Episode 246:

Most agencies have yet to harness the power of data automation tools, and the numbers reveal a concerning reality. 60% of all agencies believe that they make at least 6 costly digital marketing mistakes on a client’s account every week. 33% of agencies have eaten between $5-$10,000 to fix a single campaign mistake. And it doesn’t get better with size. The number of mistakes nearly doubles when a digital agency scales from $1 million to $5 million in fees. And that’s not the most horrifying news that came out of a recent study conducted by Morphio.

If there’s one thing most agencies have plenty of—it is data. If there’s one thing agencies struggle with—it’s data. That’s what intrigues me about data automation tools like Morphio. They define themselves as a check engine light for your digital campaigns. I invited founder (and agency owner) Eric Vardon onto the show to talk to us about this very real challenge. Out of his agency’s necessity, Eric’s team has been developing data automation tools baked with AI and machine learning. Eric’s products are helping agencies plug their leaks and become more profitable using data and automation, and he offers his tools at an affordable price point.

In this episode of Build a Better Agency, Eric shares his journey as a tech entrepreneur and agency owner. He walks us through the lessons he’s learned about refining agency processes, improving team efficiency, and expanding the agency-client relationship using data automation tools. He breaks down the common mistakes agencies make in that arena and explains how we can improve our own systems and processes. Find out how Morphio is working with other small to mid-sized agencies to bring them invaluable AI and machine learning capabilities that don’t break the bank.

A big thank you to our podcast’s presenting sponsor, White Label IQ. They’re an amazing resource for agencies who want to outsource their design, dev or PPC work at wholesale prices. Check out their special offer (10 free hours!) for podcast listeners here.

Data Automation Tools

What You Will Learn in This Episode:

  • How data and reporting have shaped the way clients interact with agencies
  • How Morphio’s data automation tools help agencies plug leaks in the bucket
  • When and how Eric decided to offer his automation tool to other agencies
  • How to leverage AI so you can focus on creativity and client strategy
  • Why you need a check engine light for your agency’s performance and efficiency
  • How you can use Morphio to make your agency more profitable
  • How Morphio has changed reporting, and where it’s headed next
  • Why data monitoring can help you make more informed decisions as an agency leader

The Golden Nuggets:

“What if we could put math behind marketing? If we could do that, clients would be addicted to the results, and it would remove the subjectivity from our process of advertising.” @helpyourhumans Click To Tweet “Humans are best at creativity. We’re best at strategy and understanding data. But there’s going to be significantly more data for us to review. We have to look at tools and automation that are going to help us.” @helpyourhumans Click To Tweet “Data automation tools can actually tell us how to modify, how to change, and how to optimize. Not only do they provide us with protection, they provide our team members with more hours to focus on other projects.” @helpyourhumans Click To Tweet “Once we told our tool what to focus on, it was smart enough to flag any information that fell outside of the norm. Then, our team knew exactly what to prioritize and what to change. Saving hours across 80 clients every day is why we built Morphio.”… Click To Tweet “Clients become so excited by the data at their fingertips that they start to see the value of your agency in a very different way.” @helpyourhumans Click To Tweet

Ways to contact Eric Vardon:

Speaker 1 (00:01):

It doesn’t matter what kind of an agency you run, traditional, digital, media buying, web dev, PR, whatever your focus, you still need to run a profitable business. The Build A Better Agency podcast presented by White Label IQ will show you how to make more money and keep more of what you made. Let us help you build an agency that is sustainable, scalable, and if you want down the road sellable. Bringing his 25 plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McLellan.

Speaker 2 (00:37):

Hey everybody, Drew McLellan here with another episode of Build A Better Agency. Thank you so much for making the time to join us. You’ve got a lot on your plate right now, so I am grateful for your time and attention. Hopefully, as you’re listening to this, you are on the move. You’re out walking the dog or walking a golf course, but getting some fresh air and giving yourself room and space to sort of think about your business in more of a macro way rather than sort of the micro way we’ve all been thinking lately. And just in terms of putting out fire after fire after fire, I think this episode is really going to get you to think big picture. I also think it’s going to deliver a tactical opportunity for you that I believe many of you will find valuable.

Speaker 2 (01:23):

So I think it’s going to be good on several levels. Before I tell you a little bit about our guest, just a couple of quick reminders. As you know, we give away a free seat at a workshop, one of our live or our in-demand workshops every month. And all you have to do is leave a rating or review for the podcast. So wherever you go to download the podcast, head over there and leave us a rating and review and then take a screenshot of it because a lot of times your screen names, SunLover103, it does not tell me who you are or where your agency is. So take a screenshot, send it to me by email to [email protected] and we will put you in the drawing. If you’ve already done it, don’t worry about it. You are in the drawing and we will leave you there until you win.

Speaker 2 (02:14):

So, sooner or later, hopefully, it will be your lucky month. So that would be great if you would do that. Also, I want to make sure you know that we have moved the Build A Better Agency Summit. It was supposed to be in May and obviously, with all this COVID stuff going on, that didn’t seem like a great plan. So we’ve moved it to November 11th and 12th with the AMI family day, being the 10th. So if you’re a member of AMI, you can come in and join us for that half-day and dinner. But for everybody else, the full conference is on the 11th and 12th of November. Same speakers, same sponsors, same opportunity to learn. Obviously, we’re going to be talking a lot about how we, our businesses into 2021, how we take advantage of whatever we’re going through now and how we’ve repositioned ourselves, the new relationships we have with clients, and how we’re going to leverage all of that in 2021.

Speaker 2 (03:13):

So it’s not only going to be a lot of learning and a lot of connecting, which by then I think we’ll all be super hungry for, but it’s also going to be a celebration. We are going to celebrate that we survived this, that our businesses are on solid footing. And for many of you, it may be a celebration of a reinvention or a pivot but we’re going to come together. We’re going to celebrate, we’re going to learn, we’re going to connect, and it’s going to be pretty awesome. So tickets are on sale. Now I know for many of you, this may not be the time to buy a ticket, so don’t feel any pressure. But if you are in a position where you can buy a ticket and you know that you want to partake, honestly, it would be awesome for me if you would buy a ticket.

Speaker 2 (03:54):

Now, as you might imagine, things are a little lean in our world as well, but we’re holding the party no matter what happens. So I hope you decide to join us. All right. Let me tell you a little bit about our guests. So Eric Vardon is really a tech entrepreneur. He has been an agency owner. He still owns a portion of the agency he started many years ago. And that agency is called Arcane. It was a digital marketing and advertising firm and he grew it from $0 million of revenue up to about $50 million in six years. But at the end of the day, Eric found that really what he loved was he loved creating products. And so out of necessity, within his agency, they created something that served them well, and now they’re offering it to other agencies, right?

Speaker 2 (04:48):

And it’s all baked with AI and machine learning. So a lot of you have wanted for a long time to tap into the power of AI and machine learning. But a lot of the tools out there just are not really very affordable for small to mid-sized agencies. So we’re going to hear Eric’s story. We’re going to hear a little bit about the tool, but more importantly, we’re going to hear about what he’s learned in terms of digital advertising spend, the mistakes agencies make because of his own experience inside his agency. And now that they’re working with other agencies with the tool that I’m sure he’s going to tell us all about. So let’s jump right into the conversation and I’ve got a lot of questions for Eric, so let’s get started. Eric, welcome to the podcast.

Speaker 3:

Awesome, Drew, thanks for having me. Appreciate it.

Speaker 2:

So you have sort of an interesting origin story. Uh, you’re sort of a recovering agency owner, although I know you still own a piece of it. So tell everybody sort of the backstory to all of this.

Speaker 3 (05:58):

Yeah, well I won’t tuck it into the long version, but the short version of it is, I wanted to build websites. And so mid-nineties, I took it upon myself, went to school and took graphic design, which, I was processing film and a whole bunch of other interesting things. So I had a fairly traditional background but really wanted to build websites. And so, mid-nineties got my degree and kind of came out and I figured out pretty quickly there weren’t a lot of people building interactive websites and at the time there was a lot of Macromedia flash then. And if you remember the really loud, noisy websites that everybody built with a whole bunch of skip intros? That was me. I was fortunate enough with a few friends at school to build a small interactive shop and we actually did a lot of the execution and production for the big agencies around North America, uh, Saatchi and Saatchi and the Fjords of the world.

Speaker 3 (06:43):

And so it was a really great kind of in-home agency with a bunch of contractors and we were just, you know, young and building cool, cool things and loved the business, but really wanted to do more. So I had a difference of opinion about where I thought the industry was going and I wanted to focus on more full service. So I separated from my partners on that and sold my shares. Fast forward and I started a company called Arcane in 2010 on the heels of the last downturn when clients were looking for more accountability and more results. And my business partner, co-founder John and I said, what if we could put math behind marketing and guarantee your return and show that their investment into marketing actually was just that, an investment into ROI. If we could do that, they would be addicted to two results and hopefully, it would remove the subjectivity from our process of advertising.

Speaker 3 (07:39):

And that’s ultimately what we did for many, many years and grew quite rapidly. So that’s the short version.

Speaker 2:

So in doing that with your agency, you know, you, in the beginning, did it like everybody else, right? You did it by hand with Excel spreadsheets and what kind of results were you measuring? Was it mostly digital advertising?

Speaker 3:

So it was, it was a mix of digital and traditional though. So one of our core, our founding partners, Tony, was a traditional mediation STI guy for many, many years. And so we actually took a majority of his portfolio, which was a hundred percent traditional and just started to get their feet wet into the digital marketing side. So we’d slice off a small percentage starting with five or 10% of their traditional media budget and said, well, because we’re handling over here your flyer program, your direct mail or your outdoor, et cetera, let’s just test and see what happens with the digital side.

Speaker 3 (08:31):

And we would actually marry the two together. So to answer your question, or yes, it was starting with Google ad words or Facebook at the time or whatever the case may be, but we’re also starting to measure the effectiveness of their flyer programs or their flyer drops to their outdoor on the traditional footprint. So it was again in 2008, 9, 10, putting URLs and trying to, you know, to, to correlate what the traffic spikes were doing. We actually got really dirty into the data in terms of when media buys were being purchased and correlating that to spikes and web traffic concessions, correlating that to lead gen. And we started to really report on cost per acquisition across both digital and traditional. And that was the sweet spot that we hit.

Speaker 2:

And was there someone on the team that had sort of that analytical background or did you guys have to just sort of self-teach because as you know, when you go to school for graphic design, yeah, math is not a big part.

Speaker 3 (09:27):

That is true. Today we split that into our offensive defense strategy, which I’m happy to chat about. So we have four partners, in the founding part of Arcane. Brian is on the other side. So Brian and I were really on offense and focused on sales and acquisition and strategy. Then, of course, we would all bleed in, but Tony and John were more on the analytics, the data, John on the development side and managing the acquisition and the reporting and those kinds of things. So we did have a nice mix of talent. And so yes, there were certainly parts of us that were more focused on the analytics side, but it was kind of that culmination together, those four corners that really brought together really interesting growth. And when you’re sitting across at that point, a lot of our clients were either, the leaders or the business owners themselves, to talk solely about what the return is and the data and what’s happening to the Salesforce and the leads that are coming and in the quality.

Speaker 3 (10:21):

It wasn’t about the creative, it wasn’t about which tactics we were using is. Is this working? Yes, it is. What’s happening? And can we do more of it? All of our clients became completely obsessed with the results. It was a fascinating time in the early 2010 sort of timeframe.

Speaker 2:

But at that point in time, I think if I remember from our earlier conversation, you guys were also banging your head against some of the things that every agency bangs their head against mistakes, costly mistakes, things like that. Right?

Speaker 3:

Absolutely. It became prevalent very quickly. Be careful or be cautious about what you wish for because that’s come true and we are compounding with new sales and opportunities. At the same time, our current client base was becoming obsessed with digital and spending more both on traditional and digital, so we have this compound effect all while you’re trying to scale and grow the business.

Speaker 3 (11:12):

So there was leakage in that bucket everywhere from team members not having enough time, there was no HR, there was no process development. We started with John and myself and a couple of partners in basements like the traditional story, you know, fast forward four or five years later, we have a hundred people in four offices and doing acquisitions and just trying to keep up with the new data and new tactics. Yeah, there was spillage, absolutely everywhere. And it became quite unruly to manage all while trying to grow. We’re seeing our revenue and our top line, but our bottom line was actually going in the other direction. That was never something that we intended to happen.

Speaker 2:

So you’re growing at the top line, your profit margins are shrinking for all of the reasons you just said, no process, costly mistakes, team members scrambling too fast. So how did you fix it?

Speaker 3 (12:07):

Yeah, so we do as we do with our other clients. Let’s do some analysis on what’s working, continue to do that, and let’s do some analysis and data dive on what is making our team upset and where these mistakes are coming from, and where’s the leaky bucket ultimately in our margin. So we put our own hats on and actually started to build processes, to bring in HR, to bring in a finance team so that we could actually focus on the business itself. And we found quite quickly that, in terms of the mistakes and the growth and the things that were happening, the complexity was a big one? Again, we’re seeing more clients, the complexity and the business acumen that they needed was taking away from us.

Speaker 3 (12:54):

But our team was growing at the same time. Obviously, we’re managing more media dollars and more volume at the same time. So, at the same time, it was a lot of reporting. At a point in time, after about three or four years into our growth, we’re just analyzing data and we found that our team was not only making mistakes, but they didn’t have enough time to actually execute and change creative, look at the strategy, the content, all of the pieces that we used to really spend a lot of time on and iterating and changing. That’s where our growth came in. And so it wasn’t one thing that would incrementally improve our bottom line. It was really small pieces or small percentages across every part of our business. And I think the main thing that I learned, early on from starting an agency was I always figured that you had to throw new clients and or people to generate revenue or profit.

Speaker 3 (13:47):

And we said, well, where is the automation for an SMB agency like us that we can afford, that was going to help us scale and automate our business? And there really wasn’t a lot. There were many that are at the enterprise level, but we just couldn’t afford them. And so we started to really build our own software and really look at ways to automate our own business. Uh, and it was a really interesting learning time for sure.

Speaker 2:

So let’s talk about that a little bit. Cause I think you’re right. I think there are two ways agencies make money. One is new clients, right? And the other is actually keeping more of the money that they’ve already made. I think when an agency is small, it is all about getting more clients. At a certain point in time, I would argue that it’s probably when an agency hits about 25 or so people, all of a sudden now the mistakes and the inefficiencies start putting holes in the bucket, and no matter how much more on the top the client pours in, if it just keeps running out at the same sort of ratio on the bottom, it’s just sort of, you know, the hamster the wheel.

Speaker 3 (14:51):

I think the biggest light bulb that we had is a consultant came in and he said something that is often overused I guess, but for us, it was something that was new to hear. He’s like, you guys need a check engine light. I like cars, I understand that. He’s like, you guys are still managing this business in a very old fashion. He’s like most of your team, and he looks through our data and he’s working with us and he said, look at where all your hours are going, they’re analyzing data all day long. He’s like, let me guess, when you started the business, you were focused on how to optimize to change the strategy, to further enhance what your clients and customers are looking for. Am I right?

Speaker 3 (15:31):

And we’re like, absolutely. He’s like, well, look at your team. He’s like, you have to build in ways that the information is coming to them, that the data variances are coming to them. And if you do so, you’ll actually probably end up freeing 30, 40, even 50 or more percent of your time. Because now they’re down to actually no time, which the compound effect is they’re too busy, they get stressed, they’re not spending time with clients, they’re not spending time with each other. That was a really kind of big eyeopener to your point.

Speaker 2:

Well, I think that gets to the whole idea. You know, when I talk to agencies, one of the pain points that is consistent across the board is reporting and, and I think it’s a combination of A, how much time it takes, but B, that it is also always looking in the rear view mirror. Right? So it is what happened last month and by the time we’re done analyzing it and making changes based on it, we’ve lost 30 days or more. Right?

Speaker 3 (16:19):

And I think for high-performance agencies and this is now, because of where we’re at in this world, as it’s going to go from the pendulum. Remember what happened in 2008 and ’09, clients started looking for accountability. It’s going to go completely flat line the other way. ROI is an absolute must. It’s flown around a lot and you hear it, but it’s going to become absolutely everything. So not only will digital spend continue to increase, but you’re right, the accountability for sure. I think for reporting perspective, my biggest differentiator in that whole new way to work, and you hit the nail on the head is it’s like bananas, right?

Speaker 3 (17:06):

Data just goes bad so fast. To another point, in terms of our data, we would spend on average 20 hours a month reporting for one client and I think at our peak we had about 80 different clients. So you can imagine, not only are our the team exhausted because by the time they finish the report they actually have to start on next month’s report. They send it to a client, the account manager reviews it, the client actually looks at it three or four days later. The data’s already bad. It means on both sides, nobody’s seeing value. So to me, it’s the mind shift of we must have live data at our access. It’s a very different mind shift in a way to actually have conversations with our clients and say, I’m going to put the emphasis and the onus on you to look at this data and know it.

Speaker 3 (17:51):

So when I’m going to sit in a room with you, once a week or once a month or whatever the cadence is, you want me to sit there and talk about strategies and ways to optimize, tell me what happened that was good and bad. Tell me how we pivoted and changed and affected it and then let me know what we’re going to do next. That’s the value of the agency relationship. Not spending my hard-earned dollars to the agency to spend and make frustrating reports that nobody’s going to look at. That’s the new way to work that I think will probably be the biggest shift for us. But we went through it and you know, dragged the team through the mud and we came out of it the other side. And the refreshing part is that the clients become so excited to have this data at their fingertips that they look at the value of the agency in a very, very different way.

Speaker 2 (18:32):

Yeah. Because now it’s actionable, right? Like it’s here’s what happened yesterday or last week. I can pivot today and put more gasoline on that fire, put less gasoline on that fire because that doesn’t seem to be kindling right now. So it is much more actionable.

Speaker 3:

It’s actionable. And I think the next phase will be, especially with the automation and AI in this now, comfortability. There’s already a shortage of skilled and there’s going to be a change with that, which will be interesting to see as we come out of the situation that we’re in right now, but automation still will be, humans are best at creativity. We’re best at the strategy side. We’re best at understanding and correlating the data, but there’s going to be way more data for us to actually review.

Speaker 3 (19:20):

So again, it’s just the shift of the time and hours that we have. We must look at automation and tools that are going to help us. Oh, they’re going to start to actually tell us how to modify, how to change, and how to optimize. And I think that will be then that next phase, which is hopefully going to provide, you know, more protection but also more time and effort for the team members that we’re paying a lot to keep on our payroll for sure.

Speaker 2:

So for you guys, the solution was, and it makes sense given your background in web dev and development, was this isn’t working, we need to develop a tool, right?

Speaker 3:

Correct. Yeah, and as I sort of mentioned earlier, there wasn’t one glaring area of our business that was saying, okay, this is where the biggest hole in the bucket is.

Speaker 3 (20:04):

It was actually in a combination of many and I think that’s ultimately how we started to build our software. Early on it was a landing page tool so that we could actually deploy landing pages so that we could optimize more quickly for our clients. We built a framework so that we could actually launch and deploy full websites more quickly so that we could turn on campaigns quicker. Ultimately we went through department by department and slowly looked at ways to just incrementally help each department automate parts of their job. And that’s where the software of Morphia really was born at the time.

Speaker 2:

So let’s talk about some of the holes in the bucket that you identified. And then I want to talk a little bit more about the tool and how it solves or plugs those holes. What were some of the, what were some of the places where our revenue, where profit was sort of leaking out of your bucket?

Speaker 3 (20:51):

In our days of rapid scale, the big one was tracking and management of data. So you spend a lot of time going through creative process videos and campaign and building and writing the landing pages and website, all to put money behind a campaign that’s going to be published to go to the traditional funnel, however it looks, keep it simplistic. But generally, there’s some kind of conversion, either lead or the online sales or some sort of webinar download, whatever that conversion is, doesn’t matter. But we’ve found that tracking that attribution, all the way became almost impossible to manage and everything’s last minute with a campaign and something would break.

Speaker 3 (21:44):

It could have been one day or two days. And I remember one of our largest campaigns and we lost about three, four days of data. We didn’t know until the third or fourth day and you can’t recoup that. And so, all of a sudden we have this national campaign and we lost four days of the initial data, which is generally the most key because you’re making all of your future tweaks and decisions for a very seasonal product on this and we couldn’t recoup it. And so, all of a sudden you have an unhappy client, you have a relationship that could be tarnished. We were able to save it, but you have doubt within the relationship. So that’s sort of dead, incorrect broken links or attribution was a big one. I’d say number two was credit card and payment failures, something that often you don’t find until again hours or days later.

Speaker 3 (22:26):

Just sometimes you don’t know. It’s not our mistakes or the client’s or someone billed something extra, they don’t know. All of a sudden you have a campaign that’s paused for even two or three days and you’re looking at a loss of revenue. And then I think another one is ads that are flagged or disapproved was a big one as well. Like all of these things cause uncertainty and doubt in the client/agency relationship and are things that just shouldn’t happen. And where does that usually come from? It’s usually the founder’s or the owner’s pockets and thinking about how much we have to sell to recoup $5,000 or $10,000 in profit is a whole ‘nother ball of wax.

Speaker 2:

Yeah. Those are the conversations you absolutely do not want to have to have with a client.

Speaker 3 (23:09):

Right. Those are not fun phone calls, no.

Speaker 2:

It looks, they don’t understand how complex it is. So it just looks like negligence on our part when we have to have those conversations.

Speaker 3:

It has gotten better. And I think the shift to a younger management workforce that is in the weeds, that understands the tactics, has allowed for some acceptance of this. But we always say there’s optimization, there’s testing, failures can happen, mistakes can’t. The sooner we can catch a failure before they become the mistake, is not only the new norm but then again, the more complexity, the more tactics, the more ads, the more clients, the number of failures will only continue to increase. We need to manage the number of mistakes in the other direction. That’s our biggest advantage as agencies with technology.

Speaker 2:

Yeah. And I know you did some research and you talked to other agencies about the sort of, were the mistakes you were experiencing the same mistakes every other agency was. And one of the statistics that sort of floored me was that 60% of the agencies self-reported that they were identifying, who knows how many, what actually happened. They were identifying more than six mistakes a week, which calculates to over 300 mistakes a year.

Speaker 3 (24:11):

And I think just to confirm for everybody listening that those respondents, 90% of them are the executors. So I think there were only about nine or 10% that were founders or leaders, which means that this is the heart of your team. These are the ones that are, as we know very well, they’re busy, they’re overworked, they’re tired, they’re stressed out. Why? Because this stuff is really hard to do.

Speaker 2:

Right. In many cases, the sequences are huge.

Speaker 3 (25:01):

They’re huge in relationships and you can’t go back. So I think that was a big one for me. I was surprised at that. And as an agency owner, I know how many mistakes we’ve made. And I do separate them between a failure versus a mistake, that that floored me as well. But what I loved about the numbers that came back was, again, it was of all of the mistakes that were listed, the credit card failures, the broken pixels, ad disapprovals, broken tracking, incorrect links, some of the things that I had already addressed, they were all in that 30% range. Which spoke to me and made me feel very good at least for a few minutes to say that’s why we built this thing was because it wasn’t one thing. I don’t have to throw clients and people out of the problem anymore. Maybe I can solve this incrementally. And that made me feel pretty good.

Speaker 2:

Yeah. I, I can’t tell you how many times I’ve had an agency owner call me, just ready to blow a gasket because somebody left a campaign on and you know, racked up $30,000 or $40,000 worth of ad spend that they couldn’t go back and ask the client for. And you know, there are pressure points on both sides of this. There are pressure points on the folks doing the execution because it’s labor-intensive, hard work. And I’m sure the pressure to not make a mistake because they understand the consequences of that mistake is huge. And then on the agency owner side, it literally is, as you said, it is literally coming out of the agency owner’s pocket when a mistake like that happens. And so, instead of a profit margin in double digits, you’re looking at a single-digit profit margin because these mistakes are happening every single day at some level.

Speaker 3 (25:58):

Yeah. And for the agency owners that maybe aren’t as technical or in the weeds, this stuff, again, it’s very, very hard. It’s a rabbit hole of complexity and technology that is changing every single hour, every day. Facebook, Google, our friends at Microsoft, Shopify, you name it, they’re all making updates, improvements, changes so their whole complexity that we have to keep up with. Sometimes it is completely out of our control, but yet you’re right, the stress usually goes on the executors. You go back into the nineties before antivirus was around like we used to take this for granted and now every single PC out there will have some kind of antivirus to make sure that we’re catching things before they destroy our computers, our files, our livelihood. How can we not have the same kind of approach for our most impressive, freshest investment, which now is in marketing leads and sales and in data?

Speaker 2 (27:39):

Yeah. Yeah. So I want to talk a little bit more about the tool that you built, but first, let’s take a quick break and then we’ll come back and talk about the solution that you guys built for yourselves and then how that really pivoted for your whole business model. So, well, that’s what we’ll jump into when we come back. But first, let’s take a quick break. Hey guys, sorry to interrupt the show, but I wanted to tell you about an opportunity that we have created for you that I hope you’re going to be excited about. So as many of you may know, uh, Stephen Woessner and I just finished and published our book called Sell With Authority. It’s available at Amazon and all other good bookstores. But what we’re trying to do, especially because right now we had a big book launch planned, and all of that feels yucky right now given that everyone is thinking about other things. So what we’re doing is instead reaching out to our community, you guys, and making this offer. If you will, go to Amazon and buy a single copy of the book. And then after you read the book, leave a review and then all you have to do is forward me the Amazon receipt for the book or a picture of you holding a book and a copy of the review.

Speaker 2 (28:41):

That would be awesome. Yeah. Then what we’re going to do is we’re going to put you into a drawing for a seat at the Build A Better Agency Summit. So we’re going to give away three seats to the conference that we are having, the Build A Better Agency Summit, and all you have to do is buy the book and leave us a review. Even if you think it sucks, that’s okay. Yeah, make me cry a little, but it’s okay. We’re just trying to generate more reviews on the book because as you know, that affects the algorithm on the book and since we’re kind of dark in terms of promoting it in other ways, we’re just looking for a little help from you. And most importantly, I really do believe, which is why I wrote the book, that you will find it valuable and hopefully inspirational in terms of how to position your agency and become an authority where prospects are actually seeking you out rather than the other way around. So, if you’ll do that, that would be awesome. Again, by the book, review the book, send me proof of both and we will put you in the drawing for a seat

Speaker 2 (29:41):

to the Build A Better Agency Summit.

Speaker 2 (29:43):

All right, let’s get back to the show. All right. I am back with Eric Vardon and we’re talking about some of the struggles his agency had around it’s tracking the work that they were doing for clients, being able to see data and results quickly enough that they could pivot, and also avoiding all of the mistakes that sort of leak profit out of an agency’s pocket. So right before the break, you were sort of leading up to the part of the story, which was you finally created a solution, which is now software as a service tool. So tell us a little bit about the solution and what it did for your business.

Speaker 3 (30:39):

Yeah, so let me tell you through a story. I remember one of our first trial users before our system was kind of automated where you could go on do a free trial and kind of plug and play and follow some videos and do onboarding on your own. But we used to really manage some of our early adopters and it was a fantastic agency owner who plugged in Morphio. I spoke to him about three days after he put in his free trial and he said, Eric, I got to tell you, you just saved me from about a $300,000 mistake. And I’m like, perfect. And this was actually before we got into the whole marketing security and it was part of why these stories actually led to this whole antivirus marketing security kind of sector that we’re in, which I’ll talk about happily. And he said, I just launched a campaign of this huge client. They’re a large multi-franchise. It’s a new account. So I put more fuel on it just to see what would happen. This was on a Thursday. Friday morning he wakes up, he got his anomaly alerts in Slack as well as his email.

Speaker 3 (31:27):

And it says, you have, basically, it flagged him and said, you have a broken tracking problem. So he calls up his dev team going into the weekend, which he normally wouldn’t have done assuming that all things are firing. He’s spending a lot of money on behalf of this client. And so Friday morning calls his dev team and they had messed up the tracking for the campaign. They actually had doubled it and so their data was not correlating and he’s looking at it going, what is this? I have to go into a board meeting with this new client on Monday to report on this successful three-day campaign, which for them is their peak time of the season. He’s like, I was able to, by one o’clock in the afternoon of Friday, fix the issue.

Speaker 3 (32:05):

He’s like, if I didn’t have this tool, it would have been Monday morning. I would have woken up and it would have had a report from my team with nothing in it and I was supposed to go into a board meeting later that day. So that’s one really small example of integrating all of their major stacks and being able to, you don’t have to get into the weeds, but being able to have something in the background that was making sure their digital data and their campaign was leading up to the success that they had hoped It’s just one way that I can tell you in a bit of a story.

Speaker 2:

So what does the tool do? What did the tool do for you and your clients? And we’ll get into how and when you decided to offer the tool to other folks.

Speaker 3 (32:54):

Fair enough. Yeah, so again, just to the major pain points for us as we were getting into it, larger campaigns that were scaling larger clients with more demands. You know, we’re putting out a lot of fires. The thing that the tool did was allow us to automate the process. So we basically, as we would set our KPIs with our clients, let’s in this case say it’s a hundred dollar cost per acquisition. We would tell our software to look at all of the campaigns and make sure that we’re equating on pace to this a hundred dollar acquisition. And if anything would fall outside of that, then flag us, send a Slack, send us an email, send a notification to our team. And so this is the whole representation of a new way to work. Because traditionally they would be logging in every day out of analytics, in and out of Google ads and Facebook, et cetera. And on the fly, remember that client’s cost per acquisition, correlating it, you know?

Speaker 3 (33:36):

And if they didn’t get busy or flagged and pulled in another direction, they were looking at their morning as this sort of over-analysis to ensure that that acquisition cost was being met. And so that’s ultimately what our tool started to do is flag that information. So smart enough to tell it what to focus on and anything that would fall outside of the norm, tell our team so then they would know what to prioritize, what to actually go in and look at and change. And so saving hours every morning across 80 some odd clients was really the correlation of why we did it.

Speaker 2:

And how did it change reporting for you? Because again, as we talked about earlier, that is a huge pain point for agencies. They are not even confident that clients are looking at the reports, Because again, it’s rearview mirror data.

Speaker 2 (34:21):

Yeah. They’re spending weeks of the agency’s staff time to develop the reports. They vacillate between doing the executive summary level report or the deep-dive report. So how did it change reporting? Y

Speaker 3:

I think this is a constant battle, but back to my whole notion of live data. So, we did things in two ways and I can also talk about where we’re taking it now, but it was to provide a different mindset. So we created a shared URL that has all their KPIs in real-time, that they can go back six months, they can see where the budget is tracking, they can see exactly where all their KPIs month over month, in terms of their data flow from start to end. And they could just refresh this URL and every day they would have access to the little black book of what’s going on across their entire platform.

Speaker 3 (35:09):

So we started with that. That was a huge time saver because again, we put the emphasis and the onus on them to look at that data. So we had to reset expectations to say, when we meet with you, we’re not going to look at the previous data. I mean, you were happy to ask any questions, but we’re going to come in and tell you what happened, why, and then how we’re going to improve on it. And then we started to get into offering a weekly report and automated in their inbox every Monday that would say, here’s what happened last week based on the goals that we agreed to and then where our pace was for that week. So that would come into them every Monday morning so they knew what happened and what to expect. And so that was really how we changed the mentality of reporting.

Speaker 3 (35:48):

And we have a whole bunch of obviously new ways and opportunities to take it, but probably the biggest part was don’t ask me or wait for that report to come in my email, that is static. Now you have to look at something and we may have to communicate on what these KPIs are and some of the more core specifics, but once they get a hang of it, now they have access to the data at their fingertips.

Speaker 2:

And did you find, because what I hear from agency owners are that clients don’t read the reports and even if they’ve gone to an off the shelf dashboard or something like that, most clients don’t look at the data or they don’t understand what they’re looking at? Did you guys find that to be true as well? Was there a big education component for you in terms of helping your clients recognize the value of looking and understanding what they were looking at?

Speaker 3 (36:29):

Well I think we tried to synthesize that into, probably I think there’s 10 core KPIs and these are just, you normal business KPIs that if you have a client that doesn’t know what their cost per acquisition should be or what you know, their lead targets will be or et cetera, then that may be a whole different problem. But I think what happens normally with agencies is they’re reporting on all the channel data detail – what happened on Facebook, what happened on Twitter, what happened in Facebook ads. Clients don’t care about that. They want to know how it’s going to affect their bottom line. And that’s definitely the shift, we wanted to create one source of truth that as a business owner, CMO leader would be able to look at it and say, is my cost per acquisition going up, down, so and so forth.

Speaker 3 (37:13):

What is my acquisition goal? What does that cost and how am I trending to it? So it definitely is more of an emphasis on what a business owner, leader manager would see. We know they don’t care about what the Facebook ad spend is. If they want to dig into it, they can. That’s a very small subset, right? It’s built in a way for business leaders to actually ingest where their marketing investment is going and not to look at the specific tactics.

Speaker 2:

I think one of the truths about all of this is that people will look at and care about the data that they’re given. So if the best data they’re given is, here’s what happened on Facebook this week with your ads, then all of a sudden that’s what they care about, but the reality is that’s not what they should care about. They should be caring about leads, lead scoring, cost per acquisition, all of that. But if we have no way to give them that data, then they all of a sudden start nitpicking into the data we do give them.

Speaker 3 (37:54):

Well that that actually represents probably the biggest area of tenseness, I guess whatever the terminology is. But yes. So our beloved and my fellow nerds, we love channel data, but we also fall into, I want to do a little bit better than yesterday, but I want to make sure that I look good. And there’s nothing wrong with that. It’s harder to go up and be confident with a business owner of a $2 million, $5 million, $50 million business and talk about acquisition costs. That is not always as easy to do. We as agency owners maybe a little bit more comfortable about it.

Speaker 3 (38:43):

So we actually have to come together and really understand what those KPIs are. There’s nothing wrong with reporting on channel data and sometimes it actually is really relevant because it does impact everything up and down. But I think there is definitely a separation of accountability with the executors and launching the Facebook campaigns and how that could translate that into a cost per acquisition. Now, that to me is the big shift that tools like ours definitely are focused on KPIs at business leaders, uh, matter. But we know that the executors are there in the day to day. That is definitely something that we’ll have to focus on. I think that’s just the shift of agencies, but we all have to get together and understand the KPIs that we’re reporting to clients.

Speaker 2:

Well, and I’m pretty sure the average CMO is not being asked by the CEO or the board, Hey, tell us how our Facebook ads are going. I mean, so really I think what your tool is doing is it’s equipping the client to have more intelligent and reputation saving conversations inside the organization because they look better when they too can talk about the business KPIs.

Speaker 3 (39:32):

And the other layers for some of us that are large enough to have an accounts team, the accounts team lives in the middle of that. And there’s another layer then of they’re the face of the client. They know what their acquisition targets are, et cetera, but they’re also not channel experts, but they’re not the agency owner. So they’re actually spending a lot of time pulling time and hours from the executing team or the strategy team, the Facebook team, whatever the case may be. And they’re not experts either. And so that provides another layer of issue that we hope our tool can provide is trying to bring all of these and it’s a crazy sort of social change movement on it, but when you actually have all things firing with that, the accounts team is learning why their Facebook spend is going up and down and how did the campaigns affect that, they can then actually translate that to the client.

Speaker 3 (40:36):

There’s another layer of accountability there that I think we will all relish in. It’ll take some time but of course, that’s another challenge that we have faced on the account side too, that we’ve overcome.

Speaker 2:

So how, and I know that I know that the tool has evolved dramatically from when you first developed it, but what was the shift that the execution team, what was the shift in what they were doing to what they were able to do and how did that impact your agency’s bottom line once the tool was implemented internally? Yeah, so I would say that it’s, that answer will differ. When we first started with the idea and when we first built it, we actually grew at the same time and the complexity of the tool change and the needs of the tool changed.

Speaker 3 (41:24):

Yeah, so I would say that it’s, that answer will differ. When we first started with the idea and when we first built it, we actually grew at the same time and the complexity of the tool changed and the needs of the tool changed. But we actually, in its current state, it does serve both small consultant shops with a couple of people that have a great work/life balance that are still in the tactics to small agencies that have, 5, 10, 15 people and then agencies that can soar up to 50 to a hundred. It really does depend. And so there are different ways I would answer it. But I think specifically, to your question, Drew, one of the biggest pieces for us was providing alerts for our team and having a sense in the background that something was keeping an eye on the data alongside them. That’s probably the biggest shift – that mistakes and failures, and again, they can happen in tandem, but now I have something in the background as a bit of a failsafe.

Speaker 3 (42:13):

Whether I go sick or I’m on vacation, or I have a campaign that’s new or a new client that I need to spend more time on, the complexity, the failures, mistakes, the challenges, the new campaigns, the changes, all the things that come with it, we’re able to provide some support to our team. So that’s probably the biggest way that the mentality shifted. We also were wanting to build in some ways that again, like most agencies, we have multiple tools within our stacks. So like SEO for example, we have three or four from AH Refs to SEMrush to Screaming Frog. But there also were things that those tools didn’t allow us to do. So we built in some features that were different and unique so that our team could actually build out their stack and have complementary tools to do certain things that otherwise were really hard to do.

Speaker 3 (42:59):

So it does sort of differ depending on the agency side. But I think the main point is the idea that is something is protecting our digital marketing executors in a way that they didn’t have before. That’s probably the biggest shift. S

Speaker 2:

So what did the conversation look like? So you built this tool for yourselves. It was working. The agency was more profitable. I’m sure it helped you sell and earn new clients because you could show them amazing case studies with real-time results. So when or how did the conversation go, you know what, we’re not busy enough. We have to offer this to other people.

Speaker 3 (43:54):

Yeah. So I think, you know, we, we realized, my, my founders and I, that we are entrepreneurs first. We love building products and we decided in 2017 that we would step aside from the day-to-day operations of the agency itself. So at that point, we had a VP of HR and Human Capital take the reins as CEO. We also had a fantastic Finance VP that took the lead of CLO and that sort of two in the box scenario allowed us to coach them to be the agency owners of the future, to do the things that we couldn’t do to build process. Again, we have an HR person managing, turning into a COO or CEO. And a lot of times people are like, well, why would you do that? Well, think about our most core asset in a service-based business is our people. A young workforce that is, hasn’t worked, in many cases, for anybody before. And so Lindsey with her very long tail in enterprise, very large corporate HR background to come in and say, I’m going to help these people really understand and thrive to a finance person who started to grow within our operations, become a fantastic marketer.

Speaker 3 (44:49):

So that allowed us to have time to do what we do best, what we love, which is build product and really, make a mess and hopefully get out of the way and let someone else kind of clean it up. But really, ultimately, we love building tools. But to me, I have this being agency world. For a long time, I became sort of obsessed with the conversations that I had with other agency owners going through all of the things that we dealt with when we were 10 people and why we started to build this tool when we were 80 to a hundred people. And then the different nuances and changes that the features of the tool will allow us to do there and everything in between. That became my passion, to go out and help other agencies solve those issues because I really do think we need a new way to work.

Speaker 3 (45:31):

It’s a fantastic, fun, creative, unbelievable business that everybody needs. Why can’t it be more profitable and why can’t it be more automated so that we can actually do more of what we love?

Speaker 2:

I think some agency owners, bristle at the idea of automation. I think we take great pride in putting our fingerprints on our work. So talk a little bit about where automation plays in all of this and where the human capital plays in this because I know for you guys it’s not about automating the whole thing. It’s not a set it and forget it tool. It’s really sort of the marrying of the best of both.

Speaker 3 (46:20):

First and foremost humans, there are just certain things we are best at. We can’t compute as quickly and as effectively as machines can with massive amounts of data. Nobody is going to argue that. So there’s a fight as to how do I get there and how do I consume it and understand machine learning or AI or what does this all mean? Every agency owner needs to at least have some comfortability. At the end of the day, it’s just taking data and making decisions with it more quickly. That’s profit, right? I think there’s the scariness of the robots are going to take over and all these kinds of things. I look at as to say if I could free up my most expensive, the team that I love, that I’ve hired, that I’ve brought in that I know doesn’t want to sit there and micro tweak budgets or campaign ads and copy all day long. Would they rather be more enjoyable in front of a client with strategy or time on strategy or time on execution?

Speaker 3 (47:03):

Absolutely. Hours are finite. We only have so many of them and every agency owner that’s listening to this is probably heard, I’m too busy. I don’t have enough time. I’m in meetings all the time. I don’t have time to work. I don’t have time. I don’t have time. We have no other options and it’s only going to get worse. There’s only going to be more accountability. There’s only going to be more budgets swing over to digital. There’s only going to be more complexity and it’s all gonna happen at the same time. It’s only going to get worse. So the only reason I got into this notion of accountability like you said, is I’m a graphic designer by trade. I love strategy. Now, I am terrible with numbers and I’m not allowed to go on the defensive team. I failed grade 11 math, not once but twice.

Speaker 3 (47:44):

And I joke about it all the time. I said it to a room full of accountants like a couple of weeks ago. They thought it was funny. And now I’m leading this AI team, but I’ve done things to slowly get out of the subjective world of creative and I always use this analogy, I’m rambling a bit. But you bring a plumber into your home to fix your toilet. You don’t tell them how to do it. But in our business, it’s so subjective that I was frustrated with why was somebody telling me how to run or change or create a campaign? Just let the data work and if it doesn’t, let’s change it. So to me, when we employ automation data and machine learning, we can actually enable more creativity. We can enable humans to do what we do best, which is to be spontaneous and fun, and creative in an exercise.

Speaker 3 (48:29):

So I think the outcome of all of this is actually going to be more time for creative and more accountability and hopefully, more agencies will be more focused on the value proposition that we bring.

Speaker 2:

So, we’re recording this on April 10th and I find that as I’m recording podcasts during COVID, I sort of have to timestamp them, right? So I’m sure there are a lot of agency owners today who are like, you know what, I would love to shift from, a service model to a product model and do all of those things. So I want you to talk about the tool, but before we get into that, I just want you to talk about sort of what’s life like and how is it different for you now that you’re not day to day in the agency as much anymore and now that you’re really on the product side. What has been the shift for you around that?

Speaker 3 (49:20):

We started it out in the service business to build product. This is what we always wanted to do. We just so happened to do so in a service-based business like marketing. And then we quickly realized we needed to shift the service of agency into agency and product. And I think now we’re all going through that. And I think to your point is more than ever we have time, a little bit of freedom. Yes, there’s more stress and it’s harder to close leads and all those things that come with it. But also, all of our clients are going through the same thing. So yes, agency owners are going to be forced to have different conversations with different terminology, with different strategies. I don’t think we have a choice. We’re all going to be forced into being half product, whatever that percentage is, half product, half service.

Speaker 3 (50:10):

Some of us may be comfortable with more, some may be comfortable with less, but there aren’t going to be many clients that don’t want accountability and ROI from anything that we’re producing. The days of flyer programs or creative posters only or those kinds of things, they’re going to go away. I really do believe that and so however each of us that are listening lives within that, that balance is completely up to everybody, but there’s going to be a shift. You’re going to need to know more things than you have before. You’re going to need to know growth hacking. You’re going to need to know and be comfortable with some sort of automation machine learning. Be careful what you invest in. Make sure they are proven technology, make sure they have LinkedIn and backgrounds and they have a team because there will be a lot of smoke and mirrors.

Speaker 3 (50:57):

But we are going to have to adapt a 100% yeah.

Speaker 2:

So now tell us a little bit about the tool because now you are offering the tool. So I’m assuming at some point in time you went this works pretty well. I bet other agencies would like to have this too and decided to shift to now offering the tool as a product. What is an agency looking for and what does this tool do for them and how do they learn more about it? As we’re sort of wrapping up our conversation, I’m sure there are a lot of agency owners and leaders listening to this conversation saying I want all this stuff he’s talking about, I want to make fewer mistakes. I want to plug the holes in the bucket. How do I get to this tool? And you guys have a very unique philosophy. Early, early on in our conversation today, you said, you went looking for a tool like this and what you found was there were tools that did some of the things that you wanted them to do, but they weren’t affordable for a small agency.

Speaker 3 (51:45):

Yeah, it was very frustrating. And I remember that conversation with John and that’s ultimately why we built it. But to answer your question, you can always go to morphio.ai and kind of do some digging. But ultimately it is a new way to work. I think as agencies getting into this, this whole check engine light is a good little analogy. We used to check our spark plugs, right?

Speaker 3 (52:28):

We used to kick the tires before we’d get in our car and go for a drive. And now we get in and it tells us if our oil is low or the tire pressure or whatever the case may be. I still think a majority of us need to just at least put that mindset on. That’s the biggest thing to take away for me is I need to just have a different way to work. I need to free up my time, the time for my people. What the tool does, I won’t get into all the nerdiness of it, but you’re right an affordable tool. You can start out as a small agency with three clients or three accounts for $39 bucks a month. It’s not expensive. It’s meant to allow you to not only have something that you can afford, but we want our clients and customers to make money from our platform if they can and many do.

Speaker 3 (53:10):

Not only are they saving time on reporting, but there are also lots of features. Reporting is a big pain point for sure. Allowing access for your clients to log in or to preview their data so that the emphasis is on them is part of the new way to work, but we also have many that are charging for that as well and so they’re saving time and hours. They’re providing more value. The client’s happy to pay for it because they have this access that they have that they didn’t have before. That’s probably the other big takeaway of where we think AI can really help.

Speaker 2:

So, this has been fascinating.  appreciate you coming on and sort of talking about the journey. I know, I know there, I know Morphio’s birth came out of a lot of pain points for you with clients and I appreciate your candor around that. If folks want to learn more about it, I know you gave the URL, so we’ll include that in the show notes. If folks want to reach out to you and have a conversation with you, what’s the way for them to do that?

Speaker 3 (53:55):

Yeah, absolutely. Well, LinkedIn, you can just look up Eric Vardon.AI. Happy to talk at any point in time. There are also webinars that are recorded on our website too. If you really want to just pull up the webinar and learn about the why, happy for you to do that too?

Speaker 2:

Yeah. We’ll include that link as well. And in the show notes. Any last thoughts for agency owners because you’re talking to agency owners like I am every single day. So as you look in your crystal ball and as agency owners are, all across the world, are strategizing how to come out of COVID 19, strong on financials, a good footing, thoughts? What are you seeing agency owners thinking about doing, uh, or recommendations you have about how we can come out of the gate big, bad and strong when all of this sort of passes by us.

Speaker 3 (54:41):

I’m optimistic that over the course of the next few weeks we’ll catch this quick enough that it’ll actually be more of a boom and we’ll see the economies spike back up. That’s my hope and I think that’s what will happen. I can tell you from the data already, that the adoption of digital across a majority of brands, whether they’re essential or not, the conversations I’m having with agency owners, and the calls that are getting around, I need to hyper hyperdrive my digital strategy.

Speaker 3 (55:45):

There will be an influx into our business and accountability and adoption of digital and online like that we’ve never seen before that will happen. It’s not even a guess or a storytale or a fortune. It is happening already and we’re seeing that in the data. So let’s get ready for it. This means now is the only time we have. We have time to talk with our team and look at processes and test new tools and try new things. So imagine your business skyrocketing and hopefully gaining more businesses. They’re going to be different conversations, which also we have to prepare for. The more time we can spend now getting ahead of it and talking with our clients, preparing them, learning and educating the agency owners

Speaker 2 (56:24):

that are listening to this, that’s where they’re spending the majority of their time. Those are the ones that are going to thrive and succeed. But it’s going to take some learning and some testing and trying new things. So happy to help anybody, chat anytime. Yeah.

Speaker 2:

Awesome. Thanks for being on the show. Thanks for sharing your story and I appreciate everything that you had to teach us today, so thank you.

Speaker 3:

Thank you, Drew. Appreciate it.

Speaker 2:

All, right guys, this wraps up another episode of Build A Better Agency. I will be back next week with another guest. A huge shout out to our friends at White Label IQ, as our presenting sponsor, they not only help us make sure that we can put the show on but more importantly they help a lot of agencies with white label dev design and PPC.

Speaker 2 (57:10):

Great people. I’ve known them for probably two decades now. Good, good people who take good care of their clients. And if you want to check them out and learn more about what they do, head over to white label iq.com/ami because as I’ve told you before, they have a special deal there. Just for you. Just a reminder, we have moved the Build A Better Agency Summit. It was supposed to be in May. We are now scheduled for November 11th and 12th. Same great speakers, same great sponsors, same great opportunity to network and connect. But now it is also going to be a huge celebration. A party that acknowledges our survival, our thriving through the crisis, and looking at new opportunities and new ways to do business. So we’d love to have you join us. You can go over to the Agency Management Institute website and register today.

Speaker 2 (58:10):

We have about, I would say, 75 tickets left. We would love to have you join us in November and I hope to see many of you there. Alright, I’ll be back next week with another guest who will help you think a little differently about the business. In the meantime, you know how to track me down. I’m [email protected] and I will see you next week. Thanks.

Speaker 1:

That’s a wrap for this week’s episode of Build A Better Agency. Visit agencymanagementinstitute.com to check out our workshops, coaching packages, and all the other ways we serve agencies just like yours. Thanks for listening.