| Mar 29, 2016 | | 5 min read

How Agencies Will Achieve Digital ROI in 2016


For years, it’s been all fire and brimstone about agencies going digital. The boss isn’t a fan of the slim margins; the sales team despises the low commissions rates; traditionalists fight change like the Crusade; and business owners turn their back on it, because hey, who has time for Facebook and Google Ads?

Well, I’m here to declare that dialogue will be officially changing—along with history. You can now tell the naysayers their argument against digital ROI is over, as more local businesses are going online than ever before. 2016 marks a new era in the local media industry, as it’s the first time local businesses will be spending more on digital solutions versus traditional ones (Borrell).

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The streams have finally crossed. Remember when Ray Stantz predicted all hell would break loose if and when the streams ever crossed? Well, he was right. He was right when they crossed for Zuul atop the Empire State Building, and dammit, he is right when it comes to the local media industry.

The hell that’s broken loose

Okay, we’re not at a Stay Puft Marshmallow apocalypse just yet, but we’re definitely heading that way. Did you know the average client churn rate for agencies is sitting at 50-60%? That's practically an epidemic.

The truth is, there’s too many of you out there. The local market is experiencing a digital agency insurgency. More than 50% of digital agencies are less than three years old, and droves are soldiering their way into the bloated market every single day (Borrell). This is forcing agencies to realign their pricing to compete with low-cost startups and adapt new products and services to remain competitive.

As you can imagine, this is not an easy thing to do—especially at scale. Data from over 250K local businesses tells us that yes, perhaps the biggest factor in churn is pricing, but interestingly, it’s not just the number on the tag that matters, it’s also the model it’s delivered in.

It’s not news to anyone of us that SMBs have limited marketing budgets, with the average business spending less than $200/month (Search Engine Land). Your clients not only want competitive pricing, they want to purchase solutions in a scalable manner to fit that lean budget. We’ve discovered, they’re giving preference to agencies who offer subscription-based prices. More insights here from local media expert Greg Sterling, as he discusses the six main causes of SMB churn.

Another key insight into why agencies lose customers is that they’re not providing the right solutions. Yes, it took me all night to come up with that one, but don’t roll your eyes just yet. Given the insane rate of change via technology, the market demands constant adaptation. A text ad might be cool today, but will it mean anything tomorrow? In fact, you might be surprised at what local businesses are spending their money on these days.

What local businesses are spending their budget on

Yep, website hosting/design and SEO are still the bedrock of online marketing, but what SMBs are considering as the other pillars of their digital foundation had me a little surprised: reputation management and social media marketing.

While I’m aware of the importance of each, I must admit, I was taken aback when I found out reputation management will be a $1.3B industry by year’s end—up 216% from 2015. This sudden surge can only be attributed to one thing: online reviews are coming of age and businesses know it, because they know this:

  • 70% of consumers’ buying behavior is dependent on online reviews (Nielsen)
  • Google has rated reviews as one of their top 5 ranking criterions (Moz)
  • Businesses experience an 18% increase in sales from reviews (Bazaar Voice)
  • 90% of people claim positive reviews influence their purchasing decisions (Zendesk)
  • 63% of consumers are more likely to buy from a site with product ratings (iPerceptions)

Social media marketing will be up 248% from last year, and netting out as $2.2B industry in the local space. Crazy! What’s causing local businesses to get suddenly social?

  • There are 2.3 billion active social media users (We Are Social)
  • Social networks earned an estimated $8.3 billion from advertising in 2015 (We Are Social)
  • Social media marketing has reduced costs for 45% of businesses (Sprout Social)
  • Revenue increased for 24% of businesses when they utilized social media for lead generation (Sprout Social)
  • 33% of millennials identify social media as one of their preferred channels for communicating with businesses (Marketing Sherpa)

What can Reputation Management solutions do for businesses

Top notch Reputation Management solutions allow businesses to take control of their online presence by allowing them to correct location data, monitor and manage reviews, observe what competitors are doing, along with other relevant capabilities. Business owners using Reputation Management can:

  • Monitor reviews - receive an alert the moment a review is submitted on all of the most popular review sites, including Yelp, Facebook, and Google+, as well as a ton of sites that are relevant to their specific industry (e.g., TripAdvisor, RateMD, Cars.com, etc.).
  • Generate reviews - easily gather new reviews from delighted customers and ensure that negative reviews stay private.
  • Advanced listening - find “mentions” from news sites, blogs and social networks to get the full picture of what people are saying about your business.
  • Competitor insights - monitor what the competition is doing online and build strategies to gain more customers in their local area.
  • Simple social media management - save time by using one platform to monitor and analyze social media efficacy.
  • Monitor web presence - view the accuracy of business listing data across the web on all of the major directories and citations. 

What Social Media Marketing solutions can do for businesses

Every day, millions of consumers declare their buying intentions on social media. With best-in-class social media marketing solutions, businesses owners can:

  • Manage social networks from one location - monitor Facebook, Twitter, Foursquare, and Google+ content from one easy-to-use dashboard.
  • Gather ready-to-publish content - save time and energy with customizable settings that find and republish their industry’s hottest news.
  • Post to multiple social channels - from one tab, publish content to multiple social sites with the push of a button.
  • Receive real-time social leads - discover and interact with leads who are looking for products and services in real time.
  • Schedule posts in advance - set-up and preview posts before publishing, and build the week’s content in one sitting.
  • Track performance across profiles - get important stats that provide insights into social profiles for better content strategy and customer engagement.

So the question is, do you offer Reputation Management and Social Marketing solutions? If not, the market is calling you! They're bankable products ripe for huge ROI (+216% and +248%). If you do, are you offering them with full capabilities and through a preferable pricing model? 

How to sell products and acheive ROI tenfold

Five words: marketing automation built for agencies. That’s right, marketing automation built specifically for you. Software programmed with data, relevant API, and partner integrations that align with the local business market.

Marketing automation for agencies really focuses on selling. Key in a few data points like a business name and phone number, and the software will generate a fully designed report from online data that grades the business’s reputation and presence, exposing major digital marketing gaps.

Furthermore, it will email it to the business in question on the agency’s behalf. Reports like these are known to provide sales reps an edge in the selling process, as businesses are rarely aware of these insights, but see a lot of value in them—which allows the rep to take a consultative approach versus a cold call pitch.

An outbound email often becomes an inbound conversation. These emails experience an average 29.7% open rate and 31.3% click-through-rate versus an industry average of 18.7% and 7.8%. Check out the Rise of Niche Marketing Automation for a more detailed account.

I hope the info above provided some valuable info on how to achieve ROI with digital products. For more information on it, we’ve developed a study from agency data that discusses the 14 challenges agencies face, with scalable ways to overcome them.

About the Author

Jamie is a former Demand Generation Strategist, specializing in advertising campaign development and lead generation communications. When he's not cracking codes on Facebook and Adwords, Jamie loves playing with his Siberian Forest cats, and going for walks.

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