5 Ways to Mitigate Risk When Hiring Digital Marketing Agencies
Finding a good digital marketing partner for your small business can seem like finding a needle in a haystack. Here’s how to narrow the field.
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Alex Yastrebenetsky is an Entrepreneurs' Organization (EO) member in Cincinnati and founder of InfoTrust, a digital analytics consulting and technology company helping marketers use data to make smarter decisions. As the leader of a data-focused company that emphasizes analysis, measurement, quality and governance, we asked Alex how to use data to hold digital marketing vendors accountable. Here's what he shared.
It's hard for small business owners to find talented, committed digital marketing partners who get the job done. But last year, we thought we had finally found the right one.
Our initial call went great. The founder asked insightful questions and showed interest in our product. A friend referred him, and we fell into a common trap: We were overly enthusiastic about a vendor who could finally walk the walk and produce results for reasonable fees.
Ours was a $10K mistake: Two months at $2K/month in fees plus $3K/month in Facebook ads.
What went wrong, exactly? In our case, the agency was only two years old and the founder--a reasonably experienced digital marketer--was not interested in doing the work himself. His model was to close deals in the U.S. but contract offshore freelancers to provide deliverables.
Why is it so hard to find a solid marketing partner?
Simple: Agencies that get strong results target mid-size companies that can pay meaningful retainers and project fees. They're not interested in clients with much lower budgets.
That leaves three options for small business owners:
- Agencies that specialize in business niches with automated boilerplate solutions and minimal customization to keep costs low.
- Agencies that don't know what they're doing and will take any client.
- Early-stage agencies where experienced founders still do most of the delivery. Such situations are fleeting because once they're successful, they, too, will go after larger accounts and transition you to another team member.
New digital marketing agencies are popping up on every street corner. Some scale, stay private or get acquired by bigger agencies. I'm in the unique position of observing how digital agencies burn through our client's budgets, so I feel a responsibility to provide insights on finding suitable partners.
There is only one surefire method: Rely on data to tell you the truth.
If you take away only one thing from this article, here it is: You must have access to your analytics, and you must monitor basic KPIs in real-time to ensure your vendor is meeting expectations. Yes, you, the business owner, must do these things.
"Why can't they generate the reports?" you ask. Because data can be manipulated, and there is an inherent bias in reporting on your own results.
With that in mind, here are five ways to mitigate risk when hiring digital marketing agencies:
1. Own the access to your data
Do not allow an agency to collect data in a Google Analytics account that they own. Make sure that you own your account. They can copy the data into their account, or you can easily provide the vendor access to your Google Analytics account.
Bonus tip: When providing agency access, insist that your vendor supplies a corporate email address that includes the company name so that in the future, you can easily tell which accounts should remain active or have access revoked (because it's hard to remember who bob123@gmail is).
2. Assess data in real-time
I've seen it happen time and time again: The agency contractually promises to provide you with a monthly performance report. This report is typically delivered in PowerPoint format with the results of month one presented in the middle of month two.
Why wait? They are spending your money, and Google Analytics dashboards can be created to make it easy for even inexperienced users to see month-to-date results, compare against previous months, and feel confident that their vendor is delivering.
To do this, be sure that your onboarding setup includes the vendor configuring basic Google Analytics dashboards and alerts to monitor data in real-time. If a vendor doesn't have the skills to do so, run away. In this day and age, you can't be a digital marketer if you don't pay attention to data on a daily basis.
3. Measure effectiveness
What should you measure? That's the million-dollar question, addressed by countless books and presentations. For now, keep it simple: The goal is to ensure that your vendor produces results.
I propose you make this the vendor's responsibility, saying, "Let's work together to identify the ways we'll measure the effectiveness of your work. Once we agree, I want you to build me a dashboard in Google Analytics showing that data."
A word of warning: The setup may cost five to ten extra hours of consulting. If the vendor indicates that it's very difficult and expensive to create measurement dashboards, an appropriate response is: "If it's so difficult to set up, how were you going to measure the effectiveness of your work?"
If the vendor will only market via one channel which has its own reporting interface--for example, Facebook or AdWords--then it's legitimate for the vendor to provide you with access to that platform's reporting interface to measure their work.
However, as a basic rule, if the vendor is running campaigns across multiple platforms and advertising channels, make them report in Google Analytics. It's the common denominator where you can compare metrics or timeframes side-by-side across platforms. If a vendor cannot make it happen, they are incapable of measuring the results of their work: Run away!
4. Establish KPIs that matter
When you talk to your vendor about what to measure, don't let them take the easy way out and only report on pageviews or bounce rate. Low bounce rate does not cover your payroll. Sales do.
Here are the KPIs that matter:
- For e-commerce sites: Sales
- For service sites: The number of contact form submissions and appointments scheduled online.
- For other sites: Any type of user engagement that indicates visitors coming from that campaign are interested in your brand. For example, the number of Facebook "likes" or shares, engagement with a survey or widget, or form submissions.
5. Carefully consider contracts
Contracts are very important, especially if you have limited experience in hiring digital marketing vendors.
Don't commit to a six- to 12-month retainer right away, even though the agency will encourage it, telling you they need time to ramp up and learn your business. That's true, but you want a 30-day cancellation clause during the first months, in case you need to cut your losses.
In our case, that's how we prevented a $10K loss from becoming a $30k loss. We had a 30-day cancellation clause during the first 90 days and, once we realized that our work was being done by consultants who barely understood who we are, we ended that vendor relationship.
It could've been a lot worse and gone unchecked for six to 12 months. As business owners, it's okay to make mistakes. However, it's not okay to make the same mistake more than once. To prevent that, we took steps to mitigate our risk. I encourage you to do the same!
BY Entrepreneurs Organization