Growing new business is vital for agencies looking to stay competitive and financially stable in 2018. But as the ad budgets get tighter, and the competition tougher, which new channels should agency directors and CMOs prioritize in 2018?
In this article, you’ll learn which lead generation channels performed best for agencies last year.
The data and advice we’ll share are based on a recent report from RSW, a lead generation firm. The report features survey results from over 5,000 agency executives and 10,000 marketing decision-makers across the United States and presents comparable stats from 2016-2017.
Are New Business Opportunities for Agencies Decreasing?
As even the biggest ad companies experience the slowest revenue growth since the recession, it’s a challenging time to be in the agency business. Agencies compete on tighter margins in the industry with a high rate of employee turnover. More often than ever, clients now choose consulting firms over agencies, or bring media buying in-house to protect brand safety.
Yet agency marketers are optimistic: 54% of those surveyed by RSW in 2017 expect new business opportunities to grow.
To succeed in 2018, agencies will need to figure out their unique positioning in the crowded market, hire and retain the best talent, and be extremely adaptive.
Lead Gen in 2018: the Battle for Your Prospects’ Attention (and LinkedIn Conversion)
According to the RSW survey, 60% of marketers are getting 6-10 calls a week from agencies. Clearly, even with the growing number of opportunities, it’s harder to reach your ideal prospects and capture their attention.
Marketers are busier than ever. They juggle a lot of responsibilities and simply don’t have the time to engage with a sales rep — unless they’re actively looking for an agency at the moment.
So what can an agency do to grow new business? Paid marketing channels — LinkedIn specifically — remain part of user acquisition strategy for most agencies. “LinkedIn advertising has proven to be the most effective channel in reaching qualified leads at the most efficient rate within our B2B manufacturing & software clients,” said Eric Ramos, Director of Analytics at BusinessOnline. Last year, BusinessOnline quadrupled their LinkedIn spend as they saw great results on the platform.
But even though LinkedIn proves to be a great source of quality leads for many agencies, the RSW data shows that digital acquisition channels are not enough.
1. To Win More New Business, Take It Offline
Last year, most new agency business came from referrals (64%), networking (56%), and existing clients (50%). Paid online marketing came last with the same percent as direct mail (2%). Phone calls as a lead generation channel grew from 8% in 2016 to 12% in 2017, proving that offline channels could bring more return on ad spend. And in-person meetings are particularly useful, as more business this year came from speaking engagements, conferences, and networking.
2. Hire and Retain Top Talent; Set Realistic Expectations
Marketers cite “finding good talent” as one of the biggest agency challenges in 2018. In the age of automation, people who can solve problems and grow client relationships are a rare and valuable find.
The advertising industry has a higher employee turnover than related industries. For example, the turnover for the position of a New Business Director at most agencies, according to the RSW survey, is less than 2 years on average.
So why do agencies struggle to hire and then keep top performers? AdWeek called agencies’ New Business Chiefs “the most dangerous job at an agency,” with the high expectations that are hard to live up to. And when things don’t work out, according to RSW, agencies should try hiring more experienced people: “Bringing young kids that have ‘a lot of energy’ simply doesn’t pan out.”
3. Double Down on Data Analytics and Measurement
87% of marketers state that marketing data and analytics capabilities are an important factor when considering a new agency partner. This number is up 14% from last year, and growing as companies hope to close the loop of ad spend reporting and understand the real impact of their advertising, as well as master advanced segmentation for a more sophisticated personalization strategy.
Marketers expect agency partners to help them accurately measure the ROI, and say that most agencies can’t deliver.
And as you can see on the graph above, agencies and marketers disagree about the agencies’ effectiveness at measuring ROI. 38% of agency executives stated they are “very effective” at measuring ROI, compared to only 15% of marketers who felt the same way about their agencies.
4. Have a Well-Organized Methodology for Prospecting.
The number one reason outbound marketing fails, according to this survey, is lack of a well-organized methodology for prospecting. To set your team up for success, you need the tools and processes in place first.
From setting qualifying criteria to the first connection and discovery call, to evaluation and closing, a solid methodology also needs the software tools and strong leadership in place to implement the processes and drive the adoption.
5. Keep Ahead of the Technology with Automation
The reason to keep up with the changing tech (and automating what can be automated) is simple: you can generate more revenue with fewer employees.
At the end of the day, when agency employees spend half of their time on manual, tedious work processing the business they already have, how much time is left to work on new business or cross-sell?
Businesses looking to get ahead in 2018 will need to invest in PPC automation and other software tools to optimize workflows and save time for deeper, more meaningful work that will set your agency apart.
6. Be a Strategic Partner
To be competitive long-term, agencies will need to be skillful in both tactical execution and strategy. Clients no longer rely on agencies for just the keyword research or scheduling and monitoring paid social campaigns. The majority of marketers come to agencies for strategy (74%) and innovative ideas (84%).
AKQA’s general manager said in an interview to CMO.com that “the job of agencies today is to be somewhat of a future/growth hacker” and look years, not months ahead to devise solutions to make clients successful in the long run.
7. Find Your Niche and Own It
As marketing guru Seth Godin said, “fitting in is a failure.”
Whether it’s a category, an approach, or your technical expertise, finding a high-potential niche that will make you stand out in the competitive market will be key to relevance.
For example, B2Linked became the leading LinkedIn advertising agency primarily because of their focus on just one paid channel.
How do you find your niche? With new channels, social media platforms, approaches, technologies emerging at a rapid speed, advertising offers more niche opportunities than ever before. As Seth Godin said, “if you can’t find your niche, just wait, it’s coming.”
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As a PPC agency director or team manager, you know that your team’s productivity is one of the most important assets. Unfortunately, there’s one thing that could be draining productivity inside your company. It’s not social media or office politics.
I’m talking about meetings. Online or offline, agency meetings can become more of a time waste for your team than a productive task.
Slack, the popular team chat tool, changes the way you can hold meetings. And it’s not just the chat; it’s the wide range of apps you can integrate on Slack.
The hundreds of Slack apps for marketers can help you find the availability of every meeting member, rent a meeting room, and make the call — all without leaving the chat.
Here’s a list of the best Slack apps you can use to make your team productive.
Trello is a visual collaboration tool that allows you to organize the projects discussed in your meetings in a simple manner.
By integrating Trello with Slack, you can add new Trello cards to boards directly from Slack with the “/trello add” command. You can also join Trello cards and boards, change deadlines, and attach conversations, among other things. All this can help you get started on your projects right away while you carry out your meetings.
Cost: Free, $9.99 for the Business Plan, and $20.83 for the Enterprise plan, priced per user.
GoodTalk is a bot that allows managers and employees to add things to the agenda between meetings. GoodTalk allows you to follow up on everything that’s discussed at the meetings, whether it’s after a client call or an all-hands meeting, fostering high-performance habits and a culture of open feedback.
GoodTalk can also assist you to prepare your one-on-ones and team meetings, keep you updated with the action items and outcomes of your meetings, keep you aligned with your team’s goals and objectives, and give better feedback to your team’s members.
Google Calendar is one of the most popular calendar tools that help your team stay organized with shared calendars, event reminders, and more. With the Google Calendar integration, you can send reminders to the members before an event starts, share the summary of the current day’s and week’s events, and update any changes to the event.
A shared calendar can help you organize your meetings with greater efficiency. You don’t waste time emailing people and asking questions; you simply check their calendars and book the meeting right away.
With the help of Meekan, which the company calls the “world’s smartest AI scheduling assistant,” you can match everyone’s calendars in seconds. After you integrate Meekan with your Slack chat, you can discover everyone’s availability and preferences to set the best time to meet. This can allow you to work out any time differences and find time to meet.
Daily standup sessions can help your agency members keep each other accountable. Carrying out those sessions, however, can be harder when done online.
Geekbot can help you run asynchronous standup meetings in Slack. As soon as you integrate it with your Slack chat, you will be able to add transparency to your meetings and stay focused on the tasks that matter.
Cost: $3 per user, per month, paid monthly, or $2.50 paid annually.
It’s a common practice to schedule meetings well in advance. Sometimes, however, meetings happen ad hoc, and conference rooms can be hard to find.
With the help of Meeting Room Ninja, you can check your organization’s Google Calendar for the meeting rooms available for the next 60 minutes. You only need to use the command “/meetingroom,” and the bot will provide you with the time options, ranging from 15 to 60 minutes. You then select one of the time slots, and the meeting room is instantly booked for you in your organization’s Google Calendar.
Trackmeet is a Slack bot that lets you run meetings with purpose. By integrating Trackmeet with Slack, you can post virtually any content you’ve created in Trackmeet to a Slack channel or direct message. Not only can you push the meeting’s agenda to a channel in advance, but you can also create notes summarizing the meeting and provide the participants with actionable steps.
If you run a remote PPC agency or company, a common problem you likely have is coordinating the timezones of every member before scheduling a meeting.
The TimeShow Slack App saves you time by eliminating the challenges associated with users in multiple time zones. You only type the “/timeshow” command in one of your channels, and the bot lists all time zones and current times of all members of a group or channel, grouped by time zones. Not only that, TimeShow automatically instantly shows you the best “meeting windows” that work for all members.
Finding the right time for a meeting can be an exhausting process. Ahoy.Ai is a meeting scheduler that helps you find the perfect time to meet with just one email or Slack command. Ahoy.Ai combines NLP (natural language processing) with ML/AI (machine learning and artificial intelligence) to find the best time to meet.
You only need to type “/meet [@person1, @person2, …] Text about why you’re meeting, and Ahoy.Ai will automatically send out the invites. Once the invites are accepted, or 12 hours have passed, the meeting will automatically show up for everyone who has confirmed their calendar.
Running PPC campaigns in different ad networks takes a lot of time. For every report you create, you have to access each of the ad networks you advertise on, find the report you want to use for your analysis, and export the data.
AskAdStage gives PPC managers the ability to access and share reports right from the Slack chat. It’s perfect for when the CMO asks for a trend or number you didn’t have handy.
You can use AskAdStage to compare performance metrics across the most important search and social networks, including Facebook Ads, Twitter Ads, and Google Adwords, among others. You can see the performance of your campaigns with the help of visualized data, including bar, line, and pie charts.
Finally, you can use AskAdStage to pause or enable your ad campaigns, ad groups, or individual ads.
Cost: From $749 for companies with up to $50k in ad spend, with a 14-day free trial.
Before closing, let me give you one last suggestion: don’t install all these apps right away.
Pick two or three apps, install them, and test them in your next meetings. Once you see how these apps work for your team, you can measure their effectiveness and try new ones.
The national unemployment rate is down 50% since 2012, yet employees are still overworked and stressed. How can that be if there are more people to share the workload and how can management and leadership help combat the inevitable burnout? And as an agency director, or manager of any kind, is it possible to manage, grow, and retain talent when there’s the hovering possibility of work-halting dissatisfaction?
To find solutions, you have to know the cause. Reasons people feel burned out can range from anything to feeling over-worked, undervalued, isolated, not challenged, uninspired, and more.
Ashley Dennison, a former agency director who has led multiple teams over her 10-year communications career and now runs her own consulting business, PR Pinch Hitter, says it shouldn’t be hard for observant managers to spot someone who’s burning out.
“If a normally cheerful and talkative team member stops greeting his or her cube mates when she arrives in the morning or stops stepping out to grab lunch with colleagues — she may be quietly burning out. Or if a normally productivity and results-focused employee is spotted slumped in his chair, texting or playing games on his iPhone — that’s an indicator that something is amiss and worth checking up on.”
With so many sources for burnout, for an agency director, or anyone responsible for teams, it can sound like your full-time job is making sure everyone is happy and productive. But it’s much simpler than that to help build a workplace employees like coming to.
Take a Look at Your Organization
As companies work quickly to grow and hit goals, they can often fall into bad habits that affect the entire staff. Turnover, unhappy employees, and slowed productivity are all warning signs that changes need to be made. Eric Garton, coauthor of Time, Talent, Energy: Overcome Organizational Drag and Unleash Your Team’s Productive Power said in his Harvard Business Review article that when he and his research team studied companies with high burnout rates, the three common culprits were excessive collaboration, weak time management disciplines, and a tendency to overload the most capable with too much work.
Knowing this, take a look at the impact you can have in your organization or what you can do to improve the everyday for your team. If you’re able to smooth out the basics for your employees, the other suggestions in this article should be bonuses.
Provide Enrichment Opportunities
No, it doesn’t mean blowing a bunch of the department’s money on goof around offsite excursions. Though outside of the office trips can do wonders for morale, there’s a lot you can do within the office that can provide a bump for spirits and keep employees engaged.
- Hold lunch and learns where team members can present activities they’re experts in, like how to write in calligraphy, how to always be at inbox zero, or how to win at poker. Though not always directly related to day-to-day business, these types of meetups get employees talking and interacting in ways they wouldn’t ordinarily do in a work day.
- Invite external experts in for interactive talks and presentations. This approach is more likely to support the company’s daily activities, but provides a nice breakout opportunity for employees to extend their knowledge and get away from their desks for awhile.
Get Out of the Routine
Work should never feel monotonous. But it will if the team is coming in and performing the same tasks day in and day out. What better way to kill motivation than to simply be going through the motions 8+ hours per day.
- Where possible, mix up teams after a big project concludes. It’ll give everyone an opportunity to work with different personalities and hear new ideas and techniques.
- Consider taking on a pro-bono project and let team members play outside their normal roles. Let the social media manager design some of the work, let your accounts lead try his hand at copywriting.
- As Eric Garton mentions, instead of stretching your star team members across multiple projects, put them all together on a particularly tricky project.
Encourage Side Projects
No matter who you are and how much you say you love your job, it’s impossible to come to the office five days a week and do nothing but perform the exact functions of your role. Humans need creative, extracurricular stimulation. Allowing staff to participate in a passion project for part of their day or week will go so far in amping up dedication and productivity when it comes to getting back to “real work.”
- Though some say Google’s 20% time policy, which allowed employees to spend that amount of time on side projects, is dead, the original idea remains. Encourage employees to form their own teams to work on what interests them.
- Some companies dedicate a whole sprint week to these efforts, culminating in presentations to the rest of the company.
- Surface some of the company’s challenges at a starting point to keep employees thinking about ways they can flex their creative muscle but still impact the organization. Maybe it’s testing out a new technology that could later be applied to help a client’s business.
- You never know when an inspired employee could come up with the next product iteration. Crew, a freelance-for-hire marketplace credits side projects with helping them save their business when they inadvertently created a stock photo site while building their main business’s home page.
Make the Office Fun and Flexible
Before you start building a gourmet cafeteria and mapping out where to put the indoor fire pit a la Google, keep in mind Bagel Tuesdays can offer a big boost in morale and not sink the company’s budget.
- Consider allowing occasional work from home days to give employees more flexibility while maintaining productivity. A 2016 survey cited in this Forbes article found American workers felt they’re more productive, more satisfied with their jobs, and happier overall when working remotely. You don’t have to allow employees to work from home every day to get the benefit. Mostly, employees just want to feel they have some flexibility and say in how their schedule looks Monday to Friday.
- Plan simple surprises. Get fresh baked cookies delivered on a Thursday afternoon and invite everyone to take a milk and cookies break.
- Sync up with a charity and invite employees to take a break during the day to participate. Girls Love Mail facilitates hand-written letters to women newly diagnosed with breast cancer.
Make Everyone’s Lives Easier
There’s the manager who makes every day hard, and then there’s the manager who understands (and cares about) supporting and encouraging his or her team to do the best work. Be the latter! All of the below are great ways to show staff you value and appreciate them and their time.
- Whether it’s introducing a new tool to make pulling PPC reports a breeze, or finding the budget to hire a new job function to take that task off everyone’s plates, a great manager is always looking for ways to increase productivity while lightening workloads.
- Think of little ways you can improve touch situations, like getting lunch or dinner catered when the team is heads down on a big project.
- Work with HR to find partners to provide discounted laundry/cleaning services, entertainment, tickets, etc.
Check in and Listen
Sometimes (actually, oftentimes), employees just want to be heard. A little attention from senior management can go a long way in making employees feel valued and engaged. When meeting with staff, do your best to make them feel comfortable so they can open up about their satisfaction and needs. Let them know this is the right time to flag if their workload is too much, too little, too beginner, they don’t have access to the right tools, etc.
- Schedule one-on-ones with the appropriate staff members, letting them know what the time is for. The last thing you want is people running around nervous they’re getting called to the boss’s office.
- Ashley Dennison, the communications professional, says, “In the past, I’ve made off-campus vent sessions mandatory for my teams. After many days or weeks of nonstop production and activity, team members need to let their hair down in a safe space. Setting a “meeting” to take off at 4:00 p.m. for margaritas, chips, and guac with a small group of like-minded team members can work wonders to hit the refresh button.”
- On a collective level, poll employees to see what perks or benefits they might enjoy. While you might be thinking they’ll ask for the moon, maybe what they’d love is to be able to knock off an hour early for Summer Fridays.
Give Feedback Often
Feedback may have a negative connotation, but that doesn’t mean it’s a bad thing. If someone doesn’t know what’s expected of them or is unclear on what they should be doing for their position, it can quickly lead to burnout. Opening up a direct line of communication is a great way to build employee engagement both when times are great, and when they become more challenging.
- Employees want to hear when they’re doing a good job, but they also want to hear how they can get better (at least the ones worth keeping around do!). The Balance has some great tips on giving feedback to help employees improve.
- When appropriate, call out great work in a public forum. It’s great to feel like an asset to the company, but it’s awesome to be able to show your colleagues your impact without bragging on your own.
- The Office of Personnel Management mentions specificity, timeliness, and manner as the most important elements of effective feedback. If you’re already meeting with staff members on a regular basis as suggested above, you’re in a great position to knock out at least ⅔ of those.
It’s easy to fall into the overworked, non-unified rut that leads to burnout, but it can be just as easy to right the ship, too. Don’t overwhelm yourself trying to make every change listed above. Start with what feels like it matters most and adjust from there. You can even enlist the help of employees to carry out some of the above. No doubt there’s someone on the team who would love to facilitate guest speakers or make sure there are fresh bagels on the cafeteria table every Tuesday morning.
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What’s giving agency directors headaches these days? Rising CPC costs and slimmer margins? Grim outlook for global ad spending? Ad tech startups aggressively chasing the direct-to-advertiser relationship? Perhaps, all of the above?
The truth is, things are never going to get easier for an agency marketer. But as our performance advertising industry grows more complex, agencies can find more opportunities to add value to clients. The one caveat: this will require going a lot deeper with client data.
Dustin Engel of PMG says that now is the perfect time for agencies to fill key technology gaps for brands. Engel, who heads up analytics at PMG, a digital marketing agency serving brands such as Sephora and J.Crew, recently told eMarketer that “bringing a technical acumen” will be a key point of differentiation for agencies.
CMOs and agency directors, take heed: To win in the digital performance agency world, you now don’t just offer a lower cost per lead and higher conversion; you meet your clients’ needs in automation, data blending, and cross-network audience activation.
Agencies >> DSPs: Data Integration Needs a Trusted Partner
Why should agencies suddenly become the new analytics technology providers? What about DSPs? Existing tools, Engel argues, may offer solutions, but they lack the knowledge of the market and all the nuances of media buying.
Data by itself has little meaning. What matters is the ability to formulate the right questions and knowing where and how to extract the right answers. If agencies can solve that for their clients, a competitor’s promise of a lower CPL will never steal their business.
Integration: the Final Piece in the MarTech Jigsaw Puzzle
Top CMOs across industries see technology as the savior to key marketing challenges such as transparency and accurate attribution. Michelle Engle, VP of product marketing and management at MaxPoint, recently said to SmartBrief:
“There’s a lot of untapped possibility that, with the right focus and investment in developing powerful technology, we can unlock as an industry in 2017”
But marketers at small and large companies already have impressive technology stacks. The 2017 Marketing Technology Landscape features 5000 vendors. Obviously, adding more technology isn’t going to solve the problem. What’s next?
The Next Frontier: Tailoring Tech to Client’s Unique Needs
“Traditional marketing and advertising technology will typically cover roughly 70% of a brand’s needs, but 30% of those are unique to the company,” Engel said. “Agencies can fill a lot of those gaps, especially in areas such as data automation, data blending, and audience activation.”
Big data has turned into a big problem for marketers who are trying to connect multiple sources: site analytics data, cross-network user acquisition data, sales, and customer scoring. One-size-fits-all solutions can’t handle the complexity of each client’s unique needs.
This is a great business opportunity for agencies, Engel argues, because no product and engineering team understands the context of media better than agency media strategists.
Agencies Can Tackle Data Tasks Better than Ad Tech Players
Agencies understand all the nuances of user acquisition and customer lifecycle. If they take on the task of activating all data sources and helping clients survive and thrive in the data jungle, they’ll get customers for life.
Going from clicks and conversions to deeper, more meaningful metrics can be daunting, but you don’t have to go it alone. It’s been our mission at AdStage to connect marketers to the data they need to understand holistic campaign performance and take action at scale. Our Universal Data API allows to send all paid search, paid social, web analytics, and custom business data from a single pipeline, unlocking actionable insights that could transform your client’s business.
If your advertising agency doesn’t already have a data integration strategy, now might be the time to start exploring one.
SEM is undoubtedly one of the most effective digital marketing channels that exist. When the right elements come together – a great product with good unit economics, relatively few competitors, and high search volumes – paid search scales very nicely.
But startups rarely have all these elements working in their favor at once, and they usually face a set of unique challenges when trying to build out SEM as a scalable channel. As a digital marketing agency that has worked with more than 100 startups of all shapes and sizes on SEM, we have seen and navigated these issues and want to share some insights about how to overcome them.
Startups have a set of unique challenges above and beyond the typical challenges faced by companies advertising on paid search channels like Google AdWords and Bing Ads.
The first big challenge is that many startups have unknown or unproven customer LTVs (lifetime values). Knowing your LTVs is the most important first step when considering doing any kind of paid advertising. If you don’t know how much money you’re making from a customer over their lifetime, you won’t know how much you can afford to spend to acquire them.
But for startups with relatively little operating history and low customer volumes, it becomes very difficult to accurately project LTV. A lack of LTV data is a bit of a chicken and an egg problem, since LTV can only be established once you have acquired customers. You have to expend some combination of time, effort, and money to acquire customers from any channel.
This is very important to understand – SEM can be used to help validate or establish LTVs, but if this is your goal then make sure you are clear on what you are trying to achieve. Sometimes a startup thinks they are trying to see if SEM is scalable for their business, but they realize they don’t have the right LTV data to assess the efficiency of the channel in the first place. It’s an important distinction that will change the approach and the resources needed to manage your SEM accounts.
One way to get around this catch-22 is to get industry comparisons by talking to VCs or people at similar companies who can augment any customer data you have. While customer LTVs for other companies will likely differ from yours, it’s a relatively good measure that can at minimum help you establish a benchmark for developing a target CPA.
How much you can afford to spend to acquire a customer (called a target CPA) is directly related to how much scale you can achieve from SEM. The higher your target CPA, the more scale you can achieve.The reason for this is diminishing returns. As you start increasing your SEM spend, CPAs also increase as you saturate the low-hanging, high-intent keywords that typically convert well and you reach for new keyword opportunities. Eventually your actual CPA will start bumping up against your CPA target and you will be forced to stop scaling spend until either you determine you can afford to pay a higher CPA or you are able to achieve lower CPAs with optimization.
Another challenge for startups using paid search is heavy competition from established companies. Because these incumbents know their LTVs and also typically have much larger budgets to work with, they can afford to be more aggressive with their bids on SEM and this can squeeze out startups trying to break in. In addition, sometimes these companies ensure they show up in a certain position – regardless of how inefficient it may be. This can make it very difficult for scrappy, unit-economics-driven startups to compete. This can be exacerbated for high-funnel keywords that are already very expensive and have relatively low conversions rates.
For an eCommerce startup selling subscription clothing boxes, a generic high-funnel keyword like “mens jackets” is unlikely to back out to a target CPA that’s based on their average customer LTV. However, when searching for this term you’ll notice Ralph Lauren, Nordstrom, and Michael Kors bidding aggressively:
Even for these companies, it’s unlikely that the CPA from these keywords backs out for them directly, but they continue to spend millions of dollars per year to show up in the top positions for these keywords. Such companies may be bidding on the belief that the brand exposure they receive from showing up for generic keywords makes up for CPA inefficiency, or they may be bidding on these keywords purely due to a fear of missing out since their competitors are bidding on them. Regardless, this is not a battle that a startup is going to win unless their LTV, and thus target CPA, allows them to compete.
The best way to get around this is to bid on a variety of long-tail keywords, which will have lower competition and likely higher intent, but will also be cheaper. The more extensive your list of long-tail generic keywords, the more traffic you can drive without relying on competitive, generic keywords. Google’s Keyword Planner and third-party tools like SpyFu can help you find long-tail keywords with low competition that are relevant to your business.
Another common obstacle for startups looking to leverage paid search is that they’re often operating in nascent or emerging markets, leading to low search interest. This can limit the amount of relevant search volume available, which is a critical aspect to scaling paid search.
People have to know something exists before they can search for it, or at least something closely related to it. If a startup is selling a whole new class of product or service, this poses a challenge. For example, in the early days of Uber and Lyft, no one knew what on-demand ride sharing was, so no one was searching for it. Only as the market matured did search interest start to skyrocket, as shown below:
How can you access search volume at scale when your industry is so new that people don’t even know it exists yet? This can be a daunting obstacle, and it takes some creativity to get past it.
Targeting competitor keywords and tangential products is one way to do this. For example, in the early days Uber could have bid on competitor keywords like “avis car rental” and “yellow cab taxi”, or tangential products like “quick transportation” and “call a taxi” to build awareness of its product and drive conversions via SEM.
However, the relevancy of a keyword to the product at hand will determine the conversion rate and so again it comes down to what CPA you can afford to pay for these keywords. Waiting for your market to develop is sometimes necessary in order to truly achieve scale from SEM while hitting your CPA target.
We’ve addressed the challenges in making paid search a profitable and scalable channel for startups, but what about the light at the end of the tunnel for those companies that are able to overcome those challenges?
The most obvious and most important advantage of paid search is the value of intent. Users are telling you exactly what they’re looking for when they type in a search term, which usually indicate higher levels of purchase intent than indirect signals like audience targeting that are available for other paid acquisition channels. As a result, no paid advertising channels come close to paid search conversion rates.
Intent-based search ads allow you to capture the low hanging fruit. Someone searching for “ride sharing app” is already generally aware of your product and is probably deep enough in the marketing funnel to download the app and use it. Search ads let you maximize demand capture.
But intent is also valuable for capturing higher-funnel interest. Someone searching for “quick transportation” is sending a direct signal that they’re looking for a fast way to get around, even if they’re not aware of the existence of ride sharing. This goes to show that you can find conversion volume from keywords that are not directly related to your product or service offering, assuming the unit-economics work out when comparing LTV to CPA.
Brand keyword coverage plays an important role in all SEM programs, but it’s especially critical for startups who should be capturing everyone searching for them. All the effort and resources expended driving awareness of a startup can be wasted if a potential customer searches for your brand on Google and gets poached by a competitor’s search ad. Branded search ads can help you protect your investment in other channels.
Given how valuable these earned branded search queries are, it should come as no surprise that bidding on competitors’ keywords can be a very effective way to reach potential customers at the bottom of the funnel who are ready to make a decision. This can be especially beneficial for startups who are in markets with well-known incumbents (i.e. lots of customers searching for their branded keywords).
While established companies may have larger budgets and more brand name recognition working in their favor, startups also have some things working in their favor.
For one, startups are able to move very fast and learn quickly due to their small size and lack of red tape, allowing for high-tempo testing and optimization, which is for scaling a paid search program. For another, startups can prioritize growth over profitability in pursuit of capturing a market, allowing them to better compete with established companies in ad auctions.
Finally, startups tend to have new and refined product offerings compared to their older competitors, creating the potential for higher conversion rates and customer LTVs. This can make it easier to compete with established competitors.
A Word to the Wise – Don’t Ignore Paid Search
Startups eventually have to acquire new customers efficiently and at scale in order to become mainstay businesses. In the early days that’s no easy task, as even defining efficiency goals based on LTV benchmarks can be arduous. Succeeding with SEM as a startup requires being nimble with testing and learning, and it sometimes necessitates sacrificing short-term efficiency in favor of long-term growth.
There will always be established competitors with much larger budgets trying to box out startups trying to break into their market, but there’s a huge opportunity for the startups that are able to successfully overcome the challenges associated with SEM. People expressing their intent through a search query is arguably the most powerful marketing signal that exists. And tapping into that signal using paid search engine marketing can be the source of a highly scalable customer acquisition channel.
Programmatic has been one of the biggest buzzwords being thrown around the industry over the past couple of years. It is also an area of the industry that is growing rapidly, with 72% of all display ads expected to be bought programmatically this year.
But what do you understand about it? Do you know you know where to go to get started? How do I manage it? Why is it important?
The customer mindset is changing and marketers are having to change their approach to how they reach their audience and create an experience that attracts, convinces and retains customers. The strategy of a single brand message, pushed to the masses via perceived viable channels, is no longer a viable option.
Brands need to be able to tailor their message to their various market segments at scale, and still nurture relationships to continue to move potential customers through the funnel. Programmatic technology allows advertisers to take everything that they know about their own customers, as well as potential customers and deliver a unique experience at every step of the customer journey.
The journey of a customer purchase has changed. Consumers conduct their online activities across multiple devices daily. From Mobile, to home Desktop, to work device, to potentially a tablet. No longer are consumers are choosing a single path to purchase to buy a product or utilize a service.
Advantages of Programmatic Advertising
The increased reach and diversity of inventory available in the programmatic eco system is second to none. Demand Side Platforms and other Programmatic Vendors provide a centralized location for advertisers to plan, launch and optimize their media buys. And while you may be moving your display buys away from AdWords display to a programmatic strategy, you will still be able to target the Google Display network via Google’s DoubleClick Ad Exchange (Adx).
Both AdWords/GDN share much of the same targeting segments and optimization techniques such as Contexual targeting, day parting, remarketing etc. However, where programmatic really separates itself from the pack is the depth of advanced targeting options it provides.
- 1st & 3rd Party Data Integration – Advertisers can take advantage of the their internal sales and CRM Data for their display campaigns, a feature currently unavailable in the GDN.There is also the added option of using 3rd party audiences created by DMPs such as Oracle, BlueKai or Exelate, who have collected user cookies and segmented them into behavioral categories
- Programmatic Direct and Private MarketPlaces – Both the streamlining of processes and the increasing concern around brand safety are becoming more prominent topics in the industry right now. Private MarketPlaces and Programmatic Direct are the cross section of these ideas right now. Private MarketPlaces are premium auctions on major publishing networks that allow select brands access to premium inventory before it moves onto the open exchange. Programmatic direct is the modern evolution of the direct display buy. Brands can negotiate, plan and report immediate on their direct buys from the same platform as their direct response and RTB prospecting.
Not only can brands streamline their process by centralizing the coordination of their online media buys, but they can also be confident that their ads are showing up on brand safe inventory. (For the most part. Their are some exceptions to the rule)
What to Look For in A Programmatic Vendor
Pricing: Are there minimums?, Flat CPMs or Dynamic CPM?, Hidden fees?
Transparency: How deep is the reporting? Can you see the true cost of your media vs your platform fees? Can you see when and where your ads are showing?
Targeting Options: Can you utilize certain CRM data? Is there a variety of targeting options (Device, Local Geos/Zip Code, Reputable inventory sources.)
Support Tiers: Full Service/Managed Options if preferred. Is the self serve support good? Do you get an Account Manager or a generic support email or phone number?
Tech: What is the vendor’s unique selling point? Is it unique algorithms, or proprietary data or advanced tech partnerships.
Tracking: How much data can you track. Can you pull in revenue data? How much attribution technology can the vendor provide.
How Do I Get Started?
As the industry evolves, PPC Managers are going to find ways to grow their accounts beyond the traditional channels like AdWords, Bing, and Paid Social. While programmatic seems like this scary unknown thing, it is actually pretty simple. It carries many of the same philosophies that we as PPC Managers do. You Plan, Launch, Test, Analyze, Optimize and Repeat.
While Programmatic has great targeting features and advanced technology, it still requires a full funnel approach and mindset.
Before you start any campaign, define what success looks like and define the KPIs that will move the needle for you or your client.
It is also important to remember that Display/Video is still prospecting first channel. On average, 98% of visitors will not convert on their first visit. Like I mentioned earlier, they need to be exposed to the brand, convinced to consider, and then nurtured to the point of conversion.
A simple way to plan your funnel could look like this:
Step 1. Awareness
Let users know you are here and send them to a generic landing pages such as a homepage of informational page.
Some potential tactics for this stage of the funnel include: Page Category targeting, Broader 3rd Party Audiences potentially associated with your brand, Programmatic Direct and/or a Private Market Places
Step 2. Consideration
This is where an increased reach for remarketing can be utilized at its best. Segment audiences who have viewed certain products, solutions or certain content of your site. Utilizing specific messaging based on these activities can help create the 1:1 relationship that modern consumers want. From a prospecting perspective, it can also be useful to use focused 3rd Party Audiences, such as those “In-market” for your product or service.
Step 3. Decision Stage
This is where the utilization of CRM data and the tracking of deep in the funnel customers such as “Add to Cart” can be added into your strategy. This audience would usually consist of users who have potentially downloaded a white paper on the B2B side, or from a B2C perspective, Add To Cart, or started a checkout but did not convert. These data sets allow for subtle, but specific reminder messaging for the customer to take the next step in the funnel.
Step 4. Nurturing
Because someone has become a customer from being a lead, or bought an item from your store, it does not mean that they should be forgotten. Staggered retargeting or “custom prospecting” can be a valuable way to cross sell customer on other products and services. Not only will this increase the customer’s attention of your brand, it will also add to the Lifetime Value of your customer.
How To Optimize Programmatic Campaigns
While Programmatic shares much of the same philosophies as PPC, such as, bidding, device performance, creative performance etc. it is important to know that there are extra layers in the optimization process:
While we have access to placement reports in the GDN, with the greater reach offered in programmatic, comes greater risk of turning up on poor quality inventory. Monitor your placements regularly to ensure that you are showing up where you want to. These lists are also useful in the planning of potential Private Market Place or Programmatic Direct Deals with your top performing placements.
Within AdWords, you only have the GDN to contend with. Within Programmatic, you have up to 90 different networks or “exchanges” can all share the same publishers and inventory. Each exchange bids and matches ads to inventory in different ways. Monitor which exchanges are providing the best performance for your primary KPI.
Analytics is probably the most important tool that you can use, just like with your PPC campaigns. Campaign metrics can only give a snapshot of performance on the front-end. To ensure that you are reaching your goals and moving customers through the funnel efficiently, monitor your bounce rate, time on site, steps through the funnel and ultimately the conversion rate. If these metrics are performing poorly, you may be facing multiple issues, both campaign related and not, such as:
- Poor Landing Page choice
- Bad UX
- Irrelevant Targeting
Armed with data and insights, you can adjust your funnel, UX and targeting to effectively optimize your campaign.
PPC as we know it today may still be the King, however the competitive landscape and demands of customers has forced advertisers to think beyond AdWords. The advanced technology and targeting offers the opportunity for a better customer experience, which in turn increases revenue and ultimately brand loyalty.
Taking the jump from PPC to managing programmatic campaigns maybe scary. There is a lot to consider, there is a learning curve, but adaption is necessary, but can ultimately it can be an easy transition.
As an account manager at Seer Interactive, my job is to manage success for my clients through PPC. While client success is at the forefront, there’s a lot that goes on behind the scenes besides the performance driven aspects of the account (analyzing, strategizing, and implementing).
Having strong internal management skills can make all the difference between meeting expectations and deadlines for production-level colleagues to making sure you are seen as a valued and growing member of the team by your boss.
While your company may be set up differently, the following tips are what I use to make sure internal management (up and down) doesn’t interfere with client management.
Do you know what your teammates’ primary motivating factor is or their career goals?
Maybe they are motivated by kudos or opportunities, or let’s just be frank, promotion and bonuses! Knowing what motivates your teammates can be key in what kind of work excites them, causes them dread, or may be needed to help advance them in their career.
When one of my support associates identified that creating new Excel processes was an area of stress for them, I made sure to spend a little extra time walking through methodology and writing more detailed work instructions for them. This helped save time in the long run from being asked frequent questions and helped them level up their skill.
What kind of workflow processes suit them best?
When managing colleagues, knowing what format and vehicle of feedback can make all the difference in getting things done in an efficient and delegated manner versus having constant interruptions that disrupt concentration and deep work.
For myself, in-person interruptions can cause me to lose my concentration on my own tasks so I usually reserve time at the start of a task for questions or set the expectation that follow-ups need to be typed out in an email or project management tool versus in-person.
The same goes for managing up to your boss to be considerate of their time and tasks by working and communicating in a way that facilitates their workflow.
Do you hold regular 1:1’s to provide/receive feedback?
Setting up 1:1 time with the people you directly work with can add context to issues, realign priorities, and set goals. Having this scheduled on a regular cadence (I typically do once a week or every other) even as optional, opens the door for communication if the need arises.
This time should be used constructively, even when discussing areas of improvement. The same can be said with establishing 1:1’s with your boss in order to take the initiative for past mistakes and turning them into learnings that can benefit the company in the long run.
Goal setting can also be key in documenting and demonstrating growth. It is important to identify and set SMART goals (Specific, Measurable, Achievable, Relevant, and Time-based) to track results and provide follow up. Even if you have a goal that doesn’t exactly fit into the SMART model, what are the sub-goals that can be set to mark your progress?
Ultimately your mileage may vary when it comes to executing the above tips (or maybe your Agency already trains and implements these for all managers!). Internal management skills may not be as glamorous as client management work, but can make a big difference in how effective you are at it.
Got any tips for how you manage up and manage down effectively? Hit me up on twitter @_GilHong
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