Tim Ash, Founder of TimAsh.com
13

Tim Ash, Founder of TimAsh.com

Full Episode

Episode Summary

We talk to Tim Ash, founder of TimAsh.com. Tim tells us about the pros and cons of being 10 years ahead of key marketing trends, why working with clients sometimes feels like marrying an insane person, why one of his clients turned down a clear $17 million optimization opportunity, what his time as a child in the Soviet Union taught him about account management, and why he believes ageism is a problem in online marketing.

 

Read Full Transcript

Transcript

David Rodnitzky (David) (00:02): In this episode of Agentic Shift, we talked to Tim Ash, Founder of TimAsh.com. Tim tells us about the pros and cons of being 10 years ahead of key marketing trends, why working with clients sometimes feels like marrying an insane person, why one of his clients turned down a clear $17 million optimization opportunity, what has time as a child in the Soviet Union taught him about account management, and why he believes ageism is a problem in online marketing. Enjoy the show.

Tim, thanks for joining us on Agentic Shift.

Tim Ash (Tim) (00:35): David, it’s my pleasure.

David (00:36): It’s great to talk to you. We’ve been friends for so long that it would age us to tell the story of how long we’ve been friends. So I’m not going to even go there.

Tim (00:45): Well, let’s just say we’re both members of the streamlined haircut agency owner club.

David (00:51): Yes. Being an agency owner, you lose your hair. So for anyone who’s out there who’s a young owner with lots of hair, you may want to think twice because it happens. Tim and I are proof.

Tim (01:00): ROGAINE isn’t going to help afterwards either.

David (01:03): No, I never even tried. So you’ve actually owned a couple of agencies. Why don’t you start by telling us the founder story, how you got involved in the first agency, how you got involved in the second agency, where you started. Actually, I just want to say upfront that you are no longer involved in any agency. So this is going to be the no holds barred what it’s really like to run an agency. You’ve no skin in the game, you have no clients you need to keep happy or employees. So we’re going to hear the really unvarnished truth today, right?

Tim (01:28): Yeah. I’ll just set up the larger arch of my life. As you know, I was born in the former USSR in Moscow, Russia, and immigrated to the US when my family came here when I was eight years old. I went through public schools in New York, Michigan, New Jersey, and then got a full ride academic scholarship at a UC San Diego with a nude beach next door. It wasn’t exactly a tough choice of schools.

So I came out here. I stayed there. Majored in computer engineering and cognitive science as an undergraduate, and then went on to do my masters and did a total of seven years of PhD work. And during that time, I worked at big companies, NCR, SAIC, which is a big defense contractor. And seven years into my PhD, I quit because the only thing you need a computer science PhD for is if you intend to teach at a leading university, and that was never my path.

So I was just more of a stubborn. My dad had his PhD, my mom had her masters. Of course, I’m going to graduate school. After my dad died, I decided, yeah, maybe not so much. At 29, I decided I’m not going to start my fourth decade on this earth still in school. So I quit graduate school, I quit my job, and I started my first agency.

David (02:45): Wow. Your first agency was called what?

Tim (02:48): It was called Future Focus, and it was essentially a dotcom incubator. This is early days, 1995, shortly after Al Gore invented the interwebs. So we were building websites, some of the first database-driven ones. We were also acting CTO on startup boards and management teams while they raised their money. It was just really early days when it was a cottage industry, I would say. And that was a lot of fun, but also just a wild ride as well.

And after that, I shut down that agency and started a new one to focus on what was new at the time, pay-per-click marketing. I don’t have to describe that to you. It’s not called SEM. And this was early days. So it was GoTo, which became Overture, which got swallowed up and became Yahoo! Search, and nobody remembers Yahoo! Search at this point anymore. But we were one of the first ones to run pay-per-click campaigns for clients, large scale stuff. We actually developed automated tools that plugged right into it and were the first bidding tool vendor. So we do fun stuff like jack up competitors bids by bidding just a penny under them so they couldn’t lower their prices and had these automated little algorithms running back in the day.

And so we managed large-scale pay-per-click campaigns for clients, and then up pops affiliate marketing. And we said, hey, we can drive lots of good traffic. Why don’t we just do some arbitrage and do PPC. Essentially, we’ll be a super affiliate using pay-per-click marketing. So we did that. I remember one month, we were making 17,000 on ringtones for cell phones, those pre-iPhone days. That was really a fun ride, but what we realized very quickly is that the traffic we were sending was high quality, but the websites and landing pages sacked.

And so we said, let us make you more money by fixing your landing pages, and eventually that became my last agency, SiteTuners, and it turned into a little bit of a tail wagging the dog. In other words, we jettisoned all of our pay-per-click management, all of our super affiliate stuff, and became one of the first conversion rate optimization agencies to make websites more effective, and had a good run from about 2000, and my involvement ended in about 2019.

David (04:57): It strikes me that you have been consistently about 10 years ahead of the curve. Like you were building a web place in 1995, and it wasn’t until 2005 that everyone woke up, and then PPC in 2001, it sounds like, or 2000, then landing pages since 2005. So that’s kind of a double-edged sword, though, isn’t it, because it’s great to see the future, but if all your potential clients don’t see the future with you, you have a lot of headwinds in some respects.

Tim (05:24): Yeah. You’re absolutely right, and thanks for calling that out. I’m a visionary, I would say, and focused on the future. So I’d spot the trends, and I would jump right in, but you’re right. The market often wasn’t mature or people didn’t know how to pay for those services or how to value them even. So it was definitely some missionary selling there.

At one point, we even did some performance-based marketing. We’d say, hey, if we make you a dollar of extra profit, will you give us 50 cents. And so we tried this performance-based business model, but in order not to get screwed by our clients, it required these heavy-duty 20-page contracts that they were never willing to sign. So even at the level of the business model, there is a lot of trial and error, mostly error.

David (06:04): Actually, that’s why I typically don’t like performance deals because it often feels like heads I win, tails you lose.

Tim (06:08): Yeah, it’s kind of like we’re going to pay you $1 million dollars if you make us $2 million. People get greedy, then they don’t want to open up the kimono about their financials, and all kinds of fun stuff happens. So in theory, it’s great, but I had a professor once told me in graduate school. He said, “In theory, theory and practice are the same. In practice, they’re not.”

David (06:30): Totally true for business. I was reminded when you were talking about doing PPC in the early days. In 2003, I had an interview with Intuit for a search engine marketing job, and they wanted someone with 46 years of search engine marketing experience. And I said, there’s only two people who have that much experience. Their names are Larry and Sergey.

Tim (06:51): And the same thing in terms of being early into the game when I cofounded SiteTuners in 2000, we were actually one of Google’s first, at the time it was called website optimizer, their landing page optimization tool, split testing tool. We were one of the first five companies that were certified by them. And then we say, early to that one too. Eventually, they rolled it into Google Analytics and had hundreds of consultancies of various stripes working on those projects, but yeah, it’s like early to the party or just standing in the corner drinking your own drink. That’s all that happens.

David (07:27): Totally. I remember speaking at a conference on PPC. There was a legal conference. I was working on a legal website. I had a speaking presentation with me and someone form Yahoo Search Marketing, and I think there were literally four people in the room, the two of us and two people in the audience. So we just came off the podium and just sat down at the table and talked to the two people who bothered to show up because no one cared about pay-per-click advertising.

At that point, we also bought a one-year contract with Microsoft. We got guaranteed top-three ranking for the word ‘lawyer’ for $0.25 a click.

Tim (07:58): Wow.

David (07:59): Today that would be probably $25 a click would be my guess. So let me ask you about the early days of these businesses. What were some of the challenges that you had to overcome that you think someone starting a business today would have to think about, and maybe you could learn from?

Tim (08:13): We’ve already touched on, which is being early to the party. And I think that’s a really important one. If you look at any activity, first it’s the high priests doing it, and then it becomes more or less understood and people have it in the job title, and eventually it becomes a commodity because it’s so well understood that it can probably be automated or procedurized in many ways and it’s not rocket surgery anymore, as I like to say.

So one of the things I had to decide really early on is what kind of agency we want it to be. And for me, that meant we wanted to be one of those bleeding edge agencies just because that was my temperament and I was spotting those trends, which meant along with it, that we had to have really expensive smart people to do the work. It’s okay to be like the type of lawyer that does wills and trusts and 90% of it is spit out by your word processing program and you fill in a few blanks, but then there’s lawyers that do international tax law for giant corporations. That’s really, really hard to do.

So, again, deciding where you want to be in terms of how commoditized or how common the understanding of your services is, and if you’re going to stay in the bleeding edge, again, it implies high salaries, really smart people, always swimming upstream. If you’re okay just cranking out operational stuff, that’s fine too. It was just never my personality type.

David (09:29): It’s interesting because one of my sayings about how agencies are successful is that they have to operate on two axes. They have to provide scarcity in terms of what they provide to clients. And they have to provide immense value. And actually, I would argue that what happened to you in the early days is you were extremely scarce. No one else was doing it, but clients didn’t recognize the value in the early days. That’s why, I’m assuming in 1995, you could go into the top 100 brick-and-mortar stores and say you need a website, and probably 80 of them would say, no we don’t.

Tim (10:03): Right. What for? It’s an online brochure.

David (10:06): Yeah. That’s, I think, where the timing becomes relevant because value is determined by the client, and if you’re too early-

Tim (10:12): The value doesn’t necessarily mean they require high profit margin. For example, if you say, we’re going to just crank out pay-per-click management and we’re going to do it with automated tools and once in a while have somebody smart take a look at them and readjust some things. Okay, that’s one model versus we’re going to do really complicated localization in multiple languages and do search engine marketing in that environment, and that requires a lot of labor and people thinking with their heads.

So I think it’s a conscious decision of how cutting edge you want to be because value might mean we do this operational stuff really well and we make a 5% profit margin, but we do in volume. That’s one type of agency. And there’s the other type where it’s like on all the ones I built which were all chiefs and no Indians, to use the Native American analogy, they’re expensive and smart and a handful to manage as well as to have the clients appreciate the value when they said, oh, my 15-year-old nephew took a class in pay-per-click marketing on LinkedIn learning, and said, you’re going to run my campaign now.

David (11:20): I agree with you. I think that that would be an example of low scarcity, low value of a business. It’s like if you’re just automating this and you have an 18-year old somewhere near Arches National Park, check once a month when they’re mountaineering to see how your account’s doing, then you’re going to charge someone $495 a month, and they’ll be happy, but they would also switch to someone else charging $395 a month if they could find them, versus what you were building was the $20,000 a month and you’re getting a PhD who studied this for 10 years to do it.

Tim (11:49): And I’m not saying, again, that’s the desirable model, all the professional services literature, and it really hasn’t changed since the ‘70s. You have to have the appropriate kind of pyramid with smart people on top and people that want to make partner and a bunch of junior intern-type people cycling through on the bottom of the pyramid. You have to have the shape of that pyramid and how steep it is to climb figured out as well because your average labor rates have to combine into something that the client can swallow and it’s comparable to what other people are doing.

David (12:22): So what would you have done differently in these businesses?

Tim (12:27): Yeah, I’ll tell you some of the mistakes that I made and maybe that’s just a shorthand for saying the same thing. Missionary selling is not fun. If you don’t have an established industry- the way I used to describe what SiteTuners did is we’re really high-end, but we don’t charge nearly as much as they do. So you have to have something to compare against. If you’re just saying, well, we’re these super wizards of internet marketing and nobody knows what that is, then they don’t have a frame of reference. So it helps to position. It’s really, really important to get positioning right, and it has to be against an existing thing. It has to be against an established industry or an established way of talking about things. Otherwise, “Let me describe this really complicated thing and you’ll want it,” not so much. That’s one mistake I made for sure.

Another mistake was not getting the labor rates right. I think one of the things I was slow to the party on was I wanted everybody in my office. I wanted those people right next to me. Obviously, post-pandemic, nobody is doing that. And then people are more comfortable. But for example, the partners that took over SiteTuners after I stepped out about three years ago, they have development in Argentina, in Mexico, in Romania, in the Philippines. So they’ve taking advantage of the supply chain, if you will, for talented people, but also understanding the advantages of that and signing up for the complexity.

So you still have smart, client-facing people in the US and smart people doing the work, but your effective labor rate can be very different. And I wasn’t interested in doing that. So I think one of the mistakes I made was not offshoring some of the work. We did that for a limited support, administrative stuff, but we really didn’t make that the core of the agency. And it seems like these days, if you’re actually going to grow an agency as opposed to be a one-man band and hang out your shingle, then you really have to take advantage of the labor rate differentials.

David (14:26): There’s a bit of a pull in both directions, I would say, in the sense that, certainly with the pandemic, the world is flat, and you can hire people anywhere. But I also think that we’ve probably overestimated how willing people are to work with offshore for all their needs. The analogy that I give is like offshore is great. You save money. There’s a ton of talented people. But there are certain clients who just want someone to come to their office once a week or once a month and show up in person. There’s some value to that.

Tim (14:59): And I’m not saying exactly. It’s a hybrid model. You have to have the client-facing folks in the US, if you’re a US agency. There’s no way to get around that. And you have to figure out how to manage people time zones away. That’s difficult. You might have clients in Europe and people working for you in Asia. You never get to sleep. That its own wear and tear. And then I think even if you do set up a center in another country, you have an expensive person that’s accountable for riding hard on those people in that location. You can’t just put together a stable of outsourced people with no management. There has to be local management.

So all that implies that you have to have enough volume and large-enough projects where you can keep those people occupied and fed and still layer on the quality control and the client interface stuff. There’s a lot of moving parts. I’m not saying it’s easy. I’m just saying but to do it all with people that are effectively costing me a couple of hundred thousand in the US, that was really, really difficult.

David (16:02): Yeah. Absolutely. I’ve lived in San Francisco Bay Area. So I know what it costs to hire and feed and house someone here. There’s great people all over the world that can do some work for much less.

Tim (16:13): Yeah, but having said that, here’s a caveat. I work with people around the world and there are big cultural norms, and I don’t mean to come off wrong, but for example, I had experience with outsourcing to teams in India. And there are two things that really surprised the crap out of me. One of them, okay, wait, you’re on holiday again. There seemed to be like 30 holidays a year. What do you mean that’s a day off for you. I expect you to be in the office and to be able to reach you. That wasn’t cool.

And then the other thing is cultural, I’d say differences, for example, yes doesn’t mean yes. Will you have that by Tuesday? Yes. Well, no, not really, because yes is I heard you and I’m trying to appease you, but it’s not my firm commitment. So there’s certain expectations of formal structure Northern European culture that I had, which works with Germans, which works with English people or Swedes, but it doesn’t work with someone in Malaysia or India perhaps.

And so you have to have people that are culturally fluent, like I said, on the other end that work for you as a manager to buffer all that and to make sure that quality stuff comes out consistently.

David (17:25): Before I started my agency, I worked for a company where I managed a team in Bangalore, India, and I had the exact experience which was that sometimes someone will say, yes, no problem. Can we have that next week? No problem. And it’s a cultural thing where I think it’s rude to say no to a boss. And so to figure out what yes really means is if you grew up in a culture, I’m sure it’s just intuitive. You just know exactly when someone says, yes, no problem, you know if that means next week or two weeks from now.

Tim (17:50): And by the way, you don’t have to go that far away to have similar examples. I’ll give you one. My Canadian friends in the US here, we’d like to think of them as America’s hat or the 51st state, but they kind of resent that. Just joking. But Canadians, in their legal system, they actually have to have a clarification recently that if somebody apologizes, that is not an assumption of guilt or them saying that they agree to underlying thing. They just have a culture, oh, I’m sorry. They just apologize a lot as a way of social niceties.

And so that’s something else to get used to, for example. So there’s these kind of quirks all over the world or differences. Americans are bizarre at many levels than others.

David (18:31): I think as Americans we don’t realize how aggressive we are relative to a lot of other cultures.

Tim (18:36): Yeah. Just too upfront, too in your face. I think the closest to us, I would say, psychologically are the Dutch because they were a country of traders and of course established the New York area, but they’re just kind of like yeah, as long as we can do business together, let’s do it. They’ll jump into relationships with strangers, but in other places, you have to have those proverbial three cups of tea first.

David (19:01): Yeah, exactly. The world is a fascinating place when you start to get into these different cultures. To what degree did your upbringing in this former Soviet Union impact the way you ran your company?

Tim (19:11): That’s a great question. I never thought about that. I would say that-

David (19:17): You put bugs in the conference room, for example?

Tim (19:20): Well, yeah. Uncle Vlad’s listening in on the recording devices. I wouldn’t say that this is a Soviet era thing. I think maybe it’s more of my personality, but one of the mistakes I made, and this is probably applicable more broadly to people that run agencies, I thought the quality of my work was enough to speak for itself. So one of the things that we overemphasized was focusing on the quality of our product. And when it’s conversion rate optimization agency, you’re basically telling them that their landing pages or their website is shit.

And so we just say, hey, look, if we can just objectively and accurately tell you why it’s such a piece of crap, then you should thank us for it. Well, not so much. I realized that the soft skills of account management, of making sure that everybody understands the corporate culture and dynamics on the other side, on the client side, was really critical on something that we undervalued and underestimated for years. We just thought that the technical excellence of our work and the results should speak for themselves. And it turns out, no. Running an agency means you have to kiss ass for a living.

David (20:27): And is that no what happens in the Soviet Union?

Tim (20:30): There it’s very different. People are more brusque. Everybody was equal under the communist soviet system, which meant we are equally in the same crap, but it also meant that anybody could get in your face and tell you what was wrong very frankly. Like you take your little kid out in the winter time and they’re not bundled up enough, any passing-by grandma could say, you should dress your kid better or they’re going to die of pneumonia. So it’s like, who asked you, grandma? But that was okay back in the Soviet days. And I think I was coming more from that brusque culture and directness.

Like I said, there’s a great line from the TV show Mad Men where Don Draper says, “The day you land a client is the day you start losing them,” which I absolutely love and it’s so true. You don’t know when, you don’t know under what conditions or why. I’ve seen it all. I’ve had companies shut down, I’ve seen legal stuff stop the campaigns, I’ve seen people transfer and go to other companies. I’ve seen a company reorganized around some other metric and say making actual money is not that important to us. We want to improve our net promoter score, this kind of bullshit.

So I’ve seen just about every permutation of it, but I think that’s the truth is in a professional services agency, you’re working with very complex expectation management, and at some point, you’re going to disappoint somebody. And keeping a pulse on that is probably one of the most important account management things that you could be doing and having formal systems for that is something we never got around to, to our detriment, I would say.

David (22:01): I’d like to say a couple of things. First of all, I’ve never lost a client. So this is obviously something unique to you. You kind of make it universal, but it never happened.

Tim (22:12): [crosstalk] super happy and just want to keep upping their retainers with you.

David (22:16): Yeah, they just double their payment every month pretty much. But I do think that one of my adages is the sad truth is that a great relationship and bad results drives more retention than a bad relationship and great results, at least in the United States. Maybe not in Russia or Holland or something with another culture, but in this culture, if someone doesn’t like you or doesn’t like the account manager, it doesn’t matter if you are setting world records for conversion rate or ROAS and everything like that. You’re out. You’re going to be gone.

Tim (22:47): And closely related to that, yes, so you’re right, relationship trumps results, but even in terms of results, it’s what have you done for me lately. One of the big difficulties for me for running an agency was a lot of things were out of our control. So, for example, they decided to change the traffic sources that they were sending traffic to the landing page from. And they go, look, our results went down. Well, yeah, because you have different people showing up from different population with different beliefs or maybe different amounts of money in their wallet, whatever it is, and it’s no longer working, but I am sure if you put back the old landing page, it would still do 20% worse like the original page did. The results would be even worse.

So talking to people through the downdrafts is hard because we want to be objective, we want to be measured on performance, but when they’re pulling levers that make the business worse and you have no say over it, that’s a problem. Or when you’re stuck in a seasonal or an economic downcycle, you have no control over that. But how do you tell them, Yeah, it could be even worse. So you should stick with us.

David (23:53): Well, one of your expressions that I love is your baby is ugly, and I think that’s from your first book, maybe.

Tim (23:58): Yeah, it is. It’s a chapter with that name in my Landing Page Optimization book.

David (24:03): It strikes me that first of all, that’s very soviet of you since we’re talking about being frank with people, and that sounds like someone would say, your baby is ugly, as you’re walking in the streets of Moscow. But it also speaks to just like, I guess, the was this your philosophy in working in clients? We got to just get to objective facts and just not take it personally and get to the good results?

Tim (24:26): Yeah. And again, that was a mistake because somebody built that ugly baby. Somebody designed that website. Somebody did those-

David (24:32): And there’s going to be confirmation bias there, right?

Tim (24:35): Right. Nobody wants to hear their baby is ugly because they’ve invested so much time and energy into growing and raising them. And you’re saying that in front of their colleagues, and you say that to the C-level people, and they really have a cow.

David (24:50): Is that when you transform from Soviet to Canadian and you just try to be as polite as possible?

Tim (24:53): You apologize a lot. You know, it’s funny because we did work for, these many years later, I can say Autodesk, a pretty big Fortune 500 company that makes AutoCAD software, and we redesigned essentially the website for one of their products. And we split tested it directly, saying, here’s which one works better. And this one, on annualized basis, the new one would have been $17 million a year more revenue in terms of leads it generated for their VaRs.

And they said but it’s off-brand for us, so we’re not going to actually flip the switch live and adopt that as our new website. Stuff like that happened all the time. Money doesn’t even talk. It’s just weird. They have other considerations.

David (25:37): I would think from the outside that doing conversation rate optimization that anyone who signs up for your agency goes into it knowing that you’re going to change things, you’re going do it [crosstalk].

Tim (25:47): Break it with a wrecking ball and a sledgehammer, yeah. But big companies, they’re so ossified. They have these brand guardians or brand Nazis, as I call them, that are very, very specific. For example, once we did a split test on Texas Instruments’ homepage. This was a big company back in the day, made calculators and such, and they actually gave us 180 page brand guideline. Thou shalt use this font, but no smaller than eight characters, and you can’t have the logo with this much whitespace next to it. Unbelievable degree of anal retentive control.

So the stuff that we could test was inconsequential because it was just hamstrung by their brand guardians. And sometimes that’s one of the most conservative roles in the company because, I understand they want to enforce consistency across a vast array of consumer touchpoints. That’s admirable, but if you’re not getting frontline feedback about what’s actually working in order to feedback into your brand documents, then you’re really fighting with both hands tied behind your back.

And we did the same thing. We tested the Google AdWords homepage, the one where you sign up for Google AdWords, not the big accounts, but the great unwashed, the small businesses. Massive, massive traffic through that page, but again, there’s a creative director pretty high up in Google at one point quit, as I recall many years ago, because they were going to test the RGB value of the blue on the button because they had that amount of traffic, and they could, but it’s just ridiculous how inconsequential some of these things are and the constraints that people put around them in the name of branding.

David (27:23): There’s a story which I think is true that in the early, early days of Google, we’re talking probably 1998 or something like that, there was a guy who every week would send an email to someone, I guess, on the Google design team, and it would be one number: 52, 57, 56, whatever, and that number was related to the number of words on the Google homepage. That was literally keeping them accountable because he had started out with being, it just said Google, I’m feeling [crosstalk]. Exactly. Someone was holding their feet to the fire to not turn into what, at that time, would be the Yahoo homepage which probably had 7,000 words on it.

Tim (28:05): Yeah. That’s a design aesthetic, you could argue, just like Apple has their thing and you can’t argue with their success. I think it’s important to chop away and simplify things, and that was a huge theme that we got a lot of mileage out of as a conversion rate optimization agency. Just declutter stuff. You don’t have to add anything. Try removing some things that shouldn’t be there in the first place because a lot of landing pages and websites are a camel, and the camel is a horse designed by a committee. And everybody has their 2 cents and it becomes this Frankenstein monster of parts that are serviceable individually, but when you juxtapose them and put them together, it’s definitely not a coherent whole.

So that is another thing that I would say that a lot of companies and a lot of digital marketing agencies get wrong is they’re always trying to add the latest stuff, and they never think about the context in which they’re adding it and the complexity that they’re creating or the choice overload for the poor visitors.

David (29:03): I wrote an article a while back that was titled, We Test Everything and Other Lies CMOs Tell. That CMOs are always like, oh, yeah, we’re very quantitative. Everything is measurable, and then you’re like, okay, well, here’s a change to your landing page that will have a $17 million impact. I’m not going to even do a test on that. That’s not brand compliant. We’re not doing it. Or I just think blue is going to look better.

Tim (29:24): Yeah. Well, there’s the HiPPO, the highest paid person’s opinion. Oh, wow, you’re not only running a profit and loss division of 100 million, but you’re also an expert on color theory and you know which colors are going to work on the button. Congratulations.

David (29:37): And actually, I mean we used to have a conference called Conversion-

Tim (29:42): Conversion Conference. Yeah, it’s going. It’s been going since 2010.

David (29:44): Okay. Still going. I remember I was in the exhibit hall of Conversion Conference, and Google Analytics was there, and they had a giant hippo at their booth to call out the HiPPOs that they were trying to avoid.

Tim (29:56): That’s right. I have one of those inflatable hippos.

David (30:00): So you’re talking about some big clients that sounds like having Autodesk as a client would be great. I think you said Texas Instruments, these are great clients but turned out to not be, not to say they’re bad clients, but you had challenges along the way. Did you reject clients upfront if they didn’t hit certain points.

Tim (30:17): Yeah. That’s a great point. You have to be realistic. You’re going to have some stretched goals. We had at SiteTuners over the years Facebook, Nestle, Expedia, Google, Siemens, I could go on. We had dozens of Global 500 clients, but those are not that fun to work with because you’re not really working with the client. You’re not their agency of record. A lot of stuff is handed down to you, and we can’t change that is the answer. Some middle manager three, four levels down, we have to use those brand guidelines or we have to use this content management system, and we’re not allowed to innovate or do anything meaningful or we have to localize it and translate it into 37 languages. Therefore, we’re not even willing to change the words on the button or whatever. There’s just bizarre stuff that comes up.

Big companies, as I look at it, are balanced on this point where they have the advantages of mass and of market acceptance and of the ecosystem they built around them, and that’s balancing on the teeter-totter with all their inefficiency and stupidity and one hand doesn’t know what the other is doing. And that’s not a fun environment to be in if you’re a creative agency or you’re doing anything dynamic or meaningful or if you want anything less than three to six month approval cycles on the most trivial stuff.

So I can’t say I enjoyed that at all. On the other hand you have businesses that are too small where the owners are one-man Oompah band and they’re questioning everything and sticking their nose in and they’re really high maintenance, and they’re not paying you nearly enough to deal with their crap. So there’s got to be a kind of Goldilocks zone. And we figured this out for our agency, when I left it anyway, it was probably companies between companies 10 and 100 million because you had the attention of their senior people. There weren’t seven or eight deep in the decision-making process. If you got the CMO or the CEO to sign off on something, it got done, had enough resources to do it, weren’t micromanaging. So you weren’t hamstrung at the enterprise level.

That’s definitely important. Think of company size and who you’re selling into. Those are critical considerations for an agency. So for us, we were best when we were dealing with at least VP to CEO level. And if we got down to director level, they couldn’t make any important decisions.

David (32:37): So director level, that would be a red flag if that’s who the decision makers when you’re looking at the contract.

Tim (32:42): Exactly. They’re not really making the real decision in an enterprise. It’s procurement that’s making it or somebody’s got to sign off on it. Gord Hotchkiss, he was in the industry. I don’t think he is any longer, but he published some stuff, some original research called The Buyersphere Project. I think it’s still available as a book on Amazon. One of the things he was talking about, size of the organization and number of decision makers. If it’s two to three, that’s okay. If it’s six to seven, it’s never going to happen. And that’s what happens in big companies. Just too many cooks in the kitchen.

David (33:12): So in some cases, you signed up a client thinking that it was going to be a good fit. Inevitably we all have bad client experiences. How did you deal with challenging clients once they were already signed on?

Tim (33:24): Well, you know what, a lot of times you sign up for clients, I’m going to challenge your assumption, knowing they’re going to be a bad fit. You’re desperate. You have your feast and famine cycles in any agency. You’re running around trying to fulfill the work, then you’re running around trying to get more work. And it’s always a rollercoaster. It’s not like some steady, linear thing that’s always up into the right. But most of the time you take, hey, you got USD 20,000 as a retainer a month. Let’s do it. We’ll even give you a 90-day out instead of a 1-year contract.

So basically, what you’re saying is, let’s get married. Oh, wait, you’re insane. Like I just didn’t know what flavor of mental illness your company represented. So it’s not like you’re that cheesy. Let’s face it. I don't know who’s lucky enough to just say, oh, we’re going to turn away business and we have no-assholes rule. All that stuff’s nice in theory, but I know very, very few small agency owners that are in that boat. So you kind of know there’s going to be a problem. You can even try to manage around it or to know it’s happening, but it’s not anymore fun on the other side of it. It really burned a lot of my staff to work with asshole clients.

And so there’s that price to be paid, too, because you’re not just keeping clients happy. You have to keep your employees happy. That may be even harder, especially if you have difficult clients. So that’s the reason not to take on big clients if you can at all avoid them. But sometimes they represent so much money that you have to take them on. Of course, that comes with a flipside of portfolio risk. We had one client at one point that they represented half of our recurring revenue. Not a good place to be. I promise you.

So one way to deal with that risk is to have entry-level plans and small-enough price points where 20, 30, 40 of these smaller guys, you don’t even care if 2, 3, or even 5 of them go away, but you really have to worry about your buffalo hunting, the big game stuff, if one of those goes away. And I don’t know. There is no Band-Aid that I found or silver bullet that would keep a big client with complex expectations happy consistently.

David (35:27): I agree with you, especially when you’re a smaller agency, you often have to just take whatever comes in the door because that client is the difference between paying the rent and not paying the rents. As you get bigger-

Tim (35:38): When your employees also paying yourself.

David (35:41): Yeah, exactly. Employees get to have lunch and you get to have ramen. It’s a huge challenge, and I do think as you get bigger, I think the no-asshole rule really comes into effect because a client that’s paying you a ton of money but that’s causing attrition among your staff or causing the staff to doubt whether you actually care about the staff, the money has to be very significant to say to your team, deal with it.

Tim (36:09): Yeah. People right now, we’re talking about things in the middle of what’s called The Great Resignation, digital nomads can go literally anywhere, and that’s who we’re dealing with as employees, people that have very portable skills, they carry inside their heads. They don’t need to be in the warehouse moving stuff along, the conveyor belt to get packages out the door or something like that. So we have to be extra nice and kind to our employees, and there are also generational differences.

I’m on the leading edge of Gen X, and to me, it’s kind of like, no, mummy is not going to come to your job interview, and no, you can’t show up whenever you want to. And no, there’s no transcendental meaning here working for my agency. It’s just like you do a good job, you get paid, and then fuck off, and do whatever you want on the weekends.

But that’s not the mentality of the workforce right now. People don’t have any sense of loyalty, or I would say, in many cases, even personal integrity, and they’ll ghost you and quit the job and the way you find out is three days later, they still haven’t shown up to the office. So you call them. So that kind of stuff, I’ve heard from all kinds of agency heads, and my way of avoiding that was to work with grownups, which to me, meant people around my own age. And I very specifically tried not to have younger employees because of all of these expectations that were baked into how they were raised. As you get older, that’s not a long-term solution either.

David (37:38): I think I disagree with you in some respects. First of all, I think that every 22-year old, regardless of their generation, thinks that they should be vice president by age 25. I certainly did. I was 22 or 23. I was working for a law firm as a paralegal, and I was like writing the closing arguments for the lawyers even though I’d never gone to law school. That’s how confident I was in my abilities. I thought they were pretty good arguments.

Anyways, I think that part is not a Gen X, Gen Y, Gen Z, I don’t even know what generation we’re on, you know, post-X, millennial, but I think two things that are different with this generation versus our generation. Number 1 is there hasn’t really been a recession for 14 years. So anyone who’s come into the market in the last 14 years has never seen a down year where suddenly a third of their friends are laid off in two months. I think that impacts people. And then the second one is, as you said, the digital nomad thing. It used to be that if you grew up in Kansas City and you wanted to work in search engine marketing, there were three agencies you could choose from.

Tim (38:36): That many?

David (38:39): Yeah, right. Or maybe one agency. And so now, you could be in remote Alaska, and as long as you have some sort of Elon Musk’s Starlink or something to get you a high-speed internet access, you can work anywhere.

Tim (38:52): I think that said, the threshold to switch jobs has gotten a lot lower, both because of choice and people poaching you on the recruiting side out of companies and stuff like that. You really have to kind of watch your back. I know a lot of management training programs folded within the last 10 years because the longevity of your people, developing them makes no sense. If the average tenure is 18 months, why would I do a management training on the assumption they’ll be there five years from now. So that’s kind of collapsed and people are all free agents.

And maybe that’s for the better, but in a way, I think ultimately, we’re not doing any favors to anybody because this is going to be like Uber. Everybody needs a side hustle. We’re all going to be exploited because the marketplace is going to be super-efficient. So yeah, you can go anywhere, but your employers can also source people anywhere. So it’s a two-edged sword, and I don’t know that the center is going to hold, frankly.

David (39:49): I agree. I think there’s been a lack of loyalty by employees. There’s also been a lack of loyalty by companies as well. So that’s the double-edged sword in all of this. A lot of companies try to have really strong cultures and core values, but at the end of the day, companies make decisions based on what’s best for the bottom line.

Tim (40:06): Let’s talk about that. There is another peculiarity of, you said, maybe it’s because I was a latchkey kid. Both my parents worked, but again, that was the ethos of Gen Xers and grunge. It’s like we’ll get by. We don’t need you. There’s this notion that work’s supposed to provide transcendental meaning that culture really matters, and I just hear that all the time and how do we develop everyone to be a leader and still have yoga nap rooms and Kombucha on top. I don’t know. No. It’s just work, and if it’s a profit motive in a hyper competitive monopolistic capitalistic society, which is what we have. It’s actually not even capitalist because that assumes that you have competition, you’re just a productive unit whether you like it or not. And so we can dress it up by saying, there’s meaning, but is Uber changing the world? No. It’s a fancier way to call a taxi.

Is Elon Musk changing the world? Arguably no. He’s just hastening cars from the fossil fuel era to the electric era. So all this disruption and all this pivoting and all this growth hacking, it’s just like really, you believe you’re changing the world? No, you’re just running faster on the gerbil wheel.

David (41:17): Well, you know, there’s Maslow’s hierarchy of needs in the job world is there’s a job, a career, and a calling. And a job is something that puts food on the table so that you don’t starve. A career is an opportunity to advance and attain higher position. And a calling is something that you do feel is mission-driven. And I think you’re right that not everything that you do in the agency world is going to be mission-driven. You may be working for a blue widgets company that just increases the number of widgets from 1 million widgets sold a month to a 1.5 million. That’s not that meaningful.

But the thing that does create some glue is if people just care about each other inside the agency, if you just want people to succeed, want people to be happy, and then also work with clients that you want to see succeed. So even if it’s a client selling blue widgets and you don’t really care, if you really like that Vice President of Marketing on the other side and you want to see her become successful, there’s a bit of a calling in that.

Tim (42:09): Yeah. And that’s what they say about warfare. You’re not fighting for some grand cause. You’re fighting for the fellow soldiers in the trench next to you. So yeah, I think establishing a culture of close ties, but that also is a two-edged sword. I would say the other thing that’s different, being on the other side of it now, is extreme ageism. So you’re expected to be on call, on the Slack channels 24/7, and yeah, some of the time, you go play beer pong together or do a ropes course on a company outing, but you’re all expected to have the time to do that. Well, you know, I have kids. I’m not going to go play ropes courses. I’ve already crashed three cars by driving too fast. I don’t need thrills in my life.

So I think part of it is a stage in life thing. If you assume everybody is in their 20s and 30s, yeah, maybe you can build a culture that’s essentially what tech companies try to do, which is an extension-, well, you never left college. So we’ll wash your clothes and there will be concierge delivery of high quality food and sushi in the cafeteria, anything to get you to be here 24/7 so we can milk you for more profits. Whether it’s an agency or it’s in-house, it’s the same, but you can’t do that to people once they start families.

And so it’s predicated on squeezing as much out of people early in their career as possible. I don’t know that there’s a culture that can span generations that would work inside of a company.

David (43:30): As you said, it’s, I think you mentioned, the pyramid that’s been around since the ‘70s. The definition of the pyramid is that the people on the bottom of the pyramid, and to use Karl Marx’s reckoning, going back to the Soviet Union again, they’re being alienated from their labor. Those people are being paid $80 an hour and being charted out at $300 an hour.

Tim (43:49): Whether it’s an architect or a law office or digital marketing agency, it’s all the same. It’s got to work economically.

David (43:56): And you bide your time at that lower level for the opportunity to someday get up to the higher level, where either you’re getting paid $300 and you’re being billed out at $600, or if you’re an owner, you’re doing nothing. You’re making money off other people.

Tim (44:09): That’s if you stay in the corporate world or the agency world. A lot of people are just opting out by becoming solopreneurs. And that’s true. If you have that possibility, a lot of people are figuring out, well, I’ll blog and I’ll get sponsors for my blog, and I’ll make money that way, or I’ll teach online yoga classes and I’ll get a big-enough following, and then I can live in Thailand and work from there. So there are possibilities, but this is for a tiny, tiny per segment of society. It doesn’t solve society’s problems. For them, for most of us, we’re still stuck in the corporate world, and if anything, it’s getting more ruthless, I think. So just some philosophical takes on it.

David (44:47): Yeah, it’s true. That is the nature of capitalism. Capitalism only really works if people feel that they have a chance, albeit a small chance to become a part of the ruling elite. There has to be that one-in-a-thousand chance that if I work hard, someday, I’ll get out the cubicle, and I’ll be the one who’s flying around in the private jet.

Tim (45:05): Yeah, that’s if you’re lucky enough to be in a cubicle, which means you got an education, which means you probably went to college or something like that, but if we look at it overall, actually there is no social mobility. There’s better social mobility in the “socialist countries” of Northern Europe than there is in the US. Your chances of going from the lowest quintile to the highest quintile in the society are lower than they are in Denmark or the UK. And in fact, the biggest determiner of your financial trajectory in life as well as life expectancy, health outcomes, all of that, is the ZIP Code you were born in by far. I can predict a lot about you just from that.

So the American dream is dead and buried. We can talk about meritocracies and working your way up, but I don’t really see that. I think that millennials are actually the first generation post-World War II that’s on average going to do worse than their parents.

David (45:59): I sort of have this neo-capitalist theory, I know we’re going way off on the agency world, but that’s okay. This is interesting. I knew that was going to happen, Tim. So again, I think capitalist, the unwashed masses, so to speak, have to believe that they can be more successful than their parents. If they don’t, then they lose faith in the system. And again, going back to Marx and Hegel, that’s where the revolution occurs, when people feel like there’s no upward mobility. And I would have guessed, and again, Hegel and Marx would have said the same thing, that the way people would have responded would be through some socialist, communist movement.

But what you could argue is, the 2016 election was a movement of people who went towards a right wide, somewhat, fascist approach.

Tim (46:43): Yeah, and that’s just not in the US and not just 2016. You’re seeing in Hungary, in Poland, Brazil, a number of places around the world is autocratic strongman populist stuff. That’s because Western democracies are fraying and not able to carry the water anymore. Actually, I don’t believe in this linear view of social development implied in Marxism and such, but I read a really influential book called The Fourth Turning. I highly recommend that. It’s a couple of historians who wrote in the late-‘90s, and they’re talking about these 80- to 100-year cycles that inevitably go from crisis to our post-crisis, high to a cultural awakening and then to an unraveling which leads inevitably to the next crisis. And the generations born in that and the dynamics in that system basically lock it in and recreate it.

Only the things that we experience in living memory inform how we live. And so we repeat the mistakes of history. Anyway, according to them, again, written in the late-‘90s, they’re saying 2025 is the current crisis period. So we’re deep in it and, yeah, just like you, I’m not sure that America in anything but outward trappings will exist as a republic after 2024. My personal hell, I could just as easily see a Handmaid’s Tale sort of society developing.

So there’s nothing inevitable about the forward march of progress. It’s the cycles and tides. Right now I have depressed the crap out of this. Let’s go back to talking agencies.

David (48:12): You know, I will say as a fellow Gen Xer, this is definitely old man argument here, but I have this theory that the ‘90s were the best decade ever, and I say that because the Cold War had just ended. So we didn’t have this existential threat of death. We had really strong economy. We had relatively low, in terms of Americans being impacted by horrific events. We had the Iraq war, which was terrible for many Iraqis, but for Americans, you had the Oklahoma City bombing, and that was probably the only major event. We didn’t have 9/11. We also didn’t have cellphones, and we didn’t have the internet, which meant that we could have some level of freedom. If we wanted to go to the beach and just relax, no one would panic. We didn’t text them in 90 minutes.

So I think, like you said around 2001, from 9/11 forward, we’ve had 9/11, we’ve had ubiquitous technology that’s taken over our lives, we’ve had pandemic, we’ve had recession, we’ve had attack on the White House.

Tim (49:06): Absolutely. If we map this latest 80 years or so cycle onto this Fourth Turning idea, the crisis period was the Great Depression and World War II. After that, we unified as a society. So from the mid-‘40s to mid-‘60s, that was the post-war high. We built the Interstate Highway System, we put people on the moon as a result.

David (49:25): It’s almost like racism and sexism and a lot of problems.

Tim (49:28): Exactly. And what happens in the society is the lid was kept on all that. In the ‘60s and ‘70s, you have the cultural awakening led by the baby boomers. They’re coming of age at that time. Inevitably, the unraveling in that ‘80s to 2000s. Things keep getting worse. That’s kind of the map, and now we’re inevitably in another crisis period. So this is the kind of cycles of history repeating, and there’s definitely different flavors to our particular version of the cycle, but I think the argument of this book, which I find very compelling, is that when you’re born into this cycle, determines you role.

Like you say, Gen Xers were, crap’s just been getting worse since we were born. We’ve never seen a better time. It’s just slowly going downhill and now it’s really fast going downhill.

David (50:18): And the music has gotten worse too.

Tim (50:20): I’m sorry, but yeah. So rock and roll, ‘60s, late ‘60s to mid-‘70s, that was the golden age. All this overproduced and sampled crap right now, I’m sorry.

David (50:32): Yep. I agree.

Tim (50:36): I really do feel like, oh yeah, old man, like yeah, the kids these days and their damn loser kids.

David (50:39): Yeah. Haircuts. How about those haircuts? Let me ask you a couple of more questions. We went way off track, but that was good. Let me ask you a couple of agency questions. Since you have been sort of a trendsetter for agencies, what’s your prediction for the future of agencies?

Tim (50:55): I think that it’s going to be very hard to have agencies in the middle. Normally, you talk about a bell curve distribution on a lot of things. We have more of an inverted U shape in terms of the revenue. It’s going to go either to tiny agencies, specialists, people that hang out their own shingle and maybe have two or three quality people that they can farm stuff out to or you’re going to have the big international, multinational agencies that can serve enterprise clients. It’s really hard to go from one to the other.

If you’re small, you’re going to get bought up by one of the big guys. It’s hard to exist as an independent in the middle. So I say like either be content working in a lifestyle business for the most part or know that you’re going to be swallowed up by the WPPs of the world. It’s very hard to do what you have done with 3Q and stay an independent mid-sized kind of agency. So be clear about what you want. Do you want to get bought or do you want to just have a lifestyle business?

David (51:56): I actually agree with you. A couple of years ago I wrote an article titled,The SEM Agency is Dying (and What To Do About It). And I basically came to the same conclusion that you either have to be an enterprise, not just SEM, but multiple offerings.

Tim (52:09): Omnichannel, yeah, multinational.

David (52:10): Omnichannel, multinational, great at landing page optimization, but also great at buying connected TV ads, or you have to be a small business solution at one of these companies where you’re charging someone $800 a month and you have one person checking the account once a month. Being in the middle, for the big accounts, you’re going to lose to the multichannel, multinational agencies, and for the small accounts, you’re going to lose to the cheaper solution. So it’s a bad place to be.

Tim (52:35): Exactly. That’s why I call it the U-shape, all the masses on the sides, it’s like flipping the bell curve on its head.

David (52:43): Yeah, I like that. You have a book that came out, I think, maybe a year and half ago.

Tim (52:49): No, no. Just it came out less than a year ago.

David (52:50): Less than a year ago. So Unleash Your Primal Brain. I have to say I love this book because it’s like a primer around behavioral psychology in 200 pages. Every chapter is just chock-full of studies and observations from people like Cialdini and Dan Ariely and Carl Jung, whatever. Maybe I poorly described it, but give us the 30-second version of the book.

Tim (53:15): Yeah, absolutely. So as you know, I wrote two best-selling books on landing page optimization. Those are practitioners, online marketing people, college level textbook, 450 pages, a lot of good stuff in there, but this one was very deliberately different. It’s actually not a marketing book. The way I describe it is it’s essentially a user manual for being human. It’s retracing the arc of evolution and figuring out where we picked up various stuff that makes up our brain. So there’s some things we share with insects like dopamine. There’s some things we share with other mammals, like the safety of the herd. And then there are some things that make us bizarrely human at the end of our evolution that we should also understand.

And so if you want to have a good career in business, whether it’s leadership, sales, marketing, maybe you should understand how people actually decide and make decisions. And that rational decision making, that isn’t actually happening in your brain at all. I mean that literally. You can’t make a decision without an emotional component.

And so I retrace brain chemistry, learning, memory, addiction, storytelling, our highly social natures, how we spread culture. I’m not talking about the contents of our operating system. I’m just describing how human beings work in general. And I think that that’s my contribution, is to make that accessible, thank you for saying that. There’s no gobbledygook in there. I also have an e-book version that I recorded. So it’s really something that describes what all 8 billion of us on the planet have in common.

David (54:45): Yeah, it’s a great book. And I will say my 11-year-old son has been using it recently but actually to balance it on his head while he does juggling on a skateboard. So I posted on Facebook. But actually, I recommend the book and I recommend that you read each chapter like three times because it is a dense book, and I don’t mean dense in a bad way. It’s so much data out there.

Tim (55:09): I want to be clear. There’s no tables, there’s no citations, there’s no graphs. There’s no scientific jargon in there. It’s designed as a straight read, but it’s dense in the sense of I didn’t put any fluff in when I was done writing a subject. I just stopped and went on to the next one. So there’s no flab in the book, I would say.

David (55:28): No. It is lean and mean. And I’m going to re-read it again because I really enjoyed it. And it’s just an area I love. I was just reading about Daniel Kahneman and Amos Tversky.

Tim (55:39): Well, some of the actual scientists that are doing the research is they’re horrible writers, and somebody needs to shoot their editors because some of those books should have never seen the light of day. So I went through the painful process of digesting about 30 to 50 books to write one good one. So I’m pretty proud of that. By the way, you can go to primalbrain.com/book, and choose the chapter of your choice. So if anybody is listening, just go take a look at the table of contents, and I’ll send you whatever chapter you want out of the book.

David (56:09): That’s awesome. Well, you know, it’s like $16. Just buy it.

Tim (56:13): Yeah. It’s not going to break the piggybank.

David (56:17): All right, well, Tim, that was a free-ranging conversation. I thank you for the unvarnished post-agency perspective, and it’s always enjoyable, and I hope that people don’t give up on capitalism and find some sort of meaning in their agency world despite our conversation today.

Tim (56:33): I’m into that, but I just want them going and do it with eyes wide open.

David (56:38): Thanks for joining me.

Tim (56:39): Absolutely. And if anybody wants to reach out, feel free to check out timash.com for my consulting and speaking and then primalbrain.com for all things focused on the book.

David (56:52): Awesome.

A new episode of Agentic Shift drops every Wednesday. Subscribe on your favorite podcast platform or visit agenticshift.com to see the latest episode.

Links

Tim Ash LinkedIn

Tim Ash Website

The Buyersphere Project, a book by Gord Hotchkiss

The Fourth Turning: An American Prophecy - What the Cycles of History Tell Us About America's Next Rendezvous with Destiny, a book by William Stauss

The SEM Agency is Dying (and What To Do About It), an article by David Rodnitzky

Unleash Your Primal Brain: Demystifying How We Think and Why We Act, a book by Tim Ash

Show Less
Contributors

Tim Ash
David Rodnitzky

Show Less

Contributors

  • Tim Ash
  • David Rodnitzky

Related Episodes

Tim Ash, Founder of TimAsh.com
0:00
0:00