Make Your Marketing Budget Work Harder With a Virtual Agency

In this economy, healthcare marketers are watching their budgets more closely than ever. Hospitals endure rising costs, pressure to increase access, and let's face it, they'd rather spend money on the latest CT scanner than media or creative talent. In response, marketers are finding that they can achieve great creative work and get more for their money by creating their own virtual agency.

Create your own agency
The virtual agency model differs from hiring freelancers or using a traditional ad agency in several ways. First, unlike an agency, you choose each team member. In addition, unlike freelancers, there's an ongoing, high level of collaboration. Resources may be freelancers, owners of small shops or even agency talent. Best of all, you pay a fraction of what a full-service agency would charge—and can still get great work.

Having worked at a healthcare ad agency and well aware of high agency fees, Mary Zokan turned to former colleagues for creative work when she became Director of Marketing at Rush-Copley Medical Center in Aurora, IL. With a small internal staff, she also added a freelance copywriter, designer, and media buyer for marketing campaigns and collateral projects. Later, she added two more former colleagues for TV, videos, and Web work.

Like Zokan, Marty Beerman, vice president of marketing and community relations at Children's Hospital in Omaha, NE, has an internal staff to handle the everyday marketing functions, but relies on an outside team for branding programs, advertising campaigns, and other projects.

Hungry to shift the strategic message, Beerman shopped for an ad agency, but decided that his freelance copywriter, paired with a design group he'd worked with in the past, and several other pros, could best accomplish his goals. Together, they determine strategy and then the creative team collaborates just as an agency's team does. They even hold weekly meetings.

Curb costs, not quality
One of the biggest benefits to creating your virtual agency is cost savings. No retainer fees. No markups. There is no overhead. No fancy building. No layers of account people logging hours. In fact, Tom Comes, director of marketing and public relations at Borgess Health in Kalamazoo, MI, estimates he spends about 50%–60% less than he would for an agency—and the hospital has won their share of awards. Plus, the virtual agency makes it easier for marketers to ensure brand consistency.

Like some hospital marketing directors, Comes had agency experience when he landed his current position, so he knew the process. He created his virtual agency when a marketing survey showed he needed to reestablish the hospital's brand. Frustrated by the prospect of reeducating an agency to the hospital's tone and processes he began working with an outside strategist, a media planner, two art directors, a producer for TV and radio, and four writers.

"I've worked with multiple, full-service agencies," Beerman says, "but the virtual agency model enables me to cherry-pick the best talent for a fraction of the cost." In fact, Beerman estimates he's saving more than 50% for the same quality work that an agency would deliver.

"The creative talent and strategic skills I have with my virtual agency is on par with any agency specializing in healthcare on a national level," says Zokan. "My key players have years of experience working for a national healthcare agency and I constantly rely on their professionalism, creative talent and strategic insight. Our work has consistently yielded top awards at state and national competitions."

These marketers also say the lack of layers inspires ownership of the work—among both internal and external staff. "Everyone here feels it's our work, so recognition is team-building," says Beerman.

Ultimately, the virtual agency model gives the marketing director more control over the brand, which produces better results. Plus, easy access to team members and quick turnarounds don't hurt either.

So what's the catch?
The only drawback Beerman sees is a little extra coordination. But for a person who enjoys participating in the creative process, he's not complaining. Likewise, marketers need to understand the process that goes on behind the agency's doors to know which skill sets they need. If they don't, they can recruit someone who does.

Even those who manage a large scope of activities appreciate the virtual agency model. In her position, Zokan manages marketing, advertising, public relations, community relations, and Web functions for a hospital, a medically-based fitness center, a group of multi-specialty physician practices, and a healthcare center in a neighboring community—all with her virtual agency.

"Team members need to understand and embrace their roles," says Zokan. "They know their limitations and they're the first to admit they're lacking a particular skill set. Then we find the right person. This is a loose, but fun and vastly different approach."

So when is it a good idea to use an ad agency? An agency might be helpful if you need a fresh direction or a project requires substantial hours. However, your virtual agency can be as full-service as you can build it.

Expect results
Expect the level of ownership and brand consistency to pay off in results. Since Zokan took her position six years ago, she has exceeded every marketing goal.

Beerman has similar results. In the year and a half since Beerman arrived at Children's, calls to the physician referral line jumped from 10 to 140 per month. Web visits increased 20% in the past year. Plus, Children's scores well on preference and awareness in its market—all without an increase in the media budget. Likewise, Comes reports that his virtual agency has helped increase ER volumes by 30% in less than three years.

"We all have had a tremendous stake in the results, so we feel a greater sense of responsibility—and accomplishment," says Zokan. "The virtual agency really puts me and my team on the line, but from a satisfaction and ownership standpoint, I wouldn't have it any other way."

How to Create Virtual Agency
It's easier than you think. First, identify the skill sets you need. Recruit former colleagues, your staff's contacts, and word-and-mouth recommendations. You want experienced professionals who may have previously worked for an agency or experienced freelancers. Choose people you like and respect. After all, this should be fun, right? Bring them all together, check the egos at the door, trade contact info, set your plan, and go.