B2B Demand Gen Agency vs Automation: Which Drives Better ROI?

• ific campaigns or initiatives with defined deliverables and timelines.
• Performance-Based Fees: Compensation tied to achieving specific metrics like lead generation, conversions, or deals closed.

Additional costs may include:

• Paid Advertising Budgets: Funds allocated for pay-per-click campaigns, sponsored content, and other paid efforts managed by the agency.
• Marketing Technology Subscriptions: Costs for any marketing tools or software used by the agency to execute and analyze campaigns.
• Content Creation Expenses: Investments in professional copywriting, graphic design, video production, and other creative services.

ROI Metrics and Timeframes

You can evaluate agency performance using these key metrics:

• Customer Acquisition Cost (CAC): The average cost to acquire a new customer.
• Customer Lifetime Value (LTV): The total revenue expected from a customer over their relationship with your company.
• Conversion Rates: The percentage of leads or prospects that convert into customers.
• Pipeline Velocity: The speed at which leads progress through the sales funnel.
• Marketing Qualified Leads (MQLs): The number of leads that meet criteria indicating a higher likelihood to purchase.

Demand generation agencies can typically deliver measurable results within three to six months. During this initial period, campaigns are launched and begin to gain traction, allowing for early adjustments and optimizations.

The effectiveness of a demand generation agency’s strategies will typically improve over time. As the agency accumulates data and insights, they can refine their strategies and tactics, leading to ongoing improvements in lead generation, conversion rates, and overall ROI.

What is a Marketing Automation Platform?

Marketing automation platforms (MAPs) help streamline and improve marketing efforts at scale through advanced technology solutions.

Their features might include:

• Lead Scoring: Automatically rank leads based on their interactions to help prioritize sales efforts.
• Email Marketing: Executing automated email campaigns with personalized content using drip sequences and autoresponders.
• Customer Segmentation: Categorizing audiences based on demographics, behavior, and preferences for targeted messaging.
• Campaign Management: Managing multi-channel campaigns—including email, social media, and SMS—from a single interface.
• Data-Driven Insights: Providing comprehensive reporting and analytics to track metrics like open rates, click-through rates, and revenue attribution.
• Integration Capabilities: Seamlessly connecting with CRM systems and other tools to create a unified marketing ecosystem.

Implementation Requirements

The first step towards implementing a marketing automation platform is selecting a platform that aligns with your specific needs, budget, and scalability requirements. This requires careful research and consideration of the different features and pricing structures offered by various platforms.

Once you have chosen a platform, the next step is to migrate your existing customer and prospect data into the new system. This process can be complex and time-consuming, depending on the volume and quality of your data.

After data migration, the platform needs to be integrated with your CRM, website, and other software to ensure seamless data flow and communication between different systems. This may involve working with developers or using pre-built integrations.

Finally, the platform needs to be configured and set up according to your specific requirements. This includes setting up features, user roles, templates, and automation workflows to streamline your marketing processes and improve efficiency.

ROI Potential

Potential benefits of marketing automation platforms include:

• Increased Lead Generation: Businesses using automation often see significant increases in qualified leads due to efficient lead nurturing.
• Improved Customer Engagement: Enhanced personalization leads to higher engagement rates and customer satisfaction.
• Operational Efficiencies: Automating repetitive tasks allows your team to focus on strategy and high-value activities.

Comparing ROI: Agency vs. Automation

How does the ROI of agencies vs automation tools compare? Let’s break down long-term and  short-term ROI, as well as the hidden costs associated with both options.

Short-Term ROI

With a B2B demand gen agency, you can expect the following:

• Quick Ramp-Up: Campaigns can launch within 1-2 weeks due to existing infrastructure and expertise.
• Early Performance: Potential 30% increase in lead conversion rates within the first three months.

A marketing automation platform, on the other hand, delivers the following:

• Setup Period: Implementation and training typically take 4-6 weeks.
• Early Performance: Potential 25% increase in lead generation within the first quarter.

Long-Term ROI

In the long-term, you expect the following results from an agency:

• ROI After One Year: Potential 300% ROI as strategies are refined and optimized.
• Customer Retention Increase: 50% improvement over one year due to effective nurturing campaigns.

A marketing automation platform typically delivers results such as:

• ROI Over Three Years: Potential 500% ROI as automation improves efficiency and personalization.
• Customer Retention Increase: Up to 60% improvement over three years with consistent, personalized communication.

Hidden Costs

Regardless of your choice, each option comes with specific hidden costs you should be aware of.

B2B Demand Gen Agency 

• Contract Termination Fees: Potential fees for ending agreements early.
• Scope Creep Charges: Extra fees when work extends beyond the original agreement.
• Communication Overhead: Time and resources spent coordinating with the agency.

Marketing Automation Platforms

• Ongoing Training: Continuous education for staff to stay current with platform updates and best practices.
• Software Maintenance: Expenses related to updates, security, and functionality.
• Integration Costs: Costs for integrating the platform with existing systems.
• Data Management: Resources needed to maintain data quality within the system.

Choosing the Right Option for Your Business

Selecting between an agency and an automation platform depends on your priorities and circumstances.

When to Partner with an Agency

Consider partnering with a B2B demand gen agency if your team lacks the necessary skills for sophisticated marketing campaigns. An agency provides immediate access to industry-specific expertise or specialized skills. 

If you have pressing marketing needs that demand quick implementation, an agency can get you up and running swiftly. 

Additionally, if you have limited internal resources—perhaps due to a small team that needs enterprise-level capabilities—an agency can provide the support and capabilities you require.

When to Implement Automation

Choose a marketing automation platform when you have a strong internal team with the skills to effectively use technology tools. If you anticipate significant growth and need to scale marketing operations efficiently, automation can provide the necessary scalability. 

Making the Best Decision for Your Business

Choosing between a B2B demand gen agency and a marketing automation platform is a significant decision that will impact your company’s future success. 

Assess your situation by considering your marketing maturity, including internal capabilities, team expertise, and technology stack. Reflect on your strategic priorities, balancing the need for specialized expertise versus operational efficiency and short-term versus long-term goals.

If you need an all-in-one solution, Metadata’s managed services give you access to demand gen experts and our marketing automation platform to help your campaigns surpass all expectations.

Transform your marketing strategy with Metadata.io — drive more leads, optimize campaigns, and scale your results effortlessly. Book an intro today!