Personalization: The Future in Advertising

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When Peter Reitano and Jeff Goldenberg, founders of Abacus Agency, (Toronto, Canada and New York City) an Ad Tech/agency hybrid that specializes in Facebook and Instagram advertising, they saw problems in the traditional agency model. They reverse engineered their organization from a vision of what a future agency would be like, noting that, in today’s fast-paced technology world, you can’t build for today, because, by the time you get the work done, what you have will be out of date—you need to look ahead 3 or 4 years and design for the future.

 

Abacus targets better ROI/conversion on Facebook and Instagram advertising spend for large brands or Series A tech companies. They maintain a tight focus on this market segment because they believe that this enables them to be extremely good at that one thing and provides the flexibility of being able to refer as needed to other agencies specializing in areas outside their area of expertise. This collaborative synergy works because partner companies provide referrals to Abacus, knowing that Abacus doesn’t want all the business and won’t cannibalize referred clients.

 

Peter and Jeff expect the future integration of more personal “smart devices” and the rise of increasingly choice-driven content (e.g., Netflix, Facebook, Amazon, Google vs. traditional broadcasters)

will bring greater personalization of advertising content. In particular, they predict that smartphone advertising will increase due to the pervasiveness, the highly personal nature, and the amount of time people spend looking at these “second screens “—and a high percentage of social is mobile.

 

Peter and Jeff can be reached on their company website at: abacus.agency, and on Facebook, Instagram, Twitter, and LinkedIn. They have a great blog on their website and can be reached by email at: hello@abacus.agency.

ROB: Welcome to the Marketing Agency Leadership Podcast. I’m your host, Rob Kischuk, and I have a special show today. I’m joined by two cofounders of Abacus Agency. We have Peter Reitano and Jeff Goldenberg on the line. They are based in Toronto, Canada and also in New York City. Welcome, Peter and Jeff.

 

PETER: Thanks for having us.

 

JEFF: Hey, thank you.

 

ROB: Great to have you guys. Why don’t you start off by telling us a little about Abacus and what makes Abacus great?

 

PETER: Sure. We started Abacus just over 2 years ago. My background is I’ve been in digital marketing and marketing for 10 years, always on the agency side. I had another agency before this called Spark, which was a full-service digital agency. That got acquired about 3 years ago now, and then we set up Abacus.

 

Jeff’s always been on the brand side, so a slightly different viewing of the marketing and advertising world. He saw some problems with how the agencies were operating; I saw some problems as well.

 

We wanted to build Abacus out as a solution to some of those problems. Abacus is an ad tech/agency hybrid that specializes in Facebook and Instagram advertising, with a real performance conversion focus.

 

One of our central hypotheses is that the agency world and the marketing world is moving away from this AoR-based relationship where you work with agencies that do it all to specialist agencies or platforms and these brands that are willing to work with this mesh network or collaborative network of different tools and platforms and agencies to solve very specific problems.

 

We wanted to specialize in an area and do it really, really well, and Facebook and Instagram fit that bill. There weren’t many people doing it in the way that we wanted to do it. We typically work with large brands or scaling Series A tech companies that want to get better ROI for their spend.

 

Jeff, do you want to throw anything into that?

 

JEFF: You did a very good summary of that. Coming from the brand side and from the startup side specifically, I spent most of my career looking for opportunities. An opportunity to me exists when there’s a big industry that is at a crossroads in terms of how the clients and the providers are getting along and how generally happy they are, feeling that they’re getting value.

 

As a purchaser of ad services for all those years, I really thought that the agency-client relationship was in a really bad spot and furthermore would be burdened with baggage from allowing itself to move to the direction it needed to move. I know there’s a lot to unpack in that, and I’m sure we’ll talk a bit more over the course of the show, but I really did see an opportunity.

 

One of the things I learned, going back over my whole startup career, almost 15, 17 years, whatever, is that when you see signs of life, you act on it. Like Peter said, there were so many Google agencies, but no Facebook agencies. Demand harvesting is easier than demand generation, which you have to do on Facebook.

 

So we saw the opportunity and we projected out into the future what our POV was going to be on what the agency/client relationships would look like in 2020. Now we’re really close to 2020, but at the time it seemed like a far way away. We were like, what do we know? What’s going to be different then? What’s going to change? How is the environment going to change? How are the incumbents going to react?

 

By having a POV of what the future of the agency world would look like, we were able to reverse engineer what we thought a useful, valuable business would be at that time.

 

The learning there, for anyone listening and thinking of doing their own thing, is that you can’t build for today, because by the time you figure it out it takes 2 or 3 years, and it’ll be out of date before it’s even up. You need to look 3-4 years ahead and know where things are going so by the time you finally get it built, it’s built for the right place and time.

 

ROB: Awesome. Did you start with the Instagram capability, or did you start purely with Facebook as the primary focus and then expand into Instagram at a later date?

 

JEFF: The short answer is we don’t view them differently a lot. We talk about them interchangeably. Part of our testing regimen looks at placement, and Instagram is sold basically as a placement for Facebook.

 

Then if we find out that the campaigns are doing well from a performance standpoint, from a conversion standpoint and that the Instagram placement is working, then we’ll split it out on its own and start thinking about unique creative just for Instagram stories and stuff like that.

 

But overall, in the 2 years we’ve been at it—before starting Abacus I was with a company called Borrowell, and we got very lucky in that the Canadian Financial Services team took us on to support us. That was one startup and then a ton of big banks and insurance companies.

 

Before that we were just basically running experiments and learning Facebook on our own. When we got access to Facebook support, the learning curve went through the roof. That’s when I realized that a lot of people are going to come to the conclusion that Facebook doesn’t work only because they’re not getting the support they need to work.

 

If you know how Facebook supports companies, it’s the opposite of Google. You know this better than me, Pete. Google will support everyone from the first $50 you spend; Facebook wants to support fewer and fewer companies. I think when I started in Canada they supported 250, and now they’re down to 150 in 2 years.

 

One of the core problems that we felt we could solve is all these companies can’t become million-dollar-a-month spenders without the advice, but it’s going to be very hard for them to get the advice. So, as a partner agency, which we later became, we can now give everyone access to the support, the beta list tools, audiences that typically only the biggest advertisers get.

 

That’s really cool because that was part of our initial premise: to give medium-spending spenders the same support and tools that the biggest in the world got access to.

 

ROB: Very, very interesting. Facebook has certainly been in the news a lot. I’m sure you know this far better than I do. Has there ever been any point in this process where you’ve been concerned about the impact of privacy issues, of GDPR, or anything else on the effectiveness of the platform? What do you expect we’re going to see?

 

JEFF: In general, I’m concerned about just about everything, every day. [laughs] That might be one of many things.

 

PETER: The efficacy side, I’ve never heard any doubt or concern. The only way that would become a red flag is if we started to see drop in performance for our portfolio of clients. I wouldn’t really listen to external factors for that type of stuff.

 

Obviously, they’ve been in the press a lot over the last 6 months. I feel like Facebook has dealt with it very well. They’ve addressed the points of concerns, and they’re constantly working on it. Everything from the privacy side to different apps getting access to different pieces of data through the API, they’ve been addressing that—but also, interestingly, on the health side. There’s been a lot of buzz about social media not necessarily being the most psychologically healthy place for people to spend time.

 

Facebook has been putting out a lot of content and information around having healthy time on the site. They’re trying to make the Newsfeed a lot more healthy place rather than this place where you go on there and get bombarded with spam and publishers. It’s been shown that if you’re spending time on Facebook interacting socially—friends, family—it tends to be a lot healthier place. So, they’re trying to hedge the newsfeed towards that.

 

I’ve been pretty happy with the updates and the way that they’ve been addressing the problems that people are raising pretty proactively. From an advertiser standpoint, the only time it’s been brought up by brands we work on is when they’ve said, “How do we do some of this cool Cambridge Analytica stuff?” [laughs] No comment.

 

ROB: [laughs] Awesome. You mentioned this focus into Facebook and Instagram. Does that mean there are lines of service that you say “no” to, or you partner with? How do you look at that opportunity and focus?

 

PETER: When we were starting the agency, everybody told us we were being idiots and that we were leaving money on the table. . . .

 

JEFF: They still do, right? [laughs]

 

PETER: [laughs] That we were leaving money on the table, we should be doing general media, blah blah blah. But we just saw it as, a lot of people already do that; how are we going to differentiate?

 

We firmly believe as well that to get really, really, really good at something, you need to do it every day and you need to focus on it. From an agency standpoint, the more services you introduce, the less efficient you can be, the more processes you need to introduce, all of that kind of stuff.

 

We wanted to be really scalable, but also focus on one area to be really good at it. So we say “no” to things all the time. The way we’ve built out Abacus is forming collaborative relationships with synergetic agencies. That’s a mouthful.

 

The way we get growth in business development is we work with other agencies. They bring us on when they need help with what we do and vice versa. So we refer a lot of work out and we get a lot of work referred to us.

 

Another benefit of specializing is we’re not treading on everybody’s toes. We’re not trying to gobble up all of the business out there. People know what we do, and they’re willing to refer to us because we’re not going to cannibalize their business.

 

ROB: Got it. How did you two get to know one another?

 

PETER: We met . . .

 

JEFF: Give him the PG story.

 

PETER: The PG story. [laughs] While I was at my last agency, Jeff was Head of Growth at a startup called Borrowell here in Canada. We were going to the HubSpot Conference—I don’t know if you’ve ever been there—INBOUND in Boston. Great conference. We were going independently, not knowing each other, but we had a mutual friend that Jeff was staying with.

 

We were going to go out for beers one night, I was going to go out with Neil, and I came over and met Jeff in the hotel room. Then I met him the next day in line for one of the talks, and we just started talking and shared a lot of ideas. We both were working on different things at the time, but we stayed in touch and kept talking about different problems.

 

We started doing the odd consulting project together, and then it just took on a life of its own and had its own momentum. Before we knew it, we were in business and we’d incorporated and we were away.

 

ROB: We’re actually going to INBOUND for the first time this year. Are you going to be there?

 

PETER: Possibly. We didn’t go last year. But it honestly is one of the best marketing conferences I’ve been to. Great speakers on every level. Tactical people all the way through to Seth Godin and those kind of guys. It’s definitely a church to inbound marketing. They have a DJ on the central floor and they’re giving out beers and stuff. It’s like a party atmosphere. But I got a lot of value from it when I went, for sure.

 

ROB: And it’s huge. I saw there were 21,000 people last year.

 

PETER: It’s nice, yeah.

 

JEFF: That’s my only knock on it. You have to be ready to navigate an event that big, you know what I mean? When it started it was nowhere near like that, and now it’s just massive. There’s good sides to that; it means they can bring in top-flight entertainment and really amazing speakers. But yeah, it’s a big event. You’ll be in queue a lot.

 

ROB: For people who haven’t been to INBOUND before, you mentioned—be prepared to wait in line, be prepared for very large crowds. Any other tips for navigating that environment, things to definitely do/not do, etc.?

 

JEFF: I’ve got a little bit of a conference hack checklist that I go through in my head. I’m one of those conference FOMO people where I always feel like I’m missing out on something better that’s happening at the same time, because people get kind of obsessed about where they’re going to be and what they’ve got planned.

 

I spend a lot of time researching it ahead of time and figuring out who’s going to be there. Then I stalk people. It’s been very effective; I’ve made amazing connections. I met the CEO for Shopify at the same conference I met [Peter] at, and now we play cards once in a while.

 

I love to have some objectives. If I left the conference having met A, B, and C, and let D, E, and F know that I exist, it’s going to be a positive thing. Then I make it like a scavenger hunt and it’s fun. [laughs]

 

So, I would say do your homework, figure out who’s going to be there. Figure out what you want to see because there’s so many choices. And if there’s people that it would change your life or your business to meet, make sure you can meet them because that’s your opportunity when they’re around a lot.

 

PETER: Also, it’s the same with any other conference, but follow the hashtags. They were super active on the hashtags and doing little meetups. There was even one if you were single at HubSpot at INBOUND. It was like “loner to INBOUND” or something like that. There were thousands of people tweeting that out and meeting up. Super useful hashtag, especially if you’re single.

 

JEFF: That’s true. The other thing is that a lot of conferences now are doing those conference apps. I assume the more interested you are in networking, the more likely you would be to use it. So, if you are looking to network with a whole bunch of people, those things are probably useful.

 

PETER: Yeah. I would say as well, one of the problems when I was there was limited space in all of the tracks. You’ve got to really pick your tracks carefully and get there fairly early. A lot of the negative complaints I saw around the event were people couldn’t get into all of the talks they wanted to.

 

ROB: Interesting. Yeah, I definitely saw a tip saying that the annual Brian Halligan and Dharmesh Shah keynote is always overbooked, and show up early and make it out for that. I know we’ve been booking up some time ahead of time. I’m going to be I think interviewing 10 or 15 of the speakers on podcast episodes while we’re there. Should be a little bit busy.

 

JEFF: Yeah, that’s amazing. That’ll be great.

 

ROB: People will be a little bit tired of episodes on marketing automation, but I’m sure there’s always an interesting lens here, much like you all know.

 

For someone who maybe feels like they don’t have that support as a partner of Facebook, what are some of the things that you would suggest they could learn—a few things they could do tomorrow to be more effective at Facebook marketing?

 

PETER: The obvious resource that is available to everybody is Facebook’s Blueprint certification. It’s not free like Google’s, but it’s packed full of everything that you need to know about Facebook and running ads.

 

JEFF: It’s free to learn. You just have to pay to get certified. If you don’t care about that, it would be free.

 

PETER: Yeah. They take it more seriously than Google in the certification you go through. You have to go to a center, or you do it online and they film you doing it so they make sure you’re not cheating. But it’s a great certification.

 

There’s just loads of resources. I really like the AdEspresso blog. Our blog, Abacus, we put a lot of good content out on there.

 

If you’ve got an ecommerce store or something like that, or a small business that you can run some tests on, there’s nothing like running some experiments and learning by actually doing, getting in the trenches.

 

ROB: Got it. Are some of their own algorithms, some of their own lookalike audiences based on high quality inputs like email lists and website visitors? Are those still pretty good places to start for the uninitiated?

 

JEFF: That’s definitely something we would look at pretty early in a campaign. Why it’s a little bit easier said than done is because at different inflection points as you scale, different things will work. Lookalikes that you thought were the answer to your prayers will stop working. Open targeting might start working.

 

So, it’s not quite that simple, but it’s definitely something that you would want to learn about really early on, because Facebook’s one of the only platforms where you can officially bring your own data to the platform, which means that the segmentation options are up to your imagination.

 

ROB: Interesting. Guys, what are a couple of things you’ve learned from your own experience building Abacus that you would do differently if you were starting over today?

 

JEFF: That’s a good one.

 

PETER: I think we were quite slow at bringing on business development support, just from an agency ops level. We didn’t hire anybody until 6 months ago, something like that. To start with it was all myself and Jeff, our network, the partner agencies that we’d build up. It wasn’t as scalable.

 

Maybe that was a good thing in hindsight because it gave us time to perfect our process and our internal operations, but maybe if we wanted to scale a bit faster—we’re all about growth—we would’ve brought on that person a little bit earlier.

 

We’re also ad tech-focused as well, building out our own technology to make our internal operations more efficient. Maybe we would’ve got to work on that a little bit sooner. But probably not, because it took a long time to work out the problems by running a lot of spend and managing a lot of campaigns to work out the problems that we saw that we could build out technology and product around.

 

JEFF: I don’t know why I didn’t think of this right away, because we’re kind of in a little bit of a mini-pivot of our own at Abacus, but I’d say about a year into doing it, we came to the conclusion that you really can’t outperform bad creative. That sounds really simple, but the question was, what if creative is an order of magnitude bigger than the next most important thing (which would be targeting)?

 

We spent the better part of a year thinking about that and the future of creative, and the fact that social is basically mobile, and came to the conclusion that we just weren’t going to consistently get the kind of creative that we need, and that was always going to hinder our performance.

 

So, with some tutelage from Facebook’s Creative Shop, we built an internal creative team—a creative director, an art director, some motion animators and graphic designers who really knew what social motion creative needs to look like, both what is a good idea on social and the ABCs of building the type of ads that work.

 

Keep in mind, we were getting feedback from people who have 100% visibility into like $45 billion of spend. When they come to a conclusion, I really want the team to pay attention to it even though everyone else seems to be ignoring what they’re being told.

 

But be that as it may, creative is becoming a really important part of our offering, and that’s something where if we would’ve thought of that earlier, it would’ve been valuable. We wouldn’t have thought of ourselves in the beginning as mostly just a media company.

 

ROB: Interesting. That’s probably a challenging lesson and learning to get through, because sometimes all you know is that you want the creative to be better, but better how? How did you know you had found the right person for that role? Sometimes you just know what you know is what you don’t know. You know that you need a better capability in this area.

 

JEFF: That’s a really good question. What I realized is that lifelong agency creative people have habits that, even though they onboard the knowledge, they’re very hard to break. The same way most smokers know that it’s not good for them, quitting smoking is another issue on its own.

 

Some of the habits are that creative strategy has been broadcast-dominant for the last 50 years. What looks like a TV ad is mostly what drives the bus. Awards are really important to those people, so what type of thing wins an award is super popular.

 

Screens being horizontal versus vertical. They have major biases towards laptop screens and TVs because that’s their frame, but now the data says that so many more people are ingesting it on their phone and they’re having trouble coming up with that.

 

It’s in that sea of uncomfortableness and conflict that we see opportunity.

 

ROB: Wow. It’s tricky, but I congratulate you guys for moving and pursuing, moving marketing itself forward.

 

Looking forward a little bit, what are you excited about that’s coming up for perhaps marketing in general, perhaps Facebook marketing, and then specifically for Abacus?

 

JEFF: Marketing in general—we wrote an article called “TV is Dead, Long Live the TV.” The idea there is that we think in the relatively near future that TV ads are going to be purchased like a display ad.

 

TV, we believe, is going to be dominated by the Netflixes and the Facebooks and the Amazons and the Googles of the world and not the traditional broadcasters. If that’s the case, then advertisers are going to be able to follow the users they want across any of their devices or services, regardless of where or when they’re watching it. That means that what was TV ad is going to become amazingly focused.

 

Think about how much waste there is buying a national show that has an 18 to 54 male and female demographic. Unless you’re Procter & Gamble or someone, you’re really not going to have a product that appeals to that whole audience. But if say you want 21 to 26-year-old females that watch Breaking Bad and similar shows, then you could just target those people and you’ll cut out an incredible amount of waste.

 

This idea of programmatic TV buying is really interesting. The ads won’t be the same. We’re never going to sit through five 50-second commercials ever, ever, ever, ever again, if that should be the goal. So you’re going to be watching content and they’re going to drop a 10-second ad in, and that’s going to be it. You’re going to watch it because you want to continue watching.

 

It’s how the social contract between advertiser and consumer has changed. You no longer have a full 30 seconds. But I’m excited about that. I think that’ll cause a huge resurgence in television.

 

ROB: And probably an increase in the ad rates on TV ads.

 

JEFF: I don’t know, that’s interesting. Ultimately, they’ll have a lot more inventory to sell if they’re not selling it nationally. I would imagine that being able to break it down into keywords or personas or demographics would mean that they’re going to exponentially increase the amount of inventory they have.

 

YouTube’s already sort of doing it with mid-roll ads. Facebook’s doing it with mid-roll ads. But all the trends are here, the hypothesis that the publishers are changing is there. All the sports are starting to be sold to the internet companies because they’ve got all the money. How can Fox Sports outbid Amazon for baseball when the contract comes up?

 

ROB: For sure. I think one of the stories of Facebook’s success has been that they continue to find ways to get advertisers to pay more for the same impressions, because they’re delivering more value. That’s what I wonder a little bit in TV. You’re paying for really cheap impressions because there’s so much remnant inventory. If you can get your targeting really good, you’ll pay more for it.

 

Do you think there’s a similar, though perhaps not quite so targeted opportunity also coming, and perhaps already here a little bit, in out-of-home, digital billboards and whatnot? How are you looking at that?

 

PETER: They’ve been experimenting. I think Google ran one of the first programmatic billboards in the city of London last year. There’s been talk of smart fridge type advertising with data being pulled in from stocking of the fridge and all that type of stuff, and then supermarkets can serve ads based on that data.

 

I just think everything’s going to get more targeted as we get more smart devices, screens. That means more data coming in. It’s going to be a lot more trackable, a lot more targeted, and served in the way that consumers are actually consuming the content.

 

JEFF: I’ve got a couple thoughts on that subject.

 

The first is, if we define the goal, if we define the end of the road of marketing as complete 1:1 personalization—which I’m not suggesting we’re anywhere clear—you could then park opportunities on one or the other side of the road, one side being “this is going to help move the industry towards personalization” or “this is holding back the industry from personalization.” When you think about it that way, it’s really simple to figure out the kind of stuff you should invest in.

 

Out-of-home would probably be somewhere in the middle. I can’t help but feel—70% of Facebook time is spent on the go. Mobile on the go between meetings, on the subway, whatever. So maybe if we’re staring at our phone, then we should think more about the real estate that’s in their hands and the focus of their attention and not something that they’re driving by.

 

I really think mass media is on its last legs, and it’s not because we can’t do it well; it’s because there’s not that many people interested in mass media audiences anymore.

 

ROB: I’m really interested to see where a lot of this stuff goes. You even look at something like televised soccer matches, and at least I wonder whether they’re going to replace those sideline ads someday with green screens to where they can deliver inventory, just overlay the ad inventory that’s for you on those sideline ads.

 

JEFF: I’m going to blow your mind. They already do it. They do it in baseball where they can localize the ads. For sure. It’s really cool.

 

ROB: I haven’t seen this. Where would we see this?

 

JEFF: Some of the ads behind—the in-stadium ads are different than the on-TV ads, and the inventory. National games can localize the sales and they can put in overlays.

 

The middle of the outfield, the part that’s usually kept black, has a huge home hardware overlay on TV that wouldn’t be allowed in the stadium because it has to be dark. And some of the ads on soccer fields are not really there. You can see when the players walk through them. So that’s really cool.

 

In China, apparently there’s out-of-home stuff that looks at your credit score. [laughs] Are we there? I don’t know.

 

I think about sci-fi movies from 10 years ago where people were staring into these personal devices and not even paying attention to real life and thinking to myself, hello, we’re sort of there. If that’s the case, why aren’t we maximizing our impact on their phones before thinking about all this other stuff?

 

ROB: Very good thoughts.

 

JEFF: Even when they’re watching TV. If you watch people watch TV commercials today—and there’s still a few—you’re going to see it’s their second screen. And if it’s their second screen, that means it’s an audio ad.

 

It starts begging questions of efficacy. If I could be reaching those people on the phone that’s their first screen, why am I spending so much money and having the second screen be such a focus of my strategy?

 

ROB: Right. Gentlemen, when someone wants to get in touch with you and with Abacus Agency, how should they find you?

 

PETER: They can find us at our website, abacus.agency. That’s probably the easiest way to find us, but we’re on all the major channels—Facebook of course, Instagram, Twitter, LinkedIn. Hit us up on our website. Got a great blog there as well, so check out the content there.

 

JEFF: Yeah, hello@abacus.agency comes right to us. Feel free to drop us a line if you have any questions that we didn’t touch on.

 

ROB: Brilliant. We will get that in the show notes. Thank you, Jeff and Peter. Thank you for sharing your experience. Congratulations on the growth, on making something that some people thought was perhaps a little bit crazy.

 

PETER: Thank you very much.

 

ROB: For being all-in on these Facebook and Facebook-related platforms and making it work and grow, congratulations.

 

PETER: Appreciate it. Thank you.

 

JEFF: Thank you for having us.

 

ROB: All right, have a great one. Thanks.

 

PETER: Bye.

 

ROB: Bye.

 

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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