for the agency, they just continue to get new clients and do the same thing.

Big companies have big marketing and brand budgets, the directors in those departments will spend the money each year, even if what they are doing isn't work. Often the roles in big companies are so narrow that the person doesn't get the chance to learn much.

It's the way that these agencies and big companies are structured, the people move to management very quickly, there's not a requirement for them to become highly skilled hands-on workers. The work that they are doing is often more about high volume, than high-quality.

Digital marketing on the whole is a very murky place, if the company is running multiple sales channels and doing off line marketing as well, it's very difficult to find out exactly which area is working and which isn't.

What is working for me now

After going through all of that pain trying to get the traditional structure to work, I've now changed things completely.

Our digital marketing department now consists of several highly skilled full time freelancers, these are guys with 10 – 20 years hands-on experience that have a deep level of knowledge and take their craft seriously. They are hard to find and expensive but once you've got them, they are absolute gold.

These freelancers are supported by some very keen juniors with 1 – 2 years experience, they are very keen and are happy to do a variety of work.

While the freelancers are very well paid, this team costs less because I don't need as many people, we don't need as many managers helping and supporting people. The freelancers have a wider skill set and just get on with the work. There's less meetings, less process, less problems and much less stress for me and everyone in the business.

The rest of the business is structured traditionally with senior managers, mid-level and juniors, that works fine for customer support, operations and finance.

A further note on digital marketing skills

I also do some angel investing in direct to consumer ecommerce businesses. After speaking to many founders over the last 2 years, I've seen a similar picture to the type of staff that I have hired in the past.

So many of these founders have set up ecommerce businesses (which are essentially digital marketing companies), and they have no idea about digital marketing and no desire to learn.

Many of them have already spent tens of thousands and even hundreds of thousands of dollars of previous investment money that they've raised or that their parents have given them on digital marketing agencies or staff that have done PR, social media and paid traffic, they've run out of money and are now looking for more investment to do exactly the same thing.

When I tell them that in order for this type of business to work, they need to learn the digital skills and they need to be able to direct people, they think that is someone else's job, that they are the supreme creator and that the marketing can just be outsourced or given to the member of the team.

I think this mindset comes from all the business books and youtube videos, they tell you that all you need to do to be successful in business is become a leader, everyone else that you hire will do the hard work and figure things out for you. If only that was true.

I have found some gems there and made some investments, there are some founders who are willing to do the hands on work themselves in the beginning.

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