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Digital Advertising Agencies 2013:
A Buyer’s Guide




A Digital Marketing Depot Research Report
Search
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Digital Advertising Agencies 2013: A Buyer’s Guide



Scope and Methodology
This report was written for marketers and advertisers who are looking for an agency to manage some or all of their digital
marketing initiatives. The goal is to help the audience navigate the many choices available and make a more informed
decision within the current agency market, including what digital marketing capabilities and services are most important to
their organizations. This report answers the following questions:

 •	 What trends are influencing the digital agency landscape?
 •	 How can I determine if my company needs a digital agency?
 •	 What type of agency is the best fit for my organization?
 •	 What is the process for choosing a digital agency?
 •	 What questions do I need to include in an RFI or an RFP?

The report draws from Wikipedia’s definition of an interactive agency, to define digital agencies as companies that provide
specialized advertising and marketing services for the digital space. They are independent from the client and provide an
outside point of view to the effort of selling the client’s products or services.

Digital agencies may provide some or all of the following capabilities: digital lead generation, digital brand development,
interactive marketing and communications strategy, rich media campaigns, interactive video brand experiences, website
design and development, e-learning tools, email marketing, public relations, SEO/PPC services, social media marketing,
mobile campaign development and management, content creation and management services, and data mining and ROI
assessment.

If you are considering hiring an agency for one or more digital advertising channels, this report will help you decide whether
or not you need to. It will give you an overview of the current state of the market, including key trends, as well as in-depth
information about the process of choosing a digital agency.

The report was prepared by conducting numerous in-depth interviews with leading digital agency executives, advertisers,
and industry experts from March through October 2012. These interviews, in addition to third party research, form the basis
for this report. In particular, Digital Marketing Depot would like to thank the following industry executives for their time and
professional insights:

Marty Weintraub, CEO, aimClear
Bruce Clay, Founder & President, Bruce Clay, Inc.
Seth Besmertnik, CEO, Conductor
Mike Gullaksen, SVP, Managing Director, and Jeff Johnson, SVP, Managing Director, Covario
Ken Dobell, President, DAC Group
Kevin Lee, CEO, Didit
Aaron Baker, CEO, Digital Net Agency (DNA)
Rob Garner, VP, Strategy, iCrossing
Rob Eleveld, CEO, Optify
Dana Todd, SVP, Marketing, and Sarna Goldenberg, VP, Marketing, Performics
Elliott Easterling, CEO, RBM
George Michie, CEO, and Ryan Gibson, VP, Marketing, RKG
Jason Tabeling, Associate Partner, Search & Media, Rosetta
Jane Bedford, Principal & Founder, Kerry Kielb, Senior Consultant, and Dan Plachta, Engagement Manager, The Bedford
Group

Research/Writer: Karen Burka
Editor: Claire Schoen, Digital Marketing Depot (http://digitalmarketingdepot.com)




© 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 	   1	            Email: whitepapers@digitalmarketingdepot.com
Digital Advertising Agencies 2013: A Buyer’s Guide



Table of Contents
Digital Agency Capabilities and Services..................................................................................................................................... 3
       Table 1: Selected Digital Agency Capabilities................................................................................................................... 4
    Lines blur Between Paid, Owned, and Earned Media.......................................................................................................... 5
       Table 2: The Lines Blur between Paid, Owned & Earned Media...................................................................................... 5
Digital Advertising Agency Market Trends................................................................................................................................... 6
    Trend #1: Digital Advertising’s Increasing Share of Overall Agency Revenue ..................................................................... 6
       Table 3: Digital Services Share of Overall Agency Revenue, 2010 vs. 2011..................................................................... 6
       Table 4: Digital Revenue Share Growth for WPP and Publicis Groupe, 2010 vs. 2011................................................... 6
       Table 5: 2011 Internet Advertising Revenue (in $ millions)............................................................................................... 7
    Trend #2: Holding Companies and Agencies Use Mergers and Acquisitions to Meet Advertiser
    Demand for Digital Expertise................................................................................................................................................. 7
       Table 6: Selected Holding and Media Company Acquisitions of Digital Agencies.......................................................... 7
       Table 7: Most Active Strategic Buyers, 2011..................................................................................................................... 8
       Table 8: Selected Digital Agency Acquisitions.................................................................................................................. 8
    Trend #3: Traditional Fee Structures Evolve to Include Performance-based Compensation............................................... 9
       Table 9: 2011 Share of Internet Ad Revenue by Fee Structure......................................................................................... 9
Choosing a Digital Advertising Agency..................................................................................................................................... 10
    Step One: Company Self Assessment – Do You Need a Digital Agency?.......................................................................... 10
    Step Two: Understand Agency Fee Structures ................................................................................................................... 10
       Table 10: Selected Digital Agency Fee Structures.......................................................................................................... 11
    Step Three: Begin the Selection Process: Phone Calls, RFIs and RFPs............................................................................... 12
       Table 11: Business Information to Provide in an Agency RFP......................................................................................... 13
       Table 12: Questions to ask an Agency in an RFP............................................................................................................ 14
    Step Four: Choosing the Right Agency .............................................................................................................................. 14
       Table 13: Sample Agency Decision Matrix...................................................................................................................... 15
    Step Five: Negotiate Contract Terms.................................................................................................................................. 17
Conclusion.................................................................................................................................................................................. 18
Resources.................................................................................................................................................................................... 19
Agency Resources....................................................................................................................................................................... 19




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Digital Advertising Agencies 2013: A Buyer’s Guide



Digital Agency Capabilities and Services
A proliferation of channels has made digital marketing more complex than ever before. Search advertising models of
pay-per-click (PPC) are now available on social media networks. Whereas social marketing once meant a Facebook brand
page, advertisers are now allocating budget among a growing array of major social media including Pinterest, LinkedIn,
Google+, YouTube, and Twitter. Search engine optimization (SEO) has spawned a new channel of content marketing, as
marketers compete to generate traffic and attract customers. Digital maps and applications for local markets such as Yelp
or Foursquare have changed marketing at the local level, both for small companies as well as national brands. Mobile
marketing has become its own discipline, with unique design, development, and distribution requirements.

Faced with this emerging digital marketing landscape, as well as limited
resources, and higher C-level expectations, advertisers and marketers are
                                                                                       More than half – or 58%
increasingly using digital agencies. More than half – or 58% – of marketers            – of marketers surveyed
surveyed by digital technology firm PulsePoint said they expect to increase their
relationships with digital agencies in the next twelve months.
                                                                                       by digital technology
                                                                                       firm PulsePoint said
Digital agencies come in all shapes and sizes. At the high end, for global brands,
are the agency holding companies with full-service digital agencies around the         they expect to increase
world. There are also boutique and specialty agencies (two terms that are used
interchangeably in this report) that provide channel-specific digital marketing
                                                                                       their relationships with
services such as mobile messaging programs, social media marketing, or SEO             digital agencies in the
link-building campaigns. Like any organization, each type of agency has its own
strengths, weaknesses, and culture.
                                                                                       next twelve months.
Agencies owned by large media or holding companies can provide the following benefits:

 •	 Diversity of capabilities from co-owned media properties;
 •	 Built-in sister agency relationships and priority referrals; and
 •	 In-network efficiencies.

Most full-service digital agencies manage a brand’s presence on many channels, manage a brand’s advertising technology/
analytics platforms, and provide professional services. Technology offered to clients, such as bid management software or
social media listening tools, is usually sourced from third parties. Client account management and support are largely based
on client size and spend. Agencies owned by holding companies generally require minimum monthly spends in the six-to-
eight figure range. That level of investment typically buys a dedicated account staff, an “agency-within-an agency” that can
manage the brand across the entire holding company.

Working with a specialty or boutique agency offers unique benefits as well, including:

 •	 More granular channel strategy and tactical expertise;
 •	 Client access to agency decision makers and top personnel; and
 •	 Lower spending minimums.

Specialty agencies offer a subset of the services provided by full-service agencies. These services may be channel specific,
such as social media or SEO, or media specific such as display advertising or email marketing programs.

Dozens of specialty agencies have launched over the past five years, a market dynamic called the “agency long tail” by
some industry executives. Prompted by the mid-market opportunity created by holding company agencies with huge
minimum spends, and wireless technologies that have made it easier to start up small businesses, many large agency
executives with strong client relationships have left their firms after an acquisition and opened specialty agencies.

Table 1 illustrates the broad range of services that digital agencies provide. A full-service agency offers breadth of
professional and channel services, while specialty agencies can provide depth within a channel, including proprietary PPC or
SEO platforms and extensive client training in software use, integration, and customization.

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Email: whitepapers@digitalmarketingdepot.com
                                                                                                                      Table 1: Selected Digital Agency Capabilities
                                                                                        Selected Digital
                                                                                       Agency Capabilities
                                                     Professional                                                                                                  Channel
                                                       Services                                                                                                    Services
Digital Advertising Agencies 2013: A Buyer’s Guide




                                                                                               Search                            Social             Public               Website            Mobile              Email             Display
                                                       Strategy Branding                                                         Media             Relations
                                                       Media Planning




                                                                                                                                                                                                                                                     4	
                                                       Customer Research
                                                       Benchmarking
                                                       Best Practices                SEO                   Paid                   Reputation       Blogging/content       Design &            Program            Program        Media planning
                                                       Customer Support                                                          management            creation         development        development &     development &          & buying
                                                                                                          Search              Content creation/     Online publicity   Content creation       execution         execution           Creative
                                                       Onboarding                                                                management        SEO/link-building     Ecommerce         Bluetooth apps     List/database         Branding
                                                       Reports/Deliverables                                                   Brand compliance       Online brand           CSEs           Website audits     development      Display retargeting
                                                                                                                             Influencer outreach      monitoring          Microsites         App & game      Lead generation




                                                                                                                                                                                                                                                     © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 	
                                                                                Keyword research        Bid management       Community building                                             development
                                                                               Content creation &        & optimization        Global programs                                            Video/commercial
                                                                                   optimization           Landing page        Sentiment analysis                                               design
                                                                                   Link analysis           optimization         Video design/
                                                                                Local/geo-search       Affiliate marketing       development
                                                                                Mobile programs        Search retargeting       Social display/
                                                                              International tracking        Campaign              retargeting
                                                                                    Campaign              management
                                                                                  management
                                                                                                                                       Source: Third Door Media
Digital Advertising Agencies 2013: A Buyer’s Guide



Lines Blur between Paid, Owned, and Earned Media
Advertisers and agencies have traditionally classified media as either paid, owned, or earned. Paid media refers to
advertising that is purchased, such as print, web, or broadcast advertising. Owned media belongs to the brand, such as
print brochures or website content, while earned media encompasses public relations and reputation management.

Driven largely by social media and user-generated content, the lines are blurring between these previously separate media
types (see Table 2). For example, Twitter is a social media channel, which can be considered ‘owned’ media, but the brand
bounce that occurs from retweeting becomes ‘earned’ media because it furthers brand awareness. ‘Paid’ media now includes
content marketing campaigns or sponsored messages on social media channels -- as well as the more traditional display or PPC
search advertising. Social strategy and mobile programs are closely linked, as are website and social or mobile app creative
development. The media are converging.

The result is that the lines are blurring for agencies and their clients, as well. Many agencies are evolving their service
offerings and fee structures to meet client demand for more integrated campaigns that cross those lines, and clearly defined
fees that better reflect the work involved.




                                     Table 2: The Lines Blur between Paid, Owned & Earned Media



 Paid/Earned Media:                                                                                                   Paid/Owned Media:
 Social media ads, shares,                                               Paid Media                                   Mobile ads, apps, games
 likes, reputation management                                            Paid search                                  Social ads, Twitter content,
 Mobile ads, shares, reviews                                                                                          blogs
                                                                           Display
                                                              Social (FB ads/sponsored tweets)
                                                                         Mobile (ads)
                                                                          Email lists                                 Earned/Owned/Paid Media
                                                                                                                      Social ads, blogs, shares,
                                                                                                                      sponsored content
                                                                                                                      Mobile apps, shares, ads



                                                    Earned Media                          Owned Media
                                                         SEO                            Mobile (apps/games)
                                             Social (retweets/likes/shares)               Website content
                                              reputation management)                           Email
                                               Mobile (shares/reviews)                   Social (FB pages,
                                                         CSEs                           blogs/ Twitter accts.)




                                                                Earned/Owned Media:
                                                                Social likes, shares, retweets
                                                                Mobile ads, shares, reviews


                                                                     Source: Third Door Media




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Digital Advertising Agencies 2013: A Buyer’s Guide



Digital Advertising Agency Market Trends
There are several important trends driving digital                           Table 3: Digital Services Share of Overall
agency market growth and change, including:                                      Agency Revenue, 2010 vs. 2011
                                                                             2010                                       2011
  1. Digital advertising’s increasing share of overall
     agency revenue.
  2. The growth in agency mergers, acquisitions,
     and new launches to more quickly meet
     advertiser demand for digital expertise.
  3. The evolution of traditional pricing models to
     include performance-based pricing.

The following section discusses each of these
trends in more detail.

Trend #1: Digital Advertising’s                                                        Source: Ad Age DataCenter
Increasing Share of Overall Agency Revenue
Whether trying to integrate cross-channel campaign data, more effectively use display ads to retarget website visitors,
or develop a Pinterest page, more marketers and advertisers are using digital media to reach increasingly fragmented
audiences. Agencies are benefiting from this growth, as marketers and advertisers seek greater digital media expertise and
bottom-line impact from their efforts.

Digital revenue grew 16.4% in 2011 to $10.1 billion, and represented 30.3% of all U.S. agency revenue, compared to 28.0%
in 2010, according to Ad Age’s DataCenter, which compiles data on nearly 1,000 agencies and agency networks (see Table
3). Digital agencies, which include pure plays, search, social media, and mobile marketing agencies, accounted for six of
every ten dollars in digital spending, or $5.9 billion.

Two international holding companies, Publicis                             Table 4: Digital Revenue Share Growth for WPP
Groupe and WPP, which own numerous digital and                                  and Publicis Groupe, 2010 vs. 2011
traditional agency brands, reported similar 2011
results. Digital accounted for 30.6% of Publicis
Groupe’s 2011 worldwide revenue, up from 28.0% in
2010; while WPP said direct, digital and interactive
revenue rose to 29.7% of 2011 revenue, compared
to 28.9% in 2010 (see Table 4).

Advertiser adoption of digital media also drove
record revenue for online publishers and ad
networks, according to the Internet Advertising
Bureau (IAB). The 2011 IAB Internet Advertising
Revenue Report found that overall U.S. Internet
advertising revenue reached $31.7 billion in
2011, a 21.9% increase over $26.0 billion in 2010
(see Table 5). The IAB’s total includes revenue
from websites, ad networks, commercial online
services, mobile devices, email providers, and
other companies selling online advertising. These
numbers represent a subset of all media services
provided by agencies, but demonstrate just how
                                                                                 Source: Company data, Third Door Media
quickly digital advertising continues to grow.



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Digital Advertising Agencies 2013: A Buyer’s Guide



Trend #2: Holding Companies and Agencies Use Mergers and Acquisitions to Meet Advertiser
Demand for Digital Expertise
Mergers and acquisitions (M&A) are having a dramatic                                 Table 5: 2011 Internet Advertising Revenue (in $ millions)
impact on the size and scope of the digital advertising
agency market, as marketers increase their demand for
expertise and more integrated digital programs. Large
international holding companies such as Japan’s Dentsu and
France’s Publicis Groupe have spent billions on acquisitions
over the past five years in an effort to create worldwide,
full-service networks that provide a broad spectrum of digital
marketing capabilities and services.
                                                                                                                                          Note: Display related
In July 2012, Dentsu announced a nearly $5 billion agreement                                                                              includes digital video
                                                                                                                                             commercials, ad
to purchase London-based Aegis, which owns such brands
                                                                                                                                          banners/ display ads,
as Carat, a large media buying agency, and Isobar, a digital                                                                                sponsorships, and
advertising network of iProspect-branded agencies (see Table                                                                                   rich media.
6). Just one month earlier, London-based WPP acquired                                           Source: Internet Advertising Bureau
digital marketing agency AKQA for $550 million.

                           Table 6: Selected Holding and Media Company Acquisitions of Digital Agencies

 Acquirer                 Acquired/Merged                       Date                  Notes
 Aegis Group plc          Communicate 2                         August 2012           India-based search agency
                          I Spy Marketing                       August 2012           U.K.-based digital agency
                          Catch Stone                           July 2012             Chinese digital agency bought for £55.2MM
                          Roundarch                             February 2012         Purchased for $125MM
                          iProspect                             December 2004         Purchased for $32MM with performance incentives;
                                                                                      made part of Aegis’ Isobar network
 Dentsu                   Aegis                                 July 2012             $4.9 billion purchase price
                          Steak Group                           June 2011             U.K.-based digital media agency
                          Firstborn                             February 2011         NY-based digital agency with animation and web
                                                                                      development services
                          Innovation Interactive (360i)         January 2010          Included digital agency 360i and PPC platform IgnitionOne

 Epsilon                  Aspen Marketing Services              April 2011            Purchased for $345MM
 Hearst Corp.             iCrossing                             June 2010             Acquired for estimated $325MM
 Interpublic              FUSE                                  February 2012         U.K.-based digital agency
 Group                    CUBOCC                                March 2010            Brazilian digital marketing agency
                          Reprise Media                         April 2007            Bolstered search marketing capabilities

 Merkle                   IMPAQT                                March 2011            Added search to existing CRM capabilities
 Publicis Groupe          Big Fuel                              July 2011             Bought 51% of the social media agency
                          Rosetta                               May 2011              $575MM acquisition to complement U.S. search & digital
                                                                                      marketing brands
                          Razorfish                             October 2009          Purchased for $530MM in cash and PG treasury shares;
                                                                                      part of VivaKi
                          Performics                            September 2008        Operates as part of VivaKi
 WPP                      Hungama Digital Services              June 2012             India-based digital agency purchased by JWT
                          Fortune Cookie                        August 2012           Acquired by WPP agency Posssible Worldwide
                          AKQA                                  June 2012             $550MM purchase price
                          DTDigital                             January 2012          WPP subsidiary Ogilvy bought 33.3% stake in
                                                                                      Australian digital agency

                                                                     Source: Third Door Media


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Digital Advertising Agencies 2013: A Buyer’s Guide


Publicis Groupe purchased Rosetta Marketing                                           Table 7: Most Active Strategic Buyers, 2011
Group, one of the largest independent digital
agencies, for about $575 million in May 2011.
Rosetta became the fourth large digital agency
acquisition for Publicis, which bought Digitas
for $1.3 billion in December 2006, Performics
for an undisclosed sum in September 2008, and
Razorfish for $530 million in October 2009.

Agency holding companies have been some
of the most aggressive strategic buyers
in the marketing, media, technology, and
service industries, according to investment
banking firm PetskyPrunier, which specializes
in marketing services industry mergers and
acquisitions. Publicis Groupe, WPP, Interpublic
Group, and Omnicom Group, represented
four of the top ten strategic buyers in the
marketing, media, technology, and service                                         Source: PetskyPrunier
industries in 2011 with 56 acquisitions between
them (see Table 7). Agency holding companies
continued their acquisition spree in the first half of 2012, as WPP, Publicis Groupe, Interpublic Group, and Omnicom Group
had a combined 33 acquisitions in the first six months of the year.

Magazine publisher Hearst Corporation entered the digital advertising agency space when it acquired leading independent
agency iCrossing in June 2010. Hearst executives said the purchase would allow the company to offer a holistic set of
marketing services to its clients and agency customers.
At the same time, search marketing agencies looking to strengthen core competencies and expand their digital channel
services have responded with mergers and acquisitions of their own (see Table 8). In June 2010, four search marketing
agencies – 10e20, Search and Social, Brent Csutoras and SecondStep Search – merged to form BlueGlass Interactive to
provide a broad array of search and social marketing services. Charlottesville, VA-based RKG, formerly known as Rimm-
Kaufman Group, acquired AudetteMedia in August 2011 to enhance its SEO technology and services.
                                                   Table 8: Selected Digital Agency Acquisitions
 Acquirer                          Acquired/Merged                   Date                Notes
 BlueGlass Interactive             3 Dog Media                       October 2012        Search marketing agency
                                   10e20, Search & Social,           June 2010           Four agencies merged to form BlueGlass Interactive
                                   Brent Csutoras Inc., and
                                   SecondStep Search
 Covario                           Top Local Search                  May 2012            Location-based traffic and optimization
                                   NetConcepts                       January 2010        Acquired GravityStream technology for fully automated SEO

 Didit                             Inceptor                          August 2012         Added SEO, CSE and social media capabilities
 iCrossing                         Wallaby Group                     September 2011      Expanded presence into Latin America and Europe
 iProspect                         ICUC Moderation                   June 2011           Global online content and community moderation services
                                   Services
                                   Range Online Media                September 2008      Search agency with strong retail clientele

  RKG                              AudetteMedia                      August 2011         Added SEO capabilities to PPC, social, and display
 (Rimm-Kaufman Group)

 Rosetta                           Level Studios                     September 2010      West coast mobile agency
                                   Wishbone                          January 2010        Healthcare marketing agency

                                                                      Source: Third Door Media

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Digital Advertising Agencies 2013: A Buyer’s Guide


Covario made two acquisitions since January 2010. The agency purchased NetConcepts in January 2010 to further
automate its SEO offerings, and added Top Local Search in May 2012 to provide its clients with location-based traffic
and optimization capabilities. The company’s goal with these moves was to create a point-solution approach for specific
SEO and social media software tools that can stand alone from its agency services as well as add to its list of offerings to
agency clients.

Trend #3: Traditional Fee Structures Evolve to Include Performance-based Compensation
Traditional agency fee structures, namely time-based and percentage of spend, are evolving to include more retainer-
based deals, as well as performance-based hybrids that link client fees to measurable campaign results, such as clicks,
impressions, conversions or sales. With tighter advertising budgets and increasing scrutiny on bottom-line results, the
goal is for clients and agencies to share the risk when trying new campaign strategies or tactics, yet fairly compensate the
agency for its time and work.

Many agencies are using a performance-based                          Table 9: 2011 Share of Internet Ad Revenue by Fee Structure
compensation hybrid that includes a time-based,
fixed-fee, or percentage-of-spend component,
along with a performance-based bonus or incentive
on paid media programs. Some industry experts
caution that performance-based models can actually
discourage innovation precisely because of the
risk involved. (See page 11 for further discussion of
pricing and fee structures.)

As a result, the fixed-fee or retainer-based fee
model, which provides predictable revenue
and expenses for agencies and their clients, is
also gaining traction. Retainers may do more
to encourage agencies to test new campaign
strategies and tactics, knowing that they will be
compensated for their time regardless of results.                                                         Source: Internet Advertising Bureau


Performance-based revenue represented nearly two-thirds of all Internet advertising revenue for the year; more than
double the revenue for impression-based digital revenue, according to the 2011 IAB Internet Advertising Revenue Report
(see Table 9). Performance-based revenue totaled $20.5 billion in 2011, a 26.5% increase over $16.2 billion in 2010. The
IAB defines impression-based revenue as any non-measurable ad revenue, such as digital display ads. Performance-based
revenue represents ad revenue derived from a user action, such as clicks on a sponsored search result. All of the revenue
refers to paid media only, and does not include revenue generated from earned or owned media.

More advertisers and marketers are planning                          Many agencies are using a
to increase their performance-based agency
relationships. Nearly half of the marketers responding               performance-based compensation
to a 2012 PulsePoint survey said they expect to
increase performance-based compensation based
                                                                     hybrid that includes a time-based,
on sales in the next twelve months. Forty percent of                 fixed-fee, or percentage-of-spend
respondents said they expect to increase performance-
based compensation based on marketing metrics.                       component, along with a performance-
                                                                     based bonus or incentive on paid
                                                                     media programs.



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Digital Advertising Agencies 2013: A Buyer’s Guide



Choosing a Digital Advertising Agency
Ultimately, the decision to hire a digital agency is a significant investment that requires a rigorous evaluation of your
business’s and any potential agency partner’s needs, resources, and cultures. The following sections discuss five steps
involved in making a more informed and successful choice.

Step One: Company Self Assessment – Do You Need a Digital Agency?
Deciding whether or not your company needs to hire a digital advertising agency calls for the same evaluative steps
involved in any significant investment, including a comprehensive self-assessment of your organization’s internal strengths,
challenges, and needs from a business, staffing, and technology perspective. This includes answering questions such as:

 •	 What are the primary objectives we want to achieve? Working with an agency can help advertisers that are looking
    to scale their digital initiatives but lack enough in-house resources to do so. Find clarity and consensus on what you’re
    looking to achieve. If your digital programs are falling short of management’s ROI goals, an agency’s expertise may be
    able to help you improve campaign or channel results.

 •	 Do we need a full-service agency or boutique? Traditionally, advertisers have hired an agency of record (AOR) to
    handle all of their advertising needs. But one-stop advertising shops may not represent best-of-breed expertise in every
    digital channel. Many advertisers hire both AORs and boutique agencies with expertise in SEO or social media, for
    example. If managing multiple agencies is too cumbersome or expensive, a full-service digital agency may be the right
    choice.

 •	 Who will manage the agency relationship? Every successful partnership needs a champion who is invested in that
    partnership’s success and can pull together the disparate groups that have a stake in the outcome or a role to play.
    For example, marketers may voice different wants and needs than an IT department, but both may be important to
    campaign development and execution. By designating a “point person” within the business even before you send out
    an RFP, you will ensure the steady flow of information throughout the process so that expectations are met.

It is also vital to assess your own business’s culture and priorities before beginning the selection process. For example, is
good creative more important than reporting capabilities? If so, you’ll need to target agencies with those strengths. If not,
you’ll want to speak to more agencies with strong analytical capabilities. Here are several other factors to consider:

Accountability: Digital campaigns have many moving parts, and in-house marketers can often be too busy to micromanage
every detail. Think about how much you’ll need to rely on your agency to stay on top of every deliverable and how
proactive you’ll want them to be regarding any campaigns that aren’t going according to plan.

Flexibility: How flexible and accommodating do you need an agency to be? In-house marketing teams often experience
scope creep, which can create missed deadlines and budget overruns for their agencies. Not all agencies have the
staff or inclination to switch gears mid campaign when clients request changes. If it’s important to you that an agency
accommodates your wishes, even if it costs time and money, make sure to say so up front.

Communication: How much communication do you want or need? How important is the geographic location of your
agency? You may be the type to ask a lot of questions or want to have periodic in-person meetings. If so, look for an
agency that has an office close to your location and welcomes the frequent interaction. If you’re looking for a more turn-key
relationship, location won’t be as important as the confidence and skill of the account team managing your business.

Step Two: Understand Agency Fee Structures
Agency free structures vary widely, even within client accounts. It is not uncommon for a client to compensate their agency
using different fee structures for different types of media campaigns. For example, one of the most common agency
fee models for paid media buying is percentage of spend. Typically, an agency will be paid 10 to 20 percent of a client’s
digital media spend on paid search or display advertising campaigns. Smaller clients may pay a higher percentage, while
enterprise clients may pay a smaller percentage due to the larger dollar volume of their accounts.

© 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 	   10	           Email: whitepapers@digitalmarketingdepot.com
Digital Advertising Agencies 2013: A Buyer’s Guide


Each fee structure has advantages and challenges for different types of
media (see Table 10). Many agencies use time-based pricing, which is based
                                                                                                        Many agencies use
on a set hourly fee to track all time spent on a client’s earned and owned                              time-based pricing,
media accounts. In these types of arrangements, it is important for the client
and agency to discuss and negotiate minimums and perhaps maximums to
                                                                                                        which is based on a set
facilitate budget planning. Clients must also be vigilant about agency staff                            hourly fee to track all
efficiency, since the agency is paid for an agreed-upon number of hours,
regardless of how much work is accomplished.                                                            time spent on a client’s
Also gaining traction is the fixed-fee or retainer-based model, which provides
                                                                                                        earned and owned
predictable expenses for marketers and advertisers, particularly on long-term                           media accounts.
accounts that require ongoing maintenance, such as monitoring SEO rankings
or social media content. Retainers may also encourage agencies to test new
campaign strategies and tactics, knowing that they will be compensated for their time regardless of results.

Increasingly, agencies are using performance-based hybrids that include a time-based, fixed-fee, or percentage-of-spend
rate, as well as a smaller performance-based component for paid media work. The goal is for clients and agencies to share
the risk when trying new campaign strategies or tactics, yet fairly compensate the agency for its time and work. This is also a
way for agencies to become more competitive in the base pricing; by adding in bonuses based on performance, the initial
agency fee may be lowered.

However, some industry experts caution that performance-based models can actually discourage innovation precisely because
of the risk involved. Some agencies may not feel comfortable with taking on extra work with no guaranteed reward. Successful
performance-based compensation arrangements that benefit both agency and client require trust, negotiation, and clarity
about campaign rules and ownership. For example, an agency might require implementation of all agency-recommended
landing page changes or updates within a certain time frame to ensure the types of results needed to kick in the performance
bonus.
                                                 Table 10: Selected Digital Agency Fee Structures

 Fee Model                          Most Appropriate Media               Advantages                            Challenges
 Percentage of spend                Paid media (PPC, display)            Expense predictability                Agency goal to increase spending and
                                                                                                               media buys may result in higher costs
                                                                                                               but depress ROI.


 Time based                         Earned and owned media               Negotiated hourly fee assures         Less predictable expenses that
                                    (SEO, social, mobile)                client is only paying for actual      depend on campaigns being run on
                                                                         time put into account work.           time or in a particular time frame.
                                                                                                               Questions may emerge about whether
                                                                                                               account staff is working efficiently.

 Retainer or fixed fee              Owned and earned (SEO,               Consistent, predictable               Large spending or budget changes
                                    social, mobile)                      expenses. May encourage               may necessitate renegotiating fees.
                                                                         more long-term, strategic             Questions may emerge about whether
                                                                         thinking because agency is paid       account staff is working efficiently or
                                                                         regardless of results.                enough hours.

 Performance based                  Paid and earned media (Paid          Agency shares risk with the client    Frequent renegotiating due to over- or
                                    search, display, some social)        on campaign performance.              underperforming campaigns. Agency
                                                                                                               may stick to “tried and true” tactics to
                                                                                                               guarantee revenue, rather than look
                                                                                                               at long-term results, strategy.


                                                                     Source: Third Door Media



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Digital Advertising Agencies 2013: A Buyer’s Guide



Potential Add-on Fees
Third-party software and campaign set-up fees are common agency add-on
                                                                                       Search Agency Fee
charges. Setting up digital marketing campaigns can be time consuming.                 Structures
Once an advertiser’s goals are understood, an agency should openly discuss
with the advertiser how long a campaign will take to set up. Depending on              In addition to the more general
the complexity of this set up, an advertiser may be charged a one-time fee             digital agency billing options, search
or monthly installments.                                                               marketing agencies may offer the
                                                                                       following fee models to potential PPC
Some agencies will roll third-party software fees into a monthly                       clients:
management fee, making them less transparent. It is important for
advertisers to understand what an agency is doing in house and what it is              1. Number of Keywords under
outsourcing, including why the function is being outsourced and what are                  Management. Now becoming less
the costs associated with the software. In some instances, agencies provide               popular, many search agencies
excellent services but do not have the development team to write their own                charge clients for the number of
applications. Conversely, there are some excellent software solutions that do             keywords being managed and how
not offer agency services and focus on providing the best software possible.              many times per day the keywords
The match of these two different teams can provide a complete solution to                 are updated. If you are an advertiser
meet all of an advertiser’s needs. (Note: Many agencies also develop and                  being charged by keyword, the
provide proprietary software solutions in addition to their agency services.)             ‘long tail’ keywords are generally
                                                                                          unprofitable. While the long tail may
                                                                                          not normally be the majority of your
Step Three: Begin the Selection Process:                                                  sales, in this pricing model, there
Phone Calls, RFIs and RFPs                                                                is less experimentation that can be
                                                                                          profitably implemented.
Once you’ve decided to hire a digital agency, the next step is to develop a
list of potential agency partners to contact – whether by phone, request for
                                                                                       2. Charge Per Click. In the early
information (RFI), or request for proposal (RFP).
                                                                                          days of PPC, click costs could vary
                                                                                          dramatically. Advertisers would see
Many digital agency executives report that the majority of their new
                                                                                          their clicks remain constant and
business comes from referrals rather than RFPs. Therefore, before – or
                                                                                          yet their bills continued to rise.
instead of – initiating a more formal RFP process, it may be wise to begin
                                                                                          The charge-per-click billing model
by contacting some of your marketing peers to find out which agencies
                                                                                          evolved from advertisers looking
they are using and why they chose the partners they did. Then call any
                                                                                          to ensure that their agencies were
recommended agencies to discuss your business needs and whether or not
                                                                                          doing enough keyword research to
they might be an appropriate fit. This step serves three purposes:
                                                                                          ensure that higher click volume didn’t
                                                                                          lower conversion. The key to this
  1) It allows any agency that doesn’t want to respond to your RFP to opt
                                                                                          billing method is ensuring that all
     out of the process right away;
                                                                                          clicks, if not equal, are relevant.
  2) It enables you to speak directly to an appropriate individual at the
     agency and establish a rapport; and
  3) It assures that you will be sending your RFP to the right person at the agency.

Some clients begin the selection process using a broad-based RFI to cast a wide net to between ten and 15 agencies
before homing in on a more targeted group of potential partners through an RFP. The RFI should query agencies about
their size, management team, organizational and operating structures, target customer, and digital capabilities. Include key
business terms upfront, for example, competitive conflicts or non-compete requirements, travel policies, and minority hiring
and green commitments. The result should be a streamlined two-page document with a deadline of two to three weeks for
agency responses.

An RFP follows through on the process to gather and assess targeted information from the agencies that seem most
interested in your business and would be the best fit for your advertising needs and culture. It should include tangible
factors such as the agency’s ability to provide scalability, proven results, and an acceptable fee model; as well as intangibles
such as common goals, cultural fit, and chemistry. Industry experts recommend sending out no fewer than three and no
more than six to eight RFPs with a two-to-three week deadline for responses.

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Digital Advertising Agencies 2013: A Buyer’s Guide


Developing an effective RFP can be complicated and should include all relevant stakeholders within your business. Many
enterprises must solicit bids through the RFP process due to accounting or procurement requirements. All staff from each
relevant department should meet to develop the RFP and sign off on it before it is sent out. It will be frustrating for both
the agencies involved and your staff to have to redo the RFP because a key individual on your end wasn’t consulted, or you
didn’t ask the right questions, or clearly identify your objectives.

Some enterprise-level advertisers engage the services of a marketing management firm that can objectively guide them
through the RFI and RFP process. These types of firms can help break down corporate silos, bring together the appropriate
stakeholders within the business, and identify its digital advertising needs and strategic goals.

The most effective RFPs only request relevant information from the agency, and provide ample information about your
business and its digital advertising needs. It should reflect high-level strategic goals and key performance indicators (KPIs),
rather than drill-down data geared toward IT or procurement. For example, mention your company’s most important KPIs
and how you will evaluate the success of your digital campaigns. When written properly, an RFP will facilitate the sales
process and ensure that everyone involved on both sides comes to a shared understanding of the purpose, requirements,
scope, and structure of the intended engagement.

Table 11 illustrates some of the information that is important to provide in an effective RFP to attract the types of responses
that will enable you to make the right choice.


                                         Table 11: Business Information to Provide in an Agency RFP

                   Industry                              •	 Industry structure and stage (early vs. mature; fragmented vs.
                   Overview                                 consolidated)
                                                         •	 Market size ($)
                                                         •	 Customer/Buyer characteristics

                   Company                               •	 Company size (number of employees and/or revenue)
                   Background                            •	 Years in business, industry position
                                                         •	 Product/service information including unique value propositions
                                                            (USPs)
                                                         •	 Sales/distribution channels and technology platforms

                   Objectives                            •	 Scope of work: digital channels for which you are seeking work
                   and Goals                             •	 Goals/KPIs: Higher conversion? More leads? Brand awareness?
                                                         •	 Say whether you are looking for a short- or long-term
                                                            relationship
                                                         •	 If project oriented, detailed specs to enable more accurate bids

                   Decision Makers                       •	 State who will be involved in the agency evaluation
                   and Processes                         •	 Clarify the decision-making process
                                                         •	 Mention the most important criteria. i.e., price, location
                                                         •	 Say who will manage the relationship once a contract is signed

                   Deadlines                             •	 Clear due date for a response (Two to three weeks is sufficient)
                   and Legal                             •	 NDA
                                                         •	 Legal terms/ownership of deliverables


                                                                     Source: Third Door Media




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Digital Advertising Agencies 2013: A Buyer’s Guide


Conversely, there are many questions that you’ll need to ask an agency in
an RFP. The key is to ask the right questions, and respect the agency’s time
and resources by avoiding questions that can be answered by a quick look
                                                                                                   Sample RFP Outline
at its website. If procurement has driven the RFP process or been integrally                       I. Summary and Overview
involved, make sure that the questions are relevant and appropriate for the                           a. An “Executive Summary” of
advertising industry. Focus on questions that are specific to your business                              the RFP highlights without the
situation and digital initiatives, with the goal of gathering the data you’ll                            technical details. Introduce
need to make the most informed decision possible. Table 12 lists some of                                 the challenge your company is
the relevant agency questions that are most appropriate in an RFP. Agencies                              having and provide the agency
that are truly interested in winning your business will take the time to answer                          with an overview of the rest of
these questions.                                                                                         the RFP.
                                                                                                   II. Technical Summary
Step Four: Choosing the Right Agency                                                                  a. Provide key pieces of information
                                                                                                         relevant to your project,
When you have received your RFP responses, arrange for face-to-face                                      i.e., technical requirements,
presentations from each of the “finalists.” During these meetings, consider                              description of the project’s
quantitative factors including pricing, channel expertise, and analytics/                                technical issues, your site’s
reporting capabilities; as well as qualitative – or intuitive – considerations such                      current platform, etc. This
as the agency’s culture, and the chemistry between your staff and the agency’s                           section may originate from your
team. Decide which of these factors are most important to your business goals.                           IT department and targets the
                                                                                                         agency’s programmers and
                                                                                                         delivery team.
                    Table 12: Questions to ask an Agency in an RFP                                 III. Administration and Management
                                                                                                      a. Describe who will be involved
 Agency                          •	 Agency history and expertise (years in business)                     in the project from your end
 Background                      •	 Agency size (number of employees and billings)                       and what the timeline is for
                                 •	 Specific vertical industry experience/expertise                      completion. Finalize the
                                 •	 Target customer (by $ and vertical market)                           framework of the work.
                                                                                                   IV. Project Expectations and
 Agency                          •	 Biographies of key executives                                      Delivery
                                 •	 Potential members of your account team and their                  a. Outline your evaluation criteria,
 Staffing
                                    experience                                                           monthly deliverables, and
                                 •	 Internal resources vs. agency use of subcontractors or               training you expect to receive to
                                    outsourcing                                                          assess your goals and KPIs. This
                                 •	 Employee churn rates and average tenure                              will help the agency determine
                                                                                                         their cost to complete your work,
 Client                          •	 Average tenure and retention rate of agency clients                  as well as their suitability.
 References                      •	 Relevant client contact information                            V. Deadlines and Budgets
                                 •	 Case studies with results                                         a. Provide projected deadlines
 and Work                        •	 Examples of the agency’s work in vertical markets or                 and budgets to avoid confusion
                                    digital channels                                                     over when a project should be
                                                                                                         completed and how much it
 Pricing and                     •	 Agency billing policies and terms                                    might cost.
 Contract Terms                  •	 Pricing structure for the account (i.e., retainer,                b. Assess your budget based on the
                                    commission, time, spend, or performance based)                       “range” of services you’ll need.
                                 •	 Add-on fees                                                          For example, instead of saying
                                                                                                         the project absolutely has to cost
 Customer                        •	 SLA terms and costs for technology platforms                         “X” amount, you are willing to
 Support                         •	 Training and onboarding services included in fees                    spend within a range from “$X
                                 •	 Availability of key personnel (24/7 vs. business hours)              to $Y”.
                                 •	 Frequency of team phone calls, on-site visits, and
                                    reports                                                        Source: Stephan Spencer, Search Engine Land

                                        Source: Third Door Media



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Digital Advertising Agencies 2013: A Buyer’s Guide


The following section discusses some of these considerations in more
depth.                                                                                              Create a Decision Matrix
Brand/Reputation                                                                                    Are you ready to start the decision-making
                                                                                                    process? It may help to create a decision
Agency brands are important and provide a sense of the agency’s                                     matrix, which is simply a chart listing the
history and values. How long has the agency been in business? Is                                    attributes you are looking for in a digital
it profitable? Does it have a business plan? Funding? What kind of                                  agency, a weighting factor for each attribute,
employee turnover does it have? How about client retention? These                                   a score from 0 to 10 for each, and the
are questions you must have answers to through the RFP process.                                     weighted score (e.g., the score multiplied by
They will also provide clues to the agency’s future and its vision.                                 the weighting factor). Remember to include
                                                                                                    both quantitative and qualitative judging
Agency Expertise                                                                                    criteria. You will add the weighted scores
                                                                                                    together to arrive at a total score that can
Step one of the digital agency selection process was to do a thorough self-                         help to differentiate some seemingly similar
evaluation of your business’s needs. Now it is time to decide: Is the right                         competitors (see Table 13).
agency a channel specialist or a full-service shop that can service all of your
digital advertising needs?

If you choose a specialist because the bulk of your digital work is in SEO and email marketing, for example, can the
agency service any future social marketing or PPC campaigns that you begin? Similarly, as your business grows, can a
boutique or specialist handle larger, more complex campaigns? On the other hand, a full-service agency may offer a
broad swath of channel services, but not have the depth of experience in SEO or PPC that your business requires. Many
times such agencies will be very strong in one area, and only moderately knowledgeable in others.

Do the finalists know your industry? Is that important to you? Some industry experts argue that channel expertise is more
valuable than vertical market experience. In other words, it is easier to get up to speed on retail, travel, or healthcare digital
success strategies than it is to learn how to run an effective Twitter campaign. However, many advertisers believe that strong
vertical knowledge is an advantage for their campaign work. If that is the case, find out if the agency follows your vertical
industry’s best practices to decide which strategic and tactical activities to undertake.

                                                      Table 13: Sample Agency Decision Matrix
  Attribute
                                 Agency X            Agency X                Agency Y             Agency Y             Agency Z            Agency Z
  (Weighting
                                  Score            Weighted Score             Score             Weighted Score          Score            Weighted Score
  factor)
 Creative (2)                         5                     10                    6                   12                    8                     16

 Deliverables (2)                     8                     16                    6                   12                    7                     14


 Agency expertise (4)                 8                     32                    7                   28                    7                     28

 Staff/Talent (3)                     7                     21                    8                   24                    9                     27


 Client references (4)                7                     28                    7                   28                    7                     28


 Client support (3)                   6                     18                    8                   24                    8                     24

 Fee structure (1)                    8                      8                    7                   7                     5                     5

 Total Weighted Score                                       133                                      135                                         142

                                                                     Source: Third Door Media




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Digital Advertising Agencies 2013: A Buyer’s Guide



Culture                                                                                   One of the best ways
The core values of an agency will foretell the kind of relationship you are likely to     to get a true sense of
have. Choose an agency that is collaborative, innovative, and proactive. Avoid
agencies that tolerate fiefdoms. If possible, do a tour of its office, which often        an agency’s capabilities
will tell you a lot about its culture, efficiency, and stability. The mark of a good      is to speak to its clients
agency is often in the cheerfulness and energy in its corridors.
                                                                                          and see case studies
Staff/Talent                                                                              and samples of its
One of the most important criteria in selecting an agency is the agency’s                 work. Ask for and call
talent – particularly of the staff that will manage your account. These people’s
skills, dedication, and passion for your business will determine the success              agency references and
of your digital campaigns. Make sure you understand who’s going to be on
your team, what their roles are, and how much time they will devote to your
                                                                                          ask specifically about
account. Agency turnover is a legitimate concern for clients. Ask to see the              their satisfaction with
agency’s turnover rate. Find out how the agency hires, promotes, and rewards its
talent. How does the agency keep current with the rapidly changing landscape
                                                                                          the agency relationship.
of digital marketing? Does staff go to seminars and conventions? Does the
management encourage ongoing educational efforts? Find out what formal
training agency personnel has received, and who specifically has been credentialed and trained.

Does the agency do all the work in-house, or does it rely on subcontractors for key functions? The more of your work that
gets farmed out, the less it is under the agency’s control – and your control. Subcontracting arrangements can lead to
serious execution problems including miscommunication, missed deadlines, and cost overruns.

Client References
One of the best ways to get a true sense of an agency’s capabilities is to speak to its clients and see case studies and
samples of its work. Ask for and call agency references and ask specifically about their satisfaction with the agency
relationship. Does the agency consistently meet timelines? Does it adhere to its quoted prices? Is the account staff easy to
work with? What results have been achieved?

Ask the agency to prepare sample work for you based on your website by the people who would be assigned the everyday
tasks on your account. This isn’t to get free advice, but rather to see the quality of the work that will be done on your
account.

Client Support
Most agencies work on a model of overlapping time, meaning you do not have a dedicated resource assigned to your
account, despite what you might otherwise be told by an account representative. Your goal should be to understand
how many hours will be applied each week to your account’s work by actual subject matter experts (SMEs) in PPC, social
media, or SEO. Make sure the agency is willing to assign a relationship manager to your business to serve as a conduit for
communication.

Fee Structure
You need to be comfortable with an agency’s fee structure. If not, you’ll second guess whether or not you’re being
overcharged or underserviced. While pricing is important, it shouldn’t be the most important factor in making your decision.
Agencies are businesses hired to help your company achieve its goals on time and on budget. Make sure you understand
and agree on a fee structure that will leave both client and agency feeling served and fairly compensated.




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Digital Advertising Agencies 2013: A Buyer’s Guide



Deliverables
Make sure that you and the agency you select define                        RFPs: 20 Questions
objectives and evaluation criteria before signing a
contract. You don’t want to be left wondering, month after                 to Ask
month, whether the agency is producing results. Your                       There are many ways to write an RFP. Here is one in
agency should be able to show you analytics on a regular                   question format.
basis and make suggestions and adjustments on the fly.
How can you know what’s working and not working if you                     1.	 Provide an overview of your company including
aren’t analyzing reports on a consistent basis? Focus not                      history, key leaders and locations.
only on statistics, but also on consumer sentiment. For                    2.	 What is your core offering? What distinguishes your
example, what are fans of your brand saying and doing                          offering from your main competitors?
in relation to the social media campaign? This type of                     3.	 How many employees does your company
feedback will allow you to address concerns, initiate                          have? How many employees focus on account
course corrections, and better estimate your next moves.                       management, development and innovation?
                                                                           4.	 Have you made any significant acquisitions within the
                                                                               last two years? If so, describe your firm’s strategic
Step Five: Negotiate Contract Terms                                            integration roadmap for your solution suite.
                                                                           5.	 What awards has your company received in the past
Contract length can often be a sticking point in
                                                                               18 months?
negotiations. Before signing any contract, you should
                                                                           6.	 How many clients do you have? What percentage of
clearly understand the pricing, contract length, and
                                                                               your client base is international?
renewal status. Many advertisers want the flexibility of a
                                                                           7.	 Who are your top 5 clients and what year did you
month-to-month contract. However, agencies usually want
                                                                               begin the relationship?
longer contracts to ensure revenue flow. One factor to
                                                                           8.	 How have you grown your long term client
consider is that many digital campaigns, particularly PPC
                                                                               engagements? Provide examples.
and SEO programs, take several months to build results.
                                                                           9.	 How does your agency stay abreast of industry trends
If an agency is offering bundled services with additional
                                                                               and educate your clients?
built-in costs (i.e., website design, domain name
                                                                           10.	How do you strategically approach the convergence
procurement, call-tracking numbers, etc.) then an annual
                                                                               of paid, owned and earned media?
contract may be necessary. Sometimes annual contracts
                                                                           11.	Who leads the strategy development process in your
can include a three-month opt-out provision.
                                                                               organization?
                                                                           12.	What steps are taken by your agency to deliver on
Decide if you want an “evergreen” contract, also known
                                                                               ROI goals for performance marketing campaigns?
as an auto-renewal contract. In this scenario, the initial
                                                                           13.	How does your agency proactively mine competitive
contract is automatically renewed if neither party takes
                                                                               data, intelligence for clients?
action. The benefit of an auto-renewal contract is that
                                                                           14.	What strategies do you find strongest for driving &
neither side has to do additional paperwork after the
                                                                               measuring offline conversions via online advertising?
contract is signed. The downside is that it doesn’t force
                                                                           15. Describe any recent experience your agency has had
either side to periodically evaluate an account’s progress
                                                                               in working seamlessly with other agencies in a client’s
or performance. Signing a month-to-month contract also
                                                                               agency network.
has advantages and disadvantages. The disadvantage
                                                                           16.	What types of analytical tools do you use with clients?
is that there is additional paperwork each month for
                                                                           17. Describe your standard testing process and
both the client and agency. The upside is that it enables
                                                                               technology that assists in testing setup, execution,
advertisers to more frequently evaluate their agency
                                                                               post-launch optimization, and analysis
relationship and campaign results.
                                                                           18.	What types of reporting and business intelligence
                                                                               insights do you provide clients?
                                                                           19.	Describe your global experience including case studies
                                                                               relevant to our business. How is your approach different
                                                                               than management of US-only campaigns?
                                                                           20.	Describe your team’s language and localization
                                                                               capabilities.
                                                                                                                             Source: Performics



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Digital Advertising Agencies 2013: A Buyer’s Guide



Conclusion
The process of choosing a digital advertising agency can be daunting and complex. From full-service agencies owned
by holding companies with global networks, to regional agencies serving the needs of a few large, local advertisers, to
boutique channel specialists that delve deeply into digital strategies such as SEO link building or Facebook conversions,
there is no “one size fits all” approach to hiring a digital agency partner.

Yet making the right selection can also begin a long and prosperous relationship for both advertiser and agency, in which
the client’s digital advertising programs more efficiently scale and mature. Digital advertising is playing a more integral role
in overall advertising budgets and strategies. Harnessing its power can positively transform a business’s brand and sales.

Each advertiser’s situation and needs are unique. The key to making a successful decision begins internally with a
comprehensive self-assessment of your organization’s internal strengths, challenges, and needs from a business, staffing,
and technology perspective. From there, you will begin to look outward and evaluate the type of agency or agencies that
will provide the best fit, and then question and meet the agencies that fall into that category. Pricing is important, but
shouldn’t be the most important factor in making your decision. Ultimately, an agency’s core values, talent, and dedication
to your business will determine the success of your relationship and your digital campaigns. n




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Digital Advertising Agencies 2013: A Buyer’s Guide



Resources
ANA/4A’s Guidelines for Agency Search. Association of National Advertisers and the American Association of Advertising
Agencies. http://www.aaaa.org/news/bulletins/Documents/agency_search_white_paper.pdf

Five Ways to Get More Out of Your Digital Agency. Author David Murdico, Managing Partner, Supercool Creative.
http://adage.com/article/digitalnext/ways-digital-agency/232856/

How to Choose a Marketing Agency. Author Tom Pick, Webbiquity blog.
http://webbiquity.com/outsourced-marketing-services/how-to-choose-a-marketing-agency-ad-agency/

How to Select an Interactive Marketing Agency. Author Bradd Shorr, Director of Content & Social Media, Straight North.
http://www.techipedia.com/2012/interactive-marketing-agency-selection/

How to Write an Ad Agency RFP. Author Tom Pick, Webbiquity blog.
http://webbiquity.com/outsourced-marketing-services/how-to-write-an-ad-agency-rfp/

How to Write a Killer RFP for Hiring an SEO Firm. Author Stephan Spencer, Founder, NetConcepts.
http://searchengineland.com/how-to-write-a-killer-rfp-request-for-proposal-for-hiring-an-seo-firm-13417

PPC Management Options – Are Your Fees Inline With The Advertiser’s Goals? Author Brad Geddes, Founder, Certified
Knowledge. http://searchengineland.com/ppc-management-options-are-your-fees-inline-with-the-advertisers-goals-14077

RFP Basics for Procuring Disruptive Technology and Services. Author Dustin Engel, Elegant Disruption blog.
http://www.elegantdisruption.com/blog/2011/11/7/rfp-basics-for-procuring-disruptive-technology-and-services.html

Vetting an Agency: Protecting the Family Jewels. Author Duane Forrester, In-house SEM, Microsoft.
ttp://searchengineland.com/vetting-an-agency-protecting-the-family-jewels-12219

What to Expect From an SEO/SEM Agency. Author Duane Forrester, In-house SEM, Microsoft.
http://searchengineland.com/what-to-expect-from-an-seosem-agency-40361

What Matters Most When Selecting an Agency. Author Avi Dan, President, Avidan Strategies.
http://adage.com/article/cmo-strategy/marketing-matters-selecting-agency/145554/




Agency Resources
Below is contact information for agencies that have advertised in this report.

aimClear                                      DNA - Digital Net Agency       RKG
www.aimclear.com                              http://digitalnetagency.com    http://www.rimmkaufman.com
(218) 727-4325                                (866) DNA-1275                 (434) 220-5210

Covario                                       Page One Power
http://covario.com                            http://pageonepower.com
(858) 397-1500                                (208) 229-7046

The DAC Group                                 Performics
http://dacgroup.com                           http://performics.com
(866) 329-1884                                (800) 615-6126



© 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 	     19	             Email: whitepapers@digitalmarketingdepot.com
Digital Advertising Agencies 2013: A Buyer’s Guide




        Stop paying agencies for the wrong behaviors.

        Start paying us for
        the right results.
        The leading performance-based digital agency
        n Search Engine Optimization                                   n Search Engine Marketing

        n Social Media Marketing                                       n Affiliate Management




     dna_11_2012.indd 4                                                                                                             11/15/12 10:52 PM




                  BIG PROBLEMS SOLVED:                                         How Do You Get
                        LOCAL                                                35,000 Locations to
                      DOMINATION                                           Show Up in Local Search?
                                                                           Our client challenged us to manage visibility
                                                                           for 35,000 of their neighborhood locations.
                                                                           We created a solution that not only overcame
                                                                           SEO and data integrity issues, but ultimately
                                                                           dominated maps, local search and mobile local.
                                                                           In most US markets now, you can search for their
                                                                           category on any device and find a nearby location.

                                                                           We solve problems others cannot — at scale!


                                                                                                            performics.com
                                                                                                            @performics
                                                                                                            +1 312 739 0222
                                                                      Global Performance Marketing Agency   marketing@performics.com



© 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 	   20	                        Email: whitepapers@digitalmarketingdepot.com

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Digital Advertising Agencies 2013

  • 1. Digital Advertising Agencies 2013: A Buyer’s Guide A Digital Marketing Depot Research Report
  • 2. Search DelivereD Smarter Search and social solutions that increase your brand IQ Passion. Innovation. Partnership. As the leading global search marketing agency, our staff has a passion for delivering great results. We have the expertise to create innovative search, social media and content marketing programs. And most importantly, our team strives to create long-lasting, solid partnerships that make it all happen. That’s why we’ve taken great care to build an award winning, world-class team of digital advertising professionals who know how to drive ROI for the world’s largest advertisers while managing diverse, intricate and holistic SEO, SEM and social marketing programs. That’s why in the search and social media arena, we’re the eyes and the ears for our clients, which enable us to help advertisers identify opportunities, increase performance and improve return on ad spend. That’s Covario. Search delivered smarter. For more information visit covario.com or call 858.397.1500
  • 3. Digital Advertising Agencies 2013: A Buyer’s Guide Scope and Methodology This report was written for marketers and advertisers who are looking for an agency to manage some or all of their digital marketing initiatives. The goal is to help the audience navigate the many choices available and make a more informed decision within the current agency market, including what digital marketing capabilities and services are most important to their organizations. This report answers the following questions: • What trends are influencing the digital agency landscape? • How can I determine if my company needs a digital agency? • What type of agency is the best fit for my organization? • What is the process for choosing a digital agency? • What questions do I need to include in an RFI or an RFP? The report draws from Wikipedia’s definition of an interactive agency, to define digital agencies as companies that provide specialized advertising and marketing services for the digital space. They are independent from the client and provide an outside point of view to the effort of selling the client’s products or services. Digital agencies may provide some or all of the following capabilities: digital lead generation, digital brand development, interactive marketing and communications strategy, rich media campaigns, interactive video brand experiences, website design and development, e-learning tools, email marketing, public relations, SEO/PPC services, social media marketing, mobile campaign development and management, content creation and management services, and data mining and ROI assessment. If you are considering hiring an agency for one or more digital advertising channels, this report will help you decide whether or not you need to. It will give you an overview of the current state of the market, including key trends, as well as in-depth information about the process of choosing a digital agency. The report was prepared by conducting numerous in-depth interviews with leading digital agency executives, advertisers, and industry experts from March through October 2012. These interviews, in addition to third party research, form the basis for this report. In particular, Digital Marketing Depot would like to thank the following industry executives for their time and professional insights: Marty Weintraub, CEO, aimClear Bruce Clay, Founder & President, Bruce Clay, Inc. Seth Besmertnik, CEO, Conductor Mike Gullaksen, SVP, Managing Director, and Jeff Johnson, SVP, Managing Director, Covario Ken Dobell, President, DAC Group Kevin Lee, CEO, Didit Aaron Baker, CEO, Digital Net Agency (DNA) Rob Garner, VP, Strategy, iCrossing Rob Eleveld, CEO, Optify Dana Todd, SVP, Marketing, and Sarna Goldenberg, VP, Marketing, Performics Elliott Easterling, CEO, RBM George Michie, CEO, and Ryan Gibson, VP, Marketing, RKG Jason Tabeling, Associate Partner, Search & Media, Rosetta Jane Bedford, Principal & Founder, Kerry Kielb, Senior Consultant, and Dan Plachta, Engagement Manager, The Bedford Group Research/Writer: Karen Burka Editor: Claire Schoen, Digital Marketing Depot (http://digitalmarketingdepot.com) © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 1 Email: whitepapers@digitalmarketingdepot.com
  • 4. Digital Advertising Agencies 2013: A Buyer’s Guide Table of Contents Digital Agency Capabilities and Services..................................................................................................................................... 3 Table 1: Selected Digital Agency Capabilities................................................................................................................... 4 Lines blur Between Paid, Owned, and Earned Media.......................................................................................................... 5 Table 2: The Lines Blur between Paid, Owned & Earned Media...................................................................................... 5 Digital Advertising Agency Market Trends................................................................................................................................... 6 Trend #1: Digital Advertising’s Increasing Share of Overall Agency Revenue ..................................................................... 6 Table 3: Digital Services Share of Overall Agency Revenue, 2010 vs. 2011..................................................................... 6 Table 4: Digital Revenue Share Growth for WPP and Publicis Groupe, 2010 vs. 2011................................................... 6 Table 5: 2011 Internet Advertising Revenue (in $ millions)............................................................................................... 7 Trend #2: Holding Companies and Agencies Use Mergers and Acquisitions to Meet Advertiser Demand for Digital Expertise................................................................................................................................................. 7 Table 6: Selected Holding and Media Company Acquisitions of Digital Agencies.......................................................... 7 Table 7: Most Active Strategic Buyers, 2011..................................................................................................................... 8 Table 8: Selected Digital Agency Acquisitions.................................................................................................................. 8 Trend #3: Traditional Fee Structures Evolve to Include Performance-based Compensation............................................... 9 Table 9: 2011 Share of Internet Ad Revenue by Fee Structure......................................................................................... 9 Choosing a Digital Advertising Agency..................................................................................................................................... 10 Step One: Company Self Assessment – Do You Need a Digital Agency?.......................................................................... 10 Step Two: Understand Agency Fee Structures ................................................................................................................... 10 Table 10: Selected Digital Agency Fee Structures.......................................................................................................... 11 Step Three: Begin the Selection Process: Phone Calls, RFIs and RFPs............................................................................... 12 Table 11: Business Information to Provide in an Agency RFP......................................................................................... 13 Table 12: Questions to ask an Agency in an RFP............................................................................................................ 14 Step Four: Choosing the Right Agency .............................................................................................................................. 14 Table 13: Sample Agency Decision Matrix...................................................................................................................... 15 Step Five: Negotiate Contract Terms.................................................................................................................................. 17 Conclusion.................................................................................................................................................................................. 18 Resources.................................................................................................................................................................................... 19 Agency Resources....................................................................................................................................................................... 19 © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 2 Email: whitepapers@digitalmarketingdepot.com
  • 5. Digital Advertising Agencies 2013: A Buyer’s Guide Digital Agency Capabilities and Services A proliferation of channels has made digital marketing more complex than ever before. Search advertising models of pay-per-click (PPC) are now available on social media networks. Whereas social marketing once meant a Facebook brand page, advertisers are now allocating budget among a growing array of major social media including Pinterest, LinkedIn, Google+, YouTube, and Twitter. Search engine optimization (SEO) has spawned a new channel of content marketing, as marketers compete to generate traffic and attract customers. Digital maps and applications for local markets such as Yelp or Foursquare have changed marketing at the local level, both for small companies as well as national brands. Mobile marketing has become its own discipline, with unique design, development, and distribution requirements. Faced with this emerging digital marketing landscape, as well as limited resources, and higher C-level expectations, advertisers and marketers are More than half – or 58% increasingly using digital agencies. More than half – or 58% – of marketers – of marketers surveyed surveyed by digital technology firm PulsePoint said they expect to increase their relationships with digital agencies in the next twelve months. by digital technology firm PulsePoint said Digital agencies come in all shapes and sizes. At the high end, for global brands, are the agency holding companies with full-service digital agencies around the they expect to increase world. There are also boutique and specialty agencies (two terms that are used interchangeably in this report) that provide channel-specific digital marketing their relationships with services such as mobile messaging programs, social media marketing, or SEO digital agencies in the link-building campaigns. Like any organization, each type of agency has its own strengths, weaknesses, and culture. next twelve months. Agencies owned by large media or holding companies can provide the following benefits: • Diversity of capabilities from co-owned media properties; • Built-in sister agency relationships and priority referrals; and • In-network efficiencies. Most full-service digital agencies manage a brand’s presence on many channels, manage a brand’s advertising technology/ analytics platforms, and provide professional services. Technology offered to clients, such as bid management software or social media listening tools, is usually sourced from third parties. Client account management and support are largely based on client size and spend. Agencies owned by holding companies generally require minimum monthly spends in the six-to- eight figure range. That level of investment typically buys a dedicated account staff, an “agency-within-an agency” that can manage the brand across the entire holding company. Working with a specialty or boutique agency offers unique benefits as well, including: • More granular channel strategy and tactical expertise; • Client access to agency decision makers and top personnel; and • Lower spending minimums. Specialty agencies offer a subset of the services provided by full-service agencies. These services may be channel specific, such as social media or SEO, or media specific such as display advertising or email marketing programs. Dozens of specialty agencies have launched over the past five years, a market dynamic called the “agency long tail” by some industry executives. Prompted by the mid-market opportunity created by holding company agencies with huge minimum spends, and wireless technologies that have made it easier to start up small businesses, many large agency executives with strong client relationships have left their firms after an acquisition and opened specialty agencies. Table 1 illustrates the broad range of services that digital agencies provide. A full-service agency offers breadth of professional and channel services, while specialty agencies can provide depth within a channel, including proprietary PPC or SEO platforms and extensive client training in software use, integration, and customization. © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 3 Email: whitepapers@digitalmarketingdepot.com
  • 6. Email: whitepapers@digitalmarketingdepot.com Table 1: Selected Digital Agency Capabilities Selected Digital Agency Capabilities Professional Channel Services Services Digital Advertising Agencies 2013: A Buyer’s Guide Search Social Public Website Mobile Email Display Strategy Branding Media Relations Media Planning 4 Customer Research Benchmarking Best Practices SEO Paid Reputation Blogging/content Design & Program Program Media planning Customer Support management creation development development & development & & buying Search Content creation/ Online publicity Content creation execution execution Creative Onboarding management SEO/link-building Ecommerce Bluetooth apps List/database Branding Reports/Deliverables Brand compliance Online brand CSEs Website audits development Display retargeting Influencer outreach monitoring Microsites App & game Lead generation © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com Keyword research Bid management Community building development Content creation & & optimization Global programs Video/commercial optimization Landing page Sentiment analysis design Link analysis optimization Video design/ Local/geo-search Affiliate marketing development Mobile programs Search retargeting Social display/ International tracking Campaign retargeting Campaign management management Source: Third Door Media
  • 7. Digital Advertising Agencies 2013: A Buyer’s Guide Lines Blur between Paid, Owned, and Earned Media Advertisers and agencies have traditionally classified media as either paid, owned, or earned. Paid media refers to advertising that is purchased, such as print, web, or broadcast advertising. Owned media belongs to the brand, such as print brochures or website content, while earned media encompasses public relations and reputation management. Driven largely by social media and user-generated content, the lines are blurring between these previously separate media types (see Table 2). For example, Twitter is a social media channel, which can be considered ‘owned’ media, but the brand bounce that occurs from retweeting becomes ‘earned’ media because it furthers brand awareness. ‘Paid’ media now includes content marketing campaigns or sponsored messages on social media channels -- as well as the more traditional display or PPC search advertising. Social strategy and mobile programs are closely linked, as are website and social or mobile app creative development. The media are converging. The result is that the lines are blurring for agencies and their clients, as well. Many agencies are evolving their service offerings and fee structures to meet client demand for more integrated campaigns that cross those lines, and clearly defined fees that better reflect the work involved. Table 2: The Lines Blur between Paid, Owned & Earned Media Paid/Earned Media: Paid/Owned Media: Social media ads, shares, Paid Media Mobile ads, apps, games likes, reputation management Paid search Social ads, Twitter content, Mobile ads, shares, reviews blogs Display Social (FB ads/sponsored tweets) Mobile (ads) Email lists Earned/Owned/Paid Media Social ads, blogs, shares, sponsored content Mobile apps, shares, ads Earned Media Owned Media SEO Mobile (apps/games) Social (retweets/likes/shares) Website content reputation management) Email Mobile (shares/reviews) Social (FB pages, CSEs blogs/ Twitter accts.) Earned/Owned Media: Social likes, shares, retweets Mobile ads, shares, reviews Source: Third Door Media © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 5 Email: whitepapers@digitalmarketingdepot.com
  • 8. Digital Advertising Agencies 2013: A Buyer’s Guide Digital Advertising Agency Market Trends There are several important trends driving digital Table 3: Digital Services Share of Overall agency market growth and change, including: Agency Revenue, 2010 vs. 2011 2010 2011 1. Digital advertising’s increasing share of overall agency revenue. 2. The growth in agency mergers, acquisitions, and new launches to more quickly meet advertiser demand for digital expertise. 3. The evolution of traditional pricing models to include performance-based pricing. The following section discusses each of these trends in more detail. Trend #1: Digital Advertising’s Source: Ad Age DataCenter Increasing Share of Overall Agency Revenue Whether trying to integrate cross-channel campaign data, more effectively use display ads to retarget website visitors, or develop a Pinterest page, more marketers and advertisers are using digital media to reach increasingly fragmented audiences. Agencies are benefiting from this growth, as marketers and advertisers seek greater digital media expertise and bottom-line impact from their efforts. Digital revenue grew 16.4% in 2011 to $10.1 billion, and represented 30.3% of all U.S. agency revenue, compared to 28.0% in 2010, according to Ad Age’s DataCenter, which compiles data on nearly 1,000 agencies and agency networks (see Table 3). Digital agencies, which include pure plays, search, social media, and mobile marketing agencies, accounted for six of every ten dollars in digital spending, or $5.9 billion. Two international holding companies, Publicis Table 4: Digital Revenue Share Growth for WPP Groupe and WPP, which own numerous digital and and Publicis Groupe, 2010 vs. 2011 traditional agency brands, reported similar 2011 results. Digital accounted for 30.6% of Publicis Groupe’s 2011 worldwide revenue, up from 28.0% in 2010; while WPP said direct, digital and interactive revenue rose to 29.7% of 2011 revenue, compared to 28.9% in 2010 (see Table 4). Advertiser adoption of digital media also drove record revenue for online publishers and ad networks, according to the Internet Advertising Bureau (IAB). The 2011 IAB Internet Advertising Revenue Report found that overall U.S. Internet advertising revenue reached $31.7 billion in 2011, a 21.9% increase over $26.0 billion in 2010 (see Table 5). The IAB’s total includes revenue from websites, ad networks, commercial online services, mobile devices, email providers, and other companies selling online advertising. These numbers represent a subset of all media services provided by agencies, but demonstrate just how Source: Company data, Third Door Media quickly digital advertising continues to grow. © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 6 Email: whitepapers@digitalmarketingdepot.com
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  • 10. Digital Advertising Agencies 2013: A Buyer’s Guide Trend #2: Holding Companies and Agencies Use Mergers and Acquisitions to Meet Advertiser Demand for Digital Expertise Mergers and acquisitions (M&A) are having a dramatic Table 5: 2011 Internet Advertising Revenue (in $ millions) impact on the size and scope of the digital advertising agency market, as marketers increase their demand for expertise and more integrated digital programs. Large international holding companies such as Japan’s Dentsu and France’s Publicis Groupe have spent billions on acquisitions over the past five years in an effort to create worldwide, full-service networks that provide a broad spectrum of digital marketing capabilities and services. Note: Display related In July 2012, Dentsu announced a nearly $5 billion agreement includes digital video commercials, ad to purchase London-based Aegis, which owns such brands banners/ display ads, as Carat, a large media buying agency, and Isobar, a digital sponsorships, and advertising network of iProspect-branded agencies (see Table rich media. 6). Just one month earlier, London-based WPP acquired Source: Internet Advertising Bureau digital marketing agency AKQA for $550 million. Table 6: Selected Holding and Media Company Acquisitions of Digital Agencies Acquirer Acquired/Merged Date Notes Aegis Group plc Communicate 2 August 2012 India-based search agency I Spy Marketing August 2012 U.K.-based digital agency Catch Stone July 2012 Chinese digital agency bought for £55.2MM Roundarch February 2012 Purchased for $125MM iProspect December 2004 Purchased for $32MM with performance incentives; made part of Aegis’ Isobar network Dentsu Aegis July 2012 $4.9 billion purchase price Steak Group June 2011 U.K.-based digital media agency Firstborn February 2011 NY-based digital agency with animation and web development services Innovation Interactive (360i) January 2010 Included digital agency 360i and PPC platform IgnitionOne Epsilon Aspen Marketing Services April 2011 Purchased for $345MM Hearst Corp. iCrossing June 2010 Acquired for estimated $325MM Interpublic FUSE February 2012 U.K.-based digital agency Group CUBOCC March 2010 Brazilian digital marketing agency Reprise Media April 2007 Bolstered search marketing capabilities Merkle IMPAQT March 2011 Added search to existing CRM capabilities Publicis Groupe Big Fuel July 2011 Bought 51% of the social media agency Rosetta May 2011 $575MM acquisition to complement U.S. search & digital marketing brands Razorfish October 2009 Purchased for $530MM in cash and PG treasury shares; part of VivaKi Performics September 2008 Operates as part of VivaKi WPP Hungama Digital Services June 2012 India-based digital agency purchased by JWT Fortune Cookie August 2012 Acquired by WPP agency Posssible Worldwide AKQA June 2012 $550MM purchase price DTDigital January 2012 WPP subsidiary Ogilvy bought 33.3% stake in Australian digital agency Source: Third Door Media © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 7 Email: whitepapers@digitalmarketingdepot.com
  • 11. Digital Advertising Agencies 2013: A Buyer’s Guide Publicis Groupe purchased Rosetta Marketing Table 7: Most Active Strategic Buyers, 2011 Group, one of the largest independent digital agencies, for about $575 million in May 2011. Rosetta became the fourth large digital agency acquisition for Publicis, which bought Digitas for $1.3 billion in December 2006, Performics for an undisclosed sum in September 2008, and Razorfish for $530 million in October 2009. Agency holding companies have been some of the most aggressive strategic buyers in the marketing, media, technology, and service industries, according to investment banking firm PetskyPrunier, which specializes in marketing services industry mergers and acquisitions. Publicis Groupe, WPP, Interpublic Group, and Omnicom Group, represented four of the top ten strategic buyers in the marketing, media, technology, and service Source: PetskyPrunier industries in 2011 with 56 acquisitions between them (see Table 7). Agency holding companies continued their acquisition spree in the first half of 2012, as WPP, Publicis Groupe, Interpublic Group, and Omnicom Group had a combined 33 acquisitions in the first six months of the year. Magazine publisher Hearst Corporation entered the digital advertising agency space when it acquired leading independent agency iCrossing in June 2010. Hearst executives said the purchase would allow the company to offer a holistic set of marketing services to its clients and agency customers. At the same time, search marketing agencies looking to strengthen core competencies and expand their digital channel services have responded with mergers and acquisitions of their own (see Table 8). In June 2010, four search marketing agencies – 10e20, Search and Social, Brent Csutoras and SecondStep Search – merged to form BlueGlass Interactive to provide a broad array of search and social marketing services. Charlottesville, VA-based RKG, formerly known as Rimm- Kaufman Group, acquired AudetteMedia in August 2011 to enhance its SEO technology and services. Table 8: Selected Digital Agency Acquisitions Acquirer Acquired/Merged Date Notes BlueGlass Interactive 3 Dog Media October 2012 Search marketing agency 10e20, Search & Social, June 2010 Four agencies merged to form BlueGlass Interactive Brent Csutoras Inc., and SecondStep Search Covario Top Local Search May 2012 Location-based traffic and optimization NetConcepts January 2010 Acquired GravityStream technology for fully automated SEO Didit Inceptor August 2012 Added SEO, CSE and social media capabilities iCrossing Wallaby Group September 2011 Expanded presence into Latin America and Europe iProspect ICUC Moderation June 2011 Global online content and community moderation services Services Range Online Media September 2008 Search agency with strong retail clientele RKG AudetteMedia August 2011 Added SEO capabilities to PPC, social, and display (Rimm-Kaufman Group) Rosetta Level Studios September 2010 West coast mobile agency Wishbone January 2010 Healthcare marketing agency Source: Third Door Media © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 8 Email: whitepapers@digitalmarketingdepot.com
  • 12. Digital Advertising Agencies 2013: A Buyer’s Guide Covario made two acquisitions since January 2010. The agency purchased NetConcepts in January 2010 to further automate its SEO offerings, and added Top Local Search in May 2012 to provide its clients with location-based traffic and optimization capabilities. The company’s goal with these moves was to create a point-solution approach for specific SEO and social media software tools that can stand alone from its agency services as well as add to its list of offerings to agency clients. Trend #3: Traditional Fee Structures Evolve to Include Performance-based Compensation Traditional agency fee structures, namely time-based and percentage of spend, are evolving to include more retainer- based deals, as well as performance-based hybrids that link client fees to measurable campaign results, such as clicks, impressions, conversions or sales. With tighter advertising budgets and increasing scrutiny on bottom-line results, the goal is for clients and agencies to share the risk when trying new campaign strategies or tactics, yet fairly compensate the agency for its time and work. Many agencies are using a performance-based Table 9: 2011 Share of Internet Ad Revenue by Fee Structure compensation hybrid that includes a time-based, fixed-fee, or percentage-of-spend component, along with a performance-based bonus or incentive on paid media programs. Some industry experts caution that performance-based models can actually discourage innovation precisely because of the risk involved. (See page 11 for further discussion of pricing and fee structures.) As a result, the fixed-fee or retainer-based fee model, which provides predictable revenue and expenses for agencies and their clients, is also gaining traction. Retainers may do more to encourage agencies to test new campaign strategies and tactics, knowing that they will be compensated for their time regardless of results. Source: Internet Advertising Bureau Performance-based revenue represented nearly two-thirds of all Internet advertising revenue for the year; more than double the revenue for impression-based digital revenue, according to the 2011 IAB Internet Advertising Revenue Report (see Table 9). Performance-based revenue totaled $20.5 billion in 2011, a 26.5% increase over $16.2 billion in 2010. The IAB defines impression-based revenue as any non-measurable ad revenue, such as digital display ads. Performance-based revenue represents ad revenue derived from a user action, such as clicks on a sponsored search result. All of the revenue refers to paid media only, and does not include revenue generated from earned or owned media. More advertisers and marketers are planning Many agencies are using a to increase their performance-based agency relationships. Nearly half of the marketers responding performance-based compensation to a 2012 PulsePoint survey said they expect to increase performance-based compensation based hybrid that includes a time-based, on sales in the next twelve months. Forty percent of fixed-fee, or percentage-of-spend respondents said they expect to increase performance- based compensation based on marketing metrics. component, along with a performance- based bonus or incentive on paid media programs. © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 9 Email: whitepapers@digitalmarketingdepot.com
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  • 14. Digital Advertising Agencies 2013: A Buyer’s Guide Choosing a Digital Advertising Agency Ultimately, the decision to hire a digital agency is a significant investment that requires a rigorous evaluation of your business’s and any potential agency partner’s needs, resources, and cultures. The following sections discuss five steps involved in making a more informed and successful choice. Step One: Company Self Assessment – Do You Need a Digital Agency? Deciding whether or not your company needs to hire a digital advertising agency calls for the same evaluative steps involved in any significant investment, including a comprehensive self-assessment of your organization’s internal strengths, challenges, and needs from a business, staffing, and technology perspective. This includes answering questions such as: • What are the primary objectives we want to achieve? Working with an agency can help advertisers that are looking to scale their digital initiatives but lack enough in-house resources to do so. Find clarity and consensus on what you’re looking to achieve. If your digital programs are falling short of management’s ROI goals, an agency’s expertise may be able to help you improve campaign or channel results. • Do we need a full-service agency or boutique? Traditionally, advertisers have hired an agency of record (AOR) to handle all of their advertising needs. But one-stop advertising shops may not represent best-of-breed expertise in every digital channel. Many advertisers hire both AORs and boutique agencies with expertise in SEO or social media, for example. If managing multiple agencies is too cumbersome or expensive, a full-service digital agency may be the right choice. • Who will manage the agency relationship? Every successful partnership needs a champion who is invested in that partnership’s success and can pull together the disparate groups that have a stake in the outcome or a role to play. For example, marketers may voice different wants and needs than an IT department, but both may be important to campaign development and execution. By designating a “point person” within the business even before you send out an RFP, you will ensure the steady flow of information throughout the process so that expectations are met. It is also vital to assess your own business’s culture and priorities before beginning the selection process. For example, is good creative more important than reporting capabilities? If so, you’ll need to target agencies with those strengths. If not, you’ll want to speak to more agencies with strong analytical capabilities. Here are several other factors to consider: Accountability: Digital campaigns have many moving parts, and in-house marketers can often be too busy to micromanage every detail. Think about how much you’ll need to rely on your agency to stay on top of every deliverable and how proactive you’ll want them to be regarding any campaigns that aren’t going according to plan. Flexibility: How flexible and accommodating do you need an agency to be? In-house marketing teams often experience scope creep, which can create missed deadlines and budget overruns for their agencies. Not all agencies have the staff or inclination to switch gears mid campaign when clients request changes. If it’s important to you that an agency accommodates your wishes, even if it costs time and money, make sure to say so up front. Communication: How much communication do you want or need? How important is the geographic location of your agency? You may be the type to ask a lot of questions or want to have periodic in-person meetings. If so, look for an agency that has an office close to your location and welcomes the frequent interaction. If you’re looking for a more turn-key relationship, location won’t be as important as the confidence and skill of the account team managing your business. Step Two: Understand Agency Fee Structures Agency free structures vary widely, even within client accounts. It is not uncommon for a client to compensate their agency using different fee structures for different types of media campaigns. For example, one of the most common agency fee models for paid media buying is percentage of spend. Typically, an agency will be paid 10 to 20 percent of a client’s digital media spend on paid search or display advertising campaigns. Smaller clients may pay a higher percentage, while enterprise clients may pay a smaller percentage due to the larger dollar volume of their accounts. © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 10 Email: whitepapers@digitalmarketingdepot.com
  • 15. Digital Advertising Agencies 2013: A Buyer’s Guide Each fee structure has advantages and challenges for different types of media (see Table 10). Many agencies use time-based pricing, which is based Many agencies use on a set hourly fee to track all time spent on a client’s earned and owned time-based pricing, media accounts. In these types of arrangements, it is important for the client and agency to discuss and negotiate minimums and perhaps maximums to which is based on a set facilitate budget planning. Clients must also be vigilant about agency staff hourly fee to track all efficiency, since the agency is paid for an agreed-upon number of hours, regardless of how much work is accomplished. time spent on a client’s Also gaining traction is the fixed-fee or retainer-based model, which provides earned and owned predictable expenses for marketers and advertisers, particularly on long-term media accounts. accounts that require ongoing maintenance, such as monitoring SEO rankings or social media content. Retainers may also encourage agencies to test new campaign strategies and tactics, knowing that they will be compensated for their time regardless of results. Increasingly, agencies are using performance-based hybrids that include a time-based, fixed-fee, or percentage-of-spend rate, as well as a smaller performance-based component for paid media work. The goal is for clients and agencies to share the risk when trying new campaign strategies or tactics, yet fairly compensate the agency for its time and work. This is also a way for agencies to become more competitive in the base pricing; by adding in bonuses based on performance, the initial agency fee may be lowered. However, some industry experts caution that performance-based models can actually discourage innovation precisely because of the risk involved. Some agencies may not feel comfortable with taking on extra work with no guaranteed reward. Successful performance-based compensation arrangements that benefit both agency and client require trust, negotiation, and clarity about campaign rules and ownership. For example, an agency might require implementation of all agency-recommended landing page changes or updates within a certain time frame to ensure the types of results needed to kick in the performance bonus. Table 10: Selected Digital Agency Fee Structures Fee Model Most Appropriate Media Advantages Challenges Percentage of spend Paid media (PPC, display) Expense predictability Agency goal to increase spending and media buys may result in higher costs but depress ROI. Time based Earned and owned media Negotiated hourly fee assures Less predictable expenses that (SEO, social, mobile) client is only paying for actual depend on campaigns being run on time put into account work. time or in a particular time frame. Questions may emerge about whether account staff is working efficiently. Retainer or fixed fee Owned and earned (SEO, Consistent, predictable Large spending or budget changes social, mobile) expenses. May encourage may necessitate renegotiating fees. more long-term, strategic Questions may emerge about whether thinking because agency is paid account staff is working efficiently or regardless of results. enough hours. Performance based Paid and earned media (Paid Agency shares risk with the client Frequent renegotiating due to over- or search, display, some social) on campaign performance. underperforming campaigns. Agency may stick to “tried and true” tactics to guarantee revenue, rather than look at long-term results, strategy. Source: Third Door Media © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 11 Email: whitepapers@digitalmarketingdepot.com
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  • 17. Digital Advertising Agencies 2013: A Buyer’s Guide Potential Add-on Fees Third-party software and campaign set-up fees are common agency add-on Search Agency Fee charges. Setting up digital marketing campaigns can be time consuming. Structures Once an advertiser’s goals are understood, an agency should openly discuss with the advertiser how long a campaign will take to set up. Depending on In addition to the more general the complexity of this set up, an advertiser may be charged a one-time fee digital agency billing options, search or monthly installments. marketing agencies may offer the following fee models to potential PPC Some agencies will roll third-party software fees into a monthly clients: management fee, making them less transparent. It is important for advertisers to understand what an agency is doing in house and what it is 1. Number of Keywords under outsourcing, including why the function is being outsourced and what are Management. Now becoming less the costs associated with the software. In some instances, agencies provide popular, many search agencies excellent services but do not have the development team to write their own charge clients for the number of applications. Conversely, there are some excellent software solutions that do keywords being managed and how not offer agency services and focus on providing the best software possible. many times per day the keywords The match of these two different teams can provide a complete solution to are updated. If you are an advertiser meet all of an advertiser’s needs. (Note: Many agencies also develop and being charged by keyword, the provide proprietary software solutions in addition to their agency services.) ‘long tail’ keywords are generally unprofitable. While the long tail may not normally be the majority of your Step Three: Begin the Selection Process: sales, in this pricing model, there Phone Calls, RFIs and RFPs is less experimentation that can be profitably implemented. Once you’ve decided to hire a digital agency, the next step is to develop a list of potential agency partners to contact – whether by phone, request for 2. Charge Per Click. In the early information (RFI), or request for proposal (RFP). days of PPC, click costs could vary dramatically. Advertisers would see Many digital agency executives report that the majority of their new their clicks remain constant and business comes from referrals rather than RFPs. Therefore, before – or yet their bills continued to rise. instead of – initiating a more formal RFP process, it may be wise to begin The charge-per-click billing model by contacting some of your marketing peers to find out which agencies evolved from advertisers looking they are using and why they chose the partners they did. Then call any to ensure that their agencies were recommended agencies to discuss your business needs and whether or not doing enough keyword research to they might be an appropriate fit. This step serves three purposes: ensure that higher click volume didn’t lower conversion. The key to this 1) It allows any agency that doesn’t want to respond to your RFP to opt billing method is ensuring that all out of the process right away; clicks, if not equal, are relevant. 2) It enables you to speak directly to an appropriate individual at the agency and establish a rapport; and 3) It assures that you will be sending your RFP to the right person at the agency. Some clients begin the selection process using a broad-based RFI to cast a wide net to between ten and 15 agencies before homing in on a more targeted group of potential partners through an RFP. The RFI should query agencies about their size, management team, organizational and operating structures, target customer, and digital capabilities. Include key business terms upfront, for example, competitive conflicts or non-compete requirements, travel policies, and minority hiring and green commitments. The result should be a streamlined two-page document with a deadline of two to three weeks for agency responses. An RFP follows through on the process to gather and assess targeted information from the agencies that seem most interested in your business and would be the best fit for your advertising needs and culture. It should include tangible factors such as the agency’s ability to provide scalability, proven results, and an acceptable fee model; as well as intangibles such as common goals, cultural fit, and chemistry. Industry experts recommend sending out no fewer than three and no more than six to eight RFPs with a two-to-three week deadline for responses. © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 12 Email: whitepapers@digitalmarketingdepot.com
  • 18. Digital Advertising Agencies 2013: A Buyer’s Guide Developing an effective RFP can be complicated and should include all relevant stakeholders within your business. Many enterprises must solicit bids through the RFP process due to accounting or procurement requirements. All staff from each relevant department should meet to develop the RFP and sign off on it before it is sent out. It will be frustrating for both the agencies involved and your staff to have to redo the RFP because a key individual on your end wasn’t consulted, or you didn’t ask the right questions, or clearly identify your objectives. Some enterprise-level advertisers engage the services of a marketing management firm that can objectively guide them through the RFI and RFP process. These types of firms can help break down corporate silos, bring together the appropriate stakeholders within the business, and identify its digital advertising needs and strategic goals. The most effective RFPs only request relevant information from the agency, and provide ample information about your business and its digital advertising needs. It should reflect high-level strategic goals and key performance indicators (KPIs), rather than drill-down data geared toward IT or procurement. For example, mention your company’s most important KPIs and how you will evaluate the success of your digital campaigns. When written properly, an RFP will facilitate the sales process and ensure that everyone involved on both sides comes to a shared understanding of the purpose, requirements, scope, and structure of the intended engagement. Table 11 illustrates some of the information that is important to provide in an effective RFP to attract the types of responses that will enable you to make the right choice. Table 11: Business Information to Provide in an Agency RFP Industry • Industry structure and stage (early vs. mature; fragmented vs. Overview consolidated) • Market size ($) • Customer/Buyer characteristics Company • Company size (number of employees and/or revenue) Background • Years in business, industry position • Product/service information including unique value propositions (USPs) • Sales/distribution channels and technology platforms Objectives • Scope of work: digital channels for which you are seeking work and Goals • Goals/KPIs: Higher conversion? More leads? Brand awareness? • Say whether you are looking for a short- or long-term relationship • If project oriented, detailed specs to enable more accurate bids Decision Makers • State who will be involved in the agency evaluation and Processes • Clarify the decision-making process • Mention the most important criteria. i.e., price, location • Say who will manage the relationship once a contract is signed Deadlines • Clear due date for a response (Two to three weeks is sufficient) and Legal • NDA • Legal terms/ownership of deliverables Source: Third Door Media © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 13 Email: whitepapers@digitalmarketingdepot.com
  • 19. Digital Advertising Agencies 2013: A Buyer’s Guide Conversely, there are many questions that you’ll need to ask an agency in an RFP. The key is to ask the right questions, and respect the agency’s time and resources by avoiding questions that can be answered by a quick look Sample RFP Outline at its website. If procurement has driven the RFP process or been integrally I. Summary and Overview involved, make sure that the questions are relevant and appropriate for the a. An “Executive Summary” of advertising industry. Focus on questions that are specific to your business the RFP highlights without the situation and digital initiatives, with the goal of gathering the data you’ll technical details. Introduce need to make the most informed decision possible. Table 12 lists some of the challenge your company is the relevant agency questions that are most appropriate in an RFP. Agencies having and provide the agency that are truly interested in winning your business will take the time to answer with an overview of the rest of these questions. the RFP. II. Technical Summary Step Four: Choosing the Right Agency a. Provide key pieces of information relevant to your project, When you have received your RFP responses, arrange for face-to-face i.e., technical requirements, presentations from each of the “finalists.” During these meetings, consider description of the project’s quantitative factors including pricing, channel expertise, and analytics/ technical issues, your site’s reporting capabilities; as well as qualitative – or intuitive – considerations such current platform, etc. This as the agency’s culture, and the chemistry between your staff and the agency’s section may originate from your team. Decide which of these factors are most important to your business goals. IT department and targets the agency’s programmers and delivery team. Table 12: Questions to ask an Agency in an RFP III. Administration and Management a. Describe who will be involved Agency • Agency history and expertise (years in business) in the project from your end Background • Agency size (number of employees and billings) and what the timeline is for • Specific vertical industry experience/expertise completion. Finalize the • Target customer (by $ and vertical market) framework of the work. IV. Project Expectations and Agency • Biographies of key executives Delivery • Potential members of your account team and their a. Outline your evaluation criteria, Staffing experience monthly deliverables, and • Internal resources vs. agency use of subcontractors or training you expect to receive to outsourcing assess your goals and KPIs. This • Employee churn rates and average tenure will help the agency determine their cost to complete your work, Client • Average tenure and retention rate of agency clients as well as their suitability. References • Relevant client contact information V. Deadlines and Budgets • Case studies with results a. Provide projected deadlines and Work • Examples of the agency’s work in vertical markets or and budgets to avoid confusion digital channels over when a project should be completed and how much it Pricing and • Agency billing policies and terms might cost. Contract Terms • Pricing structure for the account (i.e., retainer, b. Assess your budget based on the commission, time, spend, or performance based) “range” of services you’ll need. • Add-on fees For example, instead of saying the project absolutely has to cost Customer • SLA terms and costs for technology platforms “X” amount, you are willing to Support • Training and onboarding services included in fees spend within a range from “$X • Availability of key personnel (24/7 vs. business hours) to $Y”. • Frequency of team phone calls, on-site visits, and reports Source: Stephan Spencer, Search Engine Land Source: Third Door Media © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 14 Email: whitepapers@digitalmarketingdepot.com
  • 20.
  • 21. Digital Advertising Agencies 2013: A Buyer’s Guide The following section discusses some of these considerations in more depth. Create a Decision Matrix Brand/Reputation Are you ready to start the decision-making process? It may help to create a decision Agency brands are important and provide a sense of the agency’s matrix, which is simply a chart listing the history and values. How long has the agency been in business? Is attributes you are looking for in a digital it profitable? Does it have a business plan? Funding? What kind of agency, a weighting factor for each attribute, employee turnover does it have? How about client retention? These a score from 0 to 10 for each, and the are questions you must have answers to through the RFP process. weighted score (e.g., the score multiplied by They will also provide clues to the agency’s future and its vision. the weighting factor). Remember to include both quantitative and qualitative judging Agency Expertise criteria. You will add the weighted scores together to arrive at a total score that can Step one of the digital agency selection process was to do a thorough self- help to differentiate some seemingly similar evaluation of your business’s needs. Now it is time to decide: Is the right competitors (see Table 13). agency a channel specialist or a full-service shop that can service all of your digital advertising needs? If you choose a specialist because the bulk of your digital work is in SEO and email marketing, for example, can the agency service any future social marketing or PPC campaigns that you begin? Similarly, as your business grows, can a boutique or specialist handle larger, more complex campaigns? On the other hand, a full-service agency may offer a broad swath of channel services, but not have the depth of experience in SEO or PPC that your business requires. Many times such agencies will be very strong in one area, and only moderately knowledgeable in others. Do the finalists know your industry? Is that important to you? Some industry experts argue that channel expertise is more valuable than vertical market experience. In other words, it is easier to get up to speed on retail, travel, or healthcare digital success strategies than it is to learn how to run an effective Twitter campaign. However, many advertisers believe that strong vertical knowledge is an advantage for their campaign work. If that is the case, find out if the agency follows your vertical industry’s best practices to decide which strategic and tactical activities to undertake. Table 13: Sample Agency Decision Matrix Attribute Agency X Agency X Agency Y Agency Y Agency Z Agency Z (Weighting Score Weighted Score Score Weighted Score Score Weighted Score factor) Creative (2) 5 10 6 12 8 16 Deliverables (2) 8 16 6 12 7 14 Agency expertise (4) 8 32 7 28 7 28 Staff/Talent (3) 7 21 8 24 9 27 Client references (4) 7 28 7 28 7 28 Client support (3) 6 18 8 24 8 24 Fee structure (1) 8 8 7 7 5 5 Total Weighted Score 133 135 142 Source: Third Door Media © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 15 Email: whitepapers@digitalmarketingdepot.com
  • 22. Digital Advertising Agencies 2013: A Buyer’s Guide Culture One of the best ways The core values of an agency will foretell the kind of relationship you are likely to to get a true sense of have. Choose an agency that is collaborative, innovative, and proactive. Avoid agencies that tolerate fiefdoms. If possible, do a tour of its office, which often an agency’s capabilities will tell you a lot about its culture, efficiency, and stability. The mark of a good is to speak to its clients agency is often in the cheerfulness and energy in its corridors. and see case studies Staff/Talent and samples of its One of the most important criteria in selecting an agency is the agency’s work. Ask for and call talent – particularly of the staff that will manage your account. These people’s skills, dedication, and passion for your business will determine the success agency references and of your digital campaigns. Make sure you understand who’s going to be on your team, what their roles are, and how much time they will devote to your ask specifically about account. Agency turnover is a legitimate concern for clients. Ask to see the their satisfaction with agency’s turnover rate. Find out how the agency hires, promotes, and rewards its talent. How does the agency keep current with the rapidly changing landscape the agency relationship. of digital marketing? Does staff go to seminars and conventions? Does the management encourage ongoing educational efforts? Find out what formal training agency personnel has received, and who specifically has been credentialed and trained. Does the agency do all the work in-house, or does it rely on subcontractors for key functions? The more of your work that gets farmed out, the less it is under the agency’s control – and your control. Subcontracting arrangements can lead to serious execution problems including miscommunication, missed deadlines, and cost overruns. Client References One of the best ways to get a true sense of an agency’s capabilities is to speak to its clients and see case studies and samples of its work. Ask for and call agency references and ask specifically about their satisfaction with the agency relationship. Does the agency consistently meet timelines? Does it adhere to its quoted prices? Is the account staff easy to work with? What results have been achieved? Ask the agency to prepare sample work for you based on your website by the people who would be assigned the everyday tasks on your account. This isn’t to get free advice, but rather to see the quality of the work that will be done on your account. Client Support Most agencies work on a model of overlapping time, meaning you do not have a dedicated resource assigned to your account, despite what you might otherwise be told by an account representative. Your goal should be to understand how many hours will be applied each week to your account’s work by actual subject matter experts (SMEs) in PPC, social media, or SEO. Make sure the agency is willing to assign a relationship manager to your business to serve as a conduit for communication. Fee Structure You need to be comfortable with an agency’s fee structure. If not, you’ll second guess whether or not you’re being overcharged or underserviced. While pricing is important, it shouldn’t be the most important factor in making your decision. Agencies are businesses hired to help your company achieve its goals on time and on budget. Make sure you understand and agree on a fee structure that will leave both client and agency feeling served and fairly compensated. © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 16 Email: whitepapers@digitalmarketingdepot.com
  • 23. Digital Advertising Agencies 2013: A Buyer’s Guide Deliverables Make sure that you and the agency you select define RFPs: 20 Questions objectives and evaluation criteria before signing a contract. You don’t want to be left wondering, month after to Ask month, whether the agency is producing results. Your There are many ways to write an RFP. Here is one in agency should be able to show you analytics on a regular question format. basis and make suggestions and adjustments on the fly. How can you know what’s working and not working if you 1. Provide an overview of your company including aren’t analyzing reports on a consistent basis? Focus not history, key leaders and locations. only on statistics, but also on consumer sentiment. For 2. What is your core offering? What distinguishes your example, what are fans of your brand saying and doing offering from your main competitors? in relation to the social media campaign? This type of 3. How many employees does your company feedback will allow you to address concerns, initiate have? How many employees focus on account course corrections, and better estimate your next moves. management, development and innovation? 4. Have you made any significant acquisitions within the last two years? If so, describe your firm’s strategic Step Five: Negotiate Contract Terms integration roadmap for your solution suite. 5. What awards has your company received in the past Contract length can often be a sticking point in 18 months? negotiations. Before signing any contract, you should 6. How many clients do you have? What percentage of clearly understand the pricing, contract length, and your client base is international? renewal status. Many advertisers want the flexibility of a 7. Who are your top 5 clients and what year did you month-to-month contract. However, agencies usually want begin the relationship? longer contracts to ensure revenue flow. One factor to 8. How have you grown your long term client consider is that many digital campaigns, particularly PPC engagements? Provide examples. and SEO programs, take several months to build results. 9. How does your agency stay abreast of industry trends If an agency is offering bundled services with additional and educate your clients? built-in costs (i.e., website design, domain name 10. How do you strategically approach the convergence procurement, call-tracking numbers, etc.) then an annual of paid, owned and earned media? contract may be necessary. Sometimes annual contracts 11. Who leads the strategy development process in your can include a three-month opt-out provision. organization? 12. What steps are taken by your agency to deliver on Decide if you want an “evergreen” contract, also known ROI goals for performance marketing campaigns? as an auto-renewal contract. In this scenario, the initial 13. How does your agency proactively mine competitive contract is automatically renewed if neither party takes data, intelligence for clients? action. The benefit of an auto-renewal contract is that 14. What strategies do you find strongest for driving & neither side has to do additional paperwork after the measuring offline conversions via online advertising? contract is signed. The downside is that it doesn’t force 15. Describe any recent experience your agency has had either side to periodically evaluate an account’s progress in working seamlessly with other agencies in a client’s or performance. Signing a month-to-month contract also agency network. has advantages and disadvantages. The disadvantage 16. What types of analytical tools do you use with clients? is that there is additional paperwork each month for 17. Describe your standard testing process and both the client and agency. The upside is that it enables technology that assists in testing setup, execution, advertisers to more frequently evaluate their agency post-launch optimization, and analysis relationship and campaign results. 18. What types of reporting and business intelligence insights do you provide clients? 19. Describe your global experience including case studies relevant to our business. How is your approach different than management of US-only campaigns? 20. Describe your team’s language and localization capabilities. Source: Performics © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 17 Email: whitepapers@digitalmarketingdepot.com
  • 24. Digital Advertising Agencies 2013: A Buyer’s Guide Conclusion The process of choosing a digital advertising agency can be daunting and complex. From full-service agencies owned by holding companies with global networks, to regional agencies serving the needs of a few large, local advertisers, to boutique channel specialists that delve deeply into digital strategies such as SEO link building or Facebook conversions, there is no “one size fits all” approach to hiring a digital agency partner. Yet making the right selection can also begin a long and prosperous relationship for both advertiser and agency, in which the client’s digital advertising programs more efficiently scale and mature. Digital advertising is playing a more integral role in overall advertising budgets and strategies. Harnessing its power can positively transform a business’s brand and sales. Each advertiser’s situation and needs are unique. The key to making a successful decision begins internally with a comprehensive self-assessment of your organization’s internal strengths, challenges, and needs from a business, staffing, and technology perspective. From there, you will begin to look outward and evaluate the type of agency or agencies that will provide the best fit, and then question and meet the agencies that fall into that category. Pricing is important, but shouldn’t be the most important factor in making your decision. Ultimately, an agency’s core values, talent, and dedication to your business will determine the success of your relationship and your digital campaigns. n © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 18 Email: whitepapers@digitalmarketingdepot.com
  • 25. Digital Advertising Agencies 2013: A Buyer’s Guide Resources ANA/4A’s Guidelines for Agency Search. Association of National Advertisers and the American Association of Advertising Agencies. http://www.aaaa.org/news/bulletins/Documents/agency_search_white_paper.pdf Five Ways to Get More Out of Your Digital Agency. Author David Murdico, Managing Partner, Supercool Creative. http://adage.com/article/digitalnext/ways-digital-agency/232856/ How to Choose a Marketing Agency. Author Tom Pick, Webbiquity blog. http://webbiquity.com/outsourced-marketing-services/how-to-choose-a-marketing-agency-ad-agency/ How to Select an Interactive Marketing Agency. Author Bradd Shorr, Director of Content & Social Media, Straight North. http://www.techipedia.com/2012/interactive-marketing-agency-selection/ How to Write an Ad Agency RFP. Author Tom Pick, Webbiquity blog. http://webbiquity.com/outsourced-marketing-services/how-to-write-an-ad-agency-rfp/ How to Write a Killer RFP for Hiring an SEO Firm. Author Stephan Spencer, Founder, NetConcepts. http://searchengineland.com/how-to-write-a-killer-rfp-request-for-proposal-for-hiring-an-seo-firm-13417 PPC Management Options – Are Your Fees Inline With The Advertiser’s Goals? Author Brad Geddes, Founder, Certified Knowledge. http://searchengineland.com/ppc-management-options-are-your-fees-inline-with-the-advertisers-goals-14077 RFP Basics for Procuring Disruptive Technology and Services. Author Dustin Engel, Elegant Disruption blog. http://www.elegantdisruption.com/blog/2011/11/7/rfp-basics-for-procuring-disruptive-technology-and-services.html Vetting an Agency: Protecting the Family Jewels. Author Duane Forrester, In-house SEM, Microsoft. ttp://searchengineland.com/vetting-an-agency-protecting-the-family-jewels-12219 What to Expect From an SEO/SEM Agency. Author Duane Forrester, In-house SEM, Microsoft. http://searchengineland.com/what-to-expect-from-an-seosem-agency-40361 What Matters Most When Selecting an Agency. Author Avi Dan, President, Avidan Strategies. http://adage.com/article/cmo-strategy/marketing-matters-selecting-agency/145554/ Agency Resources Below is contact information for agencies that have advertised in this report. aimClear DNA - Digital Net Agency RKG www.aimclear.com http://digitalnetagency.com http://www.rimmkaufman.com (218) 727-4325 (866) DNA-1275 (434) 220-5210 Covario Page One Power http://covario.com http://pageonepower.com (858) 397-1500 (208) 229-7046 The DAC Group Performics http://dacgroup.com http://performics.com (866) 329-1884 (800) 615-6126 © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 19 Email: whitepapers@digitalmarketingdepot.com
  • 26. Digital Advertising Agencies 2013: A Buyer’s Guide Stop paying agencies for the wrong behaviors. Start paying us for the right results. The leading performance-based digital agency n Search Engine Optimization n Search Engine Marketing n Social Media Marketing n Affiliate Management dna_11_2012.indd 4 11/15/12 10:52 PM BIG PROBLEMS SOLVED: How Do You Get LOCAL 35,000 Locations to DOMINATION Show Up in Local Search? Our client challenged us to manage visibility for 35,000 of their neighborhood locations. We created a solution that not only overcame SEO and data integrity issues, but ultimately dominated maps, local search and mobile local. In most US markets now, you can search for their category on any device and find a nearby location. We solve problems others cannot — at scale! performics.com @performics +1 312 739 0222 Global Performance Marketing Agency marketing@performics.com © 2013 Third Door Media, Inc. • http://digitalmarketingdepot.com 20 Email: whitepapers@digitalmarketingdepot.com