The Truth of Selling to Brands vs Agencies

One of the constant questions that I see startups wrestle with is how to think about the selling process of brand marketers vs their agency partners.  Frankly it is a question that does not have clean cut answer.  But, it is a question that I think I am well positioned to at least help with since over my career I have spent two-thirds of my time on the brand side (P&G) and one-third on the agency side (Rockfish).  So how should startups handle the brand vs agency debate?  In my eyes, there is not a single answer but instead several questions that a startup should consider as they build their selling strategy:

Question #1:  Brand Tech? Ad Tech? Retail Tech?  Which budget would your service come out of?

Not all marketing budgets are created equal and not everyone on a brand has equal control on those budgets.  It is vital that a startup realize the type of spend that their company would fall under.  For instance, if you are a media buy or asking people to purchase based on CPMs than you are most likely AdTech.  And as such, you are not going to have much luck pitching to a Brand Manager.  In most cases, especially with the rise of programmatic buying, brands have empowered their media agency or internal media group to own all AdTech decisions.  For all but the largest strategic discussions, marketers turn over the decision on which sites to buy and do not even begin to get into the details of things like real-time bidding.   If you are a shopper marketing play (ie Retail Tech), then you need to be talking to the marketer (and their agency) that owns the relationships with their retail partners and customer teams.  Or if you are Brand Tech / Digital Marketing, then you are probably talking to the Brand Manager and their digital agency.  Startups can waste a lot of time and energy having meetings with people on the brand that really do not have a say on making the buy.  Figure out which budget you fit into and then map the right relationships based on that.

Question #2:  Who is impacted by your product? What work would take place to implement it?

While there is often a single decision maker that gives the go / no go decision on working with your startup, there is a good chance that decision will impact a multitude of folks on the brand and agency side.  Those people can become champions of your solution or there is an equal chance they can become a poison pill that kills the deal.  It is important to try and gain a 360 degree view of the landscape and how your solution might fit.  For instance, many brands are currently working on global templates to bring a common architecture to their websites globally.  If you are attempting to sell a social media content hub to the brand team in North America, you will have to realize the impact that would make on the global template work that another team might have been working on for over a year.  As the worlds of the CMO and CIO continue to blend together, the need to understand the impact of your solution is more important than ever.

Question #3:  Are you selling a “test & learn” to start or a broader implementation?

When a startup first sells to a brand marketer, they quickly learn the term “test & learn”.  Think of it essentially as a trial or foot in the door with the brand that lasts a set amount of time (and usually is under $50K at max).  Done right, it can lead to a bigger long term relationship.  Done poorly, it can mean you have shot yourself in the foot and ruined any opportunities in the future.  Some startups try to inherently avoid test & learns but that is a dangerous path.  Instead, you should focus on clearly defining the success metrics of the test & learn and what next steps would look like if those metrics are met.  Excuse the bad analogy, but you want to think of the test & learn as the engagement period that will hopefully lead to a marriage.  Even in those situations where you are pitching a much broader engagement (for instance switching to an entirely new Content Marketing Platform), the startup should look for a way to get a brand to dip their toe in the water.  If you have a great product that truly solves a problem that a brand faces, this trial can be what ultimately leads to you winning the business.

Question #4:  Have other brands or clients at the company / agency worked with you before?

Most startups learn about the concept of social signaling when first dealing with investors.  Well the same holds true with brand marketers and agencies as well.  If your startup has worked with another client at an agency, they are going to do the due diligence of finding out what worked and what did not.  And they will do the same if you have worked with another brand within a company.  You can use this to your advantage as well because marketers like to know that someone else has taken that first risk on your startup and worked out all of the kinks.  And frankly even more importantly, they know that someone else has the scars on their back from doing the hard work of getting your startup through legal and set up in their purchasing / payment system.  That seems like a small thing but it is actually a very big thing for most folks.  On the flip side, if this is the first time your startup has worked with a certain company, realize that you are asking that person on the other side of the table to not only say yes, but to also be a champion  for you internally.  You need to reward and recognize them for the extra work that in many times they will be doing on your behalf (this holds true if its on the brand or agency side).

Question #5:  What is the role and authority of the person you are talking to?

One of the biggest mistakes that a startup makes is not understanding the person they are selling to.  In general, they make two types of mistakes in this regard.  The first is they assume the more senior the person is, the better for them to sell to.  For instance, just last week a startup sent a LinkedIn message to the President of a large CPG that I know.  This President has overall Profit & Loss responsibility for his division yet this startup was trying to get him to meet to talk about a small digital activation of less than $100K (a rounding error in his budget).  The second mistake is that they don’t understand the role the person has within the organization.  There is a big difference between a Brand Manager that has budget responsibility and an Innovation Manager that is responsibility for exploring new areas.  Its not that one is better than the other but instead their internal reward structures are different.  For instance, the Brand Manager is going to be measured on growing their top and bottom line of the business – not on creating a new innovative marketing campaign necessarily.  Likewise on the agency side, the Account Director might not “own” the budget for the client, but they likely have one of the closest relationships and ability to convince them why it is worth taking a risk on a new idea.

If a startup goes in understanding these questions about their business and the company they are talking with, it will help them figure out the right path to explore.  There are amazing opportunities for brands and startups to more closely collaborate but it will take both sides working to make the most of the relationship.

You need to learn the rules of the playground first-hand

A few weeks ago, I was invited to give a talk to a large financial services firm that was having an off-site for one of their divisions.  The audience was a group of 60+ marketers that had gathered for a three-day meeting on a variety of topics.  I was there to talk about innovation and how a company could leverage digital as a key driver.  During the Q&A that followed, one of the marketers in the audience asked about keeping up with all the new digital platforms that are launching.  In particular, she wanted to know how important it is for marketers to have first-hand experience with things like Snapchat, ApplePay, etc.  Do marketers really need to try out everything new thing that comes on the market?

Well, the short answer is yes.

The thing is that marketing has changed quite a bit over the last decade.  If you think about the traditional marketing toolbox of a few years ago, just about everyone watched TV, read magazines, and drove by billboards.  So when we were making choices in the marketing mix, we were deciding between tools that we had first-hand experience with.  We knew the rules of the medium and could focus on the creative.

But today marketers are faced with more choices than ever before.  And for the first time ever, we are being forced to decide if a channel is right for our brand when we might not know what the channel is.  That is why marketers need to be prolific when it comes to experimenting with new platforms.  You need to download the new app that people are talking about.  You need to write a post on Medium or LinkedIn Pulse.  You need to support the latest project on Kickstarter.  And you need to buy that new FitBit, Nest, or Gear.  The goal is learning the rules of the playground first-hand.  You have to push yourself to experiment with everything that is new so you know what the boundaries are.  How do people behave on the platform?  What is appropriate and what is seen as shilling?

Before you can ever make that decision as a marketer, you have to be able to make the decision as a consumer.  And that means putting yourself out there and learn first-hand what all these new shiny objects are about.

Join our Roundtable on the Future of Digital Marketing

Future of Digital Marketing

This week I am taking part in a fun experiment with a new startup called Roundtable.    Roundtable describes itself in the following way:

At Roundtable we’re all about empowering meaningful conversations – between thought leaders, between friends, and between curated communities of strangers.

It is a really neat concept and one I became interested in after reading a Roundtable on Startup Funding that was hosted a few weeks ago.  I decided to jump at the chance to have Rockfish host a Roundtable on the Future of Digital Marketing.  After all, we call ourselves a “Digital Innovation Partner” so it is a topic that is at the heart of what we do.  My goal was to bring together Marketers, Venture Capitalists and Startups to discuss and debate on where Digital Marketing will go in the next few years.  We were able to pull together a really world-class group of digital thought leaders including:

  • Chris Erb, VP of Brand Marketing for EA SPORTS
  • Chris Fralic, Managing Partner at First Round Capital
  • Jason Falls, author of “No Bullshit Social Media”
  • Jon Steinberg, President of BuzzFeed
  • Pete Blackshaw, Global Head of Digital and Social Marketing for Nestle

What is really neat about Roundtable is that anyone can join in the commentary with this great group of all-stars. So please take the time to head over to our Roundtable this week and share your thoughts on the Future of Digital Marketing.

Digital Marketing for Startups [presentation]

On behalf of Rockfish Brand Ventures, I was invited to give a presentation to the CEO’s and Founders of CincyTech’s portfolio companies on digital marketing.

Five themes of Brand Manager 2.0 [presentation]

Over the past year, I have written several times about a trend I call “Brand Manager 2.0″  Whether it’s becoming a Marketing Technopologist or facilitating conversations with consumers, Brand Manager 2.0 is about evolving as marketers to the changing landscape around us. I put the together the below presentation to talk more about this trend of Brand Manager 2.0 and to showcase examples of companies and brands who are doing it well.