For the past 15 years, I’ve earned most of my income from my work as an individual internet marketing consultant. This year, I must finally acknowledge that I can’t continue as a “solo” consultant.
Nearly all my consulting gigs have started the same way: I was contacted by the founder of a new startup, or by the CEO or Vice-President of Marketing of an existing company. They wanted my help in designing, implementing, or optimizing a performance-based marketing strategy (most often, an affiliate program or pay-per-click search campaign, though at some time over the past 15 years I’ve been deeply involved in nearly every aspect of an e-commerce startup). We would clearly define a “project,” and I’d do the work we agreed upon. Often, this included advising the client on how to hire or train someone to work “in-house” to continue the work. Sometimes, we’d define another project, and I’d do more work. For a few clients, I even agreed to serve as “interim affiliate program manager” or as “their PPC search manager” for a while, but always with the understanding that once I’d “proven the concept,” the client would shift the work to an in-house employee.
In recent years, things have changed, in many ways. Here’s a quick synopsis of the key developments that have combined to persuade me that I should cease working as a “solo consultant” and seek a relationship with a larger team.
Increased Complexity of PPC (AdWords+): When I first designed and managed pay-per-click (PPC) search engine marketing campaigns, there was just one option, then called GoTo.com (later renamed Overture.com before being acquired by Yahoo). Bidding on GoTo.com was simple: the text ad with the highest per-click bid rate was shown first, followed by the ad with the next highest bid amount. There were very few options, and the only “tool” available was the option to submit an Excel spreadsheet with large numbers of keywords.
PPC has changed, with both Google AdWords and Bing/Yahoo AdCenter using much more complex algorithms to determine which ads to show, in what sequence, for which keyword phrases. We also have many overlapping options (match types, demographics, networks, and time-of-day adjustments) available. Google and Microsoft also provide fairly sophisticated user interfaces and software tools, and there are dozens of competent, powerful third-party solutions that can add value.
The competition from other advertisers has also exploded, and there are now many competing advertisers with extremely complex systems that can optimize bidding for each keyword-phrase, even “cherry-picking” the best opportunities so that less sophisticated advertisers never realize that they’re bidding only on the lowest-quality traffic.
One thing has not changed: it’s still impossible to properly optimize a PPC campaign unless the merchant has a “closed loop” system, in which nearly all transactions can be traced back to at least the most recent referral source (and ideally to multiple influencing events). This is a huge obstacle for small or new e-commerce merchants, and usually an impossible barrier to advertisers who are merely “intermediaries,” including lead-resellers and affiliates.
Understanding all the intricacies of the AdWords system is nearly a full-time job, and for merchants managing large-scale campaigns (with thousands of Ad Groups, hundreds of Campaigns, sometimes spread across dozens of separate AdWords accounts, spending tens or hundreds of thousands of dollars per month), this work alone requires a multi-person team. Add to this the complexity of mapping these same campaigns to Bing/Yahoo, with its variations, and perhaps to one or more other PPC search vendors.
Need for Expensive Proprietary Tools or Programming Staff: As merchants (advertisers) add new products and expand their pool of keyword-phrases and advertsing texts for bidding, simply maintaining that inventory can be a full-time task, especially after designing an intelligent plan to properly generate keyword-phrase variants and text-ad variations, after which there’s another challenge to intelligently estimate likely ROI to set preliminary bid rates, and then adjust bid rates based on actual performance. Over time, merchants should develop a complex series of algorithms to forecast and evaluate bid rates and ROI, including bid-rate variations for new keyword-phrase variations. And merchants need to implement systems to properly aggreggate and value keyword-phrase variations across the “long tail,” when individual keywords and ad groups don’t generate enough data for statistically-significant decision-making.
These complex algorithms require advanced software tools, and developing or licensing those tools is expensive. Since each client has different needs and uses different tools, it’s difficult for me to justify learning each tool (and impossible for me, as a solo consultant, to pay the fees for most of these tools myself). It makes sense for clients to seek out agencies which already have experience with the specific tool they’ve chosen, or to hire an agency that will recommend and implement a particular tool.
Increased Complexity of Affiliate Marketing: Like search marketing, affiliate marketing has grown more complex and difficult. Not only has it become much more difficult to recruit publishers to participate in affiliate programs, but an explosion of unethical activity has piled on huge additional workloads, and required much more careful advance planning. (Some new merchants who’ve “casually” launched affiliate programs have actually been bankrupted by crooks who’ve found ways to poach credit for transactions that they never influenced. Others have faced huge expenses to police prohibited activities, including promotion of fraudulent coupons or “trademark bidding” by unscrupulous affiliates.) The FTC has initiated enforcement actions against merchants whose affiliates have engaged in deceptive marketing practices. And most recently, several states have enacted unconstitutional laws asserting that an “affiliate program” advertising relationship with publishers in a state will trigger “nexus” so that the merchant must collect sales tax for all purchases by that state’s residents. Affiliate management is now a full-time job that requires extended planning and follow-up.
Shift to Outsourcing: The complexity of both search engine marketing and affiliate marketing have led many companies to permanently “outsource” this work. My emphasis as a solo consultant has always been on “project” work, usually with a defined end date, and almost always with a stated goal of training an “in-house” employee to take over the role. If the work will ultimately be outsourced anyway, it makes less sense to hire me to start the work and then transition to a different agency, so many prospective clients choose to consider only agencies whose business model emphasizes relationships which continue indefinitely.
Selling My Services: There’s also the problem of allocating time to “sell” my services, separate from the time allocated to actually perform work for clients. Like any “sole practitioner” business, my consulting business has a predictable cycle: when I’m doing a lot of work for one or several clients, I don’t allocate much time to promoting and selling my own services, but then when a project ends and I have time available, I don’t have a “pipeline” of new clients. I’ve also never allocated time to create polished sales materials or presentations, and I recognize that many clients won’t consider hiring someone who hasn’t created slick brochures, white papers, and a blow-your-eyes-out web site — especially the growing number of prospective clients who start the decision process by assigning a low-level employee to conduct “research” to identify prospective consultants and agencies.
Changes to Decision Process: In the late 1990′s, I found that I was never hired by anyone other than the CEO or Vice-President of Marketing at any client company. When I was called by lower-level people in an organization, I never got hired, and for a while I would simply refuse to speak to lower-level employees unless the CEO or VP Marketing expressed their “buy-in” for the idea. Of course, that’s not possible in most organizations, and so anyone selling services to ecommerce merchants must spend lots of time interacting with lower-level employees who may have no authority. The time-to-decision is also much longer: in the late 1990s, I was almost always hired (or not) within 10 days after the first contact with a prospective client. Now, this process takes many weeks or months.
In the past, I have also always required some “up-front payment,” which many companies simply refuse to do (since there are consultants and agencies out there who will agree to invoice for their services later). As a solo consultant, I wasn’t willing to accept the risk of not getting paid, especially for a project that demanded my full-time effort for several weeks or longer.
Turnover: As the “sales cycle” takes longer, we must also deal with turnover at the client company, as roles or personnel change. It may be necessary to start the sales process “from scratch” when the client contact changes. Sometimes, the new person is hostile to ideas and relationships that originated with their predecessor. (Of course, I’ve also benefited from turnover more than once, where an employee who hired me to work with one company calls me to do more work for their new employer.)
Ethics: This is nothing new: since the earliest days of the internet, there have been countless people who lie, cheat, and steal, sometimes making ridiculous promises or guarantees (which are never honored). I’ve spent countless hours over the past 15 years educating merchants on common tricks used by unethical and dishonest consultants and agencies. Not only is it difficult to compete against crooks, it’s also more difficult to sell my services to a client who’s been “burned” by unethical folks in the past.
But when there’s just one of me, and tens of thousands of unethical “marketers” competing aggressively against me, it’s incredibly difficult for me to compete for prospective clients’ attention. (Of course, I also face competition from thousands of legitimate competitors.)
(In fairness, it’s those unethical and dishonest people who first attracted me to this industry. Back in 1996, when I first sought ways to promote my estate-planning law practice online, I came across some very strange claims by some of the earliest advertising networks, and as I learned more, I created a web site to alert other small-business owners and web publishers about dubious claims and dishonest companies. As that site grew, I learned more about internet advertising and web marketing, and after turning down several offers, I finally agreed to do some consulting work for a new startup called art.com in January 1997. Within two years, I’d shifted completely from legal work to internet marketing consulting work.)
Agency Issues: I’ve resisted joining (or creating) an “agency” because I’ve heard many very unpleasant reports from clients who’ve hired agencies before or after they hired me. The most frequent complaint I’ve heard, apart from outright dishonesty, is that the agency’s performance declined rapidly during the relationship, usually starting with great service and results, but then failing to continue to apply the same skills (often passing the account over to new-hire employees or subcontractors).
Some agency staffers, under pressure to increase revenue or maintain relationships, even engaged in unethical or dishonest activities to try to trick clients into perceiving value that wasn’t received. (I once had the unpleasant experience of trying to reconcile one agency’s glowing self-reports of improved performance, which appeared to be supported by data from Google Analytics, against the client’s own internal e-commerce records that didn’t reflect the same improvement. It turned out that the agency had found a way to “spoof” Google Analytics, causing Google to report data for transactions which never occurred, thus making it appear that sales were increasing when they did not.)
Of course, clients who are satisfied with an agency’s work don’t have much reason to call me, and I’ve talked with many e-commerce retailers who’ve happily maintained successful relationships with agencies for many years.
What’s Next? I’m exploring several options this summer. One option is to join a “search marketing agency” or an “outsourced affiliate-program management agency.” Another is to accept an in-house position managing a merchant’s affiliate program, search marketing campaign, and/or social media activities. And I’m also exploring some other options that would bring me new experiences.
Over the past 30 years, I’ve worked as:
- a journalist (I was a full-time reporter for two different computer magazines, then a freelance writer, then a syndicated newspaper columnist),
- an attorney (first doing general business work including “computer law” but then opening my own law office focusing exclusively on estate planning, probate and trust law),
- a web publisher (creating several successful, profitable web sites which I later sold),
- an internet marketing consultant, as discussed above (and in more depth elsewhere on this blog), and
- a high school English teacher.
Each job was extremely engaging and interesting. In each career, every day brought new challenges, new experiences, new lessons, and usually new joy. One common thread I’ve recognized is that every job involved some aspect of “education” or “teaching,” which I always enjoy.
I don’t know what will come next for me. I am looking forward to finding out.