After a decade in performance marketing, we’ve seen one issue haunt agency leaders more than any other: “the competitive vertical portfolio.” It’s a grey area no one really talks about during a sales pitch, but it’s the one question that can make or break an agency’s reputation.
In the rush for scale, agencies often sign every client that walks through the door. However, The dilemma lurks in the shadows of those signed contracts: Can an agency maximize your ROI while simultaneously helping your biggest rival do the same? On paper, it’s just business. In practice, it’s a moral minefield.
When we first asked our team if we would ever take up a client within the same industry, in unison everyone said “no” which in honesty reflects Kant’s arguments on moral actions, think of it this way: if everyone managed competing clients in the same space without boundaries, would trust even be possible? Kant might say, “Nope.” Because when you treat clients as mere means, using their confidential data to optimize for one and then another, you violate a moral law.
Agencies often like to talk about the mechanisms of “internal firewalls,” the idea that there exists a Team A and Team B who are in different pods, blissfully unaware of each other’s tactics. For many agencies, this in reality could be true. Specifically vertical agencies that have built their empire upon managing the same clients. They have the resources to allot separate teams and guarantee a practice fair to all. More than that they offer the stability and the knowledge of knowing what is best within that industry, eliminating the novice trial and error.
We personally felt knowledge isn’t a liquid you can pour into separate buckets. Suppose a senior strategist discovers a high-converting “hook” or a specific bidding loophole for Client X; it is professionally impossible for them to just “un-see” it when reviewing Client Y’s account across the hall.
When we apply “agency best practices” across competing accounts, we’re homogenizing competition. If everyone is using the same “secret sauce,” does the sauce even exist anymore?
Is it ethical or not? We asked our team members at DMC to share their opinion. A lot of them obliged. Here are their thoughts:
“I personally believe it’s unethical for an agency to run digital marketing campaigns for direct competitors in the same city. As a client, you place immense trust in your agency, not just with your brand, but with your data, your customers, and your growth strategy. What’s really stopping an agency from misusing that access, even subtly? NDAs and contracts exist, but in reality, enforcement is weak and trust is fragile. From where I stand as Director of Operations, we value client relationships far more than short-term gains, and we would never onboard a client that directly competes with one we already serve.” -Director of Operations
To counter this, our Jr. Digital Marketing Executive presented her side of the argument: “While geography is a hard line, many in our strategy and growth teams argue that a vertical portfolio is actually a client’s secret weapon, provided the agency has the scale to back it up. If we have the resources to deploy entirely non-overlapping teams, we aren’t just ‘recycling’ ideas; we are applying high-level sector intelligence. Onboarding a competitor in a completely different geographical location isn’t a conflict; it’s a data advantage. It allows us to spot macro-trends and algorithm shifts in one market and protect our clients in another before the wave even hits them. For us, the ethical line isn’t the industry; it’s the ‘overlap.’ If the teams and the territories don’t touch, the client only stands to gain from our specialized expertise.”
While we were looking from a lens of a purely mechanical standpoint, managing two competing companies in the same city is an ethical minefield. You are essentially bidding against yourself with two different checkbooks. For instance, a moral conflict arises when you choose to optimize a Client to win the top spot; you are inherently driving up the CPC (Cost Per Click) for the second Client. We have to ask ourselves, if one didn’t know which client paid them the biggest invoice, would we still feel the strategy was fair?
Data and Strategy Execution
In the digital marketing landscape we can never assume data to just be a commodity. When a client shares their margins, conversion paths, and LTV (Lifetime Value), they are handing you the very means to their survival.
Some within the team felt that signing competitors would mean unintentional use of insights gained from one client’s “hard-earned failures” to jumpstart a competitor’s “easy success” which felt like a breach of trust. In our world, once that “sacred trust” is commoditized, the agency is no longer a partner; it’s just a vendor.
“What’s really stopping an agency from misusing that access, even subtly? As a client, you place immense trust in your agency, not just with your brand, but with your data and your growth strategy. From where I stand, crossing that line is a risk to the very foundation of what we do.” — Director of Operations
We found three ways an Agency can deal with the situation of a vertical expansion:
Firstly, they can act as a specialist which means they take everyone in a niche. They own the data, the agency’s goal is “market-wide efficiency,” not “individual dominance.”
If an agency manages 50 personal injury law firms across the country, they aren’t guessing what works. They have seen 1,000 versions of a landing page, 5,000 ad headlines, and millions of dollars in spend.
“Why would you want an exclusive agency that has to ‘learn’ on your dime when you can hire us and skip the six months of expensive failure?” They don’t offer “innovation” in the sense of reinvention; they offer optimized stability.
Secondly, they act as a Transparent Silo, which means they heavily rely on “firewalls” that are separate teams, dedicated Slack channels, and restricted data access to manage competitors under one roof. The agency is upfront about the conflict, betting that structural barriers can override human intuition.
Lastly, an agency can choose to be the Exclusive Partner. They take one player per market. It’s more expensive, and the growth is slower for the agency, but the loyalty is absolute.
The Question that Remains:
Ultimately, the health of our industry doesn’t depend on Return on Ad Spend; it depends on Moral ROAS. If we were the client, we wouldn’t want a “promise.” We would expect Full Disclosure before the contract, Data Portability (our pixel stays in our house), and Creative Originality that isn’t rolled out to our rival the following Tuesday.
As Keynes suggested, the difficulty isn’t in coming up with new rules, it’s escaping the “growth-at-all-costs” mindset. We must decide: Are we custodians of our clients’ growth or just auctioneers for their budgets?
We must acknowledge a curious double standard in the professional world. We don’t blink when a top-tier accounting firm manages the audits for three competing banks, or when a law firm represents multiple players in the same industry. These professions handle the fundamentals of a business, finances and legal survival, yet they are rarely criticized for a lack of integrity.
So, why is the digital marketing space treated differently? Perhaps it’s because our work is so public. An audit happens behind closed doors, but an ad campaign lives in the open market, where every “win” for one client can be a visible “loss” for another in the same auction. In marketing, the conflict isn’t just in the data; it’s in the very air we breathe.
The digital marketing industry is at a crossroads. Unlike professions guided by centuries of case law, we are writing our ethical code in real-time. We must decide if we are comfortable being “The Factory” a data utility for the masses, or if we want to be the “Sovereign Partner” who treats a client’s growth as an exclusive mission.
We want to hear from you: Does the “Accountant Model” work for marketing, or is our field inherently different because we compete for the same limited digital real estate? If you were the client, would you value the “Aggregate Intelligence” of a specialist, or the “Quiet Loyalty” of an exclusive partner?