How to Start a Digital Agency Transcript

Rob Krecklow

You understand, we’ve always been in the agency business. That’s kind of a new thing that people throw in our face but we’ve always provided the design services for traditional print. We’ve always provided the color counseling. We’ve always done the after-the-sales service and furnished the tear sheets. This is nothing new to us, it’s just the platform has changed but what we provide is nothing new to us.

Jeremy / Lloyd

L: I want to pause here and explain about the format we’re adopting for Broadsheet. This is one of the longer episodes of Broadsheet, which will be primarily available through the Broadsheet website and iTunes. You’re not going to find this on YouTube because it’s made for longer form content. We want you to be able to download this and listen to it while you’re at the gym, on a walk, or even on a commute. That’s the purpose of these longer episodes.

We also have similar content we’ve been providing through smaller episodes and those smaller episodes are really punchy, short, and they get to a point. This week we’re talking about digital ad agencies, and we’re going to give you a short episode that’s just on starting a digital ad agency. I just wanted to explain the difference so you understood why we’re doing it differently.

I’d also like to know your feedback. These longer episodes have a lot more stuff, we’re adding all the content we have while the smaller episodes are just a taste. If you think this is off, we’d love to hear from you. Send us an email. Now to this weeks episode!

J: Last time on Broadsheet we talked about how you can educate your clients to help them understand what products and services they should be buying. This time, we’re going to talk about how to start a digital agency inside your newspaper.

Arlea Hoffman

I think the digital agency model that a lot of newspapers are starting to offer is so important. We not only offer the print benefits that some places no longer offer, but now, every single print ad comes with a digital benefit, whether it’s on our site, whether their print ads are now searchable online and through the program we do with OwnLocal, every single word of every single ad is indexed when they put it online.

So not only are they getting the benefit of being in the paper but if someone is searching for that business through Google, they have the chance of coming up. I think it’s so important for news organizations to start offering these digital products to help their businesses because they’re only going to see better results and continue advertising in print as well as in digital.

Matt Miller

We started our digital agency about 2 years ago. The name of it is “Reimagine Main Street.” Our tag line is, “A Digital Agency With Ink In Our Veins.” Our name is reflective of the fact that we serve small businesses. Main Street USA.

Arlea Hoffman

We did so much research to start our agency. We looked at vendors of multiple different services to see who would be the best fit for our advertisers because our main goal (and it’s in the name, “Reimagine Main Street”) is to help those small businesses on main street that are not doing what they need to do online. Everything’s word of mouth. 

Well, online, everything’s word of mouth but only at a much bigger scale.

Matt Miller

We want to “reimagine” the way that small businesses market their business and provide them with options beyond traditional media. Not that digital isn’t really traditional media at this point, but we really wanted to provide options for the small businesses in our community.

Our newspaper has been in business since 1808, and we have name recognition, and there’s a trust factor there that we have been continuously serving this community for over 200 years.

We don’t want to forget our roots, so the digital agency with the ink in our veins is a nod to the fact that this is a new way of doing business, but it’s with a company that you know and you trust. I really think that is what separates our agency from the millions of startups that we’re competing against. I think that we have this advantage that we have relationships. We go out and we talk to these customers all day every day. We have a whole group of people that that’s all that they do.

Our agency is profitable, it has been from day 1 and it’s growing. We continue to bring in new customers every single month. We continue to look for new products that bring in new customers every single month. All of the products that we have have pretty detailed reporting, and most of those products, the reporting offers upgrades.

We can go out and say, “Hey, you’re on this level SEO package this month, but if you went to this, we might be able to get you here.” We really do some cool things with current customers so we don’t sell them and forget them. We’re going out, we’re talking to them about growing their buy with us, but then we try and focus on bringing in new people as well.

We’ve been profitable from day 1 and we continue to grow.

Austen Trimble

The content of a digital ad agency is a really interesting one. Historically, there were three places you could advertise: newspaper, radio, television. Now there are probably three million places you could buy advertising from.

Newspapers are totally equipped to be the guide and consultant to offer digital agency services to their customers because they have the relationships with the small businesses. Probably the greatest asset that any newspaper has is their asset connections in humans, in the advertisers that they work with.

I think that’s why you’re seeing the Buffets and the Bezos of the world buying up newspapers. They don’t know what the new model is (well, those guys probably do) but they know the value of every single one of those relationships so I think that sets newspapers up to be the provider of those digital services, the only question is whether they can execute properly.

Greg Nell

Basically, Tribune had decided that they wanted to further diversify their revenue stream in a digital space. At the time small business owners were all looking sharply at things like,

  • “How do I switch my advertising dollar to more promotion of myself through my website?”
  • “How do I use social media correctly to bring in the right consumer?”
  • “How do I use page search?”
  • “How do I optimize to be found?”

I think at the time Tribune decided that there was a shift in the market going on here. Small businesses are willing to bring in people who were able to capture that dollar.

John Paton

AdTaxi, I think is one of the best ideas I’ve seen in a long time for two reasons. AdTaxi really has two customers when you think about it the way we do it.

One is the publishers that we serve. AdTaxi is in half a dozen nations now. It’s everything from ad agencies to television broadcast to print providers. AdTaxi is a great way for salespeople to go into the communities of the advertisers that they serve and be able to offer this large suite of solutions depending on what the advertiser wants.

They can take it all the way through from a call to action which newspapers are wonderful at, to researching a product, which clearly the web is great at, to SEO and SEM.

Tim McDougall

How did Fusionfarm come about? If we dial back far enough, we always produced TV spots or print ads for our customers that had a media buy that needed an ad. As you looked at what was happening to the business though, more and more of what had formerly been advertising budgets began moving into things that were marketing but not advertising spending, things like building a better website, SEO, social, etc.

Money started moving into these things because that was the best way to reach their customer, or a way they had to reach them in addition to advertising. Part of our mission should be to help our advertisers, our customers, to reach their audience in whatever the best way possible.

Kelly Homewood

I don’t think it was an accident that we were able to come up with the idea to combine resources in order to create efficiencies that would save money that would then fund what we’re doing here at the agency. Tim McDougall was instrumental in that.

Now, we didn’t know at the time that that would be a full fledged agency type service or that we would bring on digital marketing necessarily.

We just knew that we needed to create efficiencies and cost savings because of the way that the industry was changing and the challenges that we were all facing.

Then you combine that with the work that my team was doing on creating new revenue streams and product development and you come up with the idea that we really could build that into something else. We could develop this into a real competing full service agency and we could bring in digital marketing and that’s how we grew to where we are today.

Tom Shaw

I think that if you’re calling yourself ‘Rainbow imaginary agency’ completely separate from the newspaper, and you set up all those things, that you’ve got a lot of extra expenses and you’ve got something that’s in parallel being plucked out the minute the things go wrong.

I think that our model and what we’re setting off to do is it’s part of Shaw Media. It’s integrated locally with the local papers, so a rep could go in and say, “I’m here from Shaw Media. We have Suburban Life. I’d like to talk to you about social media. I heard that you might be interested in having someone run that for you.”

I think we have it set up so that the team is separate enough to the autonomy to go after new business, but at the same time, they are integrated enough with our company that as the solutions may change, they’ll continue to have employment, and I just don’t know with media buying being a part of that if that’s the most lucrative part.

Lloyd / Jeremy

J: As you’re heard, starting an agency requires a lot of research, a lot of preparation, and a lot of action to get it up and running. Next we’re going to hear about some advantages and challenges of running an agency inside a newspaper

L: Yea, it’s not easy, there are a lot of things you can make a mistake on, and a lot of these folks have gone through it so it’s important that we learn from them.

Doug Gesiorski

The real advantage of running a digital agency inside of your print newspaper is that you’re able to be a lot more nimble than you would be as part of a much bigger organization.  We function as a startup because it’s a smaller group of people.  We’re able to stay nimble.  We’re able to communicate, I think, in many ways more effectively, and we’re able to keep pace.  

Earl Baer

We are creating somewhat of a one-stop shop for advertisers to be able to buy all their media whether it be print or digital. We’re selling T.V. now, we’re selling video pre-roll solutions as well, we’re selling ad mail. It’s all about finding the audiences and finding out ways to message to them. I think newspapers are really well-positioned to be the trusted adviser for people’s media needs.

One of the great advantages we still have as a medium is that we for the most part have direct client relationships. Unlike broadcast, we deal mainly directly with customers at the local level. With that relationship, you have that opportunity to become their trusted adviser. If we focus just on our traditional newspaper product and it’s just not enough to become that trusted adviser in the marketplace, but if we can offer a full spectrum of media solutions and audience targeting solutions, you’ve got the clients’ interests.

When it comes to things like direct mail, to a certain degree, our T.M.C. program and certainly digital reach extension, we’re no longer limited geographically to the greater L.A. area anymore either. We can go anywhere in the country and offer solutions for advertisers.

Jeannie Parent

It’s interesting, we’re trying to position ourselves not necessarily as a newspaper company anymore which I’m sure is a common theme that you’ve heard from pretty much everybody you have talked to. It’s really about selling media and selling solutions to the local advertisers and helping them understand the needs of their businesses in terms of advertising and messaging in this ever changing, evolving media mix that they’re involved in.

Because of our relationship with AdTaxi, and Yahoo, and Google and because we’re an intrical part with other media, we can offer the clients a complete sort of agency-like solution. We’re not just giving you one thing, we’re giving you advice on all kinds of ways to reach the market in print, digitally, socially, through e-mail, and so the bundle has really become more of an agency approach for us.

It’s one of our biggest challenges because we have a lot still very dedicated knowledgeable media executives and sales executives in our organization. The whole learning curve of the digital space has been a challenge for me in my role as we try to train individual reps on how to sell digital, but not necessarily digital specific, but how to incorporate that into the audience that we sell.

Tom Shaw

I will say that I think sometimes, the companies that you see say they have an agency, and then a year and a half later, they’ve closed it and in mind I wonder if that’s more of the Fad du Jour, when it really comes down to maintaining relationships with businesses, and really being able to monetize solutions, leveraging our relationships and our brand, and moving away from relying solely on just selling ads around our audience in print and online.

I think for the agency idea to work that you need to have commitment at the top levels of the company to give it time to work, what you’re really talking about from our perspective is new business, is getting new sources of revenue from new solutions. In order to do that, that takes time. It takes a lot of training, it takes a lot of support, and it’s something that you’re just going to have to invest in. I know for us that we’re looking for short-term results, but we’re also patient with making sure that we need to get the long-term results.

Kelly Homewood

We were able to build a really small team of people that were really dedicated to building the digital marketing part of the agency and we really dug in and we went to conferences and we did a lot of learning ourselves and we put together some packages that would help the reps help businesses understand why this was needed. Our biggest challenge out of the gate was having businesses really understand that they even need digital marketing.

They did not understand how digital marketing works and they certainly didn’t understand how they would have a need for that. That was really our biggest challenge. Getting the business off the ground.

Another challenge that we had is just facing part of the politics that go with working within an existing organization and trying to develop something new. There’s always a bit of a threat of what are disrupting by trying to create something new.

Lloyd / Jeremy

J: As you can see, partnering can bring some new products and services into an existing ad agency.

L: But I think a lot of newspapers make the mistake of thinking, “Hey, everyone else is creating a digital ad agency, we should do one too. Let’s just go ahead and do it,” and they’re not thinking about the potential consequences and the effort involved.

J: Yea, it really is like building a new business, and very oftentimes building a new business inside an old business so it brings up a lot of challenges.

L: Which is even harder, as we’ve seen.

J: Yes, so one thing that we would encourage you to do, is if you’re planning on starting a digital ad agency, one, do your homework. Talk to these folks, and more, who have had success with this.

And two, evaluate your capability to invest in these types of programs.

L: I’d say your culture too. This might not be in line with not just the culture at your organization, but maybe your town. Maybe you’re in a region that really doesn’t need a digital ad agency. Those are really hard questions you need to ask yourself when thinking about the time and expense involved.

J: Yes, and one thing I will say, this is something that we’ve seen in many markets where 5 years ago may have been the wrong time, but now is right, and 5 years from now even more markets will require digital ad agency services.

L: And talking about startups, the number one thing that is important to a startup, is the market size. Does the market size exist? And right after that it’s what you were just saying which is product market fit. And being too early to something is just as bad as being too late. So you really have to have that time where the market can understand what you’re providing. If it’s not there, then it’s probably not time yet.

And one good leading indicator is, are other smaller guys setting up something similar in the market right now that you could totally take over because you have a better brand?

J: Absolutely, one of the things about this partnering process is it’s pretty detailed and important to your agency because you do have other people coming in and bringing something to you.

L: And that’s actually a good transition because next time on Broadsheet we’re going to be talking about some of the big questions that any organization needs to answer which is do you build, buy, or partner, with anything.

Do you build it yourself in house and manage it and everything involved there, but you own it, do you buy something that already exists – I mean talking about digital ad agencies, the Dallas Morning News just bought three digital ad agencies in their market and I think that’s a really smart move for them – and the last one would be partner. Partnering with existing folks who already have this figured out, and it’s a really exciting episode.

J: Thanks for watching! Make sure you are signed up for our email list to hear when new episodes are released.

 

 

 

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