Here’s what I learned this week

I’ve written before about how there is no license to be a qualified marketer.

In fact, most people go into marketing because they think they’ll get to come up with creative ideas, which does happen some of the time, but far more often today, we’re instead graded on our ability to provide direct results to some tracked KPI or stat.

Meaning we’re all confined.

But this is a reason for more marketers to get a robust understanding of the space they are operating in, in the case of ecommerce I’ve said this before, they should actually run a real store with real products to get a sense of all that goes into the business.

Now there’s a side of people that say, I only want to do what I’m good at, and running a store isn’t that, I don’t want to deal with customer support and inventory etc.

That’s kind of the client service business though, even though you don’t want to do it, you should do it.

Guess who still answers support tickets and inquiries for not only Formtoro but also for Krakatoa Underwear - yup, me.

I did the same at LIFX before that, where do you get most of your marketing inspiration? From people that are interested in and own your brand that you talk to.

People will literally tell you what they think of what you’re offering.

Yet most marketers feel that doing support is beneath them.

There’s an artificial hierarchy in businesses that makes little sense, we treat those that are in charge of big projects with all the responsibility and the pay and we treat all those that actually interact with the end customer with the lowest salaries and lowest amount of input.

This has always confused me.

I posted something on Friday to LinkedIn

(Link to Post)

I'm going to get heat for this post.

Digital Agencies don't have licenses, there's no body that regulates them, no standards they have to hold themselves up to be, nothing that provides the end consumer with sense of competency.

It's all digital certificates from software companies which anyone can do in a few weeks. (and most brand teams should do)

Crazy right?

Plumbers, Electricians, Doctors, Lawyers, Accountants, Engineers, Architects, Insurance, Real Estate, the vast majority of people that provide professional services have to have licenses.

Digital Agencies, none.

There's no fact checking of case studies, I know I've seen some doozies.

There's no tests to pass, there's no core competency required, we don't train employees about how to evaluate a profit/loss statement, unit economics, operating expenses, taxes, cost of goods, duties and tariffs, or any of the other stuff that creates the business.

It's a self policing industry that relies on hype, word of mouth, and, well, marketing.

We just say we're going to trust you to use your siloed skills to perform one business function, sometimes we have a good experience, sometimes we don't.

I've seen agencies do straight up fraudulent and illegal stuff on multiple occasions.

That's the service industry generally speaking.

The competency requirements for an agency are set out by the competency of the person hiring them.

You're great work for one client might not be the great work for another.

That's the reality.

"I like dumb clients." - this was an actual quote from a consultant

Until we have actual qualifications for what it means to be a marketer, tests, licenses, etc. it's just the wild west of claims and taking credit for things that weren't entirely your doing.

Your emails didn't create more revenue, having a list of people that have already purchased, good quality traffic, and a good product experience that is creating the revenue.

Your ads didn't create more revenue, having quality reviews, happy customers, comments on the ads, a great product, and a well laid out website created the sale.

Your products didn't create the profit, knowing how to price them in a way that promotes conversion and also accounts for cogs and op ex created the profit.

Everyone needs to stop claiming they caused something, they didn't.

It was the combination of everything that drives a business forward and that requires a core baseline competency about all the facets of a business.

But Jon, that makes you anti-agency...

Seriously, it took this collective linkedin agency crowd about 6 years to start talking about concepts that haven't changed in business for decades.

People talking about contribution margin or blended roas like it's something new...hmmm

I'm anti-laziness and lacking in core competency for everyone running a business across all functions.

I'm also pro open book so everyone in a business can learn about all facets of the business.

There’s no ethical duty to do what’s in the client’s best interest.

In fact, most contracts in digital are 90 days to show results then month to month after that, that initial stage is where they can get their feet wet and look to provide results for people.

The thing is, it shouldn’t take 90 days.

Software today is so much better than it used to be in terms of being able to highlight where there are deficiencies and what to focus on.

But that requires a holistic view of all the elements that make up a business and having a comprehensive understanding of how these things work.

Most of the most impactful work is still done in excel - no joke.

This is where all our product features start, calculations, offers, profit margins, etc.

It all starts in excel.

So you’ve highlighted the problem, what’s the solution?

This is the million dollar question, I’ve talked with Stuart Briscar about this quite a bit, and something of an Agency Review Board would make a lot of sense.

Baseline competencies across understanding business metrics, like finance, legal implications and disclosures, etc.

I think this is actually the way forward for the industry, the Hermozi and Ghazi telling everyone to be a digital agency has created an industry that will do everything for a sale and just fake it til they make it regurgitating the same canned lines that they heard someone else say at some time in the past.

I know, I still take calls to be pitched by young agencies for Krakatoa for fun just to hear what people are saying.

“Have you heard of this new thing called contribution margin?” - some kid in their 20s.

I actually laughed out loud, I shouldn’t have but I don’t really have patience for half the stuff people drop like it’s new found knowledge across social media platforms these days.

The bigger question, is it a problem worth solving?

Or will it self correct and push people out of the market due to over saturation?

What role will AI agents have in the future of digital services?

Lots of questions around this.

My Thoughts on the future of digital agencies…

Adapt or die.

It’s not about LLMs and Chat GPT, it’s about what happens when agents ingest all the information they need to and start writing the prompts in place of people.

This whole space is really fascinating, but as far as we’ve gotten is still requiring people to prompt data sets to get responses, what happens when you train someone on best internal practices, then create an agent that self learns and writes those prompts for you?

You remove the need for a person to do 90% of the work.

Digital agencies are quickly diversifying into educational content and content creation and syndication, it’s actually similar in a way to how Target, Dick’s, and other stores are now creating their own ad networks.

The value in the agency’s knowledge is better utilized to teach the new generation of agencies and to help them learn through online courses.

…again, there’s no licenses needed so information becomes the wild west in terms of how good it is.

Grey areas are where the majority of businesses flourish, little to no regulation, easy access to materials, social media algos that can be gamed, and viola you have a digital voice that can sell dreams to millions of hungry people looking to get rich while working for themselves.

The industry is changing though, the silent war between software and services will collide eventually, software people think, what they do isn’t that complicated and agency folks think software will never replace my knowledge.

Both of these don’t have to be true or false for there to be an impact.

Large agencies are already looking to incorporate AI to improve efficiency. Again, I’m not talking about a ChatGPT wrapper either, I’m talking about the beginning of a shift towards building flows that are automated to manage businesses entirely.

Things are moving fast

Siloed skills won’t save most of the businesses that are currently struggling to scale in a meaningful way.

I was talking to my buddy the other day, at their height their ecommerce brand had expanded to 16 physical locations in good areas with a good footprint.

Now they have since closed all their locations.

Their revenue has dropped but their headcount is 25% of what it used to be and they are running lean and profitable.

If this isn’t a sign of the times to come, I’m not sure what is.

I’m looking at brands like True Classic opening stores and there’s a large part of me that’s thinking it’s only a matter of time before the market contracts on that plan.

On a more upbeat topic

Margins still exist, solid businesses still exist, if you don’t already, see if you can get the variable costs from brands you work with or your own and start living in some spreadsheets to identify how to improve margins and basis points.

I just found our black friday offer and it will actually increase profit by 1.4% based on past data and a spreadsheet with zero downside.

The Takeaway

Create a spreadsheet next week, you’ll learn something.

-Jon

Catch up on past posts: https://ecomwithjon.beehiiv.com/

You can learn from me: jonivanco.com