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The Past, Present and Future of Digital Marketing

July 22, 2019
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Thoughts

Nick:
I'm here today with Isaac Rudansky, founder of AdVenture Media Group located in Long Island, New York, a digital marketing agency. Isaac Rudansky's my boss, and we're going to be talking about the past, present and future of digital marketing. Anybody interested in digital advertising or digital marketing will really enjoy this content. So, Isaac, are you ready to start this?

Isaac:
I am ready. Thank you very much, Nick, for scheduling this get together.

Nick:
No problem, boss. So first it's mostly going to be your opinions on digital marketing: past, present, future. But, I feel like we should start with how did you get into digital marketing?

Isaac:
That's a great question. I have a background in art. This was back in 2012 I think, or 2013. A few years after I was married I was working on selling my art and I was was renting an office and I was doing some abstract oil impressionist paintings, and I was selling some of the artwork at festivals around Long Island, eastern Long Island, in the summertime. And I decided I should have a website for my artwork. So I've heard of this thing called Squarespace and they promised that you'd be able to make a website on your own, and to me that was not realistic. I felt like to make a website would be you have to hire developers. I really didn't know anything about making a website at all.

Isaac:
But long story short, I sat in my chair in a old recliner in my apartment for probably 15 hours straight, and I had a website. It was the most exciting, exhilarating feeling.

Nick:
Do you think that also, because your art background, it was cool to create your own website ?

Isaac:
I do think so. I think that that's the case. I think very much so I realized that there was a lot of creativity that went into designing a page and making it look nice. The layout, what you left out, the white space. Mind you, back then, I knew very, very little about web design because web design is very different than artistic design. When you're designing for the web, you actually have to make it usable for people who are visiting the landing pages. When you're painting a piece of artwork, it just has to be nice to look at, right? It doesn't have to be usable in any specific way. So that was definitely a very different. It's a very different structure to the design, but certainly there's a lot of creativity in landing pages as well.

Isaac:
After I had a website, the next question I had was how do I get people to my site? And that question brought me down a wormhole of Google research. I learned for the first time that Google actually made money on advertising and there was such a thing as Google advertising. I didn't know that beforehand, and I learned a lot about SEO. I learned a lot about Google advertising, other advertising channels. I spent the next two, three days, weeks immersed in digital advertising concepts and strategies.

Isaac:
I launched my own Google AdWords campaign. It was called AdWords back then, spending about 20 or 30 bucks a day for looking to buy oil paintings. And then that was another stage of this exhilarating feeling of wow, I can get my website that I just made in front of millions of people who are searching to buy oil paintings. It was just really, really cool to me. It was just so immediate, so exciting. You could pay for people to come to your website. Like this concept of pay per click advertising was just brilliant.

Isaac:
And shortly thereafter I felt like, listen, I'm working on my art, but I learned a ton about Google advertising. Maybe I can make a business teaching everybody else what I know about how to advertise effectively on Google. So the first iteration, I made another website on Squarespace called the AdWord Academy. I think the AdWords Academy was taken or something like that. So it was the AdWord Academy. The goal of that website, it was another very simple Squarespace website, and the goal of that site was to generate leads for people who wanted to learn how to advertise on Google themselves. Hence the idea of AdWord Academy.

Isaac:
That didn't work out, but it was interesting because it maybe foreshadowed what was to come, which was we built this agency primarily on our educational content, teaching people how to do it. But in the early days that didn't work out. People I sensed wanted to just have an agency do it for them. So after only a few weeks I switched over to the agency model. We kept the name the AdWord Academy, but it was more of an agency. We're going to do this for you. It's a monthly fee system. We're going to work with you to determine profitability and to track results and to develop creative campaigns. So that was how I got into it.

Nick:
So it seems you kind of just fell straight into it. Once you started doing it, it was kind of just like you were en-captured by this whole process of paying for clicks to get to your website. And I'm sure in your instance create profitability off of your artwork. Now you work a lot online in page optimization. How was that different back then and getting quality traffic to your website? And then getting this conversion rate going back then compared to how it could be today?

Isaac:
I would say the main difference between how things were structured regarding landing page optimization, which is the art of testing how you communicate your message on your landing page in order to maximize the financial impact of a website or a landing page, which typically means increasing your conversion rate, the percentage of people that visit your site who ultimately convert. You could increase volume to your site, volume of traffic. That would be considered traffic acquisition. So I could spend more money on an advertising campaign, I could spend money on an SEO campaign and I could spend money on content, right? I can get people to my site.

Isaac:
Conversion rate optimization is by definition trying to optimize the rate at which something happens, the percentage of people who actually convert. That's the idea. And the main difference, that whole art, is extremely tied into human nature and psychology. How to communicate. How do you get people excited? How to talk to people on their terms? What information are people actually seeking? Are you providing too much information? Are you providing too little information?

Isaac:
But the main way it's changed is mobile optimization. Even five years ago, most websites weren't doing the majority of their traffic on mobile. Fast forward five years, things have shifted drastically. There's more mobile advertising spend across the country. A lot of our clients and many websites are seeing a greater percentage of their overall traffic coming from mobile devices. So part of usability in conversion optimization, aside from the human psychology, a big part of that about it is just making the page fast, so it loads quickly. You could easily find the information you're looking for. You're never lost on the site. You have a sense of orientation. And those are the things that really differ. And there's a lot of variants between how you should design those elements appropriately on a desktop and how you should design them appropriately on a mobile device. So that's a big thing that's changed.

Isaac:
So when we do landing page testing now we're really optimizing based on a mobile first mentality, and that means looking at a website first and foremost on how it operates and how it looks on a mobile device. And if we have to make some compromises in responsive design, compromises typically have to have to be made. If we have to make some compromises, we'll make them for the desktop viewpoint.

Nick:
Right, that makes sense. And so landing page optimization is definitely a big part of digital marketing. Any Digital Marketer knows that, but that's kind of going a little off topic for now. Let's get back to more keyword structure and the process of driving quality traffic to your website back then versus today. How would you say, especially in terms of Google Ads, AdWords back then, how was it different getting that quality traffic to your website back then versus today?

Isaac:
The biggest change is automation. Five years ago there wasn't really reliable automated bidding systems that at least we knew about. Google has some automated bidding where you could tell Google how much you want to pay for a sale, how much money you want to spend for a conversion, or for a form submission. And Google looks at your keywords and they figure out the best max CPC bid for you on your behalf based on each individual click. Those systems existed, but they were very early stage systems five years ago. They've gotten a lot better.

Isaac:
So back then, if you wanted to drive profitable traffic, you as an advertiser had to be the one in charge of setting individual keyword level max CPC bids. You would use your formulas, you would take a look at what the client's ROI was, you would look at the ROI targets for each individual keyword in each product segment, you would take a look at click through rate or historic click through rate, you would take a look at historic conversion rate, and you'd basically figure out this is where my bids need to be. Then, you would adjust the bids manually as more data came in and if the client's targets changed.

Isaac:
Clients targets and client's goals will still change. One client will want a 500% return on ad spend. One client will be happy to lose some money on the first year because they're looking for brand awareness, right? So the client goals will change, but now you're able to tell Google, listen, for this campaign or for this ad group, I want to have a target return on ad spend of 400%, or I want to have a target cost per acquisition, CPA, of $29. Google is doing a much better job now at understanding the potential value of every individual click because they have a lot of this other data that they're tapping into.

Isaac:
Remember, if you're advertising manually, and you're setting your bids manually in Google, right, because there's a number of dimensions that you could control to augment your max CPC bid. So, say, for example, you have a keyword, and you're selling men's polo shirts. So, you're putting a manual bid of $3 per click, let's say. Now, you might know that on certain days of the week people are more likely to buy, so you'll increase your bid there. You might know that men obviously are more likely to buy for themselves than women, so you'll increase your bid for men and decrease your bid for women. You might know that certain hours of the day are more profitable, so you make some bit adjustments there. Certain locations might be more profitable, so you'll make some bid adjustments there. So a $2 bid could turn into a $1 bid in Florida, but it'll turn into a $4 bid in Texas.

Isaac:
You could do those things on your own in manual bidding, but Google has access to a trove of additional data. They might know how many polo shirts you bought in the last year. They know your credit card spending. They know where you're driving. They know if you go to the beach often They know if you own a second home. They know if you have children. They know when you fly, or what class you typically fly. They know your political affiliations.

Isaac:
So, Google is now able to tap into all this data in the background to say, okay, this individual click with all these different factors is 20 times more likely to buy a polo shirt today than the next click searching for the exact same keyword or triggering the same keyword or the same search term. That's because Google has gotten better at accessing that data on behalf of their advertisers, and automated bidding has become a more useful system. And it's incredibly useful if, as an advertiser, you no longer have to manually set bids for potentially hundreds, thousands, tens of thousands of keywords. But aside from saving time, there's no way a human being will ever be able to replicate automated bidding with the same level of accuracy as a machine learning system ultimately would.

Isaac:
So that's the big difference in in Google Ads in traffic acquisition over the last five years. It's going switching from manual bidding in most cases to automated bidding in most cases, but yet, even today, there are still certain clients that we have in certain instances where manual bidding still works better.

Nick:
Right, so you would characterize the present state of digital marketing and getting the most quality and profitability in terms of a lead generation company, the best leads, as more of an automated process.

Isaac:
Yeah, it would be just... Okay, go ahead.

Nick:
Yeah, so that's one part of the question. Then the second would be do you have any insights that you can share in terms of processes or maybe some manual processes or just anything in the current state of digital marketing that you'd like to share it with anybody?

Isaac:
Yeah. I think that it's more important now than ever for digital marketing agencies to be able to understand the shift, the technological shift in the industry, and to be able to position themselves in a way that still provides value to their clients. And, to us, that's taking a more consultative approach with our clients, and I think that this is something which is more important, more important than ever for a digital marketing freelancer or agencies to understand. It's more important now to understand your client's numbers.

Isaac:
So, you have to really understand what are their profit margins? You should be able to help your clients figure out what is the LTV of a customer? How many repeat purchases a customer making? Are there ancillary products that will typically be bought as add-ons? Could we help optimize your entire business? We see that you're selling copy machines, right? And you have four different copy machines that you're leasing out to businesses, but we know that your competitors have whole different price points. So, you need to start putting together a matrix of price, and testing different prices, testing different free trials, and using these psychological principles of persuasion.

Isaac:
So now you're starting to become more like a marketing agency with ideas to help a client's business grow, right? While you can still operate in the digital sphere, you could be a digital marketing agency, right? You don't have to necessarily be a full service creative agency. And of course there's going to be Google Ads. You have to be coming to the table with ideas that are going to help your clients grow and optimize their entire business because you're going to end up, if you're doing it right, in most cases, you're going to end up spending less and less time on the specific optimization of the Google Ads account. That's really the goal. So, I think that's a big difference is agencies understanding that they have to come to the table with a business head in a more consultative context, with ideas and how to optimize a client's business, how to grow their revenues.

Nick:

So you're saying that that's kind of both a new challenge but also an opportunity for agencies to really grow upon with this new model of automation?

Isaac:
Yeah, I think it's a huge opportunity. I think it's a challenge. It's going to force people to shift how they do things, but I think it's a big opportunity as well at the same time.

Nick:
Right. Are there any other challenges you think in this current digital marketing that we face as a digital marketing agency or just any other agencies, or any person in digital marketing today?

Isaac:
I think it's the same type of challenge. I think that ultimately a lot of these ad platforms that smaller boutique digital advertising agencies like ourselves rely on: Facebook advertising, Instagram advertising, programmatic advertising, Google advertising... All this stuff is going to become more and more and more automated. It wouldn't surprise me in the next few years, three or four years down the road, the Google ads interface, as you log into Google ads, all you do is put in your website, put in your target CPA, put in a credit card and that's it. That wouldn't shock me at all.

Isaac:
And Google has made every indication through the changes that they've been making that they're moving in that direction. Now, on the flip side it's a little bit unlikely to happen because Google is certainly incentivized to have an army of thousands and thousands of salespeople, which are the agencies across the country and across the world selling Google advertising to their clients and making a profit. Right? So the fact that agencies exist that manage Google ads campaigns, and they take a fee, is a very good thing for Google because Google pays their salespeople nothing.

Isaac:

We're all salespeople for Google, and we don't get paid. We get paid from our client, right? So it's really a great system for Google. So Google's certainly incentivized to do as much to expand agency growth. And they do things to support agencies that indicate that they want to continue to do that. But I think that some of these other platforms will continue to get more automated. And it wouldn't shock me if Google Ads becomes fully, fully automated. Who knows? Who knows what will happen.

Isaac:

But at the same time, that's not going to be a real threat to agencies that know how to adapt. So if you're identifying as a Google AdWords management company, then you might be out of business. But if you're identifying as a digital advertising agency or a marketing agency that's going to help you figure out where you should be spending your money, that's going to help you really track the returns and really look at the financial impact of a businesses happen. If you're able to come to the table with consultated ideas of helping your clients understand market position and market sentiment or you're using user surveys and you're doing more conversion rate optimization or you're doing more landing page testing or you're building micro sites and different user experiences, and you're just overall helping a company's online presence generate more profit, then that business is not going anywhere. Advertising is not going anywhere.

Isaac:
So I certainly think that there's no real existential threat to a digital agency over the next five years, but they have to be willing to adapt.

Nick:
Which is finding that new opportunity. Any other new opportunities you think digital marketing agencies can find or follow in this current state of digital marketing?

Isaac:
There's always looking at additional channels as well. So, you have Influencer marketing for example. A typical digital advertising agency or an SEM agency might start off their advertising, their basic service offering is PPC, SEM, Bing advertising, Facebook PPC, things like that. But we found a lot of success over the last year with Influencer advertising for our clients where we reach out to people that have a large following that obviously their following overlaps with our clients as customers. We developed partnerships bartering. So, to me, it's still advertising, it's very creative, but it's worked incredibly well. It's another profitable line of service for us as an agency, and it's certainly profitable for our clients.

Isaac:
So looking for those additional opportunities, that's another good one that I think is not going anywhere. This idea of Influencer marketing and tapping into Influencer marketing has been around forever, right? Whenever somebody bought a celebrity endorsement for a TV commercial, that's not that much different than Influencer advertising. It's slightly different in form, but the concept is the same. So that's not going anywhere. I think that's going to continue to grow. I think that's very strong. That's a big opportunity in my opinion, is tapping into Influencers on multiple ways, and not only on Instagram, but on YouTube, on Facebook groups, and things like that.

Nick:
That's awesome. And so Influencers you think are going to be a very big thing? They are now and leading into the future.

Isaac:
I think it's growing. Yeah.

Nick:
Any other aspects of digital marketing that you think are growing or just in general? And you've touched upon it with Google Ads, you wouldn't be surprised if you just set up an account and you put in your target CPA, or your target return ad spend, and that's it. That would not be shocking to you. Are there any other potential ways you see digital marketing forming in the future? Just any insights on that in general.

Isaac:
Like I said before, I think the overall digital marketing landscape is continuing to grow. It's been growing every year. Digital ad spend is growing. Companies are now pushing away a lot of their business from or they're taking away a lot of the spend from traditional media, radio, print and television. They're putting it into digital advertising, in video advertising, in online paid search, in social, or in Amazon advertising. These are huge, huge advertising networks that are just growing every single year.

Isaac:
Obviously, you should always have a sight on new things like Influencer marketing that you could do, becoming more consultative, and adapting, but there's also a huge opportunity just within the existing platforms that exist. These are massive, massive advertising platforms generating hundreds and hundreds of billions of dollars of revenue a year. And they're growing. So you have to look at those ad platforms, look at the channels that are growing, and, assuming that they're not going anywhere, because I don't see any reason to assume that they're going anywhere, figure out ways to capitalize and extract as much revenue for your agency outside of the channels that already exist.

Nick:
Okay, I think that's it from my end Isaac Rudansky. Thank you. Do you have any closing comments?

Isaac:
No, I think that this was great, and I would just encourage people to not only focus on traffic acquisition, which is influencer marketing, PPC, SEM and finding more consultating opportunities, but also, realize that what we spoke to earlier for conversion rate optimization, landing page design and user testing aren't going anywhere either. And it's a huge value add for your clients. It's a huge value add for companies figuring out how to humanize a brand and how to communicate your brand message. It's a really, really good thing for digital agencies to be able to provide to their clients, and if you could do it well, it's the work that will be most impactful for profit.

Isaac:

If you could increase the conversion rate of a website, that's going to be the win that most significantly drives business impact. So, it's something really worthwhile to focus on. And, that's it. I appreciate the interview.

Nick:
Thank you, Isaac.

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