AOA sneak peek: The Future of Agencies with AI

0:00If you're looking to hire additional marketers for your team, there's no better place to look than hiring nearshore, hiring offshore. sure. And we found that we've hired amazing creative people. We've hired amazing people that can help with execution in the marketing side, whatever it is that you're looking for. Exactly. We are helping with that. We have recruiters from our side. All you have to do is go to marketing school.io slash hire. Once again, it's marketing school.io slash hire, fill out the information in terms of what you need. And then we'll have our recruiters reach out to you to help you with the placement.

0:32And it should be great for you at the end of the day, because you're going to save a lot of money and you're going to get the help that you need. So you're going to get help from a cost standpoint and also an execution standpoint as well. So again, marketingschool.io slash hire, and we'll see you inside. All right. So we have a little treat for you. So this is a coaching call from the Agency Owners Association. This is a group that Neil and I have for agency owners to help you grow faster. So if you're in the agency space, you are a services business. This is applicable to you. It's a little preview of a call.

1:01It's probably 10, 15 minutes or so. And you get a sense for what it looks like to be in the group. If you want to learn more about the group, you can go to marketingschool.io slash agency. Again, it's marketingschool.io slash agency. Hope you enjoy the episode. I can just start off with kind of high level stuff and then we can talk about strategy. I think in this group, we can talk about strategy. You guys can share things with each other. I think there's a lot of things you guys probably know that I've never heard of before too. But largely what Neil has his attention on right now and what I have hurting my attention towards right now is acquisitions.

1:34we're not in a good economy. I don't believe we're in a good economy and maybe it gets worse, right? But if it gets worse, then that means people become fearful and then that's your chance to get greedy, right? So Warren Buffett over here, guy over here, right? Little statue. So that's Warren Buffett. So there's interesting ways you can structure these deals too, right? You can put 20 % down, you can sell our finance, you can get an SBA loan for$5 million, right? You just need to make sure you're profitable, you're in good standing. You can build a platform if you want, go to private equity, and you can build a platform to go acquire other agencies.

2:10So there's a lot of ways you can play the game. You can do a leveraged buyout and just buy them out using their own cash flows. And so I think there's going to be room for consolidation. And the problem that I'm wrestling with that I just spoke to my coach about, we had a one and a half hour session is I wrote this entire thesis on M &A about where we're planning to go. But also, I wrote a counter thesis to that around AI. I do believe a lot of people are going to lose their jobs. But I think the agency of the future is maybe if you have, I think everyone here has high standards. You have super high standards with their people.

2:45You're only hiring the top 5 % of people that think strategically that are super innovative, super creative. And then they're running 50, 100, thousands of these AI agents per client. and you're building campaigns that way, right? So I might be a little optimistic with this, but I think that's like the next five to 10 years. And so that's why like, you know, internally we're building product right now. And then we're trying to figure out how we want to play this. Because if we play it too soon, then all of a sudden we're going to have to cut all these people, right? And I don't want to deal with that.

3:14And I don't think you guys want to deal with that either. So that's my little thought that I'll just throw out there into the ether. And then, you know, let's just talk through challenges and whatever, just give me an open conversation.

3:27that world you just shared one thing i'll just say is that all to where i don't know who's familiar with what we do over here at all terrain but we're like a real world marketing agency experiential gorilla all that stuff so it doesn't affect me as much as as someone who's uh you know doing you know seo and all these other things digital let's just say because it's very hard for AI to replicate the real world. Although, you know, I'm taking notes from your podcast, from all these calls of like, how can I apply it to be more efficient or be aligned with my customers and things like that. But I just want you to throw it out.

4:09I'm kind of not a part of it. Did you see what Sam Altman said this week? No. So he believes that in-person experiences are going to become way more valuable in the next five, 10 years, right? Because a lot of stuff is becoming AI. So stuff that you're doing is going to become more valuable. And everyone just, if you're looking to do experiential stuff, Adam actually just works with agencies and you just go to him and he builds out all these things. So I think, Brendan, this seems interesting because you seem to do a lot of in-person things as well. So, you know, going to someone like an Adam, there might be an angle there.

4:38I don't know. Was that on the All In podcast interview or someplace else? No, he said it on someplace else. I haven't watched the thing yet, but I'm going to, I think it's interesting because at the end of the day, I think what we realized in the last four years is like it's all about people, right? Your family, your friends, and then even your coworkers, like you want to see them in person. So, yeah. Well, I'm going to find it and I'm going to do a post around that. Thank you. Eric, that. What did you say, Brendan? I was saying milk that to your benefit while you can. Go for it, Adam. Yeah, yeah.

5:13Yeah, I mean, drive ads towards that thing. I'm in chat, like a group with a couple of agency owners that are like, you know, just scraping a million dollars that the other people in the group and on the SEO side, a couple of them have like their SEO businesses are falling apart. We are not having that experience right now at all, at all. Like our SEO business is up from 178 ,000. Sorry, no, that's the wrong. I have a new model that I just got built by our new fractional CFO and I have no idea how to use this damn thing. It's up like 70 % year over year, though. Right. And I'm just curious if anybody's got like headwind experience with SEO right now, because I'm not worried about advertising.

5:59But with all the stuff that's going on in the SEO side, I want to know what y 'all are seeing. David, you were going to say, David's in the content SEO space. So David, I don't know if you want to add in perhaps Mario too, but go ahead, David. We're also feeling tailwinds. Like we have record number of leads coming through, like legit enterprise logo leads. And all of them seem to be, they do want help. It's like, they're just figuring out like better agencies to work with. And I think it's, I mean, it's kind of mean to say, but I think it's the lower quality agencies that are, that are missing out right now.

6:29Yeah. I think it's, to David's point, that's what we're seeing too. It's quality. I think you, you, you guys get on these discovery calls or you listen to these discovery calls. It's like, if you just know what you're talking about slightly more than the, all these other agencies, then you're good to go. It's hard to find SEO agencies that do good work. Yeah. I mean, I'll ask a basic question like, tell me about your ICP and your personas. And they're like, you're the first person to ask that question. I'm like, are you serious? Like, what are the people asking you about that? Now, a quick question.

7:00The reason for it is, is it because people are freaking out because of AI and the Google algorithm or they see opportunity like which what's driving it yeah um i think that's it ai and search and people are like google's dying and they've lost one tenth of a percent of market share over the last year like of their 91 market share add to you like i can i can also add a couple more points uh so in addition to ai which is definitely a corporate here uh we see that b2b sas is down dramatically due to the withdrawal in funding, meaning that teams are getting leaner, fewer BDRs calling phones, response rates are 50 % down.

7:45CPCs are getting audited for the first time ever since the big boom, so over the past five years. And customer acquisition costs in some cases are up to, I think the latest report by Chris Walker I saw was something like$41 ,000 customer acquisition costs with CPC, with paid ads in addition to follow-ups and demos and everything else on top of that. So most SaaS cannot, like their CAC payback time is five or six or seven years. Yeah, most customers simply don't. Enterprise SaaS. Yeah, pretty much. So yeah, all of those things combined are leading to that. And on our end, we also saw a rapid bump in SEO contracts over the past year.

8:30However, with the latest changes by both OpenAI and Jamie Knight's announcement and HGE rolling out everywhere, it's kind of hard to tell how this is going to play out in the next five to six months. Yeah, I mean, I think to Brendan's point, it's like, yes, Google will probably lose market share in the next five, 10 years, but it's not going to happen overnight. The AI overview stuff, I don't know how much you guys have tested it, but it seems that they're pulling from LinkedIn Pulse answers, a lot of Reddit answers and core answers. The SEO game is always changing, right? So as long as it seems like everyone here is ahead of the game, then people will trust you and good work goes away.

9:10It's still very index driven. It's not driven by, like, it's an LLM under a lot. I mean, that drives it, but really it's surfacing search results and citing search results. So it's really over indexing on the index that exists, which is the SEO practice as a whole. So like credible sources, would you say? Like that's where they're credible. I don't know about credible. Yeah. I mean, LinkedIn, yeah, yeah. Reddit, maybe not. I asked perplexity who the best digital marketing agencies are and it cited us first. So yeah, it's complete bullshit. Yeah, it's bullshit. So not saying we suck, but I'm just saying I don't think we're necessarily like top, top number one.

9:50You know what I mean? All right, everyone. Quick message from the Agency Owners Association. So this is the peer group for agency owners that Neil and I both put together. This is for people that are doing six figures, seven figures, eight figures, even nine figures as well. And we're all here to help you grow your agency faster. In this group, we share leads. We share learnings with each other. It's a community where people can ask questions. Their most burning questions personally, professionally. We'll share templates, reports, things like that. We're constantly adding more value to the group.

10:15I will tell you that the price is continuing to increase. The good news is that there's no long-term commitment. So you can just learn more by going to marketingschool.io slash agency. Once again, that's marketingschool.io slash agency to learn more. And we hope to see you inside. I kind of want to add to that. So yes, it's over-indexing on indexing. That's a fact, but it's working in pretty mysterious ways. Like normally with the standard, you know, Google Brain or any of the latest major Google algorithms, You know, they're relying quite a lot on backlinks, which is completely normal. So page rank and everything that followed afterwards, domain authority, domain rating and stuff.

10:50And right now what we're seeing with both, you know, GPT-4O and Gemini and Cloud and Grok, they're picking one or two resources and relying on them 100%. So what we see actually, and to your point, Eric, I looked up the best WordPress agencies in the world and like several similar searches yielded completely different results. Two of them ranked Syed's multi-beginner pro sites on top and it launched 30 days ago. I got to tell them that. Yeah, it's literally brand new. I posted that on Twitter like the other day. It's literally brand new. So OpenGPT4.0 just picked a press release from somewhere and said, okay, this is the number one source.

11:32They're not linked elsewhere, right? So what I'm saying is it's kind of a hit or miss. There may be directories like Quatch or other listicles of top 50 agents and stuff. So normally, if you're listed in 30 of the 40 listicles, you're always going to be on top. In this case, it's a hit or miss. So it really depends on which one specific article does the LOM pick to yield back to you, which is super weird. Yeah, it's weird. We'll see how it goes. David, you had something to say or a question. You might have forgotten it. I don't know. I was going to ask about your decision to build product again, because I know you did that in the past and you kind of decided to sunset it.

12:11And the question's coming from a place of we're trying to build some internal tooling, not planning on making it external, but we have a pretty healthy balance sheet and trying to figure out where to invest capital right now. Yeah, I did a spot check with my coach because he's seen when I worked on too many things that were unrelated. So just a little background here, the software that we're working on a couple years ago, it was even though it was generating like half, like I think 600k in ARR, it was losing 100k a month, right? And would we have made it work? Probably, but I wanted to focus on single grain instead.

12:46I was spending a lot of my balance sheets, right? Personal balance sheet to fund the thing, right? And so now the way we have it going is we are building, we're first focusing on a product that will set auto optimizations from a CRO standpoint. So we're going to focus on CRO first and see how that goes, right? And I've talked to a couple of other people that are interested in it. And then David, one question that we're asking, like, if I appear on like a really big, like prospect call, I'll just ask, like, hey, like, if you had unlimited resources and you had unlimited money, what's the one solution you'd like to have to solve your customer acquisition problems, right?

13:23And one guy said yesterday, I'd like to have, like, a customer agent or, like, a chat agent that takes the customer from, you know, filling out a form to closing, right? So he basically wants an AI agent at the end of the day. So I'm going to continue to ask these questions, and I'll continue to help us shape product. And then we'll just run these pilots with people. Because David, even I think looking at you, you probably won't have problems getting these initial phone calls with people and doing these customer development calls, right? You want to like make sure that it's working on your own stuff first, ideally, before you start rolling it out to other people and trying to get on these calls.

13:55Because I wasted a lot of that relationship capital working on the first software. So the way I'm justifying it now is like, okay, if we want to buy other companies, the conundrum right now is like, okay, if AI is going to eliminate a lot of jobs, maybe we shouldn't jump the gun on buying other companies because we might have to cut a lot of people, right? And so right now we're like, okay, the in-between is let's build product and let's see how well it works for ourselves. And we're shipping very quickly on it internally right now. If it works really well, we'll start to roll it out to a couple other people.

14:24And then we'll move into other areas, right, where we can automate. Because a lot of the things we do can be automated at the end of the day. And we just want to see if we can have like an entire customer acquisition platform that can do it. And that's very optimistic, but, you know, we'll see how it goes. I want to take a second to tell you about my podcast co-host agency. So NP Digital, so Neil Patel Digital. What they do is they do a whole host of marketing services and they are global. They're worldwide. They have SMB services as well. They have mid-market to enterprise services as well. They cover the entire gamut.

14:57So you can just go to mpdigital.com to learn more about it. And now back to the episode. I've had a pressing issue come up or question that I wanted to pose to the group, if that's okay. All right, cool. The question is, how do you know, before you take on your client, how do you know that they're a good fit for your company? because throughout this whole process, like, I mean, you want these customers, but sometimes they have things going on at their company. They're disorganized or they're not as well-funded or who knows what's going on there. There could be a toxic environment. That was what happened with me.

15:42I realized after I took on this client, there was a lot of infighting between departments. And my question to you is, Are there like secret questions or insights that I could apply when I'm trying to figure out if they're a good fit for all terrain? So we just want to throw that out to the group to see how you guys tackle that, if that'll.

16:08What I can say is we are trying to drill into the core of the problem. Like, who are we speaking to? Is it a new CMO who was just hired three months ago or is it someone more senior? what is the previous backstory what does their team look like and normally you see a lot of flows in that process right if it's if there's a lot of churn of marketing managers who show big red flag probably not a good fit if they had a you know massive layoffs of the marketing team probably you know short resources or maybe not paying on time and stuff so it's more about what does the team look like what happened with the project previously what was the you know marketing prospects over the past one year.

16:46And you normally see a lot of flaws in that. Sometimes it's lack of competence. So, you know, they're calling you because they need help. But in most cases, it's, you know, something hidden under the rug that you can probably uncover. I just asked them, what's a home run in the first 90 days? I mean, that's one of them, right? It's because then it shows you what their expectations are. And it's also like, it shows you how smart they are too. Because sometimes they'll give you a dumb response. Like we want to increase our traffic by like a million in 90 days. And so I think that goes a long way.

17:17And then you ask, then you, there's some threads you can pull on because they're going to tell you a story there and you can be like, well, why do you want to hit this goal? Well, okay, what resources have you used so far to get there, right? You know, and then so you can, I think you go just the five whys, like why, why, why, why, why? The home run question works really well for us personally. I love it. Thank you.

17:41All right. That's all the struggles for everyone, right? everybody there's literally nothing else going on what do you think this week huh mario what did what do you think the summer is going to look like summer yeah in terms of lead flow by applying contracts and stuff it's normally slower but last year we were swamped and now we call after covid all the seasonality so much all that i'm having a hard time predicting anything what industry what what are you in b2b Yeah. Is it a specific part of B2B that you're in? Funded startups, health tech, fintech. We also do publishers and some others, but yeah.

18:22I could just speak to our lead flow. Our lead flows look pretty good. We're getting a lot more MQLs than we usually would get, at least right now. Summer hasn't started yet, right? But I think just May so far, I don't know, like 20, 25 MQLs. So it's pretty good. And MQLs are pretty close to SQLs for us, so we do the same thing.

18:46Well, you never know with the economy. You never know with this whole, like, unstable world right now.