The marketing agency blueprint.
The handbook for building hybrid PR, SEO, content, advertising, and web firms.
Paul Roetzer.
Foreword.
When I started HubSpot in June 2006 with my business partner, Dharmesh Shah, our experiences with marketing agencies led us to almost entirely avoid working with them. In fact, we designed our original business model around selling our marketing software directly to end customers, and developed an internal marketing team that would not be dependent on agency a.s.sistance. Our decision to circ.u.mvent marketing agencies did not result from questioning their skills or capabilities, but rather from their failure to acknowledge the impending shifts in consumer behavior.
I felt as though many marketing agencies were, and still are, trying to cling onto the Mad Men marketing methodology. They want to sit in rich mahogany corner offices with 21-year-old scotch on ice, and brood over their grandiose and flowery advertis.e.m.e.nt campaigns. They rely too heavily on traditional outbound marketing techniques, such as television advertis.e.m.e.nts and cold calling, which allow them to safely distance themselves from the nitty-gritty operations side of marketing and direct contact with the end consumer. However, the detached Don Drapers of the marketing world cannot simply rely on creating deep and lofty brand awareness campaigns any longer.
Consumers have now a.s.sumed control over their purchasing processes. With the help of devices like DVRs, satellite radio, and caller ID, consumers no longer tolerate irritating outbound marketing efforts designed to interrupt their daily lives. Instead, they know what they want to purchase, and strongly object to businesses that try to force-feed them messages. With millions of Internet pages at their fingertips, consumers actively research their own product information online. They contribute to forums, follow industry thought leaders on Twitter, and even write their own blogs about products and services. By filtering the excessive marketing clutter produced by outbound techniques, the Internet has changed consumers" buying behaviors in ways we never thought possible.
Because of this dramatic shift, we believed that it was time for marketing agencies to concentrate on providing inbound marketing strategies to their clients. As Dharmesh and I explained in our book, Inbound Marketing, this involves creating an integrated online process that uses original content to provide educational and salient advice to consumers, helping them with their purchasing decisions.
These "hybrid" agencies-as Paul coins them-could help clients develop original content (blog posts, whitepapers, etc.) that would attract interested and engaged prospects, who would begin to a.s.sociate and rely on those businesses as active thought leaders in their respective industries. This would significantly bolster the client"s online reputation through indexed pages and inbound links, leading to an increased level of website traffic. With systems in place to track the progress of their inbound marketing campaigns, these agencies would be able to adapt strategy based on solid metrics to ensure improvements over time.
Agencies like PR 20/20 are the breaths of fresh air for which the marketing world has been gasping. Although he started his agency to specialize in traditional PR and marketing services, Paul possessed the foresight to see the inevitable shifts of the business world. He was brave enough to make the switch to an inbound-oriented strategy early, and executed it perfectly.
Unlike the mad men of today, Paul became the marketing Renaissance man; he understood that marketing consultants could not succeed as one-trick (or in this case, service) ponies, and that collaborations with companies like ours would lead to excellence. When he joined the HubSpot movement in October 2007, he voraciously consumed all things HubSpot. By 2008, Paul became one of our most adept product users, and PR 20/20 became the first agency to join our Value Added Reseller (VAR) program.
All of this work, driven by a hunger for knowledge and drive to innovate, added up to incredibly significant gains for PR 20/20. Starting as a one-man shop in late 2005, Paul now employs 10 dedicated employees. What is even more impressive is that, through testing its methodologies on itself, PR 20/20 grew revenue by nearly 500 percent in just four years; increased its average website visits from less than 1,000 per month to more than 8,000; boosted blog subscriptions by 1,400 percent; and has totaled 12,000 inbound links and more than 900 indexed pages.
In addition to these successes, the agency has also perfected its inbound marketing service offerings for clients. In 2010, PR 20/20 launched the industry"s first service packages that bundled website development, brand marketing, search marketing, social media, content marketing, and public relations for a set monthly fee.
To truly drive change in the industry, Paul understood that it was necessary to educate and improve the marketing-services world at large. He became one of HubSpot"s leading inbound marketing evangelists, and began speaking nationwide on topics including blogging, content marketing, social media, and inbound marketing strategy. With the help and support from agency partners like PR 20/20, the HubSpot VAR program now accounts for 20 percent of our sales revenue. Based on demand, we are forecasting that our revenue from agencies will be 40 percent by the second quarter of 2012.
We now take tremendous pride in working with savvy marketing agencies that not only purchase HubSpot for their clients, but also frequently for themselves. With more than 170,000 marketing agency contacts in the HubSpot database, we have high hopes that many more agencies will fully embrace the inbound marketing methodology, and believe that these agencies will be the next generation of Madison Avenue marketing all-stars. As Paul explains, these hybrid agencies will master a new kind of business model, where a sales team, software tools, refined business infrastructure, and new marketing processes all work in unison to support the marketing agency"s core consulting services.
In a time when others were unwilling to accept the apparent shifts in the marketing services industry, Paul"s commitment to changing the course of his agency, and the agency world at large, is incredibly commendable and truly impressive. This book is particularly special because you will read about Paul"s personal experiences as a business owner and marketer, rather than try to decipher the ideological musings from some business scholar or a.n.a.lyst. No matter the maturity of your agency, Paul comprehensibly dissects his success so that you can replicate it.
All professionals in the marketing-services field should read this book because it clarifies the confusion around the roles and responsibilities of marketing agencies in an inbound marketing world. The marketing-services industry is at a turning point where an agency must choose whether to, as Paul states, "disrupt or be disrupted." So the question now is, which side will you choose?
-Brian Halligan.
CEO and cofounder, HubSpot.
Acknowledgments.
In 2005, at the age of 27, I became an entrepreneur in pursuit of a better way. My business partner, Larry Ondercin, believed in me enough to fund the startup phase, and four months later we hired our first employee, Christina Capadona Schmitz (@christinacs), who took a chance and bought into a vision when I was still working out of coffee shops.
We a.s.sembled an amazing team of highly motivated professionals, and created a culture that refused to accept traditional wisdom and conventional solutions.
The Marketing Agency Blueprint would not be possible without the entire PR 20/20 team-Christina, Keith Moehring (@keithmoehring), Laurel Miltner (@laurelmackenzie), Tracy DiMarino (@TracyDiMarino), Dia Dalsky (@DiaDalsky), Christy Hajoway (@ChristyBarks), Jessica Donlon (@JessicaDonlon) and Laura Pinter (@lipinter). Their work, commitment, sacrifice, and friendship mean the world to me.
The book also has been inspired by countless people, some of whom I know personally, and others whose work, writings, and teachings I have admired through the years. It would be impossible to recognize them all, but here are some of the entrepreneurs, professionals, authors, and teachers who have influenced my life, business, and writing.
Chris Brogan.
Clayton M. Christensen.
Matt Cutts.
Rand Fishkin.
Jason Fried.
Malcolm Gladwell.
Seth G.o.din.
Peter N. Golder.
Robert Greene.
Brian Halligan.
David Heinemeier Hansson.
Mel Helitzer.
Tony Hsieh.
Steve Jobs.
David H. Maister.
Tim O"Reilly.
Daniel H. Pink.
Ca.s.sandra Reese, PhD.
Howard Schultz.
David Meerman Scott.
Dharmesh Shah.
Bradford Smart, PhD.
Jim Sweeney.
Gerard J. Tellis.
Fred Wilson.
Sergio Zyman.
Introduction.
We are on the cusp of a truly transformational period in the marketing- services industry. The old guard, rooted in tradition and resistant to change, will fall and new leaders will emerge.
The industry will be redefined by marketing agencies that are more nimble, tech savvy, open, and collaborative. Digital services will be ingrained into the DNA of every agency, and blended with traditional methods to execute integrated campaigns. Agencies will create and nurture diverse recurring revenue streams through a mix of services, consulting, training, education, publishing, and software sales. They will use efficiency and productivity, not billable hours, as the essential drivers of profitability. Their value and success will be measured by outcomes, not outputs. Their strength and stability will depend on their willingness to be in a perpetual state of change, and an ability to execute and adapt faster than compet.i.tors. The depth, versatility, and drive of their talent will be the cornerstones of organizations that pursue a higher purpose.
This is the future of the marketing-services industry. A future defined and led by underdogs and innovators. You have the opportunity to be at the forefront of the transformation.
The Origin.
In February 2004, I came to a life-changing realization-the marketing- agency model was broken and had been for years. Although I was only four years into my career at that time, a number of contributing factors had become obvious to me: Billable hours were inefficient at best. Professionals were more worried about meeting hour quotas than delivering the level of service and quality needed to produce measurable results for clients.
There was little differentiation between firms, and a lack of innovation within the industry.
Training and education were stagnant. Firms and universities were teaching the same systems, principles, and services that had been applied for decades.
Request for proposals (RFPs) were a waste of time and energy, for both clients and agencies.
Standard measurement systems, such as press clippings, impressions, reach, ad equivalency, and PR value were meaningless, and they had no real connection to bottom-line results.
The industry was ripe for disruption.
The Opportunity to Emerge.
Fast-forward to today, and many of the same challenges exist. Traditional firms-public relations (PR), advertising, search engine optimization (SEO), and web-are fighting to remain relevant by grasping for new services, such as social, mobile, and content, rather than focusing on what really matters, including pricing, technology, staffing, infrastructure, processes, and purpose.
As a result, there are unparalleled opportunities for emerging agencies and consultants to transform, disrupt, and thrive within the developing marketing services ecosystem.
The agencies and professionals with the will and vision to adapt and evolve will rise, and many traditional and digital-only firms will become obsolete.
Causes for Change.
The forces that are fueling transformation can be narrowed down to three primary catalysts-change velocity, selective consumption, and success factors-which we will explore throughout the book: Change Velocity.
The rate of change, continually accelerated by technology innovations, has created growing demand for tech-savvy, forward-thinking firms. Specifically, trends and shifts in consumer behavior, business processes, software, data a.n.a.lysis, communications, and marketing philosophies have affected the need for evolved services and consulting.
Consider the impact and meteoric rise of cloud computing, virtualization, social networking, mobility, and group buying as examples. We live in a real-time world, which demands real-time agencies.
Although change velocity presents challenges, it also provides significant advancement opportunities. Technology has made it possible to create remarkably efficient agency management and client services systems that lower operating costs, while increasing productivity and profitability.
Agencies have access to a wealth of reliable software-as-a-service (SaaS) platforms in the areas of time tracking, project management, customer-relationship management (CRM), lead nurturing, website content-management systems (CMS), sales, accounting, data storage, campaign management, monitoring, a.n.a.lytics, enterprise social networks, virtual meetings, and communications. Not only does this reduce the barrier to entry, but it makes it possible for emerging firms to more quickly compete with, and usurp, slower traditional firms.
Selective Consumption.
Selective consumption is the basic principle behind inbound marketing, the philosophy made popular by HubSpot, a fast-rising Internet marketing software company. In essence, consumers are tuning out traditional, interruption-based marketing methods, and choosing when and where to interact with brands.
They are conducting billions of Internet searches each month, downloading case studies and ebooks, opting into e-mail newsletters, watching online videos, listening to podcasts, following brands and professionals on social networks, joining online communities, posting product reviews, and reading blogs, and they are increasingly doing it all from their mobile devices.
As a result, business-to-business (B2B) and business-to-consumer (B2C) organizations in every industry are shifting budgets away from print advertising, trade shows, cold calling, and direct mail toward more measurable and effective inbound marketing strategies that cater to consumer needs.
Savvy firms are capitalizing on the shift by expanding and integrating their service offerings in the areas of search, mobile, social, content, a.n.a.lytics, web, PR, digital advertising, and e-mail marketing. They also are diversifying revenue streams and driving new business through affiliate relationships and value-added reseller (VAR) partnerships with marketing software companies.
Success Factors.
Marketing campaigns are not about winning awards for creative, building the flashiest websites, gaming Google for higher rankings, generating mounds of media coverage, or negotiating the lowest cost per thousand (CPM) in order to interrupt the largest audience. The job of a marketing agency is to produce results that impact the bottom line. It"s that simple.
Although traditional marketing firms rely on impressions, reach, advertising equivalency, PR value, and other arbitrary measurements of success, marketing firms now have the ability to consistently produce more meaningful outcomes-inbound links, search engine rankings, click-through rates, website traffic, landing page conversions, content downloads, blog subscribers, and leads-that can be tracked in real time and directly correlated to sales.
These success factors are how firms should and will be judged.