You’ve taken the plunge. Gone from taking side projects on to hanging out your shingle as a real marketing agency. Problem is, you’re not getting any business. In this episode, Mitch Joel (President of Twist Image Agency) will tell you what you’re probably doing wrong and how to fix it.

Mitch is president of Twist Image, a fantastic digital marketing company in Canada. He is the author of Six Pixels of Separation, the author of CTRL ALT Delete. One of the country’s first podcasters, he has a great podcast now, and a good friend of mine. Hi Mitch.

Mitch: Hello Tod.

Tod: So what is the biggest mistake that people are making when it comes to running an agency and servicing clients?

Mitch: The biggest mistake? It’s funny, I just listened to your interview and and I constantly make mistakes. When are you not making mistakes? For me, the biggest lesson that I think you really have to embrace and understand when you’re running an agency is truly the definition of what an agency is. As an agency what you really are doing is — I mean, in a formal way, you’re sort of the — you’re the marketing department that a company doesn’t want to have the liability of having.
This is essentially why we were created. It’s like focus on what you do best and leave the marketing to the agencies for when you need it, and obviously over the history of agency life has change dramatically, but the mistake that a lot of you don’t make is drag the time to that definition because I think people come into the agency business thinking, “I’m going to work on bunch of different brands”, “I’m going to succeed in breakthrough campaigns”, and “I’m going to do all these big things”, and what they really fail to understand is we are all here to act as agents to serve our clients, and in a world where it isn’t easy to bend your own trust and do your own thing, the biggest mistake I see even people on the team making or other agencies is that they fail to understand that they are there to serve the client and not the other way around.

Tod: That’s interesting too because it sounds like the most common sense thing and you would think that everyone who’s on staff wouldn’t automatically kind of know that, but it’s like — that’s a cultural thing, isn’t it, when it comes to hiring?

Mitch: I think part of it is you forget you have a couple of windsyou’re able to demonstrate a propensity in a certain space or channel or you’ve had creative winds and suddenly you think you’re “it”, and you know everything, and it’s easy to go in and be — “This is it. This is how it’s going to roll, let me sort of clean up this big mess that you’ve got here”, and you do often forget that you’re there to serve them, to help them, to be their for them…

I have a very close friend who was a very senior manager at a restaurant. We would often hang out there and tell me all the crazy stories about what people do. It came to a point where I realize psychologically, I think what’s happening is these people go to work and they get screamed at and so they go to restaurants so they can scream at someone else, so they can feel better about themselves, and that terrible they had. Not that that happens in agency life, but there’s a parallel to that of like. You know, yes you want to push great ideas through, yes we all want the best work to be in the market but ultimately we are there to service the clients. Even more importantly in terms of talk about this big mistakes, is also the fact that the people who are working on the brand side are actually there to serve the brand not their own egos and their own needs. So, it does create a sort of weird, strange, dynamic relationship but it’s ah.

Tod: One of the things that has always fascinated me about how agencies have to operate when they’re dealing with clients is taking on the brand voice and how that’s so different between clients. I mean just – in my own agency, we represent, we work with a lot of shopping centers and in one shopping center, Oakridge Centre, is a very high fashion brand. Kildonan Place in Winnipeg on the other hand is very family, friendly. Even though they’re both the same business they are completely different voices, completely different tone. So, how do you guys get that tone? How do you start to learn what the voice of a brand is that you’re representing or that you’re working with?

Mitch: I’ve pushed so dear forever and say it’s not even the challenge of the voice of the brand, it’s the voice of the brand. Well, that is the biggest challenges is voice of the brand plus contextually relevant to the platform you’re speaking in.

I don’t think the voice of the brand that we use is the same on Youtube, as it is on Facebook, as it is on Twitter, as it might be on a website or on a transactional site, and that’s what makes the world really interesting and unique. I would almost be ready to argue. I’ll throw it down with you Tod anytime, that maybe you’re not trying to do a sort of unified voice to the brand, you’re trying to figure out what the spirit of the brand sentiment is and then you try to make it applicable to the channel in which you’re speaking. The best visualization I can give you for that is if you think about Youtube, and there are so many brands — I’m sure you deal with this everyday, where you pop open a video on Youtube, and knows just like you can skip this ad preview and you hit skip because there’s nothing even happening in the first five seconds because they built that ad for TV and they’re just sort of posting it on to Youtube. What I tell a lot of brands when I talk about this idea of voice and I sort of extend a larger – to be the brand narrative, is that selling on Youtube is an opportunity. Anyone can buy – call Youtube now and buy a pre-roll or by post-roll or by sponsorship anyone can do that. Understanding who you’re trying to send that message to because Youtube has a very, very big audience and then understanding how to become a part of that community is a whole lot harder and that’s why I think that that voice is one, it’s a very, very critical but two, I think it really is contextually relevant to the audience because the community you’re trying to join on Youtube is very, very different typically than — let’s say speaking to a bunch followers on Facebook or Twitter, so I think that’s the real challenge and it’s not about getting a unified voice but figuring out contextually the voice within each channel, relevancy of your brand and then how to do it. And the answer of how you do it is you test somewhere, I mean you got a really find the right way in, you have to nurture it, you have to see if there’s any action or attraction on it, and it’s a very long process and no one is going to say otherwise. I spent time, I was fortunate to spend some time with Jonah Peretti from BuzzFeed. Jonah was telling me that — we all see the videos that go extremely crazy on Youtube or BuzzFeed, it’s wild to see, he’s like, “If you actually saw how much time it took and effort to get the video there, to have it be ready for that type of prime time it’s a real process”, and it’s an inner process, it’s an expensive one, and brands are doing that at Buzzfeed just on Buzzfeed over a period of time. But that’s just a sort of nature of the new game.

Tod: One of the things with Youtube obviously is you can track the clicks, the ROI is relatively easy to prove, you might be able to put conversion tracking down for Facebook ads and things like that, their ROI when it comes to those kind of direct click to goal processes are very easy. How do you as an agency track and report ROI on the softer things like social engagement?

Mitch: The biggest trick of our trade, and the biggest opportunity of our trade and the biggest missed opportunity of our trade lies exactly in the answer to your question. The reason is just because, philosophically we believe that digital affords any brand the opportunity to measure metrics in completely personalized and unique ways that are only relevant to them, it’s easy to look at follows, clicks, by throughs, whatever you want to look at, it’s much harder to say, “Okay, so if we do this on Youtube, what do we really want to have happen?”, and that’s the sort of end, this is all stolen by the way, from Avinash Kaushik, who is the digital marketing that manages Google, a close friend of mine. We’re really heavy well done a lot of sky too, and he talks a lot about this idea of macro conversions and micro conversions. So, in this instance the macro conversion is he wants someone to buy, but the truth is they may not watch a video and buy. They may watch a video and they want more information and go to a landing page and from a landing page, they may sign up for a newsletter or they may watch another video or go look at customer reviews, and that’s the sort of focus that’s interesting. It’s when brands take campaigns or ongoing initiatives and look at the macro conversion and then the micro conversion. What I love about this micro conversions is you can benchmark them, Avinash says you’d assign points to it or dollar amounts at random, whatever you want them to be, but when you start learning really quickly is that hello– if someone clicks on this link and watches this video then signs up for the newsletter, they have an 85% propensity to convert, however if they just watch the video and go to a website and then look at the customer reviews, it’s only 50%. You can look at those two instances and go, how do we manipulate those or bring those to the forefront to maximize them because we know that basically no one watches the video and then converts, right?

Tod: Yeah.

Mitch: And it’s that beauty of digital, and as I say beauty of digital I realize most people go like, “Oh man, that’s like so much work”.

[laughter]

Mitch: Totally, I mean totally it is nuts. That’s what we talked about. Avinash talks about getting rid of vanity metrics which I think is predominantly what I see that ROI, oh I mean I’ll be talking about this stuff to somebody, and I’ll say, “Hey, yeah, yeah, it’s great”, we got 50,000 more followers last week and I’m like, “Wow!”

[laughter]

Mitch: Is there like an echo chamber between ears here like what — what ,happen? And it’s easy, it’s easy to fall back on these really useless metrics. So, to me the beauty of this whole thing is the personalization of metrics and keep the eyes, the trick is to not have them in the rearview mirror. It’s over. How do we do — how do you move to the passenger seat and not the rearview mirror would be the better analogy.

Tod: Isn’t a lot of the sort of the whether robber hits the road he’s in educating clients on that?

Mitch: There is, but you have to be extremely careful, we live in an age of sophistication. I really do think you have very, very sophistic marketers and very, very sophistic agencies, easy for me to say something like, “Why would you go to your traditional ad agency to do all this stuff?”, and the truth is they’re doing it very, very well now. And the truth is that brands are hiring and engaging marketers who have a serious depth of digital knowledge, so, the challenge isn’t so much in education. I think it’s in getting it done and building a culture within the organization about the agency and client’s side, of being encouraged and excited by the traditional way of how we charge and build. It needs to be changed you know. Clients often talk about we need agencies to be more real time and always on and the truth is it’s not easy to do and it’s not easy to do because our typical pay structure wasn’t based or driven on that, and now well we have to adapt.

Tod: And how do we adapt? How does that model change? What does it look like?

Mitch: You suck it up, I mean it’s the stuff we talked about earlier, it’s about understanding at a more grander level what we’re talked about. When we talked about budget, it’s about understanding the true business challenges that are being faced by these businesses. It’s about recognizing that the advertising communications aspect of our business is one part of it only, it’s not everything anymore. You’re ability to create at least in my world – it’s a digital agency, digital products and digital services and build those KPIs that we’ve talked about, moving analytics to the rearview to the passenger side instead of the rearview mirror, and then using communications channels to communicate to the audience, pay their down rented, what that looks like and how it can be successful. I really do believe in digital. I believe in the ability and capability for us to build new business development and business lines and streams of business within there. I believe that digital as a sort of euphemism for marketing should be much more vertical rather than horizontal. So, it’s those things that I think you’ve culturally — you’re speaking to C level executives who fundamentally have read the same things I’ve read or follow the same people I have and are looking for more efficiency in the marketing, they start going down this road and hopefully – you know, Twist Image becomes one of the agencies that they hopefully choose and then ultimately we win. It has definitely become a much more complex and challenging business and I embrace that, and it’s part of the reason we’ve decided to join up with WPP and be acquired by them. It was for the ability to have the half of data, the half of resources, the half of history, the half of experience to be able to feel comfortable going after any piece of business.

Tod: Do you see a time when agencies will restructure? We’ve talked a bit about sort of compensation but will they restructure the model that they use entirely and may be base it on performances measured by the softer social metrics, and I hear what you’re saying about the metrics being kind of silly, so I’m not talking about follower count or you know people talking about that if that even still exists, but you know the things like engagement rates or amplification rates, should agencies be taking on that requests that sometimes comes from clients which is why don’t we put part of your pay based on your performance in social?

More from Tod:  The New Sales Funnel

Mitch: I think pay for performance – first you know first for Tod you’re a smart guy and you know that pay for performance isn’t the new model that was invented because of digital, it’s something that we’ve been talking about well beyond decades. The challenge with pay for performance, it sort of insinuates that the marketing agency has any form of impact on what the product and service actually is. So, if you look at what marketing is and we could argue whether or not the fourth piece is still louder than up a product price promotion place. Do marketing agencies really have impact in those four areas or because the nature of this –have we been relegated primeout the promotional fee? So, it’s a tough question to answer in a sense of what’s the right payment scheme because I don’t think it’s fair to ask that question, unless as a marketer I can say that the client — this practice having problems because of this. I can’t do my job right unless you can get it into this retail store. There’s so many things that I can’t impact to be able to say that the overall sales performance must be driven ultimately by what I would call the end of the final activity. It’s just the ads that helped push the product is a mistake, if you’re involved from the beginning in development, I think it becomes that much more interesting and I think agencies are getting more and more poised to do that. We saw that very recently with the Nike shoe brand. That was very much an agency of brand collaboration. Now, whether or not they were paid to that level, I don’t know but that really was a brand — went to an agency and saying, “What could we do? What can we build together?”, and to me those are exciting times, how we’re compensated, I’m not so finicky or fussy on it.

Tod: It speaks to kind of the old school model of agency of record, right where you sign on with an agency and they’re yours for a significant amount of time instead of kind of the year-to-year evaluation. It’s like in every fiscal year, it’s like, “Wow, we’re going to have everyone do an RFP”, and go through and pick another ad agency and marketing agency and I could see how that be frustrating. In your book, CTRL ALT Delete, you talk a lot about big data — great chapter by the way in there. Everyone should read it, this is phenomenal. Does big data play into the work that you do at the agency level for clients?

Mitch: No.

Tod: [laughter] Alright.

Mitch: You know what I talked about in the book is the — I call it Sex with Data, which sound like a “star trek” sort of weird thing. The real idea is that listen, if you’re really able to show me brands that are taking to spare it sets of data in different sort of buckets and leveraging them together using high-end speed of technology and high and analytical research technology that is able to spit out a unique insight that no human being could ever understand or access because it could never grab information at that speed, — and by the way, I would say that my complete formalization of what their data was, what became was based off of your video when you explained it on Youtube, Tod. I was sort of perplexed by the whole thing, and so I was like,“Well, Tod explained that really nice and so simply”, and I’m like, “I’m going to require that and let people although that, I definitely attributed it to, but you’ve explained it so well on Youtube that every rock man, anyone scrub with it to don’t look. I know many brands are doing it that way. What I’m proposing in the Sex with data chapter is if you’ve got what my friend Bryan Pearson at LoyaltyOne calls this data ghettos email and one ghetto like a search data and not derive at traditional data and whatever it might be. One is, can we get those data ghettos to be not ghettos anymore? Can we get them to work together? Two would be, if we do live in the era that we lived in as my friend, Nilofer Merchant will call the Social Era which I believe we are in the social era. He is very – makes a lot of sailing points towards that. How do we take – what I call that circular, social there, it’s not the people just intuitively creating, sharing, putting it up online, how do we melt that ethically and with permission in a way that allows us to become truly better marketers. So, instead of looking at demographics and psychographics, suddenly I know Tod because I’m connected to you and we’re sharing, and that’s a valuable and equitable exchange of contact let’s call it. Through that, I’m able to understand the things that truly are of interest to you at the moment, that’s truly matter. So, instead of creepingly following you around because you put something in some checkout bin online, that you’re going to go back to a venture but suddenly you can’t get any other form of advertising because they are retarding you, because they think you abandoned shopping cart which I recently blogged a lot about. It really does demonstrate that we are so nascent in the world of what we can do with just understanding people social behavior and connecting to them ethically and creating value, and combining that with data. And the truth is there are any organizations primarily most in startups who are leveraging that’s –what I would call in Sex with Data very, very well. I call it Sex with Data because I argued that prior to this DNA, we’re just say basically fooling around with information. But now that we can bring the social information and this linear information by those data ghettos and build permission, consensual Sex with Data, right?

Tod: [laughter]

Mitch: It is. At least its the first week be way more intimate with the customer.

Tod: And it is interesting how early days it is, you know, people talk a lot about it and big data is nothing new. We used to call it data warehousing, just the tools are a lot better now. I just spoke a couple of weeks ago to a very IT-focused senior group of people, the types of vendors that were in the room were Siemens, PeopleSoft, Oracle, IBM, Microsoft and the big players in this space. I talked a bit about the higher level of big data and I started – I don’t usually do this, you know, I put up your hand if kind of thing I find them quite easily but I did in this case. I said put up your hand if you’re working on any big data, that thing, and of the 400 people in the room or so, maybe three. And these were senior level at large national, international, multinational chains. It’s so early, it’s incredible to me.

Mitch: Yeah. I’m very lucky I’ve built a very different agency I think than most people and I’ve started my agency 15 years ago. The real thing that I wanted to do was to work with big national or multinational brands and ongoing and very complex digital and ongoing challenges. I mean that was really – And that sells like a mouthful but it is true. That’s the type of work I thought our agency could be best at. So, now we’re pushing some of the biggest retails, biggest financial institutions, biggest in pharma, and when I really look at what they’re capabilities are, to get access to data because access is different than capabilities, and again, I’m not disparaging them, they’re doing great. It’s just they’re not – they’re at a point where, “Hey, we’ve really exhausted all these stuff, so let’s start the whole big data thing”. And I really do believe in going back to Avinash, he has a system we should do we’ll call the Digital Ladder of Awesomeness with a lot of awesomeness and he talks really about it in steps like, “Don’t do this if you haven’t done this yet”. It’s very basic. If I ask you to draw one out, it would probably somewhat similar but the point is that they are so lacking in some of that foundations and basics but it’s absolutely crazy, it’s embarrassing. You and I share a love for a very large airline, and I think I share a love for differently than you because I share it in a very positive way and I think you sort of sway between most in negative sometimes positive.

Tod: True. Because you need your status and you don’t want to piss them off that much.

Mitch: That’s right. Yeah, exactly. So, they recently launched which is all the rage now what we will call stunt advertising, we’re going to go and video us doing something very noble and at the same time exploit those who have nothing. And we’re going to look so great, we’re going to get tons of millions, millions upon millions of users. I’m not belittling it because it is something that we’re seeing time and time again by major brands that are doing and can afford to do this. Now, if you saw that they had done this, let’s say you’ve read an article about it in the national newspaper, on TV or somewhere else, you’re natural posture would be you go onto Youtube and you type in the brand name. Now, because of an airline I can tell you what the first search result is. The first search result for that airline is actually Mayday, which is a TV show about airline crashes.

Tom: What?

Mitch: Yeah. The second search result is a very well-known Youtube celebrity who spends 12 minutes just completely dismantling them, a completely terrible costumer experience whether or not she is right or wrong in certain instances, etcetera. It takes to the fourth or fifth search result to even see this video. Now, I’ve just read somewhere or saw it on the news that this really amazing heartfelt thing that I go search for, that search that first page of search was also it doesn’t matter I’m talking about since 2004. That first page search result is the brand experience. So, we’re going to have a conversation right now about the fact that they’re leveraging big data. They can’t even get the first page of their search results right. No, I’m not saying that they can have any power but I think they can. I think if they call Youtube and said, “Hey, we’ve done this video and it’s got millions and millions of views, we’re buying media gains, we’re big advertisers in the whole Youtube world, can you take a look at this organic search results and tell me if you think it makes sense that as an airline, my first search result is a plane crash?

Tod: Wow.

Mitch: And so, I love talking about big data and all the amazing opportunity it provides but I very rarely in practice see brands doing the one-on-one basics. Are they indexing properly on Google? Are they indexing properly in Shopper SCL? So, indexing great on Google but if someone is on a major shopping site and they do a search for your brand or a competitor to show up. Now, all these stuff is so basic and it’s stupid. It’s stupid for us to talk about this in 2014, heading into 2015, it’s silly but yet here we are. So, I’m really excited about big data because it just, just my agency a much longer and wider runway in a world where they’re not doing much yet.

Tod: It’s what’s the future of digital agency, digital marketing agencies, is there going to be a role five, ten years from now for the small shops, the one, two, three-person shops, would that all be consumed by multinational ad agencies and acquired and brought in? What does it look like?

Mitch: I don’t think it’s a zero-sum game, I think there’s always going to be the land of independence. I think that even within the land of big networks which I knew very well and now I’m getting intimately accustomed to being a part of WPP and then again we will have a lot of exciting views and I’m hopeful coming up in a year or two. It’s a great question. I think it’s less about is it big network versus small, independent which you can – more about the roles, like will there even be a digital marketing agency in five years if you have most of the major networks publicly saying they need over 50% of their revenue coming from digital like tomorrow which is what the WPP, and the publicists, and the [Inaudible], and the IPGs are saying. But, there’s only one way to do that. It ain’t going to be because they’ve got five new clients, it’s going to be through acquisition. So, you have two sides of it, there’s acquisition or they’re actually growing their current organic business more to be digital. So, we’re going to do it maybe last year or same month to keep it more digital. Yeah, I think there’s a ton of friction between what I call the traditional agencies and the digital pure plays. I think within the digital space, you have a lot of specialists, specialists who do performance, specialists who do affiliates, specialist who ain’t go down the whole list of what we can do. But I think that that’s good and healthy, where it’s going to net out, it’s anybody’s guess. I mean, I even see the challenges going beyond that. I see the challenges being in the actual broad channels at Google, Facebook, BuzzFeed are offering full on creative services to brands for specifically to their channel. And a lot of them are not even charging for it.

So, you’re going to go to an agency and work with them or you could go to Google and you buy where buying ads snyways and have them do the creative. It depends on the type of agency, the type of brand you are. You know a lot of brands that want to do it, all these multiple relationships and that’s why they picked an agency in the first place. Ultimately, I’m hoping that the agency relationships simply evolve to a point where they are really partners and not vendors with clients, I think that that would be the nice place to end up. I’d personally believe in the world of what I call specialists and this idea of — you know, if you blew your knee and would you want to go and see the number one person who treats the national hockey team or your national football team, or would you rather go to a GP? You know?

And so, I’m hoping that the world of specialty wins because I’ve got a lot of chips on that side of the table.

Tod: Mitch Joel, you can find him at mitchjoel.com. Mitch, thank you.

Mitch: Pleasure, Tod. Always great talking to you.