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Your ad agencies need to be managed and the campaigns need to be continually optimized for maximum … [+]
In my recent article, we learned how to select an advertising agency, with the best skillsets needed for your exact business challenges. In this article, we are going to learn how to best manage that agency, to ensure both parties are in alignment on key goals and performance metrics. As you are going to learn, it is not as simple as hitting “autopilot”, crossing your fingers and hoping they get it right. You will need watchful eyes along the way, helping to get your agency back on the desired track, when they start to stray off course. Let’s learn more.
1. Set the Business Goals
Everything starts with the business goals. Your agency needs to be perfectly clear on the budgets they have to work with and what you are defining as success from the campaign. Sometimes that is upper funnel targets, like growing your overall brand awareness metrics. But more often than not, it is lower funnel targets, like hitting a desired revenue level and matching return on ad spend (ROAS) or cost of acquiring a customer (CAC). It is very difficult to manage for everything at the same time, so set a very specific goal to shoot for. As an example, a ROAS in the 5x-10x range, or a CAC not to exceed 33% of your average order value (AOV).
2. Set the Target Customers
Every business is different. If you are a B2B company, you are typically targeting specific companies that would be logical buyers of your products. Or, more likely, specific employee roles, within those businesses. For example, if you are selling a social media marketing software, you may be reaching out to a Chief Marketing Officer, or a Director of Social Media, at those target companies. Understanding that not all companies are created equal. Maybe you are targeting employees at big enterprise scale Fortune 500 companies, or you are going after employees of small and medium size businesses that can better afford your products. So, lock down your target company size and the target roles of employees inside those companies, understanding you may have more than one target persona to go after.
If you are a B2C company, you are most likely going after a particularly customer demographic that would be most interested in your products. Is that men or women? Is it high income, well-educated people, or more mass market? Are they aged 21-34 or 55 plus? Does geography matter, if so add your target states or cities of residence? And if you can layer in persona information from various psychographic data sources, that is even better. For example, is your customer more of a “fitness fanatic” or an “arts and crafter”, to enable media targeting at that “interest” level. The better you understand your current customer base, the easier it will be to identify the right look-alike targets to go after. Again, there may be more than one persona here.
3. Set the Media Mix
Mastering your marketing funnel and media mix is a more in-depth conversation that I have written about in the past. But, at the highest level of understanding, your marketing funnel has three parts: (i) upper funnel, driving awareness of your brand; (ii) middle funnel, driving consideration for your products; and (iii) lower funnel, driving transactions and revenues for your business. And, there are different media tactics to consider for each stage of the funnel. For example, maybe you would consider television media for upper funnel, social media for middle funnel and search engine marketing for lower funnel. That’s why understanding your goals is so important, so we use the right media to help you hit those goals. So, at this stage, you are deciding how much of your budget to put into each funnel stage (e.g., 20% upper, 30% middle and 50% lower funnel), which tactics for each funnel stage (e.g., social media for middle funnel), and which specific publishers for each tactic (e.g., spend the social media budget evenly between Facebook, Pinterest and Twitter).
4. Set the Analytics and Reporting
The best advertising agencies these days are as much technology and analytics businesses, as they are creative and branding businesses. They will make sure your website and campaigns are set up in a way that most all clicks, contacts and transactions can be tracked back to their originating source, including assigning cross-channel marketing attribution metrics. And, they will build the dashboards that will enable you to easily see which marketing efforts are working towards hitting your desired goals, and which ones are not. So then, they can easily “dial up” or “dial down” any winning or losing tactics within the campaign. It is important that the key business goals are being measured in these reports, by funnel stage, by channel, by publisher, by campaign, by creative, etc. Make sure you are getting these summary reports sent to you on at least a weekly basis, so you can track their progress and make changes quickly, before you waste a lot of money on a “losing” campaign. And, make sure you are using the right metrics at each funnel stage (e.g., CPV upper funnel, CPL middle funnel and CPA lower funnel).
5. Set the Communications Frequency
Your communications with your agency depends on the size of your budget and how often things are changing. If it is a relatively small budget and the campaign is largely optimized and static in terms of changes, maybe you can get away with monthly meetings. If it is a large budget, the campaign is still being set up and lots of testing and changes are being made, more likely you will need weekly meetings with your agency. But meetings will be needed for communications both ways. You will want to make sure the campaign is achieving your goals, and your agency may need guidance from you for anything they are not clear on, or if there is a “fork in the road” that needs your input.
6. Set the Roles & Responsibilities
Think of setting up multi-leveled roles and responsibilities at both your company and your agency. Those levels most likely include: (i) executive oversight (e.g., a CMO in your business and a Head of Strategy at your agency) that is not too involved in the day-to-day, but is being kept abreast of the big picture issues; (ii) day-to-day project leadership and management (e.g., a VP-Media Buying in your business and an Account Executive at your agency), that are “quarterbacking” their subordinate teams and keeping everyone on task and on plan; and (iii) the teams in the trenches living and breathing the campaign and the resulting data (e.g., a Social Media Marketing Manager at your company and a Head of Social Media at your agency). Make sure you have the appropriate teams set up at both your company and your agency, to optimize at each level—strategic, planning and execution.
7. Rinse and Repeat
Just because you followed the above process doesn’t mean your job is done when you have completed the six steps above. This is an iterative process—every quarter you should go back to step one, to restudy everything and adjust for any changes in business goals, customer learnings, media learnings, etc. and then reset the campaign in steps two through six for the new learnings. Plan for quarterly campaign review meetings with your agencies and internal teams at that more strategic level.
I know this sounds like a daunting process, but it is required to make sure you don’t unnecessarily flush any of your marketing dollars down the toilet. A strong, well-optimized relationship with your advertising agency could be the difference between sales and profits being flat this year, or up 100%. If you need any help here, don’t hesitate to reach out to me, as I have worked with many agencies in my past, and know the ones who are currently “best of breed” where the rubber hits the road—with smart teams driving a high ROI on your investment. If you need help thinking through this process, you know who to call!!
George Deeb is a Partner at Red Rocket Ventures and author of 101 Startup Lessons-An Entrepreneur’s Handbook.