Recently, I had dinner in Orlando with Bill and Ted (not their real names), some pretty successful digital agency owners. (By successful, I mean more than 50 employees and strong annual revenues.)
They’ve been friends of mine for a long time, so I assumed they’d be up for a little of the usual expert banter.
The first punch in the gut came when I casually explained about some PPC bidding methods we routinely use. My friends had no idea what I was talking about. Hyperventilating, I reminded myself they deliver SEO services, primarily.
So I told a story from the SEO world. As usual, it involved a chartered jet, a bottle of Scandinavian spirits, a spammer with a weird nickname and a senior Google evangelist who shall remain nameless. I was interrupted as I was just getting warmed up. The guys who run this SEO-first agency simply had not heard of the senior Googler — one of a handful of SEO evangelists Google has ever had in its history.
Talk turned to sports. The longevity of Jaromir Jagr’s mullet was debated.
Pardon the assumption, but I always thought the owners of professional services firms were more respected when they had “chops.” Granted, the owners or top execs of an agency may not need to get down in the weeds for their team to be successful. But you’d think we’d at least need to maintain a culture of expertise in agencies.
Less obvious — but no less important, if you ask me — is the need to keep up with an industry’s people, personalities and events. At some level, networks and connections matter. It’s hard to divorce the concept of maintaining relationships with key people (key experts) in a fast-moving industry from the very kernel of expertise itself. There are the “on paper” answers to tough problems, and there are the “real answers.” A great network provides shortcuts to the truth.
Many imperfections in agencies, of course, stem from low profit margins that stand in the way of learning opportunities, “20 percent time” and R&D.
Regardless, I’d like to challenge the related fiction that the only chances for agencies to climb out of the low-margin trap are those that “figure out scale” and deliver cookie-cutter services. The claim is demonstrably false. Take ReachLocal ($RLOC): have a good look at their financials and decide for yourself whether they’ve done well, even after raising all that money in an IPO.
Of note: ReachLocal’s once high-flying stock currently trades below book value. Flat to declining revenues may indicate that the cookie-cutter model, when applied outside of realms like sandwiches and oil changes, breeds client dissatisfaction.
An Aside About Awesomeness
David Ogilvy was brilliant. He also had good enough timing to be a co-founder, in 1948, of an ad agency that would soon win gargantuan accounts in an era when big brand ad spending was in its ascendancy.
Arguably, Ogilvy’s inspirational power at his own company was heightened by the fact that Ogilvy possessed what Seth Godin calls a “superpower” — no mere manager, bean-counter or big idea man, Ogilvy consistently wrote powerful advertising copy that made clients wealthy. Like several other early pioneers, he was also a champion of using data and research to improve targeting.
Ogilvy found his way to the top by rolling up his sleeves and doing a job he loved, not by planning a business model, raising “VC” or learning how to manage “key functions in a company of this type.”
Given his financial success, Ogilvy could be forgiven for enjoying the fruits of his labor in his later years, relaxing in his massive French chateau, Touffou.
It may simply be because the agency business is too competitive now, and upstarts face behemoths backed by decades of tradition and billions in revenue. Or maybe it’s because we’re facing a massive shift towards martech in the wake of the steady unraveling of the TV-industrial complex. But our world today doesn’t look much like Ogilvy’s.
It’s far tougher for agency owners and executives to get credit for maintaining “chops” nowadays, especially with the proliferation of media, technology, events and fields of expertise requiring attention. The pace of change is faster than it was in Ogilvy’s heyday; optimization is an hourly or daily activity. I get it. No one person, short of Mark Zuckerberg, is getting much mileage out of “keeping up.”
To paraphrase Bart Simpson: Gotcha. Can’t win, don’t try. Right?
Working “In The Business” — A Bad Thing?
Like most small business founders, agency founders have been led to believe that they should stop poking their noses into accounts, stop trying to achieve results directly for clients, stop holding technical conversations with clients and employees. That’s how you “stay small.” Don’t you want to get big?
According to business orthodoxy, the real problem would be if agency founders remained technicians. In The E-Myth Revisited: Why Most Small Businesses Don’t Work, and What to Do About It, Michael Gerber asserts that there are really three competing people fighting inside the body of a small business founder: the Technician, the Manager and the Entrepreneur. The Technician is greedy for the attention of the business, because the Technician just wants to work on stuff. If left to his own devices, the Technician will destroy the business. Balance is a must.
Fair enough. But as any critical reader might conclude, Gerber doesn’t just instill balance in the technician, he shoots the technician.
It’s important to remember that his entire book is constructed as a dialogue with the owner of a pie shop (not even a variety of baked goods!), and that saving this pie baker from the slow-growth future of always being in the shop baking pies comes across as cutting-edge business advice that should be widely applied.
The franchise model (and business process thinking) of companies like McDonald’s and Mrs. Fields’ Cookies are held up as models for how to save the business founder from having to work “in the business” instead of “on the business.”
For a professional services agency, that’s extreme advice. It explains why many clients of marketing agencies today feel like they’re being served up a plate of Mrs. Fields’ Cookies (literally: cookie-cutter services) instead of developing a relationship with an educated, connected, senior-level marketing professional and the team around them.
Beyond that, Gerber’s ideas predate the complex challenges and opportunities related to scaling businesses in a digital and interconnected world. The trends of the past 20 years have radically altered business culture, supply chain management and much else. Certain business functions (under the aegis of the all-important Manager lionized in Gerber’s book) are more accessible to small companies today with software and outsourcing. Communicating with third-party vendors of logistical and managerial functions is also easier, thanks to tools.
Like many founders, I’ve often longed to follow Gerber’s advice to log out for the last time and work full-time “on the business.” As an already-proven expert, I’d also love to skip out on the Google Partners exams they continually require experts to re-take.
But I sense it doesn’t work that way. Our field is a little like pro golf. Your PGA Tour exemption – unless you’re the proud winner of a major or two – lasts but a couple of years. Fall out of touch with the fundamentals because you’re too busy hobnobbing with sponsors and celebrities and meeting with your agent, lawyer and accountant, and you’ll find yourself literally “back in school” — the professional golf “qualifying school” events – if you want to rejoin the pro ranks.
Somehow, expertise is going to have to rub off on employees who work on complex digital marketing assignments. Once liftoff is achieved, it would help if some employees developed actual careers with a sense of professional direction, as opposed to being semi-competent in addressing a few odd tasks.
There are only so many ways for this to happen, and in many agency cultures, ownership has no game plan to allow this to happen.
First off, it may be time to drop the act. You know the one. “The company is so big now, I’ve grown distant from day-to-day operations.” “I’m a philanthropist/show horse breeder/angel investor/triathlete.” Nothing against charity, the equine arts, angels or exercise, but unless you’re the departing chairperson of a mysterious, privately held $50 billion insurance company, isn’t all that extracurricular activity just a shade pretentious?
Mentoring (in some form or fashion) is essential. Many agencies do more monitoring than mentoring, trying to squeeze every ounce of “work” out of new people.
Conferences and meetups are also invaluable sources of insight and learning. To be sure, with tight agency budgets, not everyone can go; hardly anyone can get out frequently or routinely. But agencies that shut themselves out from industry events entirely are relegating themselves to a kind of dogged toil increasingly devoid of insight.
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