The link to the podcast can be accessed at the top of the page. A full transcript of the podcast can be accessed below. Thank you for listening, and happy marketing!
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Speaker 1:
Welcome to the Agency Founder Podcast. Are you ready to grow your marketing agency? We pull back the curtain to show you how real marketing agency founders struggled, built, and scale their agencies. Practical advice, lessons learned, wins, and losses. We hold nothing back. Now your host, Jeremy Sonne.
Jeremy:
Welcome to the Agency Founder Podcast by Moonshine Marketing. Every single week, we interview successful founders of marketing agencies at different points in their journey to pass on their victories, defeats challenges and lessons learned to help you take your agency to new heights. This week, we’re speaking with Peter Reitano of Abacus, an agency that merges creative media and data to scale for a mobile first world. Peter, thanks so much for being here.
Peter:
Oh, it’s a pleasure.
Jeremy:
Really appreciate you taking the time. You said that before we started recording that you are up in a sunny, warm tropical Toronto area right now. Is that right?
Peter:
That’s correct. It’s actually a sunny day today, but we’ve just come out to the Arctic Tundra phase of Canadian life. We’re based in Toronto and the agency has an office here and an office in New York.
Jeremy:
International agency, very cool. I would love to kind of hear a little bit about how you personally got started with marketing and, kind of how you got started with Abacus? What’s the kind of founding story there?
Peter:
So, I mean I’ve been in agency start side at marketing for 10 or so years. I learned marketing, I didn’t do marketing at school or anything like that. I actually learned while I was working for an agency doing more sales style, kind of work in the UK. They had a successful kind of HR product, SAS product that I took over to Australia, and this basically given the job of growing that by myself on a 100% commission structure. That’s when I started to tinker around with SEO and PPC, back in the day when SEO was keyword stuffing and hiding keywords everywhere and all of that kind of good stuff.
Peter:
So hacking all of that together, I kind of got my first taste of online marketing. I did that, help set the company out in Australia and then moved to Canada and joined an agency that I later became an owner in called Spark. We grew that for six years, eventually that agency got acquired. I didn’t earn out and then set up Abacus, which is my current company with my co-founder, Jeff Goldenberg. So it’s been a kind of 10 year ride.
Jeremy:
Wow, that’s quite the story. So that’s really interesting to go from kind of the sales side to more of the founders’ side and things like that. How do those sort of roles compare as I think about this from kind of being in an agency, working for an agency on the accounts side, versus kind of running an agency day to day.
Peter:
I mean, I actually think sales is like a foundational scale for entrepreneurship generally, you need to be able to sell a vision externally. When Abacus started, we actually raised a little bit of seed capital and that’s all sales. You need to be able to sell your vision internally to your staff and also, when you start an agency and… In the early stage of agency, a lot of the selling falls on the founding team, the CEO whatever to sell clients. I still… A big part of my job still is sales and running the sales team internally. So it’s been a common thread from my career punctured with kind of learning online marketing and frankly, how to run a business along the way. So finance and all of that kind of good stuff was never something that I did at school or anything like that. It’s been something that I’ve learned and been forced to learn throughout my kind of 10 years.
Jeremy:
That’s really fascinating. So backing up a little bit, can you tell us all a little bit more about Abacus and what you all focus on, what you do and kind of your approach to the marketing agency world? What your unique sort of differentiator is?
Peter:
So when we started Abacus I was pretty keen on doing something very different to what I had before. What I had before was a full service generalist kind of agency, doing everything for everybody. I, myself and my partner we thought that wasn’t the future of the agency world. We thought the future would be more specialized kind of boutique agencies to work together with other agencies in a kind of mesh network. We thought that the old AOR model was starting to break down and didn’t offer the value to clients that it’s, that it maybe should have done, or maybe used to. These people say they can do everything, but the truth is they really don’t do a lot of the things that they need to do very well.
Peter:
So we thought we want to be specialized, we want to be collaborative and in a network. The area that we’ve started to specialize in right off the bat was Facebook advertising. So you just want it to be known as the Facebook people. When we started, there weren’t too many agencies doing just that, and we wanted to bring a kind of performance perspective to Facebook advertising. So that’s what we did to start with, we only ran ads. We ran ads doing kind of CPA driven, direct response marketing. Then we worked with other agencies and brands to get the creative and all of that kind of stuff, but what we realized a year into it was, it doesn’t… We can spend millions of dollars on the platform. What we really learned was creative was a key driver. You can’t out optimize bad creative.
Peter:
We kept on getting a lot of bad creative, and what I mean by bad creative it doesn’t just mean like bad quality. It means it’s not suited to the form and function of the platform. We’d work with big agencies that would produce beautiful spec commercials. Then we would get it on Facebook and then it’d be like, hey, why don’t you remake this and chop it down and then run it on Facebook. It just doesn’t work like that. We were getting horizontal ads that needed sounds that were too long before they got the main message. A big turning point I remember is we were running a campaign for Star Wars and there was this Father’s Day commercial, I am your father. I am your father’s day. It was this beautiful, very emotional ad, really nicely done.
Peter:
It played really well on TV, and we were excited to get it, obviously rolled out and to be like Star Wars. But it just fell flat on Facebook because it took 20 seconds to realize that it was actually anything to do with star Wars because the narrative on Facebook that, that arc that on TV that you can tell over 30 seconds was the opposite.
Peter:
You need to tell people what’s in it for them, why they should stick around right away and then drop down that arc. So, that was a big turning point for us. So we now… A big part of our work is the creative and content side. So we still very much focus on social and mobile and we build out the content, we do all of the kind of the media campaigns and the attribution and where we’re not full service, but we’re full service within that. We do content and creative and media buying joint together, and all kind of value prop is media and creative and data all in one package. So without one of those things together, you’re not going to get the results that you want.
Jeremy:
That’s actually really fascinating because largely my big question is, do you still see the future as this sort of like mesh network of specialist agencies? Or do you think that the AOR is making a comeback, or is it going to be kind of something in between? Because largely when you started it off, I’m like super agreeing, right? Not that I disagree with your end point at all, but it was just interesting because I’ve largely had the same philosophy myself, right. It’s why I only do media buying now, granted I don’t do just media buying for Facebook. A lot of my work is Facebook cause I’ve been doing Facebook ads for nine years, but I … Largely I’ve been white labeling or partnering and, that’s what our agency does. I’m curious if you still think that’s the perspective that is the future.
Peter:
I still think the future is very different to the future that the large AOR, multi no-national conglomerates are moving towards. It’s very different to what they’re in, and I don’t think that model is going to survive the next 10 years. The incentives are all misaligned for them and they don’t have the capability in house. I still think… You can see it, there are some really interesting groups emerging that provide for this kind of new reality. So companies like S4, that’s Martin Sorrell’s new group, they merge companies together, but they’re still kind of independent groups that work together in collaborative environments, but they’re not stuck together in these weird acquisitions where…I don’t know whether you’ve seen inside of these acquisitions that they kind of jammed them together.
Peter:
Hey, you guys need to work together, but you’ve still got different PNLs. One company is doing an earn out, so they still want to keep most of the business.. It’s just that they just don’t work together very well. So I almost see the future is some kind of record label of agencies that can come together and work together and make it easier for large companies to buy. But, you need specialized people to execute efficiently on all of these different types of campaigns and platforms like SEO is very different to Facebook ads. I still see a kind of need for those big deep specialisms, but having more collaboration across the companies that work together.
Jeremy:
That is actually really interesting perspective. To be honest, I haven’t ever worked for like a big holding agency or anything like that. So I don’t have the kind of boots on the ground intel. What you’re describing is a record label, is how I sort of assumed it looked or maybe that’s how they’ve marketed themselves to look but the reality is probably a little bit different. That’s really interesting though, where you see this kind of record label, could you dive into that a little bit more? So you’d have one holding company or, sort of umbrella partnership co-op thing or whatever, and then it would just be specialist under that sort of umbrella.
Peter:
I think there’s a ton of ways of doing it. Even now with Abacus, a big part of our business development right from the start has been, don’t be overly competitive with other agencies, be friendly and collaborative. We’ve got a ton of our business from other agencies and these partnerships that we have. So because we specialize and because we plant our flag in one particular area, that means we can work with PR agencies and SEO agencies and internal marketing teams at large brands because we’re not trying to do everything. We’re just… It makes it very easy to buy from us as well. Even our outlook now Abacus has that we’re specialized and we work with this loose kind of network of other agencies and brands to make sure they get the best value possible.
Peter:
But in other models could be something like a co-op where you have a board of directors or something like that where other agencies plug in. But there’s no… Maybe there’s no contractual obligations or something like that, but it makes it way easier to… Cause one of the things… One of the problems with pitching big brands is they have generally had crazy procurement processes and RFP processes and they have listed companies that can take a long time to get on those lists. So maybe there’s a way for an overall company to get on those lists and bypass procurements, and then make the large cause feel more comfortable because there’s a quality assurance process of below it. Then underneath that you have these agencies that can… that have been vetted and work together really well. Because as well you need, you need agencies and people that collaborate well, some agencies might be really good at one thing, but they also might suck at playing ball with other people. So…
Jeremy:
I know I’ve often said that I’ll take a B plus player over an A plus player that can work with other people because I’ve met a lot of self reclaimed geniuses as it were that are insufferable to work with. Then ultimately the work suffers and the client outcomes suffer because of ego getting in the way unfortunately. That’s really fascinating, so you mentioned that you try and be friendly with other agencies and things like that. Is that how you kind of run your sales process? Is that, you go out and you just network and look for kind of referral work because you specialize in kind of… would it be fair to say, mobile social ad and look to help out with that. I don’t know if that’s a fair characterization, so please correct me if I’m wrong or you running a more traditional sales process?
Peter:
So our sales process has evolved obviously as the agency has grown. So to start with Jeff and I both had a decent network that referred work into us. To start with, we would do a ton of speaking, thought leadership at different conferences where we would get business that way. We would go to, I would say describing them as almost super influencers. So we would build very strong relationships with say VCs and VC portfolios who had need performance marketing for their portfolio investments. So we’d get a lot of work that way and, network with agencies and build referral relationships all of that type of stuff. Then over time we’ve… I think one of the things that most people are told when a building an agency is their founders should do the sales until you’re XYZ size.
Peter:
That may be true, but I think also that holds people back from scaling at a certain point, like you can’t just rely on you or your network or referrals. I think there’s a point of pride with a lot of people where. Hey, we get all of our work from referrals and that’s great, but there’s only a certain point that that can scale to. I mean, if you want to scale beyond that, you’re going to need some of sales process sales team. So what that looks like now for us is we do a ton of inbound marketing SEO at our own ads webinars, especially right now we do a lot of virtual type stuff. Then we have a dedicated sales team, we have one sales person that does outbound sales, very SAS kind of a base. We have email marketing and a funnel set up and they kind of harvest that stuff.
Peter:
Then we have one sales person who’s more traditional agency relationship. Let’s take this client out to the bowl game type person. So we get both of those styles and it works really well. I think it’s one of the fallacies I always hear with agency world like sales . You can’t build a…that kind of sales team at an agency, the SAS type sales function and it’s worked for us. We have a really good sales team that, we can turn the spigot on and ramp up and ramp down kind of as needed. It’s combined with great…A lot of thought leadership and speaking, and master classing and all of that kind of stuff.
Jeremy:
That’s really interesting. I love kind of hearing about that. It sounds like, it’s a little bit of, I don’t want to say like patchwork or anything, but it sounds like it’s a little bit of everything, right. There is no kind of silver bullet as it were. Would that be kind of a fair way of saying it about agency sales processes?
Peter:
We’ve spent a lot of time honing it and we were just lucky we have… We found the right team. If I had to, I don’t think I would bet on myself to continually hire great salespeople. I think we’ve probably hired six sales people and we now have two and they’re awesome, but I don’t think I’ll bet on myself knowing what that looks like to make a hire. It’s a very… It’s a hard role to hire for, I think, and it’s a bit of trial and error. You need at least 90 days to test people out… But it’s in what we have now works really well, so.
Peter:
I would add, one of the things that allowed us to sell into large clients early on, I think was just part of a positioning and strategy. So being a specialist agency that was doing something that, a lot of brands recognize they weren’t getting very well from the current agency relationship allowed us to get into those relationships pretty fast. Whereas if we’d have just, come onto the scene and said “Hey, we’re another full service agency”. It would have been very hard to break through the noise. So I think good positioning and differentiation goes a long way, especially early on where you’ve got to break through.
Jeremy:
Absolutely. Yeah, I think that it’s definitely a lot easier of a sell to come in and say, we do this really well. Is this a need for you versus just let us do everything, right. Because that’s its, it’s a little bit harder of an ask, I think. But yeah, no, that’s, that’s fascinating. So as you’ve sort of grown, I’m curious what, your sort of biggest lessons learned are positive and negative, right? If you could go back in time and say, do more of this in the early days of building Abacus and then stop doing this immediately, what would this, what would those two things be?
Peter:
I would say that the biggest one, and I’m still learning it and I still have trouble with it is saying no to bad clients. It’s as somebody that, one of my jobs is to make sure we’ve got the revenue, and I had my finger on the pulse of the finance of the company. It’s so tempting to take money when it’s presented to you, but a bad client is like a tax on future profits. Its…You need to be so careful and not taking those projects on because it’s like a hamster wheel, you take it on and then you need to hire more and you need more resources and it’s not profitable anyway. So you’re almost kicking the can down the road.
Peter:
So saying no to those kind of clients and projects and having a very structured approach to evaluating new projects where they’re kind of lead scoring system is super helpful because you can take out the overhead of having to think about this every time that kind of mental energy. You don’t need to burn all of that kind of fuel and thinking about this every time you’ve got this system in place where you’re like, okay no, this doesn’t fulfill two out of three of the boxes, so we’re going to take a pass on it.
Jeremy:
Now, that’s something that I still need to learn as well.
Peter:
I think we all do
Jeremy:
It’s one thing that you hit on that I think that people don’t realize, and I realize it and I still fall into the trap over and over, and I probably need to systematize it a little bit better, like what you’re talking about. But it’s not even that you might make no money or whatever, it’s all the time wasted, and mental energy wasted that could be spent finding good longterm clients.
Jeremy:
You know what I mean? That’s what, to me sets it back so hard when you sign like a big demanding, needy, whatever the problem with the client is. Right? It’s really that you’re the good clients that are out there are getting snatched up by somebody else. Right, when you could have been using that time to find them instead.
Peter:
There’s our opportunity cost.
Jeremy:
For sure, the opportunity yeah. Opportunity cost is, is massive. So what would you say is the biggest thing that you would do more of that you wish you would’ve figured out earlier, or rather than… Cause obviously, you say no to more clients, but what positive action would you have taken earlier on if you could do it over?
Peter:
I mean, when we started the agency, we were really keen on building a positive culture. We saw the retention average in the industry is at about 25%, 30% annual. So we wanted to avoid that obviously as a service business, your people are your biggest asset. And we built that in right from the start and it’s worked really well, but I would… Just thinking back kind of just making sure that I’m doubling down on that all the time. To be honest, one thing now with all of this coronavirus kind of stuff would be now were fully remote. We’ve always been flexible work hours, but we’ve always had an office. Now I’m just talking to my co-founder and our management team. I think we could have gone fully remote a lot earlier and that kind of… The coronavirus is forced on our hands.
Peter:
I think that’s the same with a lot of companies. I saw a meme online the other day where it was like, which person in your company instigated digital transformation? Was it the CEO?, Was it the chief strategy officer or was it COVID? For most people, it’s COVID that’s forced people to digitally transform their company. I think we could’ve gone remote a lot earlier and built out a lot of, kind of the efficient automation systems that we have now a lot sooner. I still think there’s an argument to have some kind of communities, small office or something like that, which we probably will do but we don’t need the flashy office downtown. I think we kind of… We thought that’s what clients wanted and needed and maybe some do, but I think we could have chopped that up a lot faster and become remote. I think one of the things that comes out of this current crisis for us is we just want to be the best remote distribution agency we possibly can be.
Jeremy:
That’s amazing. No, I love that. And I guess a question, right. Is, do you necessarily want the clients that need the big flashy office to visit, right? Is that like a good indicator? This has been absolutely fascinating, Peter, I really appreciate your time. I always give my guests a minute or two here at the end of every episode to pitch whatever you want, whether it’s your company or anything else. I will take a second and pitch social distancing, keep away from each other, but stay at home. We’re all in it together, but yeah, go ahead and just take a minute or two and pitch, whatever you like.
Peter:
Cool. Well, I’ll double down on your social distancing and say wear a mask people, even if it’s just a DIY cloth mask, put that on your face. It has been a lot of mixed messaging out there, but I think it’s pretty clear that’s something that helps. I don’t really feel like… I don’t want to pitch anything particular, but what I would say is I’m seeing a lot of kind of interesting content right now from the advertising community speaking a lot about… Or lamenting the fact that storytelling has gone and we’re over relying on data and kind of, we’ve lost that art of… The Steve jobs style inspirational commercial, and kind of lurching back into that. I think, I think that’s a mistake, I think we really need quality storytelling and beautiful ads, but we also need to remember that context has changed and people’s way of consuming content has changed.
Peter:
And although the biggest creative directors in the world may want to still produce 45 seconds commercials that can win a Cannes lion. The truth is most people are consuming content asynchronously on their phone and you don’t have that, six seconds, you may not even have sound. So we need to think about that context and how to tell stories in that context. But also we don’t just want to throw data and tracking out of the window, a well-timed ad with the right story to the right person at the right time is key. So we need a combination of that technical data perspective, performance perspective, and also high quality storytelling. It’s not one or the other. So that’s what I…I like to think that Abacus is kind of working towards or try to try to solve for.
Jeremy:
No, that’s incredible. And I could not agree more honestly, even as somebody that, white labels and is a pure media buyer, right? All marketing is content marketing, right? If you define content broadly enough. And I think that the context in which that content happens can tell a great story and that’s really ultimately what it comes down to. Right, so I completely agree. Well Peter, thank you so much again, really appreciate the…your time. This has been an incredible episode for everybody out there listening, Peter has an incredible perspective and I learned a lot, so take these lessons to heart. So thank you everybody and happy marketing
