Abacus Versus the World
We interviewed our CEO, Peter Reitano, and CSO, Jeff Goldenberg on what makes Abacus different from traditional advertising agencies, why Facebook is an important platform for advertising, and why company culture is so important at Abacus.
Interviewer: Why Abacus?
I’ve been in digital marketing and acquisitions for ten years. For the last six years, I ran an agency called Spark, which we ended up selling two years ago. Spark was a full-service digital marketing agency doing everything from SEO, PPC, social media and content marketing. Around when we were going to sell, we were kind of pivoting and started doing a lot of research into where the agency world was going, how it’s being disrupted by technology and different agency structures, brand structures. We were either going to use that information to pivot Spark or sell and do something else. And so we ended up selling and I started doing consulting work for start ups. I met Jeff and we started doing work together. Jeff at the time was working at Borrowell.
We both shared a similar vision for where we saw the agency world going and marketing world going and so we set up Abacus together. There were a few things that kind of backed that vision. So first off we saw the marketing world and agency world going more specialists, so specialists over generalists. Everybody says they can do everything for everybody and we wanted to do something very specific and get amazing at one thing, and that was Facebook ads because we both had a lot of experience with it and we saw that no one was doing the Facebook ad specialty like people do say, search marketing, or something like that. So we wanted to come in and be the best at Facebook from creative to optimization and audience and targeting.
The second thing is we’re seeing more and more data availability and better attribution so we wanted to tie that in. The third thing is a push to tie as much marketing back to revenue so move away from say impressions and frequency type marketing to more revenue focused marketing. So whenever Jeff and I pitch now we pitch like we are talking to CFOs rather than CMOs talking about the bottom line. We’re bringing in our lean startup style marketing to bigger brand worlds. So how do we run marketing and move the needle and track it back to revenue?
Since 2001, I’ve been in the startup world and really customer acquisition focused because that’s what the startup world is all about. A lot of my startups have required venture capital money and when you’re dealing with venture capital companies they are pretty much obsessed with the relationship between what a customer is worth to and what the customer costs you. And it’s that magic rule of thumb in term of the relationship between those two things that determine the degree of interest that they have in investing in companies. They call it unit economics and the closer you get to positive unit economics the more interested they are in putting money into the company because the money is less risky once you have this critical stuff figured out. So marketing at a startup that relies on VC money means that you’re always tracking bottom of the funnel customer acquisition cost type metrics and you really don’t have the luxury of tracking anything higher in the funnel like a lot of brand marketers do and spend a ton of money.
My most recent startup before Abacus was I was a part of Borrowell, which is an online loan platform for Canada, similar to Lending Club in the states, and when I joined Borrowell the product was online loans. An algorithm, which you could fill out a form really quickly, and instantly find out whether you’re approved for a loan, at what rate, and how much the company is willing to lend you, so it saved multiple visits to a bank branch. It was really neat and we were marketing through Facebook and Google, mainly this message about getting a loan from the comfort of your home.
We started working really closely on the Facebook platform and running a number of experiments scientifically to track one metric and see what we could do to affect that metric. That metric was how much it cost us to generate a loan offer, so we would run experiments. It wasn’t linear, sometimes it would go up sometimes it would go down, two step forwards one step back type thing. But, over last summer we became the first company in Canada that was allowed to give people their credit scores for free and started working really closely with Facebook Canada in terms of how to get them distributed at the lowest cost per acquisition and that’s when things really began to hum because with an offer as good as getting your credit score for free and saving twenty dollars plus we had really high click through rates, really high conversion rates and Facebook interpreted it as a really positive campaign to show a lot of people. As a result, we really found out how to win the Facebook bidding auction with help of Facebook Canada.
We got a really good education from Facebook Canada about how to do what we call performance marketing on Facebook, which means you’re spending money with the objective of optimizing a conversion that leads to revenue, that could be a lead, that could be a sale, that could be a whole bunch of bottom of the funnel stuff. We want to solve for understanding. We don’t think it’s excusable anymore that you don’t know what part of your marketing works. You need to know what part works so you have the ability to scale and 10X the stuff that’s working. Then stop all the stuff that isn’t working and if you can’t make that determination you’re just spending and hoping that it works for the best, looking for a general change. This isn’t to suggest that attribution is nailed but if you limit your spend to platforms that are more trackable than others, you do better than the competitor who is buying very un-trackable media.
So I met Pete at a conference in Boston through a mutual friend. I invited him out for breakfast one day and I shared with him my vision of what the agency world was going to look like in the year 2020. Obviously, he agreed and we got together to reverse engineer and build this type of agency. Things we saw, Pete had already talked about, but the death of AORs, or agencies of record, that’s really interesting. Over the last decade companies have needed one agency to spearhead or quarterback all of their marketing efforts and what we’re starting to see and we project we are going to continue to see is groups of specialists loosely aligning with each other to ensure that there is an all star in every position. That you’re not getting any mediocre services just because of an overarching arrangement or agreement.
We say that the future belongs to the specialists we think that the only way you can become a master of something is if you spend your entire days and weeks working on similar problems and that’s what we want to do with Facebook. We think that the world is totally shifting and that marketers know it’s shifting, but continue to look at it in old ways and through an old lens. And really a new lens is needed to understand what this mobile post television world is going to look like. As Peter mentioned we think code and data are the new art and copy. We’re not just trying to make pretty pictures we’re trying to elicit a result. Data science is going to determine marketer’s abilities to figure out where their marketing spend is working the best to that they can optimize and double down on the stuff that works really well. Just a general feeling of transparency, a feeling that because we’re on the same bottom line mindset as the client that we can really partner on driving revenue and not just do marketing for them.
Interviewer: Why is Facebook such an important platform for advertising?
To start with the enormous amount of growth– there are now 2 billion people on the Facebook platform. There are a billion active users every day, there are a billion users on Facebook messenger alone so they dominate a lot of their general usage for the internet. Super important in that it’s a demand generation platform rather than intent harvesting platform. So with say search you are harvesting existing demand for a product or a service that you’ve got, but most of the market isn’t ready to buy at a specific time. If you’re not generating demand know you’re just relying on existing and temp bait traffic so Facebook is a super powerful demand generation platform. You can identify buyer personas really effectively, and pull them down a funnel and convert them. Facebook has some of the best data, so Google doesn’t even come close when it comes to data on individual people. Google tracks cookies, Facebook has individual user data. So we can target people on fill in the blanks. Anything we want we can use our own targeting, we can use Facebook’s targeting, we can upload email lists, find individuals by lookalike audience. Just an incredibly powerful broad platform with a ton of growth.
I agree and the things that attracted me to the Facebook platform as I got to learn more and more was the tracking. So using Facebook pixel and SCK on mobile apps to track conversions and attribute the conversions to ad campaigns and actually to ads is really powerful because we get real time immediate feedback on which ads are working the best in terms of driving real revenue, real results. I love Facebook because we can bring our own data to the table. We can segment our customers in different ways and then create lookalike audiences of people on Facebook who resemble our best customers and our best segments, so that’s really exciting. It also has humongous scale potential, as Pete mentioned. One in four and a half minutes on your mobile phone is spent in one of four Facebook owned apps and that’s more than the next ten years combined. People are really watching a lot of videos, conducting a lot of transactions, discovering stuff on their phone through Facebook and Instagram. And that scale allows you to get much beyond what you could find in search because you’re not waiting for intent you’re sort of creating it through discovery. People based targeting means you can get really specific and granular in your targeting.
It also allows you to connect the different levels of the funnel together, which is very difficult to do on other platforms. You can have awareness campaigns that integrate with demand generation campaigns that integrate with direct response campaigns so you can really run a more full funnel approach and nurture people more through your messaging than you can through other platforms.
Interviewer: What is an Abacus growth mindset?
The Abacus growth mindset is about applying a performance mindset regardless of where you are in the funnel. For example, if you’re gonna run a ton of awareness campaigns, if you run them on video on Facebook we can create lists of people who watched certain percentages of the video and then we could retarget them with ads. So they’re not hearing about us for the first time with more of a demand generator or direct response ad. We want to look at whatever the client’s objective is and figure out a way to attack it from a performance mindset because we want to know exactly what works so we know exactly what to scale.
Interviewer: Why is company culture important?
We wanted to create a culture first and foremost that we liked working in. Both Jeff and I aren’t micro-managers. We like to work with people that are kind of self-directed. We also think that people work best with autonomy. Employees work best with autonomy so we wanted to give people a lot of autonomy and freedom to be able to be as creative and productive as possible. There’s a productivity perspective. We think people work best in an environment, but also a talent, traction, and retention perspective. The way we’re going to attract the top tier talent away from other agencies is to create a better culture and environment and treat people with respect. We didn’t want to create a company where it’s only the CEO who gets to leave early on a Friday to go up to his cottage. We wanted everybody to be able to have those benefits and have that flexibility. You know, if you’ve got to run your child to the doctors at 11 o’clock that’s fine. We don’t care about bums on the seats from 9 to 5 what we care about is hitting goals, and work ethic, and productivity.
With me being in start ups for almost 20 years start-ups are interesting from a culture standpoint because large companies can’t really change a huge pre existing culture but start-ups can kind of create their culture from the ground up. We knew we had the opportunity to create something different and something special. Something that we’d like to work in. Something that we think is more modern, something that fits the way that people like to work today. You know what I’ve seen most startups fail is that they wait for a culture to emerge and then call it their culture versus controlling it and doing it. Everyone thinks they’re working on culture everyone thinks they’re good at culture but they’re really approaching from an academic point of view and the way you should approach it is from whether these decisions are easy or hard. We’re looking to make the hard decisions that represent what our culture is and really walking the walk and not just talking the talk.
Culture’s not just perks it’s not just about vacations and lunches and work hours and stuff like that. It’s much deeper it’s the whole environment you work in. And we want to carefully manage that both in terms of where we work and who we work with and what clients we take and who we hire and just control everything. We think that the most important thing that we’re doing at Abacus is creating a modern work place where the type of smart people that we’re looking for would like to work and would thrive in. The result of all this work … we put together a document that talks about our culture and what it’s like to work at Abacus and we’ve noticed really early on the culture has really attracted people who think it’s a cool place and really repelled people who were like that’s a terrible environment for me I want more structure I want to be more directed, whatever the case may be. So it’s really cool to see it working because you know your culture is working when it’s attracting the type of people you’re looking for and it’s repelling the kind of people you might have to replace soon after hiring.