ONE MORE WEEK

A GUIDE FOR ADVERTISING AGENCY OWNERS TO SERVICING DIGITAL MEDIA PROFITABLY

by Jay F ri edm a n with G eoff H al se m a an d D avi d W o l k

A COMPANION TO 30 DAYS TO PAID DIGITAL MEDIA EXPERTISE, 6TH EDITION

Introduction 3rd Annual Survey: Regional Agencies and the State of Going Digital
Much has changed since we last updated this study. Realtime bidding (RTB) dominates the display news as well as blogs within our industry and now accounts for about 22% of all display spending (eMarketer). The trend of all media going RTB is partly the reason as weve recently seen streaming audio and even out-of-home video become RTB-enabled. Leaps forward for search and social are being made as well. While you and I may not have access to Facebooks Graph Search, our SEM/Social lead here at Goodway does, and its a game changer. From restaurants to music to movies, never before have reviews, check-ins, and recommendations from those youre connected with been so influential simply in the results shown. You may never even see it if your friends dont have a result within their history. The search side of business may now be forever intertwined with social, and vice versa. Of course, attribution, analytics, and their proud papa, Big Data, have been the romantic thoughts of many but the reality of few. If all of this sounds more like the future than the present to you, youre not alone. But if doing any kind of digital advertising sounds foreign to you, consider yourself one
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of the few. Whereas most regional agencies were hardly toe-deep in digital advertising before, that has changed significantly. About the Study Goodway started the study in 2010, continued with an update at the very end of 2011, and just completed a third update in 2013. This study asked the same 11 questions we asked in 2011, but this time it was answered by 116 agencies, up from 90 in 2011 and 74 in 2010. The fact that we have more years of comparative data now is giving us a real view into the trend of doing digital media.

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Summary Rather than conclude at the end, we wanted to start with our most relevant insights up front. Once youve digested the summation, we hope youll enjoy the depth and detail that the analysis of each question further provides. The 30,000-Foot View All of this data paints an interesting yet positive picture of the position in which regional agencies find themselves: Regional agencies have come a long way with their digital advertising capabilities since 2010: In 2010, large agencies digital teams were in full swing, whereas regional agencies were behind the curve. Regional agencies are no longer behind the curve in their adoption of digital media in general. How theyre using it and what they expect from it still need updating and upgrading. The budgets have caught up: With 38% of eyeball/ mind-share time now falling within digital media, its impressive and reassuring to see regional agencies now spending their clients budgets more in line with how their audiences consume media. Remember, virtually every target audience consumes digital media in one way or another. So the old my target audience isnt on digital excuse seems to be appropriately resting in peace.
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 Agencies now seem to know what they dont know: Its often said the most dangerous state of learning is not knowing what you dont know. Not knowing the world was shifting, this was the regional agency in 2010. Though, now it seems agencies know what they dont know. They know theyve been moderately successful in their digital advertising campaigns and are seeking ways to better measure their outcomes. Some have even found that success. Additionally, in our conversations with these agencies, they were quick to point out the misdirection of some of our questions regarding how they should be applied. For instance, If you were to start from scratch and propose a new digital campaign for one of your clients today, which of the following would be the first thing to be included in the plan? was answered by many respondents via the other comments tool, where they called out the ridiculousness of this question, knowing that objectives drive campaign tactics and that choosing one outright doesnt make sense. Good for them! Agencies want to own the foundation: Respondents comments also showed us how astute many agency owners have become: They now understand none of the media matter if the foundation isnt well built. Wanting better web-dev and SEO capabilities inhouse was a theme mentioned by just under 20% of agencies in the comments. This is admirable in that
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it shows agencies understand the need to build the foundation right before putting up the frame. The Obstacles to Going Digital

Gone are the spikes. In 2010 and 2011, we had some answers clearly spiking over others, whereas in 2013 we had a more even distribution. Surprisingly, the response to the question, Clients arent asking for it actually came up a bit, matching Selling to upper management. Has the budgeting problem been solved? Not completely, and understanding why is interesting as well. Some agencies may have converted their staff from handling traditional media to handling digital advertising, and others may have realized digitals importance and budgeted appropriately. But as a greater percentage of advertising dollars are being
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allocated to digital, cuts are likely being made elsewhere to fund this growth area. The leading answer to the question regarding obstacles to going digital now is Realigning internal processes. This response took a hiatus during our last survey period but now is back, as the hires have been made but the process integration still remains a challenge. Both billing/systems integration and work flow are challenges for regional agencies that most off-the-shelf systems cant easily solve. To put this in perspective, we at Goodway built our own work-flow system on top of QuickBase specifically for this reason. The result? Its the first time Ive been at a company where there hasnt been a single complaint about the software systems. Partnering for Expertise These results are fascinating now that we can see the trend maturing. In our first survey, traditional-media thinking dominated the landscape. We must buy cheap. That is our only advantage! was the rallying cry carried over from times past. In our second year, it became clear digital was not about buying cheaply but about buying efficiently. That sentiment appears to have remained constant, although the emergence of trading desks and DSPs has brought slightly more focus back on price recently. For the third year in a row, the perceived importance of digital strategy grew. We will pepper anecdotal experience
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weve had in dealing with over 100 regional agencies around the country throughout this paper. As an example, agency principles and media directors I speak with are truly overwhelmed by the sophistication required to develop any plan crossing more than one digital channel. The need for SEM to align with landing page planning, SEO, and now social can be daunting.

Also remaining important to many agencies is technical expertise. As I reviewed the comments, a healthy portion of respondents referred to website development as being a challenge. Web development requires true coders, whereas other digital planning and buying at least can be done within somewhat familiar tools. As one of the founders of Invite Media once said, Stop asking me if I know any
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good coders. If I did, Id have hired them myself! Clearly great development folks are hard to find, and when they can be found, they command premium compensation. While reliability appears down, its not because this quality is any less important. It may have declined because reliability has become an expectation. Also so many digital vendors have now been tested that the unreliable ones have been weeded out. Its simply no longer a pain point. What Do Agencies Want at Their Fingertips? Knowing how highly agencies value strategic expertise conveniently leads us to our next question: If you could have just one area of digital experience internally, what would it be?

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As was discussed in the previous question, web dev is becoming more central to the thinking of a regional agency. But why is this and why now? Simply put, a properly functioning site is the core of almost all efforts. Not just in the obvious wayall media lead back to your websitebut in deeper ways as well. Excited to try mobile? Great, where do you send the clickers, or even just those searching for your product/business on their smart phones or tablets? Your site better be mobileenabled or responsive. Frustrated with your SEO results? Its likely directly related to your website. Even poor results in SEM and other media are directly linked to and heavily influenced by the quality of your website design. So what is quality? As one participant in this survey said, We need someone who can develop knock-your-socks-off design for sites. True, many marketers will initially be very pleased with a sexy design. But quality doesnt mean just design because design does nothing for SEO, SEM, and conversion optimization. A client who is initially very impressed with the design will quickly become frustrated with the actual marketing performance. At that time, having built true qualityor best practicesinto your site would have really helped. Our survey results confirm agencies are realizing just this very notion.

The Web-Dev Theme Continues...

This question perhaps oversimplifies digital by leaving out key tactics such as mobile. That said, the drastic trends are informative. In both of the previous surveys, agency mentality appeared to be, My client has given me a budget, and I need to figure out how to spend it. Now it appears to be trending toward, Lets figure out what our goal/objective is before we spend the first dollar. This is outstanding news for clients who work with these agencies. Since the advent of advertising within mass media came about, we havent had truly good ways to measure advertising results (other than the true direct-response types). This led advertisers to worry little about the objective and focus more on the tactic. Before digital

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advertising, most clients would ascribe one of two objectives to their campaigns: increase awareness or drive sales. Now, with every step as measurable as it is, clients and agencies appear to be thinking more about objectives before spending. As an example, we have a client who uses certain media to fill the consideration portion of the funnel but uses other tactics and vendors to target those who are now considering converting. This kind of strategy is more strategic and thoughtful, yet didnt appear to exist at the regional agency level just a few years back.

Flipping the Lens Weve heard what agencies want and recommend, but what are clients asking for? Long the bane of account executives existences, the shiny object syndrome appears to still be
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alive and well on the client side. While agencies appear to have learned that a great strategy begins first at home (the client website), clients are still enamored with the power of social more than any other strategy. This isnt to say social isnt powerful but its sexiness is apparently still distracting, enough to make it clients primary focus. Lets look at each category individually. Social is mostly unchanged but still the leader. Mobile fell significantly, but why? Perhaps its because mobile technology is so far behind desktop in measuring true success (something agencies are now accustomed to with their online campaigns). Or maybe its because mobile ads are smaller than your pinkie? For whatever reason, the shine has worn off mobile rcently. The same appears true for display banners. As RTB has brought display back with the largest clients, its possible regional clients either have not been exposed to it or dont have budgets that seem to fit in order to make this technological development of interest. Following the web-dev theme, because web dev was not an option in this question, its likely that respondents used the SEM/SEO box to highlight clients requests for increased core/base strategy around their site. And reputation management shows up for the first time. It was an option last time, but there were no takers. Clients now appear to be putting this on their radar more, albeit in small numbers.

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What Does Success Look Like? The hope was that CTR would have finally fallen to such low levels it wouldnt be worth mentioningno such luck. In fact, its still the leading metric for how agencies measure success. The good news for marketers, though, is agencies looking at conversions (which the client and agency can define together) is up and now in second place. When conversions and ROI overtake CTR as the primary measures of success among regional agencies, it will be a proud year for digital marketing

There are a couple of other pieces of good news here: CPM has fallen to a nearly negligible level. Why? Traditional medias value is largely determined on a two-axis graph:

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cost and content (which includes audience). Digital medias value is often determined on a two-axis graph as well but with audience replacing cost since the two can be separated. Add to that the ability to measure conversions, and CPM becomes a very irrelevant factor in determining a vendors value. If the performance for the dollar is there, the numerator becomes less important. Rich media metrics continued a slight increase in value, but conversions experienced the biggest jump. Again, great news for the industry and the agency/marketer relationship as both are now able to learn about and assign the appropriate value to consumer actions. Whats interesting is the drop in true ROI. Marketers may have initially approached digital advertising thinking, Well, if its as measurable as they tell me, it should be able to tell me anything I want to know! We have certainly heard this from dozens of agencies around the country as they were introduced to this new medium in years past. It appears agencies and marketers now may have realized measurability isnt binary but can be plotted on a continuum. (The Perception of) Success Grows Not only are we down to near-zero respondents who havent executed a digital campaign, the trend clearly shows agencies are more confident in the performance of digital media. The real question seems to be, Is the increased confidence merited?

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We believe the answer is yes and no. On one hand, we saw many more agencies measuring conversions and ROI than ever before. This is a good thing; and if these agencies have been successful, they deserve credit for those efforts. On the other, we still have more than 50% of agencies using CTR as their success metric. As weve discussed in past years, most agencies we speak with that use CTR as their success metric later feel empty. This may be the case because they have nothing to show for their efforts once they realize a click isnt even a directional measure of good performance. As agencies become more savvy, are they defining good CTRs as moderate success? Moderate success generated the highest response by a long shot at nearly
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75% of all respondents. Cross-reference that with more than 50% of the same respondents using CTR. Have they now just come to accept a decent CTR and become OK with this? Its hard to say. Whats most promising here is noting the percent of respondents answering Very successful not only grew significantly but seems to be directly proportionate to the percent of agencies measuring conversions. While we cant say these are the same agencies with certainty, the correlation is interesting enough to note. Were Here! Now What Do We Do? Is digital advertising the big party everyone was invited to but no one knows what to make of upon arrival? Maybe it is and maybe it isnt. Seeing those that will allocate more than 20% of their clients budgets to digital advertising within the next year jump from nothing, to a little, to now being the number one response is encouraging. Its encouraging because 38% of our time spent with media is now spent online or with mobile devices (source). This means the effort and spend are aligning with consumer media consumption. On the flip side, 0-5% and 6-10% have declined from their 2010 levels, which are signs agencies are aligning their spend, in general, with mediatrends.

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The question is, now that agencies are at the party, do they know how to stop being wallflowers? As noted earlier, we see an increasing number of agencies getting real value and success from their digital advertising spend but not as many as could or should be at this time. Given the increase in digital ad spending within this agency setting, its not surprising to see the following question has probably run its course because clients are indeed spending in online display!

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Its great news for agencies and clients alike that being too complicated to plan, buy, and report on has gone from being the clear leader in this category to a response that gets less than 10%. From our experience, each agency figures this out differently, but most do a great job determining what works for them within their system. Additionally, the leading answer is now, Our clients arent interested in spending more, or anything at all, in online display. Clearly from the jump in budgets year over year, we need to take the spending more part of this question to heart more than the or anything at all. Clients and their agencies are indeed purchasing digital advertising. Many of them are spending at healthy levels. Despite it being a core business line for us at Goodway, we agree that

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once at a healthy, successful budget level, its not good to keep spending more just because you can. How Far to Lake Wobegon? While illusory superiority may be the clinical name for the notion were all above average, the Lake Wobegon effect appears to be closer than in the past when it comes to agencies perceptions of their own digital prowess. Since average is most easily described as the 50% line (yes, thats actually the median, but were trying to keep this simple!), its certainly feasible that 31% of respondents are indeed above average. But with this increase in confidence, how long before 51%+ believe theyre better than the rest?

Scrutinizing this against other answers, though, the results seem to make pretty good sense. Those who are spending
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moderately believe theyve been somewhat successful, and when they use CTR as their goal metric, they probably are indeed about even with their competitive set. Those who have done very little digital may face high publisher minimums due to their client size; those who dont plan to spend much in digital would and should feel behind. This leads us back to those at the head of the class: Agencies doing more with their digital advertising by measuring conversions, helping align client budgets with share of time and mind, and starting with websites, SEM, and SEO are indeed ahead competitively and should be proud of it.

Are We There Yet? The clear aha! moment here is definitely the, Wed like to, but were not in a hurry crowd has dwindled to next to
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nothing. Regional agency owners have put going digital as a top priority in nearly every case. The resurgence of those believing its their top priority also reflects the urgency with which agency owners are treating the need for digital expertise and the ability to showcase it to clients. The recognition of the need to go digital also shows that fewer agencies are playing ostrich and burying their heads in the sand about the reality of digital media and its importance in the future of the agency. The responses here indicate they understand the importance of the task ahead and are approaching it head-on. In the future, well look to better understand where agencies are within this processwhat they feel most behind in and best positioned for and what subpriorities rank highest forthem.

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What Does the Near Future Look Like? The good news is that regional agencies really appear to be getting it when it comes to digital advertising media. They understand the need to provide expertise to their clients, either through outsourcing it or owning it in-house. They understand the way they were doing digital a few years back wasnt necessarily the right way. They understand the importance of the foundational areas of digital such as web dev and SEO. The bad news is that digital advertising media continues to change rapidly, and the pace of change is not letting up. So while regional agencies are showing progress by embracing digital media in general, they may not necessarily be catching up. For instance, social, search, and reputation management are starting to blend heavily. What happens on Facebook and Twitter affects reputation and also how to run an SEM strategy, especially with Facebook Graph Search. Within display, eMarketer says about 22% of all display advertising will be bought via RTB in 2014. We dont have data on this, but our conversations with regional agencies tell us they are nowhere near keeping pace with either of these trends. Part of this stems from the fact they are not set up with trading desks like the large holding companies. And why have the holding companies set up these trading desks? Because they know eventually all media will be traded programmatically. Its a must.

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So for all the catching up regional agencies have done, keeping pace is and will continue to prove as challenging as ever. What can you do as a regional agency, then? As a regional agency owner, you have no choice but to throw yourself headfirst into this advertising medium: Read every major industry news source, network with the authors of those pieces, and attend conferences. Spending $20k/year on conferences may not be in the budget but neither is falling behind, which will surely cost much more. And, along the way, realize you may need help. Lean on vendors offering expertise in the areas where youre behind. Theyll often teach you what they know, and one day, you likely will be able to bring these practices in-house, if it makes financial sense. Whats now clearer than ever is all agenciesregional or globalneed to accelerate their pace of change, learning, adoption, and understanding of digital media ahead of the industry to make up for any lag they currently face. Until agencies are on a par with the most advanced in the industry, theyre getting closer and closer to the now or never moment when all media become digital, and they must either present themselves as experts to their clients or get left behind. Additional Resources One of the fastest ways you can improve your digital media knowledge is to immerse yourself in the information and
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trends in the digital media marketplace. Reading newsletters, blogs, and websites like adexchanger.com, clickz.com, mediapost.com (the digital side), imediaconnection.com, searchengineland.com, and techcrunch.com expose you to varying perspectives within the market. Additionally, we recommend you attend conferences, such as ad:tech, OMMA, or IAB, SMX, and SES. Youll know youve become an expert when you feel your conversations with these vendors are teaching them more than theyre teachingyou!

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Without knowing the language, this sign means nothing (left image). Upon learning the language, it becomes very clear (right image).

Day 1: Speaking a New Language

Remember taking a foreign language in high school? Remember how nearly everyone in the class memorized what they needed to, but there were always those few kids who ran way ahead of everyone else, participated in pronunciation contests, and seemed to be able to just think in the language rather than translate as they went along? Digital is a new language. In order to excel, youll need to think in digital, not merely memorize the terms. Trying to translate from traditional rather than speaking digital from the start will leave you sounding like a non-native speaker, and it will be obvious to all. Ever seen a washateria in a strip mall? Its a combination of wash in English and tera in Spanish, meaning store or place where you buy or do whatever the prefix of
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that word is. Of course, washateria isnt used in Spanishspeaking countries, but its been adopted here as a way of saying Laundromat. Likewise, GRPs/TRPs in traditional media are really just a function of reach and frequency. Rating points in and of themselves are kind of meaningless: For example, your goal might be 100 TRPs. Lets say you buy 100 TRPs, but its only a 5% reach and a 20 frequency; you wouldnt be too happy, would you? Like learning another language, it pays to know the roots and sources of what youre speaking rather than simply memorizing a term. Much like Spanish in the United States has in some cases become Spanglish, digital has adapted to traditional media in some ways as well. In fact, digital had a hard time converting metrics into GRPs but recently figured out how to do it. Even though everyone would agree that in-market car shoppers is a more precise target than A25-54 adults, clients have proven so desirous of keeping GRPs/TRPs as a key measurement that sellers have realized its simply easier to find a conforming solution and to take the money than to try to be smart. The same applies to buying a placement or trying to achieve reach through buying a placement. In digital, each ad unit functions more like the Price Is Rights $0.05-$1.00 wheel than a traditional media ad unit. When you buy a print ad, everyone who picks up that publication has the chance to see it. Only a portion of Internet site users will see your

digital ad because its in a rotation with other advertisers on that site. Its almost always cost-prohibitive and not smart marketing to boot to buy out an entire sites worth of inventory. Its natural as youre learning about digital advertising eCPA (effective cost per action), frequency caps, and expansion rates to try to make the comparison to traditional media to root yourself in existing knowledge. But the longer you do this, the longer your digital advertising transition will take. The same goes for your clients: The faster you help them think digitally rather than translate digital for them, the stickier your client relationship. You will become their trusted guide in the land of a new language. So why is CTR (click-through rate) typically an irrelevant metric? CTR is rarely relevant because clickers are not converters! Google the Natural Born Clickers study that put this argument to bed years ago. It pays to know the whole story every time!

Day 2: Staffing for the Digital Future

When we first began hiring media traders (our term for buyers, since real-time bidding is more like trading than old-school buying), we looked for candidates with impeccable marketing/advertising/media pedigrees. During one hiring stint, we simply couldnt find that right person, but we found someone who had great data and analytical skills. She knew nothing about marketing, advertising, or digital. She just knew data. But she turned out to be one of our best hires and is now a vice president who knows as much about digital media as anyone in the industry. I say, When we first began . . . for a big reason. When I joined Goodway, 100% of our business was printed marketingdirect mail, newspaper inserts, and the like. Of the 35 people who were part of the successful print business, fewer than 20% had the right aptitude, skill set, and cognitive disposition to continue with us on our digital
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journey. This was realized over time, of course, but the point is the staff you currently have is probably not the staff you need to succeed with digital in the future. Weve had to hire very differently, as will you. Now with 110 people and averaging only 3% turnover over the last three years, Im proud to say weve come much closer to finding the right mix. Heres how you can, too. Mental WiringThe first key to our success was hiring people with the right personality, disposition, and motivating factors. Weve tested every one of our employees using a multitude of testing systems to help us determine what an ideal candidate assessment looks like. This has been the single most valuable factor contributing to our successful hiring and low turnover. In our virtual work environment, we need people who are self-starters, who dont need daily in-person social interaction. Then, each job function requires different traits if the person is to thrive. For instance, our account managers must have a balance of social aptitude and task-orientation. Too far one way or the other and things tend to not work as well as we require for that person and our company. When it comes to testing, theres really no excuse not to test. For companies our size, its flat-out cheap. A couple thousand dollars a year will reduce bad hires, which probably will cost you ten times more than the tests themselves. Also, if youre worried about the process and time to administer the assessments, dont be. You send

candidates a link, it takes them 10-60 minutes (based on which assessments youre using), and you get the results. For the Greater GoodThis isnt a management book nor am I qualified to write about it! Worth sharing, though, are the single statement and point of view that have helped us keep great employees while moving on from the less desirable ones. When we tell our team someone has been moved out of the organization, the first thing people think is Am I next? The second, Is the company in trouble? We still personally call some of our remaining employees to ease their concerns, especially if the person exited was one of their personal friends. They appreciate this personal touch so much, and its easy to do. We explain that we expect excellence from all employees in their work every day. We then point out it wouldnt be fair to others on the team if some people were allowed to perform less than excellently and still get paid a full salary. Once weve conveyed this, we let them know weve moved that person out of the organization and are looking to hire/promote someone from within whom we can get the same excellence currently delivered from everyone else. Every person Ive had this conversation with has understood and agreed withit. Pay UpWithout getting into client feeswell address that head-on lateryoure going to need to figure out how to get paid fairly enough to afford great people. Let me illustrate by referencing a recent conversation I had with an agency president/CEO.

He, like many others, told me he needed to hire a digital expert. As he sits in client meetings, the president told me his clients ask countless digital questions, and he doesnt have anyone on staff who can answer them all. I asked him what topics the questions covered. And he said, Oh, everything. Google Analytics, SEM, SEO, display, ad serving, mobile, geotargetingyou name it! Then I broke it to him. Budget $150,000, and your chances of getting someone pretty average are very high. There are a lot of $150k people in our industry who know just enough about each of these things to be dangerous, but the reality is that the breadth of expertise he just cited covers at least two, if not three peopleeach at pretty healthy salaries. While were not an agency, I understand agency financials well enough to be dangerous. I understand there simply isnt budget to hire this type of talent unless these employees work is directly billable or unless they have direct roles in the business. I understand this, but well discuss charging clients fairly for digital in Day 4, and youll come to see how vital it is to figure out a way to be paid fairly enough so you in turn can provide all these services to your client.

Day 3: Facilitating Ongoing Training

On May 31, 1913, John Paul Jones of Allston, MA, ran a 4:14.4 mile. That was fast. So fast, in fact, the newly formed International Association of Athletics Federations that was internationally responsible for determining world-record holders then (and now) recognized him as having run the fastest mile in history. Unofficially, there were others, but this governing body established this as the time to beat. Decades later on May 6, 1954, Roger Bannister of England officially ran the mile in 3:59.4. He was the first human to ever run the sub-four-minute mile. Of course, this happens regularly today, with Hicham El Guerrouj of Morocco holding the current world record of 3:43.13 set in 1999. In my past, I spent a lot of time working for ad agencies in the pre-digital era. We looked at different types of training that employees needed on an annual basis. Today, were in
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a time where everyone in marketing runs the four-minute mile. Anything slower means becoming obsolete. Training cant be looked at annually; it needs to be reviewed in realtime. With this increased speed of information also comes an increased ease of access to that information. Twenty years ago, the best and brightest may have only gathered at a conference once a year to share ideas and collaborate. Now this is done in real time with LinkedIn, Quora, Twitter, or with any of the other dozens of tools available. The best and brightest are now forging social media relationships with those who have more expertise than they do. Theyre learning all the time. As an agency owner looking for ways to ensure your team is learning as efficiently as possible, social media can be the most efficient way. Just having the tools at your disposal, though, doesnt constitute using them. Additionally, simply reading what others are saying puts you on par with 500 other agencies around the country. Its about insights. Taking the information everyone has and actually making something of value out of it for your clients is what will put you at the top. How do you do that? Here are some tips to get your entire team engaged in this process: 1. Ask employees to pick a social tool they are most comfortable with and use it. Have pre-established lists of suggested follow-worthy experts they can start off with to populate their information feed.
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2. Dont require participation. Instead, create a contest where employees can choose the most insightful tweet or post from the week and give their two cents on what it means. You can pick the one that truly delivers the most insight and give out a $25 gift card, a one-on-one lunch with you, or any other prize that makes sense. 3. Share these insights across the company to give people credit for what they contribute. You could set up a system like this using something as low-tech as email (to a centralized person or to your entire company), or you could set up an online forum with something like Bloomfire or Yammer. This last point is important. Sure, you can have your team participate in traditional social media, but how will they share with each other? The cost of internal social collaboration tools is now so affordable, and they can add tremendous value to yourcompany. Of course, social media isnt the only way to learn. Ive spent a lot of time on it because its free and effective, which is quite the combination. But there are other ways to teach, train, and learn. Reading trade publications is one of those great ways. Similar to social media, they tend to be effective and free. You should encourage your staff to engage with authors when they have a thought or comment. Its a great way to network. Typical publications in our space, beyond those
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that also cover the traditional world, are AdExchanger, iMedia Connection, Mashable, MediaPost (digital), Re/code, Search Engine Land, and The Makegood, amongothers. Next, there are conferences that typically are best for beginners. I say beginners because youll see dozens of speakers and expert panelists, but theyll never share their best knowledge with you since that would put them at risk with the competition. At best, theyll share something a year old onstage. If youre new to the digital language, one-yearold information still can quickly get you closer to whats current, and farther ahead of where you are. I definitely learned a lot at my first ad:tech conference in 2000, but its considered by those who are knowledgeable in the industry to be quite basic. iMedia is a tough conference to get into for agency people because its completely free (including hotel room and all food) to agency attendees, and so many agencies want to attend. AdExchanger holds great conferences; although, theyll be advanced for someone new. There is also South by Southwest (SXSW), but it tends to be more client-entertainment-driven than business-driven. Search Engine Strategies (SES) and Search Marketing Expo (SMX) are it for search. The reality with conferences, though, is once youre fairly caught up on knowledge, the biggest benefit to attending is interacting with the people there. You dont need to pay for a pass to meet up with great people! Simply consider getting a floor pass to these conferences and not attending the sessions.
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You wont learn as much, but for anywhere between free and $100, you can meet hundreds of vendors and absorb as much of their knowledge as youd like! Another optioninviting vendors to present to your agencycan also be a good way to learn. Ask for a presentation that includes vendor information as well as industry information at large. Clearly, presenters are only going to show you data that benefits them; but if its good data, itll at least be true and give you one side of the story. Finally, sign up for our email list at goodwaygroup.com. Sure, this is a plug for our own company, but youll receive tips about the newest industry trends and information to help you better serve current clients and/or win new ones.

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Day 4: Charging for Fees and Commissions with Digital

Inventor Ron Popeil made the phrase Set it, and forget it! famous and part of our vernacular with his Showtime Rotisserie. Nielsen did the same with TV ratings. Sure, agencies may post daily now, but until youve sat at a digital media traders desk and watched the optimization that goes into even just $1,000 of media, you wont realize how set it, and forget it traditional media will appear. These issues require resources and drive a cost of providing basic digital services that is directionally double that of traditional full-service agency fees, when expressed per dollar of media spend. A Marketers Guide to Understanding the Economics of Digital Compared
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to Traditional Advertising and Media Services, a 4As white paper by Joe Burton (http://www.aaaa.org/eweb/upload/ catalog/pdfs/MG18.pdf) To begin, read this 4As white paper. It does a great job of illustrating the contrasting nature of digital and traditional media efforts required at the agency level. Its a bit dated, but its dead-on. The simple explanation is because we dont set it, and forget it with digital like we do with traditional media; the effort to create and manage a digital media campaign takes at least double the resources. Therefore, if youre charging 15% or, heaven forbid, 10%, 5%, or less, youre guaranteed one of two outcomes: either youll lose your shirt financially and be in a constant state of panic, or youll lose your client because campaign results are poor. Oddly enough, its not uncommon for trading desks and DSPs to charge 25%-35% for media, especially if youre not in the annual multimillion-dollar range. Thats right. I personally know of someone chargingand getting35% on media. That may blow your mind, but its reality. In this chapter, well walk through the approach you can take with your clients to recoup costs as well as the pitfalls to watch out for. In digital media campaigns, its all about the e. An e can be put in front of nearly any digital success metric: eCPA (effective cost per action), eCPM (effective cost per
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thousand), eCPC (effective cost per click), and so on. The e stands for effective, meaning its all relative to the goal. Because traditional media is most often less trackable than digital media, clients have traditionally focused on finding an agency that charges the cheapest rates and paying them as little as possible. Now that digital campaigns are trackable, clients will absolutely pay more if the results are there. The key is figuring your fee and including it within the e of the results equation. If youre buying media at $4 but taking a 25% margin, the CPM to your client is $5.33. If it takes you 2,000 impressions to generate an activity, then your effective cost per activity is exactly $10.66. To be clear Im not suggesting hiding the net from your client and doing blind margins. Im suggesting you not make it hard on yourself by showing the client everywhere youre charging for them and how much better off theyd be if they could pay a true net rate. Once the client sees the value in a reasonable eCPM or eCPA, the questions will subside. Another great aspect of digital is so much inventory is available on a bidded basis through the RTB markets. I always tell my clients, We will recommend a CPM to you, but you can pay whatever CPM you want. If I recommend $3.50 and you want to pay $2.50, feel free to do so. Its an auction environment, and youll win some level of impressions at any price. They may just not be the right impressions. Sure, youll still need to negotiate site-direct placements, but any time youre buying unsold, audiencedriven inventory, do so on RTB to eliminate any questions
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or concerns your clients have about your ability to buy cheaper than the agency down the street. Finally, realize what role you serve with your client. Are you a paper pusher doing administrative work for the client? If so, youll need to compete on price. Or are you the clients most important salesperson? Most clients have a sales force, and salespeople are paid a basic, comfortable wage for showing up to work every day but dont make good money unless they hit their numbers. Why are you any different? The budget you are assigned and the impact you can make are more than any one or many of their salespeople! Working with your clients in the role of its biggest-reaching salesperson changes the focus from How cheaply can I get this? to What do I need to pay to get great results? We wrote a piece on this very topic here, which may be of help: (http://blogs.imediaconnection.com/ BlogAdmin/BlogEdit.aspx?BlogID=259).

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Day 5: Winning New Business with Digital Media

Remember sitting in class and seeing the teacher roll out the TV cart? Youd think to yourself, Thank goodness! A video! I can almost sleep through this one! The funny thing is, even if you did only pay attention halfway, you probably gleaned more from that video than if the teacher were teaching it alone. Sight, sound, and motion are a powerful combination! Then there were those rare teacher-taught nuggets of knowledge that, despite it being decades later, you still remember. Maybe the teacher was good, or maybe the knowledge simply cut through the clutter well. For me, some of those moments cameI cant believe Im admitting thisin drivers ed! The teacher had a smoky cough and laugh, was not necessarily endearing to us, and wasnt even all that good of a teacher. So why do I remember these nuggets? They were simple to understand
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and made me think about them in ways I hadnt before. For instance, give enough distance behind the car in front of you at a stoplight so you can see where the tires hit the ground. Remember the two-second rule? UCLA (uphill, curb, left, always)? These are things I should not remember 20+ years later, but I do, partly because they were important to what I was trying to achieve at the time and partly because they changed the way I framed that concept in my head. Fast-forward many years, and Im an account guy in a client meeting. Get to the creative! Get to the creative! was always the mantra. The media stuff bores them! Just get to the creative! Essentially, were saying, Just roll out the TV cart! Creative is important and is typically the sexier side of the business, but most clients want to be taught something they dont know. They want to learn how to think about their media, and theyll remember those who teach it to them that way. While UCLA was mnemonic, it also changed how I was trying to memorize it. At first I was thinking, OK, there is uphill and downhill, and then left side and right side. So there are four possible outcomes. But the term UCLA stopped that mental process and said, Listen. Youre making it too hard. Digital media is quite similar, and the greatest successes Ive had in educating and pitching have been achieved by helping people reframe how theyre thinking about a topic so its crystal clear. This makes clients buy.

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One great example is the concept of geotargeting. Im amazed at how unnecessarily complicated digital sellers make this concept. They wave around shiny objects like ZIP+4 targeting and census tract targeting. Clients think it must be magic! But theyre still left with a feeling of discomfort since they dont know how its really done. Instead, why not explain geotargeting backward? Your house is plugged into the Internet most likely via wires going under your sidewalk or back alley. They may be cable, fiber, or phone/DSL lines. Those wires have to go somewhere to plug you into the Internet, and that place is the local node. Its usually a green box somewhere in your neighborhood, on a corner, or at the edge of a park. For fiber, its probably literally in your neighborhood. For cable, its in your general area, and for DSL, it could be eight miles away and be an actual building. But when you geotarget without using log-in data, the best you can do is geotarget that node, not the household. So when people say they are geotargeting to the +4 level, theyre not lying. Theyre just not targeting any households to the +4 level; theyre targeting that nodes +4, which is probably not your+4. This isnt crazy smart stuff; it just reframes how you think about it. Rather than thinking about zeroing in on a consumer, you back out and realize its not so hard. The same can be done with mobile in-app targeting, predictive modeling, behavioral targeting, and even RTB. None of these concepts is that hard if its explainedright.
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Before you step into a client meeting or pitch to discuss digital, you must have a thorough understanding of the concepts youre dealing with and be able to connect these simplicities to your clients and their ways of thinking. This requires learning, education, and rehearsal. Rather than winging it because everyone understands a GRP, take the time to prepare and boil down what youre trying to impart. It will pay off. Lately, Ive left many meetings where clients come to thank me before the creative teamall because my effort to simply reframe complex concepts helped them truly understand digital for the first time.

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Day 6: Seeing the Other Sides PerspectiveThe Biggest Mistakes Agencies Make
Before you criticize someone, walk a mile in their shoes. That way, when you criticize them, you are a mile away and have their shoes. Jack Handey Sure, the joke is funny, but the original quotation is legitimate. Lucky for you, Ive worked in an agency clientside and am now on the seller/agency vendor-side. While Ive walked a mile in the agency shoes, Ive never owned an agency, and thats who this weeks supplement is geared toward. So while Im nowhere close to knowing everything you need to know about your business, there are consistent mistakes we (and other vendors) see agency owners making. Well share them with you here so you can make adjustments if there isnt something weve overlooked.
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I need a digital expert on staff. I sit in client meetings, and I dont want to keep having to go ask vendors for the answers. We need to know the answers. Yes, you should have someone digitally conversant on staff, but there is no way that person will be able to answer even half of the client questions right there in the meeting. The mistake we see agencies make is when they look for a silver bullet miracle person. Heres what you need toknow: 1. The IABs annual salary survey shows sales engineers (the smart product people who come to meetings with salespeople) with a base salary of ~$100,000 and total comp of ~$140,000. Keep in mind, that person doesnt actually execute on much; they are sales support. 2. Do you have that in your budget? 3. Do you have a person with that knowledge in your market? If youre in Santa Fe, NM, you do not have a person with that knowledge in your market. Period. Youll either need to be comfortable hiring remotely or training someone in-market. 4. You can choose one of these two options, or you can find a vendor to work with closely and develop a great relationship with them. We do this for dozens of agencies around the country.

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Speaking of which, have you ever heard this said before?: We dont have the talent in our market to build the right digital team. Correction: You dont have people with the existing knowledge in your market. There are plenty of people with the talent. Three of our most digitally knowledgeable people at Goodway came from: 1) ad trafficking, 2) data analysis, and 3) direct mail. The right training and industry exposure will make anyone with the right talent and aptitude much more knowledgeable than someone whose aptitude is lower but has memorized a lot of the rightanswers. Rejecting a vendor: Well, were all planned out for the rest of this year, and well be sending out RFPs for next year in four months. Ouch, youve just done your client a major disservice. Digital is real time. If youre not looking at your campaigns every minute, thats OK; but you sure should be looking at them every week! You may, in fact, have buys running through the end of the year, but is every one of those vendors performing well enough and hitting your campaign goals? If not, find a new vendor to replace themstat! There are two much better answers when rejecting a vendor. First, Im sorry. You havent explained a true point of difference and reason why I should spend money with you and not other vendors. Im sure you have lots of happy clients, but right now were not interested in working with you.
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Second, All of our current vendors are performing and hitting our goals. Clearly, we dont want to interrupt that. However, we look at performance all the time and should one of them slip, since we like your product, well give it a try. The only thing worse than no to a salesperson is telling them maybe when you dont really mean it. Our clients site is being redesigned and will launch in a few months. Were not doing digital until then. I barely can speak after hearing this, and Ive heard it many times. The website is now your clients second storefront, second showroom, second call centeryou name it. If construction were done on the building, would all advertising come to a halt to make sure no one saw the ugly construction? Heck no! EXTRA advertising would likely be done to make sure people knew the business was open! Do not allow a client to stop running digital advertising campaigns while rebuilding a website. Websites will always be undergoing some changes; that is a part of life. What is the biggest mistake vendors make when pitching to you? Shoot me a note at jay @ goodwaygroup . comId love to know!

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Day 7: Marketing Yourself Using the Best Practices Youd Recommend to a Client
I resisted the TV show Breaking Bad for a long time. I knew what it was about, but I just dont watch much TV. Finally I gave in, and Im glad I did. One of the things that make the character Jesse (the junkie type on a show about the methamphetamine drug trade) so credible is he actually tried this new product and could personally say its the best hes ever had. I mean, if you want the best meth out there, are you going to trust the chemist who made it but never tried it and has nothing to compare it to or the junkie whos an expert? Fortunately, the only thing you and I plead guilty to being junkies of is great marketing practices. Yeah, that was cheesy, but roll with it. You and your staff are constantly amazed by clients who wont listen to the most obvious

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business advice, but do you take your own? In digital, we preach SEM as the first line of offense in any paid digital media campaign. If someone is actively searching for a solution related to what you sell, why would you not want to appear there? If youre an ad agency in Kansas City and someone is searching for Kansas City Ad Agencies, you should want to appear! Whether its a potential client or employee, that couple dollar click is well worth it.

Next in the paid digital media pyramid is site retargeting. Last week, while online, I visited 50 regional agency websites and clicked around. Then I left the sites. Only one of those 50 websites retargeted me with display banners after I left, and none did so through Facebook Exchange(FBX). Now is the time to take stock of the best practices you most often preach to your clients and make sure your own practices are in line with them.

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Wrapping the Week: Moving Forward by Building, Buying, or Bridging

It doesnt have to be the holidays for me to enjoy a great piece of pecan pie. My friends know I love desserts of all kinds, and when it comes to pecan pie, they ask, Whats the best youve ever had? Before I talk about the very best piece of pecan pie Ive ever had, Ill talk about Sams Club pecan pie. Sams pie is really good. Its not the best, mind you, but its good. So when I order pecan pie at a restaurant, it needs to be better than Sams. If its not, Id rather the restaurant just buy Sams pie and charge me for slicing it. When it comes to the old buy or build question with regards to digital media, use the Sams Club pecan-pie factor. In a similar fashion to how restaurants make every kind of food, agencies want to say they do everything inhouse. Its their people pulling the levers and pushing the
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buttons, which outside entities will not understand. This means the client cant get it anywhere else. But what if the pie youre making in-house isnt better than Sams? In other words, what if the agency is not that good at executing digital? Agencies try all sorts of crazy things. Theyll buy Sams pie, sprinkle sugar on it, and claim it may have originated at Sams, but its their own special recipe that makes it great. Or theyll find an ingredient in Sams pie and tell the client how bad it must be. This is supposed to make their inferior pie taste better to the client? The digital industry is now mature enough there are digital experts in every specialty. Whether its email marketing, SEO, SEM, user experience, or display banners, people know their craft. However, while the industry may be mature enough to have experts, its also still young enough that these experts arent plentiful and often arent even hirable! Many have their own businesses and enjoy working for themselves. As you shape your digital practice, what are your options to meet or beat the Sams pecan pie line? Lets take a deeper look: Building OK, all this talk about pies still hasnt convinced you. You want to have the expertise in-house and working for you understood. Here are some considerations: 1. What are you building in-house? Websites? An email-marketing practice? SEO, SEM, display

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banners/video pre-roll/mobile buying? Digital is multipronged, and there is no single expert who can lead all disciplines. Ive done this exercise with many clients, and a minimum of four (wellpaid) experts would be required to lead a digital practice: A) web development (no coding, just leadership), B) email/CRM, C) SEO/SEMand this is a big stretch to find someone who is truly great at both (this will often be broken into two, or perhaps youll find the SEO within the webdev role), and D) paid media, such as online display, mobile, and video. 2. Now you have these experts hired, they typically lead a team and often dont want to do the work themselves. Theyll need at least one additional hire each. 3. The best carpenter in the world is nothing without his or her tools, so make sure digital tools are in the budget. SEO experts will at least require a moz.com subscription; SEM experts will require competitive keyword tools; and the paidmedia folks will require insights from comScore plus a few others. 4. Youre about to sign and pay for some big contracts: For instance, in the RTB space, if you want to pull the DSP levers yourself, youll likely need to commit to spending at least $1 MM/year per platform in order to receive the
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training and access. If youre growing your SEM practice, youll likely outgrow Googles and Bings interfaces quickly. This means you need access to companies such as Marin or Kenshoo, which do not tend to allow contracts less than $100kmonth. *Special note: Buying Google Search, Google Display Network (GDN), or AdMob through Google is the very definition of Sams Club pecan pie in the regional agency space. While good products, they are a far cry from truly building great capabilities in-house. Buying Buying could mean two things: First, it could mean you acquire a company specializing in the discipline in which you want to be an expert. Alternatively, it could mean you simply purchase the product from an outside partner. This would mean the pie is being baked elsewhere, but it may be the best choice at this time. Assuming youre not interested in buying another firm, heres what to look out for when buying outside services: 1. Transparency, transparency, transparencyThere is absolutely no need to buy from someone who will not show you reporting on every keyword, every email, or every website you ran on along with associated metrics. The age of dont worry about whats behind the curtain has passed indigital.
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2. After performance, reporting tends to be what agencies rank next on their needs list. So make sure you get in writing exactly what kind of reporting youll get, how often youll get it, and what level of detail/insight will be provided. 3. What happens with the data once youve bought the product? Whether youre in Google AdWords, using advanced bidding software, or running RTB, where does your data go and how do you stay in control of it? Can you ever get it? This is worth exploring before you choose the buy only route. Bridging So you want your pie and want to eat it, too? Sounds reasonable to me! Many agencies will find they have the media/spend budgets for certain components of the build scenario stated previously, but other components are missing. To build something completely in-house, youll need the budgets AND the people AND the tools. Bridging allows you to experience most of the benefits of building with only the budget portion of this scenario covered. Lets set up a sample scenario: Youre spending around $275,000 per month in display media (it could be online, mobile, video, or a combination thereof), but you dont have the talent and tools in place to run this as well as youd like. You may be spending $50,000 of this directly with sites, but the rest is going toward RTB performance
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buys. With this budget level, youve outgrown working with an ad network andself-servingly, I admitshould be working with a trading desk or DSP directly to achieve the full level of transparency and control you deserve. Heres how to make sure you get the most out of choosing this route: 1. Ask your service provider if you will have a full-time, dedicated (meaning dedicated only to your business and no one elses) trader/buyer and account manager. Depending on whom you work with, different spend levels will be required to achieve this, but make sure to ask! 2. Ask about options to OWN YOUR DATA. Regardless of how much data you choose to consume, the provider will still retain a copy. Find out not only if you can access your data but if there is a charge for them to provide it. At this level, you should have these options. 3. Online reporting access should also be high on your list. Are you able to see this reporting whenever you want, or does someone internally need to enable it and make updates? The reason its important is not to ensure trust but to ensure instant access to metrics when your client calls and you need to look up something. If your spend levels are low, you may need to wait until you grow further to be able to take on the bridge or build
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functions. As always, please dont hesitate to reach out to me if youre in this situation and want to discuss it further. Im not in sales, so I tend to provide people with straightanswers!

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Bonus Day: Knowing Real Objectives

The following is Day 15 from 30 Days to Paid Digital Media Expertise6th Edition, but it is so important it bears repeating for you, the agency owner. You and your family prepare to head out to a theme park for the day. You make the drive and find a parking space. As youre getting on the tram, the driver turns to ask you, What is your reason for being here today? Isnt the answer obvious? So much so, youd look a bit confused as to why someone would ask. Certainly, its to have fun. Or is there more? Digging deeper, we find you work long hours and have taken the day off to spend time with your kids (layer one). Additionally, your son has been busy excelling significantly at high school sports, and now colleges are inquiring about

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the future. Waiting in line will give you time to discuss issues that will affect the rest of his life (layer two). Finally, your daughter has been arguing with you recently, and hanging upside down 100 ft. in the air will give you something to laugh and talk about (final layer). Whats interesting is that you might not have consciously thought out each of these issues but subconsciously realized that a trip to the amusement park would be the best solution to solving all of them. This is nearly a direct parallel to how online campaigns are planned every day. When planning an online campaign, you might initially think brand awareness and sales are your objectives. These might be your end goals. If so, heres what you should consider if they are. If brand awareness is your objective, how will you measure it? Will you implement a brand study? If the CTR is 0.00% and you cant prove a single sale from the entire campaign, will you and your client still be satisfied with the campaign, assuming a lift in brand awareness can be proven? Brand awareness can be a meaningful goal, and weve helped a number of brands measurably lift their awareness. But be prepared for the first campaign report to be very uninteresting and resist the temptation when you see a low CTR to feel its not working. CTR and brand awareness have absolutely zero correlation, and optimizing to a good CTR might actually hurt your brand awareness.

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What if your objective is simply sales? If this is the case, how will you measure this? If you have e-commerce enabled on your website, youre in great shape. A few pixels placed and your buy should go well. What if you dont have it enabled? What if your business is furniture or automotive where most purchases are made in person? If you cannot track online behavior to a sale, dont let sales be the objective of your online campaign or youll be disappointed. Online is measurable, not miraculous. One way to make sure your objectives are reasonable (assuming youre outside of e-commerce) is to ask yourself if you would have insisted on achieving the same result from your TV, radio, or newspaper buys 20 years ago. If not, you may be either using online for the wrong reasons, or expecting more from the medium than it can deliver. So how can you generate a positive result when truly looking to sell an offline product? Instead of setting sales as your objective and guaranteeing yourself disappointment, determine actions consumers might take on your site that are likely to indicate buying behavior. If youre an automotive dealer and consumers look up store hours or directions on your website, this is a good indication that theyre planning a visit to test-drive. Its doubtful theyre looking at your hours for the fun of it! A quick note about mobile: While your Google Analytics (or similar) can tell you what has happened with mobile site visitors, measuring media outcomes with mobile is
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more difficult. Without the ability to set a reliable cookie, measuring activities and conversions on mobile devices is inaccurate. Mobile technology is growing up and will someday enable the same benefits provided for online, but, as of this books publishing, were not yet there. Online display, video, and paid social are all fully measurable, though, so have at it! At another company, I used to work with a car dealer who once told me, We just need traffic! We advised him that we could drive plenty of traffic, but it might not be quality traffic. Doesnt matter! Just get me people! So he enthusiastically approved a promotion that only would run on the last Saturday of the month. It was a teaser giveaway mailer with the chance to win a new car. It came. It went. He called me first thing the Monday morning after andno liesaid, That was the biggest crock of s*** promotion Ive ever run! There wasnt a full set of teeth between all 200 people that came in here! A click is like someone visiting your physical store. Your goal should never be just site visits. Just get me someone, anyone is not an offline marketing goal. There must be something more the consumer should do upon arriving at the site to demonstrate his or her value. Determine that something and tag it to measure it. Make sure you have a way of measuring the outcome and optimizing to it. This is done with conversion pixels, small

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snippets of code placed within your clients website that will provide conversion metrics for your campaign. Finally, openly state your objective to your publishing partners. If your goal is to get consumers to locate a dealer, tell the publisher. Then the agency and publishing partners can work together to achieve a clients measurable objective. Exercise: If you arent using Ghostery as a browser extension within your web browser, definitely take the time to download it at (https://www.ghostery.com/). Once installed, you can see all the pages that are tagged and with which pixels/ publishers on any website. Go to some of your clients competitors sites and see which pages are tagged and which arent. This will give you a good idea of what actions they value the most.

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