Why the SMMA model is fundamentally broken

This year, I have gotten more messages about one specific subject than anything else by far.

On Reddit (where I engage regularly in PPC & agency related topics) I’ve gotten 41 messages this month alone…and of those, 37 of them were asking about SMMA.

To be honest, even though we published Building A Successful Micro-Agency earlier this year, I hadn’t heard this specific term. So I did some in-depth research. SMMA (social media marketing agency, also called “agency in a box”) is a term used by a few gurus — where they sell courses teaching you how to make millions without any specific skills or domain expertise.

This model is fundamentally broken, and the more I look into it the more scammy and misleading the whole thing is, but before I get into that I need to explain how this model is sold, and why I decided to spend the time writing this post.

First: there is nothing new under the sun. The gurus who are selling SMMA courses today are of the same ilk that sold dropshipping courses in 2018, and affiliate marketing courses in 2014.

Second: these gurus are taking advantage of ambitious, hard-working young people who want to work for themselves. There are better, legitimate ways to make money and find independence.

Third: you can learn marketing yourself, without paying anybody for anything. Actually, you can even get paid to learn digital marketing…which is better than spending thousands with these hustlers.

You can make good money in agencies…

Anya and I have been fortunate enough to meet folks in marketing (mostly in the Google Ads/paid search world that we live in) who have done very well for themselves.

Several of the micro-agency owners I’m friends with make well into the mid six figure range. Larger agency owners have high overhead, but they can still pull in a quarter million. And more than a few PPC agency owners have sold their agencies for seven or eight figures. Even freelancers can easily break six figures with a few decent accounts.

But these guys did not follow the SMMA model. They followed the old-school model of getting good at one specific skill, and then growing it, and making smart cash flow decisions.

How the SMMA Model is Sold

The basic idea is: 1) sell your digital marketing services to local businesses, usually via some sort of cold calling or cold emailing model 2) charge them “high-ticket” prices usually in the $2000-$5000 range 3) find a freelancer from a cheap country to outsource the actual work, pay them $200-500 and 4) rinse & repeat.

The model is sold by good-looking twenty-somethings wearing joggers and Rolexes. SMMA is promoted visually. By that, I mean in the most garish way possible. Young guys posing in front of private jets, getting bottle service at fancy clubs, letting scantily clad girls sit on the hoods of Lamborghinis…and if you want this same lifestyle, buy this $1500 course and you’ll become as profligately rich as they are!

If that’s setting off alarm bells in your head, you already understand why that raises red flags for me.

Because no one who actually earned a Lamborghini lets someone sit on the hood.

Heck. My E550 is ten years old, and I wouldn’t even let Princess Grace of Monaco herself sit on the hood.

The SMMA model is broken

The SMMA model is fundamentally broken and it is not scalable, sustainable, or even economically feasible. 

Here’s why. For a profitable, stable, and sustainable business, you need the following:

• You have to add value
• You have to have subject matter expertise
• You can’t outsource everything

If you are merely acting as a broker — connecting someone to another person — you simply can’t justify the sort of margin the SMMA folks say are possible. You aren’t adding much value. Platforms like UpWork and Fiverr exist to fill this need, and they’re making 20%, not 500%.

You also have to actually know something about what you’re selling. How do you guarantee results, sell cold leads on your service, and offer any real insight without knowing anything?

And following on that, anyone who’s spent any time in marketing knows that outsourcing is way trickier than it sounds. It’s hard to find freelancers and consultants who actually know what they’re doing. It’s even harder to find cheap freelancers. Freelancers usually charge what they’re worth.

SMMA agencies don’t last

The SMMA/agency-in-a-box model suffers from fundamental problems that don’t allow them to last for long. They are truly quick-win, short-term projects at best…and a waste of money that sells courses from gurus at worst.

They suffer from the following:

• High churn
• High cost for no strategy/value
• Hard sales, lots of promises

When you are trying to build an agency that can only survive on high-volume cold email/calling, no domain expertise, and hard sales, you have to promise results that simply cannot realistically be provided. If you charge $5000 a month and don’t deliver any results, you will charge $5000 for exactly one month before they realize you have no idea what you’re talking about, and will leave you for greener pastures.

So why do people say SMMA works?

Gurus have been saying SMMA works because they are selling courses. But here’s the thing. I have yet to find a single guru who knows jack squat about digital marketing. They are just regurgitating the same basic information you can find for free on YouTube.

And it’s not like it can’t work. It’s pretty easy to land a few clients and make a few grand…for a month or so. It is easy enough to see mediocre results, enough to sell a few more course add-ons or premium memberships.

Gurus are slick. They promise things that everyone wants. The actual advice is super generic at best, ignorant on average, and misleading at worst.

Why is the SMMA model so attractive?

In the vast majority of cases, the SMMA model is attractive because there is no shortage of young folks out there who want to work for themselves. They’re ambitious, independent, and want to find out ways to live life on their own terms. Maybe they don’t really know what career path to follow, and it’s inspiring.

These are great reasons. I understand. That was why Anya and I started our agency in 2017…we weren’t fulfilled either personally or financially in our boring old 9-to-5s. So I totally get it.

But there is also a portion of the audience who, unfortunately, are just lazy. I hope it’s a minority, but there are definitely folks out there who can’t hold a job and are just looking for quick overnight riches.

How do you identify a scammer?

More than anything, they use jargon and catchphrases. They have entire course modules called “mindset” where they teach things called “Monk Mode” and “War Path”. They use phrases you never hear in the real world — like “high-ticket” or “appointment setters” or “personal manifestation”.

They choose flashy over expensive. The items they flaunt are gaudy. They will wear a massive golden Rolex over a simple Patek Philippe. They will drive a neon Lamborghini over a black Maybach. They will wear Gucci over Ferragamo.

The story is always accompanied by a rags-to-riches story that takes place way too fast. “When I was 16, my deadbeat dad kicked me out…I couldn’t afford school…I had five bucks to my name…and now, three years later, I own an eight-figure agency and drive around in a Huracan.”

They say anyone can do it — the barrier to entry is nonexistent for anything they sell. Any reputable person will hedge their promises. Just like not everyone can become an astronaut, not everyone is suited to work in digital marketing. Not everyone will be great at it.

They play fast and loose with numbers. Always be cautious when people use words like “I manage millions in Google Ads” or “I own a seven-figure agency” or “I did six figures this month.” First, some people outright lie. Second, vague numbers can seem high but aren’t necessarily anything impressive…probably every freelancer out there is managing millions in Google Ads, but that doesn’t mean they’re driving Lambos.

But they live such a nice lifestyle!

The truly wealthy are shockingly low-profile, and in many cases you can’t even find information when you Google them.

You have passed billionaires on the street in New York and not known.

You have sat next to hundred-millionaires in business class, not first class.

The percentage of people who flaunt it is very low, and likely didn’t earn it.

Don’t get fooled by the glamour.

Anyone can rent a Lamborghini, stay for a night in the Four Seasons, and hop on a private jet. All you need is a credit card and some fast cash. Usually the type you get by selling $1500 courses to how to get rich quick.

So how do you actually make money in digital marketing?

Slow and steady wins the race.

It took Anya and I a half-year before our agency was making as much money as we’d been making in our 9-to-5s, and I consider that very lucky. Anya and I had both been freelancing & working in marketing for years before we started Discosloth.

Even now, six years after starting Discosloth, I learn new things every single day.

The only way to start is to start. Freelance. Take a few courses (the affordable, technical type). Read a couple books (the affordable ones). Get a job adjacent to marketing. Network. Find something you’re interested in. Learn more about it. Do pro bono work for local nonprofits. Start offering gigs on platforms like Fiverr or UpWork just to get experience in various niches. Slowly increase your prices. Become an expert. Build your own personal brand. Land bigger clients. Then…eventually…you will either be able to land a lucrative in-house position, a great job at an agency, or even start your own.

I personally think the micro-agency model (a specialized, high-margin, low-overhead boutique) is the best approach.

But it will take years, not weeks.

But if you stick with it, it will happen.