You and your business partners have probably put in an enormous amount of time and effort into building your website or app. And utilizing good old-fashioned hard work, you may have accomplished a lot with minimal expenses.
So the first thing to understand here is that even though we’d all like to see the project go viral, the reality of the situation is that it will take a while to build up a user base. So if you are looking to build this user base with online marketing there will be costs associated with this.
And while the holy grail of marketing is when users start to share your application or service with their friends – reaching a mystical critical mass where ‘the people’ end up marketing the app for you – the fact of the matter is that you’ll need to work hard (and spend money) to get the first generation of users in your door.
So what does that cost?
Let’s just break it down simply. Here is a list of typical services that digital marketing agencies charge for:
So keep in mind that there are different ways that an agency will get paid so it’s important to choose the right team to ensure that your spend creates a strong ROI. No one wants to spend money for the sake of spending; however, when you select the right agency (one that is well aligned with your goals) you will benefit greatly in the long run. Aside from their hourly or project rates, if there is advertising involved the agency will typically charge either a percentage of your advertising spend (plus any consulting or creative services they provide) or offer a monthly retainer.
It will help both parties if clear objectives are laid out and there is a solid understanding of what needs to be done, what will be charged, and the overall goals of the project. Maintaining focus on key objectives and measuring this performance will allow both sides to determine how the campaign is performing and make ongoing adjustments to the campaign.
Some start-up clients want to offer a ‘piece of the pie’ – or the agency’s work in exchange for profit share. The agency may consider this if they think you are the next Facebook, but in most cases the firm you are speaking with have already been down this road before and will not be open to this scenario. Don’t be discouraged however when they look at your product objectively. They may not be jumping up and down screaming when you ‘reveal’ your product to them but if you have a good product and develop a solid relationship with the agency they will want to perform for you and make you come back for more.
Though you’ve poured your heart and soul into this project, it will come down to business when working with the advertising firm. They naturally will need to turn a profit and the ultimate goal is a win-win situation for both client and agency. There is another payment scenario referred to as, ‘Pay per Performance’, but that is a topic that goes beyond this blog post.
Most companies will want to know whether the agency has ‘worked within their industry before?’ – and are concerned with how much experience the agency within this industry. Fair enough, but the agency will tend to view this from a different angle. Conversely, they agency will want to know if the company has worked with a marketing firm before and whether they have experience in this regard. This is equally as important to the agency.
The client knows that if the agency is familiar with their industry they won’t have to explain how things work and that this inside knowledge will help them be more effective when reaching out to prospective customers. This is a logical mindset, no doubt. But digital agencies feel that whether they are promoting a person, product, service or idea, the fundamentals of marketing remain the same. So to the agency, the idea and practices involved when promoting a financial product is very similar to, say a clothing line. The important part is knowing who to reach out to (the customer) and getting them to either purchase a product or fill out an interest form. Both sides are correct.
Education goes both ways.
The client needs to bring their expertise to the table as it pertains to their industry while the agency brings their specific knowledge and experience. When these two experiences are efficiently married, good things happen. It is important that both sides defer to the other when it comes to their specific body of knowledge.
Oftentimes, the client is seeking an agency after they’ve already built their site or application. After much work, they realize that they need traffic and users. Yet, the client is very hesitant to spend advertising dollars when they don’t know what the return will be. This mindset is perfectly understandable, but it won’t necessarily fly within the advertising world.
The first thing to understand here is that the process of driving traffic, leads and conversions is not a linear process. Think of an Internet advertising and marketing strategy as a fluid and dynamic game that changes constantly. The ability to make adjustments during the campaign is crucial. As the agency moves forward, the results will tend to get better over time, building and creating success. The company hiring the agency needs to understand that traction could take a few months. For example, Facebook advertising could be very effective, or not. PPC could yield positive results while display advertising falls flat (or vise versa).
It is during this period of time where the company (and agency) becomes more familiar with the target demographic, the competition, what it will cost to get the traffic and most importantly, how much it will take to convert the traffic. This takes time to understand and is typically why agencies will offer a test campaign.
The beauty of online advertising is that in many cases you can turn it on or off at any time. This is both a blessing and a curse. Turn it off too soon and you won’t have the data needed to make adjustments, learn patterns or tweak the campaign. So if the company is spending $xxxxx dollars the first month and bows out because of a mediocre performance in the first month, they could be missing out considerably on a natural rise in performance from fine-tuning that the agency can provide.
Understanding consumer behavior within a given market takes time and this is what we refer to as an absorption process for both the client and agency. Necessary adjustments, testing (a/b) and ability to course-correct throughout a campaign is crucial to performance. This means, that the client will need to be patient and watch closely for improving results even though they may not see the ROI they are looking for the first month. This is why test campaigns are set up to monitor performance so the client doesn’t feel locked in to a long term contract.
If the company is expecting to sell tens or hundreds of thousands of dollars worth of product each month, a clear understanding and realistic ROI will need to be established. In other words, if you are trying to sell $30k of product each month, you may want to reconsider that budget of $1000/month you’ve been thinking about.
The project requirements, direction and scope will change over time. You can count on that. With this comes fluctuation in what you will need to spend to get the product out the door and market it. It can be difficult for an agency to forecast expenses until they have a clear understanding of what the finished product will be, especially if we are involved in the creative or development process.
Agencies will often field questions like, “We have a website and an iPad app that we want to build. How much will this cost?”. The agency then asks the client for a project overview document or detailed outline and they are told that nothing is on paper yet.
Do take the time to put your ideas down on paper even if they are in a bullet point format.
Not having any documentation or plan in writing is a red flag for an agency because it tells them that the client isn’t yet ready to hire an agency. It is important that the client has a clear understanding of who the app is for, how it will be built, the value that it brings to the consumer, the target market, how to get the user to keep coming back, the competition..etc. The agency can certainly provide consulting services as well to help create this project game plan, but it is important that some general information is provided to help the agency familiarize themselves with the project.
If the user needs instructions on how to use your app or website, it may need to be rebuilt. And while the site and or application doesn’t need to win any design awards, it needs to be intuitive and easy on the eyes. Design is way too often overlooked – cast off as being an unnecessary ‘bells and whistle’ approach to a good app.
Handing a poorly designed website or product off to an agency and then asking them to advertise and market it will put the agency in a bad position. They may be reluctant to tell the client that it needs to be redesigned. And even if they do, the client will simply think that they are trying to add $ to the project.
Beautiful, usable or both?
MySpace had the social networking world at its finger tips, and yet it was an utter mess from the start (both design and usability) which played a key role in its demise. Facebook on the other hand isn’t exactly beautifu, but it is usable. And Apple products?…well they seem to get it right all of the time. Beauty + Design + Usability = Apple products.
It’s not that a website or app has to be beautiful to be usable, but if it lacks in design and usability then it will be very challenging to keep people using it – even if we’ve gotten them to install it or try it out. This is an all-to-common scenario for businesses and start-ups that are entering into a new arena. They may have a good product and a market that has a need for said product, but they can’t get people to use and adopt it. And this is exactly the point where engineers (albeit reluctantly) must hand off their product to designers and usability experts.
Underneath the face of the application there are two very important attributes to design. They are User Interface (or GUI) as well as the User Experience (UX) – both of which are close in relationship to design. To an agency, the lines between design, development and user experience are very narrow. All must be working harmoniously together. Agencies will expect this and hence their push towards a good design. Remember the point above though, if you ask a marketing agency to advertise a poorly designed product it can make them look like the bad guys when they come back and suggest that you should re-think the structure, layout or look and feel of the app. So just remember, the agency wants the product to do well. Be sure and let them have their say.
This is probably the most common of all oversights that we see. Despite having seen the movie the ‘The Social Network’ and realizing the vast potential of the web, you’ll need to work hard to get users unless you have a lot of money to throw at this. Furthermore, you’ll need users that ‘continue’ to use your application. So you may want to devote some time to this strategy before you spend a lot of money building the app.
Outside of getting users to ‘try’ your app, the toughest part of all comes next. You’ll need them to *adopt* the service, application or tool that you have built. Having lots of initial users are great, but until they use your product on a regular basis and start telling their friends about it can be tough going and many months of work will be needed. It can take up to two years or more to acquire enough users to gain steam. Don’t let this discourage you – it’s just that it takes some time.
