Build a Thriving Digital Agency Where?

jacob

Jacob Baadsgaard is Founder and CEO of Disruptive Advertising, an agency that helps companies grow to the next level using Google and Facebook ads, leveraging the platforms with revenue—through a CRM- or lead-gen-based campaign or by ensuring that the ecommerce analytics are strong so everything is revenue-driven, testing website experience to see what resonates with potential customers, and perfecting the website experience so clients can effectively scale.

Jacob started his career in web analytics implementation with Omniture. He soon discovered that pay per click (PPC) was the easiest metric to track and provided the most insights, and left Omniture shortly after it was acquired by Adobe to go out on his own. As his agency grew, it leaned heavily on Google-Adwords-based paid search to drive traffic to landing pages—but had no way to measure conversion until they implemented Unbounce.com to refine the landing page experience.

Disruptive Advertising is located in Lindon, Utah. With a 2017 population of almost 11,000, Lindon nestles between beautiful Mount Timpanogo and Utah Lake, the largest freshwater lake in Utah. In 2009, 2011, and 2013, CNN Money Magazine listed it as one of the “100 Best Small Cities to Live in America.” Lindon is part of the Provo-Orem Metropolitan area, with a 2016 population of slightly over 600,000. Lindon is not the bustling metropolitan area where one would expect to find a thriving advertising agency with over 100 employees.

Disruptive Advertising has around 500 clients—and they’re not the mom-n-pops. An enterprise team manages accounts with monthly spends of $100 to a million dollars. A small business division works with lower-spend clients, e.g., healthcare and home service companies. The majority of Disruptive’s clients have an average Facebook and/or Google monthly spend of $20,000 to $50,000. Hardly average. How does that happen?

Jacob credits his company’s success to the fact that it takes its own marketing and branding very seriously, to the tune of a million dollars a year. Disruptive drives a lot of inbound, but, at the same time, maintains a laser focus on its performance-driven PPC and PPC ancillary services. When clients request “other” types of work, Disruptive provides these by partnering with agencies that excel in those specialties. Quality control is also critical for keeping Disruptive’s customers happy.

In order to track the performance of over 100 employees, Disruptive uses a technology that continually audits all accounts to confirm that best practices are consistently and universally implemented. Employees and their managers are likewise responsible for ensuring this is done. In addition, product owners in the areas of Google Ads, Facebook Ads, site testing, and analytics review all accounts on a specified schedule—a triple redundancy that ensures customers get the services they expect.

For years, Jacob put all his energy into growing his company, to the detriment of his health and his relationships. He felt the success of his business was a reflection of his value as a human being and that, the minute his company stopped growing, he would no longer be a good person . . . he would be a failure. A company valuation and mergers & acquisitions expert asked him some pivotal questions: “What is your plan with the business? What is your exit strategy? What is going on?”

When Jacob didn’t know whether he wanted to sell the business or what he enjoyed about it, the expert told him, “If you love what you’re doing and you love the people that you’re working with, run it the way that you love running it, take a little more off the table along the way, and just be involved with it long term.” When Jacob realized he could define his own success, he fell in love with his business all over again.

Jacob can be reached on his company’s website at disruptiveadvertising.com or on its LinkedIn account at: https://www.linkedin.com/company/disruptive-advertising/

ROB: Welcome to the Marketing Agency Leadership Podcast. I’m your host, Rob Kischuk, and I am joined today by Jacob Baadsgaard, Founder and CEO of Disruptive Advertising based in Lindon, Utah. Welcome, Jacob.

JACOB: Thanks for having me, Rob.

ROB: Fantastic to have you on here. Why don’t you start off by telling us about Disruptive Advertising and what makes Disruptive great?

JACOB: You bet. At Disruptive Advertising, companies come to us to help them advertise on Google and Facebook. They come to us because, typically, they lack the bandwidth or expertise to do so themselves and building out the team internally can be more expensive than leveraging a group like ours.

What gives us our secret sauce are the two areas that we leverage to make Google and Facebook successful. Number one is we take the time to integrate those platforms with revenue, whether that be a CRM or a lead gen based campaign or making sure that we have good analytics for ecommerce so that all things are revenue-driven.

The other aspect is that oftentimes the biggest wins that we drive in a Google or a Facebook campaign comes from perfecting the experience that we point them to on the website. So, we actually have a team of designers and developers that test a lot of different experiences to figure out what’s actually getting that traffic to convert, and that’s how we’re able to break through some of those barriers and allow our clients to scale.

ROB: That’s a really interesting specialty. We don’t like to dwell too much on numbers here, but if one is to look up Disruptive Advertising on LinkedIn, it looks like you have over 100 people in the company.

JACOB: That’s correct.

ROB: How do you take some of that excellence and actually ensure that 100 people are executing well against that vision? Because there is a large responsibility there. You’re not just taking a budget and spending it.

JACOB: Yes. Quite honestly, as an owner of an agency that size, there’s some real anxiety that comes with that. We hope everyone shows up every day and does what they’re supposed to.

What we’ve done and put in place to make sure those things happen – and not only happen, but happen well – is we’ve developed technology that continually audits our accounts for us to make sure that all best practices are implemented and occurring within all of our accounts.

Then, I have product owners that are over each of our respective areas of Google Ads or Facebook or the site testing or analytics, and one of their responsibilities is actually 100% review of all accounts within a certain time frequency, depending on the circumstances, so that we’ve got that redundancy in place as well. So, we’ve got the individuals and their managers, product owners, and technology that make sure all that happens.

ROB: That sounds like a little bit more structure than some people might think of when they think about the agency world. Did you start off with AdWords and Facebook, or was it originally more AdWords? How has that evolved over time?

JACOB: When we initially got things going, what’s interesting is that my background was actually not in advertising. It was in web analytics implementation and finding insights in the data for Fortune 100 companies. After doing that for a while, I basically broke off, thinking, “Hey, I’m just going to be a web analytics consultant and freelance.”

What I found was that oftentimes where the wins occurred were, “Hey, all of this PPC stuff is the easiest to track because I can just have every ad tagged appropriately and cookie those users and tie these things in.” So that’s where I repeatedly kept stepping into the PPC world, where we were having the most success and finding the most insights.

As the agency started to get off the ground, the area that we were pushing the most was absolutely with paid search, primarily on Google, who has the lion’s share of search volume, and running that through AdWords. That’s where we got things started – but even right out of the gate, realizing that we needed a solution to make sure that that traffic was actually converting.

So out of the gate, we were a very heavy paid search agency using landing pages, using Unbounce.com as our solution to really have the flexibility to create the right pages to point that traffic to. Then over time, it evolved into having Facebook as a big part of what we do now, and that came over time.

ROB: Got it. You were in this web analytics world; what gave you the boldness to decide you were going to go out on your own? Who else was involved early in the business?

JACOB: I’ve never had a job I didn’t love. I’ve always been able to make great connections with people, enjoyed the work that I was doing.

There was this specific moment that I realized that it was time for me to move on. I had an annual review. I looked at my numbers performance compared to my peer set, sat down, got the feedback of how great I was and told the annual raise that I would be getting, and it was just at that moment when I realized, this just isn’t going to do it for me anymore. I can work at level X and get compensated at level Y, but if I perform at level 10X, which is where I was at, I’m still going to get compensated like 1.1Y.

That was my moment where I said, “Hey, no ill feelings towards my employer at the time” – I actually loved where I was at – I just realized that I needed something different. That was the catalyst to me starting to move in that direction, and then things came together pretty quickly after that point.

Early on, when I initially got the business going, I did have a brief stint with a partner. It only lasted a couple of months, for a variety of reasons. Great individual, just wasn’t the right fit for us to be working together. That came and went pretty quickly, and then just went from there.

ROB: This will be a little bit off the path, but we’ll come back, we’ll throw it together in a moment. What does a typical client look like for Disruptive right now? Is it a particular size? You mentioned people who can have a revenue alignment, but what do they look like?

JACOB: A standard client for Disruptive Advertising – if we talk about the bell curve and we talk about right in the middle, our average client is going to be spending in the $20,000 to $50,000 a month range on Google or Facebook or both. We have an enterprise team that manages accounts that spend anywhere from a hundred to a million plus a month in spend, and then we do have a small business division that services some more healthcare, home services, other industries where they have lower spends. But if we just looked right in the middle, the vast majority of our clients, that’s where they fit.

ROB: Here’s where I’m pulling with this. When I hear Utah and I hear web analytics, I think Omniture. Was that your background?

JACOB: Yeah, that’s where I worked.

ROB: Were you there before, during, after the Adobe acquisition?

JACOB: I was there before and there for 1 year after the acquisition.

ROB: That’s probably an interesting dynamic in and of itself as well, that entrepreneurial, perhaps legendary company in the local tech scene.

JACOB: Yeah, absolutely.

ROB: It’s a different world with Adobe. That part is pretty interesting. When you’re at Omniture and you’re selling – some people may not know, it’s now Adobe Analytics – but you’re in an era where Google Analytics is free. How do you think that selling a paid and somewhat premium analytics solution has affected your ability to also land value and push value with clients? Talk about that thought process, about selling a premium product against a free one, and how that affects you to this day.

JACOB: Well, I probably have a different perspective than people at Adobe or Google at this point, right? For me, what I found the difference was someone that knew how to do something with the data. That has typically been the difference in companies getting success from their web analytics, more so than using a premium or a free version.

Now, that being said, there is a lot of pros and cons and tradeoffs to using either one, but that’s where I’ve found the difference. I actually became somewhat disenfranchised with the tech world because I would see the size of contracts being signed and the lack of value being derived from those contracts, unless the right people were in place to make that happen.

I think that most organizations and agencies really need to understand that the resources that we put behind making the technology successful is actually a more important decision than the platform itself, from my perspective.

ROB: And how interesting that you’ve been able to move downstream, right into the thick of that. How many 100-person agencies are there in Utah? Independents?

JACOB: There’s not very many, for sure. There’s not very many. Yeah, Boostability has got quite a few employees – they’re more focused on the SEO side of things – but I’m having a hard time thinking of any others.

ROB: Geography is not destiny, but it also matters. What do you think have been the keys to being able to build the company that you have, where you are?

JACOB: I think there’s a few things that play into that. As a percentage, we don’t have that many clients around us. In terms of clients to population ratio, I’m sure we have more in Utah than we do in other areas, just because of our presence here, and that does get us something. But that’s not the driving force behind our growth as an agency. We service about 500 clients, and I would guess maybe 10% or so are here in Utah.

I think some of the keys to our success have been a variety of things. Number one is we take very seriously marketing and branding ourselves. We don’t rely purely on referrals or networking or those types of things, which it seems like most agencies do. Makes it hard to scale or grow very quickly.

We do have over a million dollar a year marketing budget, which is quite a bit for the agency community. So, we drive a lot. We do a lot of marketing, we drive a lot of inbound, we make that happen.

Then the other thing is – it’s so easy; clients always ask us to do more. “Hey, we’re having a great experience with you. Can you do this? Can you do this for us?” I think we’ve been a lot more disciplined than others to say “no” to those things.

Rather than staying the small shop that tries to do everything for a few clients, and may be good at that but probably not great, we’ve really stayed focused on we’re primarily a PPC shop, performance-driven, driving great PPC traffic from Google and Facebook, and then we have a couple of ancillary things that help those channels be successful. But beyond that, we actually partner with other agencies that specialize in other areas, and we’ve been able to help grow each other by focusing on doing those types of things.

ROB: Very interesting. It sounds like having the clients that you have, the number of people you have on the team, the discipline you have in sticking in the lanes that you stick in, and this ongoing growth – sounds like a lot of work.

JACOB: Yes. [laughs]

ROB: What’s the motivation underneath this? What drives you to keep pushing and growing this thing?

JACOB: That’s a pretty personal question. I don’t know if I’m willing to answer that. No, I’m just kidding. [laughs]

What I can tell you, Rob, is that that has changed quite a bit throughout the course of the agency. My motivations earlier on – in fact, what I would even say to a fairly unhealthy point – was the success of the business. It was for me a direct reflection of my value as a human being, and so I invested way too much time and energy in growing the agency, to the detriment of my relationship with my spouse, not being as present as I should be with my kids, not getting the sleep that I should be or exercising well, and eating poorly.

I really put all of my energy into that. The reality of what I found over time is that I could never win, because the second it stopped growing, then I wasn’t a good person anymore. I was a failure. So for me, what I found is that those things drove me a lot early on. There’s always been good motivations as well, but I found that that was driving me more than I’d probably like to admit.

It wasn’t until I had a conversation actually with a company valuation and mergers & acquisitions expert – he sat me down and he said, “What’s your plan with the business? What’s your exit strategy? What’s going on?” I said, “I don’t know. I don’t know if I want to sell this. I don’t know if I want to do this or that.” He walked through and asked me a few questions about “What’s your top line? What’s your bottom line? Do you see the summit? Do you enjoy it? What about it do you enjoy?”

He went through a series of questions, and he said, “I’ll bet you’ve had people interested at this price points, haven’t you?” I said, “Yeah. That’s interesting that you’d know that.” He said, “All they’re going to do is buy you out, restructure things a little bit to get themselves paid back in a few years, and then have the asset.”

He said, “If you love what you’re doing and you love the people that you’re working with, why don’t you just do the same thing? Run it the way that you love running it, take a little more off the table along the way, and just be involved with it long term?”

It was an interesting conversation that really opened my eyes to – I just like this. Going back to the first client I ever worked with, I scaled them from 25 to over 350 employees, and I just fell in love with digital marketing and helping businesses succeed and grow. That was why I got the business going.

And then seeing individuals in my organization that are way outperforming what I did at that stage in my career, that’s what I love being a part of. Sitting across the table from someone that I care enough about to tell them something hard, and to have them tell me something hard, and to cry it out and hug and grow together. Those are the things that I love about running an agency.

So now I don’t even think about selling it anymore. I love what I’m doing. I love what we do for our clients, and I love the people I work with. That’s where my motivation is now. Any time I find myself not liking my job – because I’m an employee of the agency as well – then it means we’re doing something wrong. That’s where we go and make the adjustment, so that it is something we want to be involved with long term.

Getting back to the root of your question, the motivation for growth now comes from my personal growth. If I want to continue to grow and develop as a leader, the challenges and opportunities that come at a different size of agency give me that opportunity, and they give those opportunities to the people within the organization as well, and ultimately allow us to make a bigger impact in the world.

That’s where the drive comes from now, and I would say it’s a lot different than it was a year ago, and a year ago was a lot different than it was two years ago, and so on.

ROB: There’s some real truths in there, I think, that are true to you, and that’s what makes them really interesting, when you say you realize that you enjoy the work, and you realize that you do enjoy the people. But also, unapologetically, it’s not a crime to take a little bit more money off the table and to do all of this work for an upside.

Sometimes I think we contemplate selling as the only way of having that windfall, but you want to work hard and do good work and be compensated rightly for it. But I think it sounds like you realized along the way, if you like doing the work and you like the people, that stands in conflict with selling the business. Finding ways to make the business put more money to the bottom line aligns everything there.

You mentioned these realizations that sometimes something’s out of whack. Have you found any routines or habits that help you contemplate when some of those motives and when things aren’t in alignment?

JACOB: There’s a few things. I’m a big believer in coaches and getting professional coaching, support, having a network that one can feel safe talking about the best and the worst things with.

A few things that have really been beneficial for me is I’ve been a member of the Entrepreneurs Organization for over 3 years now, and man, I have got my band of brothers that have been there for me in some of the hardest and most exciting times in my growth and evolution, with the business and just personally, quite frankly.

I have had some fantastic business coaches that have changed my life, personally and professionally. I’ve also always invested in having good financial support, whether it be from a consultant outside or eventually hiring a CFO internally. Having that financial guidance and direction and really driving things by the numbers has also been really helpful in that process.

Those are a couple of the things that stand out to me.

ROB: Very good things to think about. You’ve already talked a little bit about some things that you’ve learned along the way. Are there any other key lessons you’ve learned while building Disruptive Advertising that you might do differently if you were starting from scratch today?

JACOB: Absolutely. A couple of the things that I would do differently is I would say “no” to so many clients that we’ve worked with at this point, if we did it all over again. In those early stages of getting an agency off the ground, you kind of feel like you’ve got to get any revenue you possibly can.

I would just challenge that, if I was talking to the 5 years ago version of myself, and say, focus on the ones that really align with our values and direction that we’re going as a company. Even if that means you’ve got to do some pretty work for them to get the contract, whatever it takes to get the right contracts.

And all those red flags that you’re concerned about taking this client on, but “don’t worry, it’ll work out and it’ll be okay” – run away from those ones. You know exactly what I’m talking about. They’re abusive in terms of expectations, the way that they communicate with team members. It just makes the agency life not worth it, and you never make money on them anyway because of the amount of attention that they require.

That’s probably the first thing that comes to mind for me. Do what it takes to win the contracts that are a good fit, and just to not be afraid of saying “no” to the ones that we know are not going to end well.

ROB: I think that’s a lesson that has been learned so many times in the industry, but still one that I think we all certainly need to hear.

If we think a little bit about the name of the firm, Disruptive Advertising, in some ways even the flight to focusing on, “Can we actually drive revenue in a way that is good for your business?” doesn’t sound disruptive. It sounds kind of old school, but it’s actually been quite disruptive. What do you think is coming up next for Disruptive Advertising or industry-wide that we should be thinking about?

JACOB: With machine learning and artificial intelligence and a lot of the things coming that are being built into the platforms, to me I think that where the real value lies as an agency is strategic alignment with organizational goals and objectives.

Plugging and playing the right platforms – I just think that a lot of the things that agencies are built around and the levers that they pull and the manual work that is done at some point is going to be gone. All either automated internally or other solutions will automate those things as well.

What I’ve seen being in the tech community for so long is that ultimately, the difference maker is not the automation. It’s not the software. It’s the strategy behind that, because if everyone does the same solution, then everyone starts to get average results, even with AI and machine learning. To me, it’s the strategy that drives those things behind that that are going to be the differentiator for agencies in the future.

That’s where we’re really focusing our time and attention, is alignment from that standpoint, and less about staffing to do a lot of manual tasks that we’ve done in the past, and starting to make that transition.

ROB: For sure. It’s really interesting thinking about over time, there have been different things that agencies have claimed as secret sauce. I think about SEO among some of the highest of those things historically. People had their SEO magic sauce. Increasingly, the truth is, make something that people want to find, and Google keeps pressing on toward that goal.

It’d be interesting to hear where you think this comes into play, but it seems like Facebook, and for that matter Google on the ad side, have every incentive to make it fairly easy for you to find the people you want to find and then let the strategy carry through and make money or not on the merits of the strategy, because then they can charge you more for the same ad impression.

How is AI making that come true, and what are the next couple of things you think might happen that we should be looking for?

JACOB: The way that that comes true currently is that Google has a lot more data points than any agency or in-house marketing team is ever going to have. Their Smart Bidding, ad rotations, and headline testing, a lot of the things that they’ve put into these platforms to really streamline the efficiency, optimization, and growth of these accounts, is fantastic.

The people that jump on that are currently gaining a lot of value from that versus the people that are slow to adopt. Those will be the people that step ahead, and that’s kind of what’s going on there. Now, as everyone transitions into that, companies and agencies are going to have to find a way to differentiate in their strategy and direction and things going on there.

I’m a big believer that long term, acquisition cost for new customers is going to become – that’s where a lot of the focus is currently placed. I think the companies that are going to thrive are the ones that ultimately can spend more on marketing than their competitors, so long as they’re spending it effectively.

The way that companies do that is by increasing the lifetime value of a customer, and through the other marketing channels that get them from buying one or two things to three or four, or increasing the engagement length or whatever those things are – which then equips them to be able to spend a lot more on marketing compared to their counterparts.

That’s the direction things are going. I don’t think there’s a lot of thinking about it. That’s what’s happening.

ROB: I think earlier in the conversation, you mentioned that you’re integrating through to revenue in terms of CRM or ecommerce – which means you are in a very good touchpoint to be able to look at the lifetime value of the customer. Is that part of the strategy? You’re getting back to a customer and to email, and you’re not just trying to do cold audiences every time you’re ramping up something new for a client.

JACOB: Absolutely, and most agencies are not approaching things from that standpoint – or in-house teams, quite frankly – of conquest campaigns versus lifetime value campaigns. That’s where you can really start to leverage that data to say, okay, we can afford to spend twice as much as anyone else to get a new customer because we’ve really dialed these things in on the backend, between email retargeting and all these other things that we’ve put in place. Those are the ones that we see winning.

That being said, we’re not 100% successful with that with all of our clients. It’s a challenge. Those are not easy things to accomplish, but they’re worth accomplishing and getting in place.

ROB: For sure. It seems like the more of these conversations I have, the more it comes back to, quite often, strategy is usually staring us in the face. Strategy is not cooking up something that nobody has ever thought about. It’s something you may not think about until you hear it, and then it’s obvious. It’s obvious that getting these customers and using the channels that you know work is a pretty good way to go, and you at least have a fighting chance of doing well by the client.

JACOB: Yep.

ROB: Jacob, when people want to find you and when they want to find Disruptive Advertising, how should they find you?

JACOB: Easiest way, disruptiveadvertising.com. Reach out to us through there. Like I said, most companies reach out because they lack the bandwidth or expertise to execute on their Google and Facebook strategy. That’s why they reach out, and that’s where we step in and help. We partner with a lot of agencies, and we work a lot directly with companies as well.

ROB: Very cool. Google works really well. There are a bunch of people paying for ads above you when you google for “disruptive advertising,” but at least according to my relationship with Google, you’re ranking #1 for a phrase that some people probably search for. So, congrats on that.

I definitely recommend that people should look you up, Jacob, and if they need some advertising that can deliver against the bottom line and want to be able to track it, I think that’s a very good thing. Thank you for coming on the podcast and sharing with us, Jacob.

JACOB: Thanks for having me, Rob.

ROB: Take care.

Thank you for listening. The Marketing Agency Leadership Podcast is presented by Converge. Converge helps digital marketing agencies and brands automate their reporting so they can be more profitable, accurate, and responsive. To learn more about how Converge can automate your marketing reporting, email info@convergehq.com, or visit us on the web at convergehq.com.

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