What Is The Ideal Agency Structure? [Traditional vs. Pod]
Structure is key to agency growth.
Whether your agency is brand new or has 100 employees, how you are structured has a direct impact on efficiency, culture, client success, and scalability.
Without a well-thought-out structure, agencies will suffer from miscommunication, frustration, and poor results.
What are your options? What should you consider when creating or adjusting an org chart? Should you separate account management and execution? Should you go remote? And most importantly, how do you structure in order to scale?
We posed these questions to 16 experienced agencies who weigh in on what works for them.
There are two primary ways to structure your agency: the traditional approach and the pod approach, sometimes referred to as “Mechanistic” and “Organic”.
And there are a billion combinations and adaptations in between.
There’s no one right model, but some are certainly better options depending on your size, industry, and desired culture.
The Traditional Agency Model
The traditional model is the go-to structure for larger teams who offer a wide variety of services. Think: department heads, VP’s, and senior / junior roles.
Each team is broken up by function and typically led by a department head.
“A hierarchical structure with clearly defined roles and a chain of command works great when you have a large team,” says Jonathan Gorham, Founder of Engine Scout.
However, even smaller teams find benefit in a traditional approach.
Jeff Romero of Octiv Digital says, “Our agency follows a traditional agency structure... Our team is structured with a President, VP of Business Development, VP of Marketing, Senior Developer, Junior Developer, an SEO Specialist, a Paid Media Specialist, and an Analytics Implementation Specialist.”
The traditional model does a good job of handling significant growth.
Director of Extrabrains Marketing Agency, Illia Termeno, explains their shift, “As we grew bigger, we had to change the structure. Now we have an account management team with a team leader as well as the execution team with team leaders per direction: organic traffic, design, paid traffic, analytics, web development, social media.”
The downsides to this agency structure are the divisional silos and potential tension in the chain of command.
Jonathan Gorham points out, “People may argue that a flat structure is best, but I have found that there is still always a 'hidden' chain of command existing in flat structures too.”
Amit Raj finds the hierarchical structure can be helpful, “While it’s fine to have a flat organizational structure, and is sometimes necessary with smaller agencies, you may reach a point where there's confusion and mini power struggles. And if there’s no clear boss to report to, you run the risk of people not being held accountable for their work (and especially the quality of that work)...”
This traditional agency model best suits larger teams who typically serve clients individual offerings requiring little cross-team collaboration.
The Pod Agency Model
A pod is a small team of individuals with complementary skills. Think: Account Manager (who may or may not double as the Project Manager and/or Strategist) leading a team containing an SEO Specialist, PR Specialist, PPC Specialist, Copywriter, and Designer. Plug and play with any specialty or discipline.
Scott Krieger, Creative Director & Web Developer at Studio 54 recommends it, “Flat and non-hierarchical. We have teams that work in pods, as this is much more effective than the traditional top-down approach.”
Natalia Wulfe, Co-Owner & CMO of Effective Spend also recommends the pod or “team” model, “We have 2-3 person media teams working on a small set of clients and managing their entire digital media budget across all channels. We keep our client portfolios limited to only a handful of accounts per team to ensure that our team members can go deep and become experts within each digital channel. This structure ensures that the client is getting a service that is working toward their best interests. A siloed media team leads to in-fighting between teams over the client’s budget and focus. Our structure allows us to optimize budgets toward the channel where we see the best performance – no politics.”
The pod model streamlines many processes by reducing friction. All members of the team are working on the same projects, day-in and day-out. It takes the chain of command and senior positions out of the picture, while increasing accountability within the team.
Other Agency Structures
There are hundreds of structures that combine aspects of both models.
Chris Weatherly, the Director of Sales & Operations for WRAL Digital Solutions, describes their structure, “We have an account management team that takes over the relationship and handles all client communication. Internally, we have a project management team that quarterbacks all campaigns to ensure that the right specialists, think designers, developers, producers, media planners, and more, are involved and that the works is completed on time and to scope. From there, we have our specialists that handle the production work.”
The siloed account management and project management teams assign execution to a rather flat group of specialists.
Many digital agencies offer web design and development, in addition to digital marketing services. Bryan Coles of RKD and Rahul Khosla, Director of Point & Quack describe the way they structure around the two offerings:
“The current agency is split up into 2 disciplines: Web Development and Digital Marketing. There is fluid collaboration between the 2 disciplines for production staff, however, on the development side, account management is not tied to any production staff.”
“We structure and equip our team starting with web designers, developers, SEMs and copywriters. Our initial focus was designing and building bespoke beautiful websites. However, as time went on, our clients started asking us the question of 'what next'. From that point on, we heavily invested in SEMs and copywriters.”
Still other agencies are smaller, meaning individuals have to wear multiple hats.
“With a smaller team, there is inevitably going to be some overlap in roles as there are more roles than individuals.” - Ross Johnson of 3.7 Designs
Separating Account Management and Execution
No matter the structure your agency chooses, one decision you will have to make is whether you separate account management and execution. It seems every agency has a different opinion.
Some are all-in on splitting the responsibilities.
Ross Johnson points out, “One major advantage is having a buffer between those doing the work and those providing feedback on the work. There is less opportunity for someone to take feedback personally and develop bad blood as a result. This can also be an issue as well, as those executing the fulfillment have a much deeper understanding of what's being done and critical information can be lost through the game of "telephone" when it gets transferred through the project or account manager.”
Jeff Romero says, “I think it’s an ideal customer experience to have a specialist handling all of the work and an account executive communicating the progress to the client. However, in a smaller agency, everyone has to be “all hands in” when it comes to client service.”
“Account management occasionally overlaps fulfillment with campaigns where the account manager has a good rapport with the client, but for us they are mostly kept separate,” Geoff Hoesch, CEO of Dragonfly Digital Marketing comments.
“It’s helpful to have this account management team in place because it gives a buffer between our specialists and the client—allowing our specialists to perform the work needed to move the needle on their sites and marketing efforts without having to be in constant contact with the client all the time,” says Chris Weatherly.
Others lean toward grouping the responsibilities into one role.
“I recommend keeping account management and fulfillment the same. I've been at agencies where they keep them the same and separate them, and I've found it is much more effective not to have a middleman who is just an account manager because when the client has specific questions, they are often not able to answer them. Having an account manager and a different person to fulfill the specific tasks just adds an unnecessary step in the communication chain,” says Stacy Caprio, Founder of Accelerated Growth Marketing.
Filip Silobod, Founder of Honest Marketing describes the potential for miscommunication, “Majority of agencies have account managers, but I think there should be one person who "handles the account" and does the actual work on their website. I worked in a few agencies and often there is an information discrepancy between an account manager and a seo, ppc person who is working on the account. Also from a client perspective, it is better for them to have direct contact with their digital marketing person.”
Finally.. Should You Go Remote?
We’re in a digital age that offers possibilities businesses have never seen before. Technology allows for collaboration across the globe, which opens the door for remote possibilities.
Jason Lavis of Out of the Box Innovations Ltd. agrees, “A digital agency might be the most suitable business model for a remote company structure.”
The benefits are clear: remote work is a strong work perk, and it opens the talent pool from a single city to the entire globe.
But on the other hand, it can be problematic if not done well.
Will Craig, Managing Director of Digital Impact points out, “Working in one space ensures the team are able to solve problems quickly, whilst also providing a relaxed environment for building strong workplace relationships.”
Your agency structure may allow you to be partially remote and local.
Written by Brooks Manley
Brooks Manley is a digital marketing strategist and freelance writer specializing in SEO and content marketing. He’s a big fan of the internet, tacos, and the NBA.