When I decided to take over the traditional ad agency, I had been CFO for about seven years and the shop focused on anything and everything related to marketing.
We did TV, radio, print, direct advertising – nothing very well. We went from 75 people in 2007 down to a head count of 14 in 2009 and the services provided were 'whatever you need, we will do.'
This positioning was meaningless. Management was not aligned on corporate direction and we had lost 61 people in three years. We were not winning any business and we were unable to compete.
Time to strip back
The basic fundamentals of economic theory adhere to the principal of specialisation and trade.
Limiting our offering and focusing on one thing was the order of the day. A major problem we faced, was that what we were doing for our incumbent client base was not the direction we wanted to go.
We faced a dilemma. Keep what we have and try and grow it using the "we do it all" positioning or lose our current clients and try and win new business with our new model.
Using our new methodology, we ran the risk of alienating 100% of our revenue source. If our clients were to look at our new website, they would not have recognised the agency they had been working with for years.
The new model?
We looked for a gap in the market by studying the fastest growing companies in the marketing world. We dissected every national agency model and added to it. By starting again from scratch, we created a fresh model that had never been done before. Things looked great on paper, but in practice it was a different story.
To make it all work, I sought out an incredible business partner. He was 20 years younger, full of fresh ideas, had a strong drive and was 100% committed to our new positioning. Most importantly, he wasn't afraid of failure. The fear of failure will kill you.
Our inaugural client who bought into our new ad-tech remit had modest success – enough to allow us to keep and grow the account. I even took out a $1m (£0.6) loan to fund this and went through a divorce, but it worked. Our legacy clients, however, were confused.
We did not consult them about our new direction. We failed to manage their expectations. Consequently, we lost all but two of them. This coupled with some serious payroll issues, including myself going without a salary for a year, meant we stood on the edge of a rather scary precipice.
And there was also the small problem of not explaining to our own staff why we were doing this. If we had, then leadership might have bought into the new idea earlier on. In the end, we found ourselves letting most of the senior management team go and brought in a whole new raft, one by one.
The goal
As John Wanamaker famously said: "Half the money I spend on advertising is wasted; the trouble is, I don't know which half." 100 years on and this need not be the case. Our number one goal was to take the uncertainty out of marketing spend. We wanted to be the first agency to address this reality and change it.
Anyone got a screwdriver?
Since we were creating an entirely new technology and data integration platform, we encountered a few teething problems, not least, much of the staff were pretty damn confused. This lead to moral issues and we needed to let go more of our team unwilling or unable to change. Our Glassdoor management profile was diabolical and this damaged our recruitment drive.
We now work with some of the world's greatest brands creating predictive models and some of their strongest sales results, they've seen through marketing. With three offices in three cities and over 125 employees in the same three years, our methodology is killing it. What makes me really happy, though, is working with the best professional staff in my career.
Ernie Capobianco is the CEO of conversion optimisation agency, Sq1.
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