How to choose the right digital marketing agency and crack the digital code

In searching for a digital marketing agency, what are you actually looking for ? This term is becoming more and more all-encompassing in recent years.

Many traditional professional services providers in Singapore such as web development firms , video production, PR firms, media buying agencies, creative agencies have all transformed into somewhat of a digital marketing agency. Each has their own definition of digital marketing. I don’t think there is a universal agreement to what it really means.

In our agency, we define digital marketing simply as such: The future of sales.

In the past, there weren’t any form of marketing. Sales was the only growth engine of a company. As companies evolve, marketing was introduced as a way to increase brand awareness and grow sales indirectly. Sales has always been the main driver of revenue. Today, with digital marketing in the picture, selling is partly carried out online. Who knows? In the future, there may only be marketing, and no sales.

What do you want ?

The first step in choosing an agency is to get clear on your objectives. Digital marketing can vary in the type of 1)channel, 2)content format as well as 3)objectives. For example, video is a great tool for gaining impressions on Youtube or Facebook, but video marketing can also be effective in acquiring leads on these various channels, depending on how you tweak it.

SEO service is one of the most commonly requested service in Singapore, with the keyword “SEO agency singapore” getting as much as 1300 searches per month on Google! What is SEO(search engine optimization)? Referencing the diagram above, SEO is actually a traffic generation tactic using search engine as a channel.

This is where the problem lies. Most people request for SEO but they want leads/sales. These 2 things do not gel. Traffic generation does not equal Leads generation. SEO belongs to the former. To give you an idea; we rank on first page for several top keywords for a client and got only 10% of the leads that paid ads generated. (For further understanding of the nature of SEO, you can refer to this lengthy SEO article I wrote in Techinasia.)

The same goes for Facebook page management/growth of page fans, another in-demand service. Similar to SEO, it is a branding tool, not a sales generation tool(at least not direct). You probably heard the news many times; Facebook is starting to severely limit businesses from reaching their Facebook page fans.

Facebook’s algorithm tweak has gotten so bad that it has killed several high profile businesses. One such example is a company called Little Things , an online business with13 million facebook page fans. They announced that the business had to shut down because they could no longer reach their Facebook fans. Tragedy.

Hence, there can be no progress if the tactic does not align with the objectives.

Some businesses want to do SEO or grow their Facebook fan page in order to enhance their brand awareness. That is all good, as long as you are aware of what you are paying for.

What if I want to grow bottom line

If you have decided that your goal is to directly increase sales through digital marketing, probably the only way to do it is through paid advertising. With the algorithmic changes going on in Google and Facebook, experts are saying that “organic is dead” and “pay-to-play” is the new rule of the game. While we think that organic is not completely dead(you still have content marketing), pay-to-play is 100% here to stay.

Think about it. Google is a $600 billion company and Facebook is almost worth $500 billion. The bulk of their fortune comes from paid ads and they are doing everything in their capacity to help advertisers make money…so they can make more money. In recent years, Facebook has modified its ads platform more times than we can count, introducing tools such as lead ads, machine learning and audience insights to help advertisers get the most out of their dollars. We think that the world of online advertising for ROI enhancement is extremely exciting.

How to dominate paid ads ?

Paid ads is a tactic whose objective is to generate leads and increase sales. The channel can range from Google to Facebook to Youtube and so on.  Whether you are hiring an agency or a digital marketing specialist to help you in your paid ads, you need to have a good idea of what makes your campaigns tick.

For example, some agencies declare that they developed their own A.I. technology, others say that they are experts in data analysis. There are those that parade the beauty of their banner designs. Since no one is good at everything, how should you go about choosing ?

If you study Facebook and Google, 2 of the largest ads platform in Singapore, you would know that both companies have made A.I research & development their core focus over the next decade, having hired an army of A.I experts. In fact, machine learning is already a big part of Facebook ads platform. These days, it has gotten so smart that you do not even need to set targeting to reach your ideal target audience. Facebook’s algorithm would ‘learn’ by itself. (Yes, its pretty scary) In the A.I race to gain more advertisers, I would say Facebook is slightly edging ahead.

Furthermore, their A.I. technology is built for big countries such as USA. In Singapore with a relatively miniscule population of less than 10 million, it is almost child’s play for Facebook or Google to do its machine learning magic to get laser targeted on your target audience. Human intervention is therefore reduced.

With A.I set to take over the jobs of humans, does it mean there is no need for a campaign specialist ? Nope, that is not the case. It just means that campaign specialist’s skillset would have to be different today as compared to a decade ago.

Campaign specialists have to be really good at understanding human beings, something that robots cannot do. They need to have certain grasp of psychology in order to know how to appeal to real human beings, and not to Google or Facebook. Increasingly, optimization and data analysis can be carried out by Google/Facebook machines but campaign specialists need to be good at crafting resonating messages. That involves real work and effort in understanding the target audiences. Robots will never be able to do that.

How much budget should I set aside ?

Here’s the thing about machine learning and A.I. It needs data for it to do its thing. That means you need to pay money to buy ads in order for the system to gain more data. The more data it has, the easier it is for a system to optimize your campaign for the best results.

This is probably one of the reasons why many DIY campaigns fail. Many conservative SMEs set aside a few hundred dollars for their Facebook/Google campaigns and did not see any form of returns from their campaigns. Actually, the money is used merely for buying data. The system is only just getting to work. Had they go on further and continue to run their campaign, the data accumulated would help in making the campaign work. However, they give up too soon for fear of losing money in this ‘mysterious’ platform.

To find out exactly how much budget you should set aside, you can refer to my article where I discuss the costs of facebook advertising. Simply put, it has to tie in with how much you want to earn. However, you need to be realistic. No matter how good the platform is, you can’t expect to put in $1 and get $1million; it is not lottery. A 3-4x ROI would be reasonable; that means one can expect $50k ad budget to yield $150k earnings, for example.

What KPI can I expect

This brings me to the next section.

Like any other business investments, there has to be a KPI for your digital marketing campaign.

If you are doing SEO, the KPI would be rankings on page 1 of Google. If you are doing Facebook page management, the KPI could be the extent of reach or the number of new facebook fans. If you are running a creative/viral campaign, the KPI could be the number of likes & shares on your post.

However, these could be considered vanity metrics.

For paid ads, the KPI is something highly tangible and business-oriented. We are talking about the number of new leads or the increase in sales.

Here’s a tip. One has to be clear about the difference between guarantee and projection.

If an agency guarantees that they can achieve a certain KPI but they don’t hit it, the penalty would usually be refund of fees.

If an agency projects a certain ROI or KPI from the campaign, the failure to meet it doesn’t result in refund. This is because marketing takes into account human behavior which is highly unpredictable.

You have to be clear about the terms with your agency before signing of the contract.

What agency should I hire ?

With all that out of the way, you can look into what kind of agency you want to hire. It can be categorized into long term vs short term engagements.

Short term or one-off projects include: PR, web design/development, creative or viral campaigns, branding projects.

Long term or ongoing projects include : content marketing, SEO, paid advertising,

Note that you may have existing in-house resources so you don’t want to get an agency that overlaps or even conflicts what your team is already doing.

For short term projects, it makes sense to outsource. You can also look for overseas freelancers to save money. For example, Upwork and Fiverr provide freelance help in areas such as design and development, though you have to watch the quality closely.

How about long term engagements ? You probably need to talk to someone locally especially if it’s an important part of your business.

Our recommendation is to carry out content marketing in-house while outsourcing paid advertising.  Why so ?

  1. Content marketing requires a lot of domain knowledge that cannot be easily outsourced.
  2. Content marketing is a long term game that takes a while to see ROI. For that reason, you find it hard to justify paying an agency on an ongoing basis with no sight of any monetary returns.
  3. You also need to be able to measure the effectiveness of an agency in quantitative and objective way. This prevents any disputes when you want to end the relationship with them.

Paid advertising is a quick way of measuring effectiveness of an agency.

When should I start hiring an agency ?

For a business that is in its initial stage of growth, we typically advise the founders to tap on their network first.

Word of Mouth is the best form of lead generation. It beats digital marketing or any other form of marketing flat out.

Why ? These people already know you personally and trust you. It is definitely easier to close the deals.

You are ready to embark on digital marketing when you meet the 4 criteria:

  1. Your business is scalable to a reasonable extent, such that you don’t have to shut off campaign the moment you reach capacity. It can be very frustrating for yourself and the agency.
  2. You have a proven process for closing deal, whether through the founder or the sales team. That happens when you have a predictable closing rate, say 20%-50%. Otherwise you could be wasting money when you begin advertising.
  3. You have testimonials from satisfied customers. This proves to people that you are tried-and-tested instead of a risky new business.
  4. Typically when you have revenue of over $250k annually.

Charging models of agencies

Charging models in Singapore include cost per man-hour, percentage of ad spend, fixed retainer or performance based pricing.

Each has its pros and cons. For man-hour pricing, you could be paying for inefficiencies of the agency. For percentage of ad spent, there is a conflict of interest to get you to spend more. For fixed retainer, there is lack of transparency. For performance-based pricing, you may have to pay a lot more if the agency is good at what they do. Over here in Ice Cube, we believe in a pricing model tied to performance that allows for a win-win situation.

Qualifications of agencies

Unlike the case of hiring an accountant where you can filter them based on whether they have an accounting degree or whether they are a CA(chartered accountant), there is no such credentials for digital marketing in Singapore.

Well, we do have one given by Google: Google Partner badge. This is for agencies that have exceeded certain amount of ad spend across accounts under their portfolio.

There are also the marketing awards given by organizations such as Marketing interactive or Mumbrella. Big agencies tend to boast a suite of marketing awards. Just make sure you are not paying a premium for these awards.

Last thing you can look at is probably the case studies and testimonials that an agency has garnered. This tells you the track record of the agency.

Credentials aside, you can see if an agency walks the talk by checking with them if they do their own digital marketing. You can also check out their online presence to see if they know their stuff.

Ice Cube Marketing is a strong proponent and practitioner of digital marketing

Criticisms against digital marketing agencies

Let’s be real; digital marketing agencies don’t enjoy the best reputation here in Singapore. There are many complaints against agencies in recent years. Some said their agencies overpromise, don’t know what they are doing and are in it just for the money. For any industry that is unregulated and has low entry barrier, cases like these are bound to happen. Digital marketing vendors range from international agencies, local agencies to solo freelancers.

I would say it takes both hands to clap. You need to carry out due diligence and set the right expectations. Within an agency, the sales team and delivery team may be disconnected. Sales team promises the sky and the moon while the delivery team is left to do the fulfillment. Do not be taken in by wild promises that are too good to be true. At the same time, don’t squeeze your agency so much that it is impossible to deliver.  We have companies asking for $1 or $2 per lead which is not realistic to fulfill.

Lastly, if you are still not sure what type of agency is suitable for your current situation, feel free to talk to us by clicking on the button below. We may not be good at everything but we can direct you to the right resources!

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Ted Chong

Ted is the director of Ice Cube Marketing. His insights on marketing has been featured in AsiaOne Business, Singapore Business Review , e27 and TechinAsia. He graduated with a 1st class honors degree in Business IT from NTU. While not planning campaigns for clients, he enjoys a good read on books related to psychology.

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