For most companies, a traditional advertising agency is not the right approach, especially startups who have extra pressure to grow in a efficient manner. The main issue is that the traditional agency model doesn’t really align with the interests of the advertiser. These agencies charge a percentage, usually 10 to 20%, of your media spending. This is the costs of managing your media, but this gives them an incentive in spending more of your money, rather than optimize your budget to get the maximum results. Most of these agencies also require a minimum spend, and long term contract which keeps the advertiser stuck with them, even during bad times.
In the online advertising community, we see a lot of these scenarios with adwords management. Most PPC management company work with this percentage model, so they don’t really care how optimized your campaign is. The more you spend, the more they get payed. I’ve been approached by many of these so-called agencies who were offering to manage Elise Publicist’s adwords campaigns. They usually provided the list of recommended keywords they would use for the campaign, which is nice of them, but when going through it I realized how the keyword list had no purchase-intent and sometimes nothing to do with our business. It was simply $10 per click random keywords such as “what is a publicist”. So everytime a student somewhere is looking for a definition, we’ll be paying $10 for their click, great… But the agency will get their $1 percentage, so why should they care. That’s really alarming, and I can understand when my clients at Elise Publicist are skeptical about if internet advertising works. They probably were working with some traditional agency who didn’t give a crap about their targeting.
What is the solution ? There are a few models we have found to better aligh incentives between agency and advertiser. The firt one is the Elise Publicist way, which is to have a flat monthly budget, inclusive of media buying strategies, ad testing, and funnel optimization. This pushed the agency to manage a fixed budget efficiently to prove reasonable results to the client. You would then have the A-team of publicists taking care of your budget and trying to push for more and more results months after months.
The second way is to work on a straight perfomance basis, which is a model who still needs some proving. A comapny would tell the agency how much a lead is worth to them, and pay the agency “per lead”. This is a similar system as the Elise publicist, just not focused on a monthly general budget, but more of a per-lead budget. Then it would be the agency’s job to optimize their advertising to deliver the leads to the client, or they would lose the contract. Also the key is to allow the companies to cancel their contracts at anytime, we wouldn’t want to keep clients into a deal that isn’t for them.
Some tips ?
– Commit to optimizing the entire funnel through an ongoing multivariate testing plan. You should always be running experiments on ads, landing pages and post-registration flows. Once an experiment hits statistical significance, call it and launch the next experiment immediately. It’s requires discipline to maintain this level of experimentation, but the most successful companies never stop testing.
– Build out a great refer-a-friend program with a double sided offer. The value of a referred customer is often much greater than one driven via ads. Uber did a great job of this which helped fuel their growth in the the massive business they are today.
– Have a solid exit intent strategy. We often look at onsite user behavior to identify when we think a user is highly likely to leave and present them with a strong offer or value add prior to exit. You can often capture 15-20% of leads that would have otherwise been lost.
Company Name: Elise Publicist
Contact Person: Elise Marie Michelle Arnaud
Address:88 Rue du Faubourg Saint-Honore
City: Paris 75008