You are not alone. The vast majority of agencies are not worthy of investment. Would you invest in your competitors? Probably not.
OK, that’s them. What about you? Let’s solve this because a low-value agency to a prospective investor or buyer is a low-value agency to a prospective client. You are not alone if you are a me-too low-value agency. Unfortunately, it comes with the territory of the 2015 ad agency business model. The way out is to be different. Think you can’t do that?
Attract high-margin clients. These are clients that do not need to be mega pitched and really want to love your expertise.
Are more efficient than your project-based approach
Are trully category specific. This is G5’s laser-sharp pitch: “G5 simplifies digital marketing by delivering best-in-class sites, search, and social for Apartments, Self Storage, and Senior Living properties.”
Are unique in a world of me-too agencies.
Leverage the power of digital marketing tech to help client’s grow the agency’s bottom line.
And… increase agency valuations. You do want to sell someday, right?
Way back in 2013 you had to take my word for it. Not anymore. I was right. This kind of agency attracts clients and investment.
From the Portland Business Journal:
Digital marketing firm G5 (yes, an advertising agency) has raised $76 million from a private equity firm.
The figure is the largest Oregon investment round this year. According to investment research firm PitchBook, the next highest round was $22 million for the New York and Portland-based biotech firm Schrödinger. Urban Airship raised $21 million and Jama Software raised $20 million.
The Bend-based company offers a digital marketing platform for the apartment, self storage and senior living market segments. Peak Equity Partners, which is taking a majority stake in the company, led the round. CEO Dan Hobin declined to name other investors in the deal.
Here is a bit from the press release:
BEND, Ore. (August 12, 2015) – G5, the leader in maximizing digital marketing effectiveness for the property management sector, today announced the closing of a $76 million investment led by Radnor, Pa. based Peak Equity Partners, a private equity firm focused on the enterprise software market. The investment enables G5 to build on its ten year history of growth and innovation by accelerating feature development of the G5 Marketing Cloud – the most innovative, scalable, and up-to-date digital marketing platform in the property management sector.
From my 2013 blog post:
G5. A Little Digital Agency That Kicks Butt
When the digital agency G5 was launched in Bend Oregon in 2005 (my agency Citrus had offices in Bend and Portland), I wondered if their templated / digital / SEO oriented business model was going to succeed. As you can see, it did.
G5 is, if anything, a highly focused agency. They chose not to be one of the thousands of “full-service” agencies that are designed to meet virtually any client’s needs and ultimately wind up with a somewhat mushy sales proposition and inefficient business model.
G5 provides software and services directly to the large national property management sector which includes multifamily, senior living, self-storage and student housing. They call their service Digital Experience Management (DXM) and they offer an audacious promise: they promise that they will deliver client properties “within the first five organic SERP listings on Google.” In the active property management category, having a high SERP is a promise that can’t be refused.
G5 works it. In addition to their original SEO service, G5 now offers suites of services that include a Discovery Suite (SEO / SEM): Reputation Suite, Conversion Suite (websites, lead tracking, applicant screening), Retention Suite (CRM) and the Insight Suite (analytics.)
These targeted services allow G5 to pitch a compelling benefit story to prospective clients. Take a look at G5’s Solutions page to see how a set of services can be applied to multiple clients in each of their target categories. Like efficiency? This pitch can be repeated over and over.
- Category specificity and expertise.
- A focused and efficient new business pitch.
- An audacious promise and an unequivocal value story.
- A set of core services that can be resold across an entire category.
Add Central Oregon’s outdoor lifestyle and you have a profitable, smart, narrowly focused agency staffed with national talent that gets to live 25 minutes from great skiing. That’s Mt. Bachelor in the background.
So, How Will You Get Your Agency To The Promised Land?
Pick up the phone, talk to me and hire me to help you break out of the pack by building an advertising agency that gets noticed for its success. Can I do this? I ran two internet start-ups that garnered over $20 million in investments. One was eventually bought by Microsoft.
Need more? Listen to Vito Corleone. Please get past the same old same old.
Do me a favor and share this post with your closest friends and colleagues.