Field Notes
Fractional CMO vs. Marketing Agency vs. Full-Time Hire: Who Owns the Number?
On Upwork this summer, seven of eight postings that put "fractional" in front of a C-suite title resolved to contractors at $12 to $27 an hour.
That is what the word has come to mean in a marketplace. A title, an hourly rate, and a task list. It is also the reason "fractional CMO" now describes two jobs with nothing in common. One is a contractor who will run your ads on Tuesdays. The other is an executive who works inside the company part of the week and carries its revenue number.
A builder deciding how to fill the marketing and technology seat has three real options. The agency, the full-time officer, and the fractional seat in the second sense. Each one answers a different question, and only one of them answers "who owns the whole number."
Fractional CMO vs. agency vs. full-time hire
The agency. An agency sells a channel with a report attached. Search, ads, social, a site rebuild. The retainer is the product and the report is its receipt. Whatever the agency knows, its advice ends at the boundary of what it bills for. It can tell you how to run the channel. It has no reason on earth to tell you the channel should be off, because that sentence cancels the retainer. Nothing dishonest about it. That is what a retainer is.
The full-time hire. A real CMO runs about a quarter million a year in salary before benefits. A real CTO costs about the same. A builder somewhere between $2M and $20M a year cannot carry both and usually cannot carry one. Even where the money exists, the fit is off. A company that needs a fifth of an executive's week and hires the whole week gets an expensive person filling the other four days. Poor use of the officer. Poor use of the builder's payroll.
The fractional seat. One person. Both seats where the company needs both, because in a builder's shop the technology and the marketing are the same machine. Inside the business part of the week, with a login to the CRM and a chair at the Monday meeting. Paid on the number, not on attendance.
Side by side
| Agency | Full-time hire | Fractional seat | |
|---|---|---|---|
| What you buy | A channel and a monthly report | A salary, a title, a full week | Part of a week and a share of the outcome |
| Who owns the whole number | Nobody; each vendor owns a slice | The hire, if the owner lets go | The seat, on paper |
| What happens when a channel fails | The report explains why | Budget moves to another line | The line gets cut and the seat loses money too |
| How it is paid | Retainer, due either way | Salary, due either way | Low base plus commission on produced revenue |
| What they will tell you to cut | Something outside their scope | Something outside their department | Whatever is not earning, including their own idea |
| How it ends | Notice period, files handed back | Severance and a search | Handover on notice; the systems stay yours |
The pay structure is the product
The base is deliberately low. Most of what the seat earns arrives only after revenue the work can be traced to has arrived first. That does something a retainer cannot do. It makes "stop spending on this" free to say and expensive to withhold. If a channel the seat chose is not producing, keeping it alive protects nothing on the seat's side and costs the builder every month it runs. So it gets cut, and the loss lands on both parties, which is the point. A discount is a lower price for the same incentives. This is a different set of incentives at a lower price.
Attribution is written down before month one. Which form fill is a lead and which is a vendor pitch. The stage at which a deal stops being a conversation. Which revenue the system sourced and which walked in on the owner's reputation, because that second kind belongs to the owner and nobody else gets paid on it. Where a company cannot yet say what produced revenue means, the tracking is missing, and installing it is the seat's first job. I wrote about the seat itself here.
Five tells of a fake fractional
- A bench behind the name. If the fractional CMO has a team that does the actual work, you hired an agency with a new label on the door.
- A retainer with "fractional" in the title. A flat monthly fee is a retainer no matter what word precedes it.
- No written definition of produced revenue. If nobody can say which dollars count, nobody is on the hook for any of them.
- No ledger. A real seat can show sourced pipeline and closed work from the last company, with the line between the two drawn and labeled.
- No answer to "what would you cut." Put the question in the first meeting. A pause, or a pitch for more budget, is the answer.
When the other two are the right call
Buy the agency when the job has edges. A site rebuild with someone on your side who will own it after launch. A photo library. A single campaign with a start date and an end date. Scoped work from a good shop, handed over, is the cheapest way to get that kind of thing done, and nothing about it needs an owner of the number.
Hire the full-time officer once the seat is a full week's work. Roughly, that means several markets or product lines running at once, a marketing team that needs a manager more than it needs a plan, or technology that has become the product itself. Most builders under $20M are not there yet. A fractional seat that has done its job should be the one to say when they are.
What it costs here
There is no rate card for the seat. The structure is the price: a low base, a commission on produced revenue, the attribution rules signed before month one. Fractional CTO cost and fractional CMO cost are the same conversation here because it is the same chair.
For a builder, the way in is a build, and the seat comes later if at all. Capability gets proven on something with a deadline before anyone talks about the Monday meeting. The productized front door is The Bid Room: one bid built for you at a fee fixed by the size of the job and shown before anything starts, or nothing at order and five percent when it signs. The department the seat installs is laid out in the pillar post on fractional CTO/CMO work for builders, and the questions to ask before you sign have their own post. Every layer the seat builds, in order, is on the services page.
Three ways to fill the seat. Only one of them gets paid on whether the seat worked.