Digital Marketing Services. Sales and Profit Management. INLAND Press Foundation
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1 Digital Marketing Services Sales and Profit Management INLAND Press Foundation
2 Digital Agency
3 Agenda 1. What is the Digital Agency? 2. Who cares? 3. A Starting Point 4. An Engine 5. The Model 6. Bundle 7. Thank you
4 What is the Digital Agency?
5 Some examples
6 Who cares?
7 Ad-agency employment is at its highest level since 2001, agency stocks have hit all-time highs and U.S. ad spending this year is forecast to grow at its fastest clip since It's a good time to be in the agency game -- as long as you're connected to digital...
8 Digital advertising at the local level will grow, by our estimate, 42% this year. At that rate it would account for $2 out of every $5 spent by local advertisers.
9 Where do we start?
10 A Starting Point
11 A Starting Point
12 A Starting Point Simply. PLATFORMS
13 A Starting Point Simply. PLATFORMS DESKTOP
14 A Starting Point Simply. PLATFORMS DESKTOP US Programmatic Ad Spending to exceed $14B in 2015 and $20B in 2016.
15 A Starting Point Simply. PLATFORMS DESKTOP MOBILE
16 A Starting Point Simply. PLATFORMS DESKTOP MOBILE Mobile ad spending forecasted to exceed desktop ad spending by end of 2015.
17 A Starting Point Simply. PLATFORMS DESKTOP MOBILE VIDEO
18 A Starting Point Simply. PLATFORMS DESKTOP MOBILE VIDEO 300 hours of video uploaded per minute in 2014.
19 A Starting Point Simply. PLATFORMS DESKTOP MOBILE VIDEO SOCIAL
20 A Starting Point Simply. PLATFORMS DESKTOP MOBILE VIDEO SOCIAL $8 billion in Social revenue in 2014 forecasted to double by 2018.
21 A Starting Point Simply. PLATFORMS DESKTOP MOBILE VIDEO SOCIAL SEARCH
22 A Starting Point Simply. PLATFORMS DESKTOP MOBILE VIDEO SOCIAL SEARCH 155% lift in search activity following a banner ad and 59% increase in conversions when a search followed a banner impression.
23 A Starting Point Simply. PLATFORMS DESKTOP MOBILE VIDEO SOCIAL SEARCH WEB DEVELOPMENT
24 A Starting Point Simply. PLATFORMS DESKTOP MOBILE VIDEO SOCIAL SEARCH WEB DEVELOPMENT Over half of small businesses still don t have a website.
25 We have the parts
26 Are you a mechanic?
27 Are you an ad technology expert?
28 The goal
29
30
31 A Complete Campaign: Agency Model Overview You can provide campaign planning and management expertise that leverages data, consumer purchasing habits, purchasing windows and buying funnel to establish consistent communication throughout the purchasing journey. TARGETING RETARGETING GEOGRAPHIC Awareness CONTEXTUAL DEMOGRAPHIC BEHAVIORAL IP TARGETING Interest Intent PPC Purchase SEARCH RETARGETING PLATFORMS DESKTOP MOBILE VIDEO SOCIAL SEARCH
32 Consistent Presence: Client Value P1 P2 P3 P4 Window of Opportunity Time Consumer Shopping Habits Traditional Marketing Agency Digital
33 Execution Models: Possibly Agency Models Do it yourself White Label Blend (Do it Yourself / White Label Staffing: Requires hiring operations, technical support and supporting digital sales specialists Support of brand: Solution is owned and operated in full support of company brand Yield: Eventual higher margins and better yield Coverage: Challenge to grow revenue to a level that allows for scalable team Overhead: Expensive start cost from a personnel and technology perspective, 12 month payback period Support: Difficult to support reporting, retention and customer service Limitations: Very difficult to find qualified talent, slow go to market Staffing: Very little to zero staff change or additions required Support of brand: Solution should be fully white label and supportive of company brand Yield: Lower margins but immediate revenue and contribution to bottom line Coverage: Very little risk as it s white label and typically comes with dedicated support / account management Overhead: Much less expensive sales channel and support Support: Customer service, automated reporting, dashboard and analytics Limitations: Not totally accretive to the company s valuation Staffing: Requires hiring qualified managers and leaders to orchestrate marriage between teams Support of brand: Fully supportive of local brand and can be converted to completely owned and operated Yield: Stronger margins and immediate bottom line impact Coverage: Perfect marriage allows company to scale internal team slowly Overhead: Balanced overhead and immediate margin contribution Support: Customer service, automated reporting and seamless representation Limitations: Lower margin then full white label but can be converted to O&O only Example Companies and Revenue Model Deployments Possible Providers Possible Providers
34 Execution Models: White Label White Label Staffing: Very little to zero staff change or additions required Support of brand: Solution should be fully white label and supportive of company brand Yield: Lower margins but immediate revenue and contribution to bottom line Coverage: Very little risk as it s white label and typically comes with dedicated support / account management Overhead: Much less expensive sales channel and support Support: Customer service, automated reporting, dashboard and analytics Limitations: Not totally accretive to the company s valuation Possible Providers
35 Execution Models: White Label White Label Staffing: Very little to zero staff change or additions required Support of brand: Solution should be fully white label and supportive of company brand Yield: Lower margins but immediate revenue and contribution to bottom line Coverage: Very little risk as it s white label and typically comes with dedicated support / account management Overhead: Much less expensive sales channel and support Support: Customer service, automated reporting, dashboard and analytics Limitations: Not totally accretive to the company s valuation Goals Customer: Provide a campaign that delivers results for local advertisers Company: Drive profitable revenue and gain market share Sales Team: Train, coach, empower and deliver a strategy that makes the sales team excited to work at your company Operations: Seamless integration that doesn t add more to an already taxed team Possible Providers
36 Execution Models: White Label White Label Staffing: Very little to zero staff change or additions required Support of brand: Solution should be fully white label and supportive of company brand Yield: Lower margins but immediate revenue and contribution to bottom line Coverage: Very little risk as it s white label and typically comes with dedicated support / account management Overhead: Much less expensive sales channel and support Support: Customer service, automated reporting, dashboard and analytics Limitations: Not totally accretive to the company s valuation Goals Customer: Provide a campaign that delivers results for local advertisers Company: Drive profitable revenue and gain market share Sales Team: Train, coach, empower and deliver a strategy that makes the sales team excited to work at your company Operations: Seamless integration that doesn t add more to an already taxed team Strategy Bundle: The right bundle delivers advertiser results and company profitability Sales Model: Sell an advertiser something they want to buy White Label: Partner with a company that provides full white label services and helps you build equity in your brand Possible Providers
37 Bundle
38 Bundle
39 Bundle 100%
40 Bundle
41 Bundle Bucket Estimated COG % Gross Margin Display 38% 62% Mobile 38% 62% 70% 30% Video 65% 35% Social 65% 35% SEM 90% 10% SEO 40% 60% 100% Services / Web Dev 50% 50% OL Dir / OL Other 50% 50%
42 Revenue Breakout: AdCellerant s recommendation is to refocus the sales effort based on the new allocations and incent the sales team to achieve these numbers instead of focusing on their current mix. The refocus will increase gross profit by $1.167MM and gross margin % by 9%. Revenue Breakout Cont. Current Allocation Bucket Revenue Estimated Estimated COG Estimated Gross % Gross 19% Display $2,418,550 COG 38% $919,049 Margin $1,499,501 Margin 62% 8% Mobile $1,020,991 38% $387,977 $633,015 62% 18% $2,266,498 70% $1,586,549 $679,949 30% 4% Video $516,595 65% $335,787 $180,808 35% 2% Social $313,145 65% $203,544 $109,601 35% 17% SEM $2,252,597 90% $2,027,337 $225,260 10% 4% SEO $491,481 40% $196,592 $294,888 60% 2% ATE / WD $226,066 50% $113,033 $113,033 50% 27% OLD / OLO $3,436,587 50% $1,718,294 $1,718,294 50% $12,942,511 58% $7,488,162 $5,454,349 42% Bucket New Allocation Variance to Additional Margin Display 19% Current 0% Contribution$25, Mobile 19% 11% $891, % -10% $(369,329.10) Video 1% -3% $(135,509.63) Social 1% -1% $(64,302.09) SEM 8% -9% $(121,719.62) SEO 17% 13% $1,025, ATE / WD 7% 5% $339, OLD / OLO 20% -7% $(424,042.48) 100% $1,167, % Gross Margin 51%
43 We have added over $178K/mo in programmatic and over $675K/mo in Agency Services Scott Tobias, CEO Voice Media Group
44 By incorporating Programmatic and an Agency Model, we have consistently doubled digital revenue period over period Matthew Chamberlin, National Director of Digital Brand Strategies
45 Case Study: Major Print Media Company - Blend Total $'s in Pipeline Summary 1 st 6 months 1,080 Proposals Presented 23.4% Closing Rate Avg. Deal Size = $1,600/mo (5 Mo Avg. Sale) $6,670,063 Revenue in Pipeline $1,000,000 $750,000 $500,000 $250,000 Total $'s Sold $0 Avg. Deal Size Jan- 15 Mar- 15 May- 15 Jul- 15 Sept- 15 Nov- 15,000 $2,200,000 $1,650,000 $1,100,000 $550 $0 Jan- 15 Mar- 15 May- 15 Jul- 15 Sept- 15 Nov- 15 $0 Jan- 15 Mar- 15 May- 15 Jul- 15 Sept- 15 Nov- 15
46 What to look for in a partner Premium inventory Performance guarantee A partner who provides proposals on all sales opportunities Free training Fully white label Sales support and in market 4 legged sales calls Sales material Training material Dashboard reporting, conversion tracking, imps, clicks, view through
47 Thank you Denver, CO
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