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The Path to Connectual

Why I Started the Company

Wednesday, April 15, 2009 | Posted by Aaron Goldman

Posted In: About Connectual

In today's MediaPost Search Insider column, I highlight trends in the space that led me to form Connectual. Here's the full article...

It's Time To Get Connectual
by Aaron Goldman

Sometimes in the worst of times come the best of opportunities. You just have to know where to look. And when you find one of those diamonds in the rough, you have to act quickly. It’s all about timing. And gumption.

In Search of a Silver Lining

Ever since Resolution Media was acquired by Omnicom Media Group 3 ^1/2 years ago, I’ve had a clear line of sight into the marketing programs of some amazing global Fortune 500 brands. Our team’s collaboration with sister agencies has given me a window into emerging trends in the space spanning multiple marketing platforms and media channels.

Over the past year, I’ve observed some very distinct patterns brought on by the recession. These trends have helped shaped my point of view on where the opportunity is for me personally and the digital marketing ecosystem at large.

1.       Marketers are cutting budgets across the board. No channel has been spared in recent rounds of cost-cutting, although search has fared better than others. Accordingly, every dollar needs to work harder. Frankly, every dollar needs to be working. Clients have little tolerance for fat agency commissions or T&E against their account. Those are dollars that could be in market driving sales.

2.       Agencies are feeling increased margin pressure. Clients have been asking their agencies to take haircuts on fees commensurate with budget reductions. This leaves agencies in the unenviable position of needing to cut staff or automate processes to deliver the same output with less compensation. Furthermore, agencies need to make tough decisions between putting their best resources against pitching new business to replace revenue lost from current clients or over-servicing current clients to make sure that no additional biz is lost.

3.       Media companies are struggling to break through the clutter of myriad digital marketing solutions. Even in this downturn, the pace of innovation has barely dipped. It seems like every day a new ad network is formed or a slick social media app pops up promising to help marketers connect with their fragmented audience. Meanwhile, traditional media companies have made progress cobbling their digital assets together into meaningful platforms -- witness Hulu. The problem all these folks are facing is that they can’t hire good sales people to pound the pavement nor can they justify investment in corporate marketing efforts -- save Microsoft and its $100MM campaign touting Live Search/Kumo. The result is a sea of undifferentiated offerings.

4.       Technology providers are unable to fully realize their value proposition. For that matter, most of these companies can’t even articulate their value prop. And in the rare case when they’re able to, clients often don’t have the resources to implement the solution and are forced to pay heavy support fees -- ahem, Omniture , cough, cough -- just to use the tool.

5.       The sales process is becoming increasing complicated and opaque. I’ve already put in my 2, er… 3 cents on the client/agency RFP process and am moderating a panel on this topic at the upcoming Search Insider Summit. Having spent 5 years on the media provider side prior to Resolution Media, I can tell you the agency/publisher RFP process is no better. The last thing anyone should be spending time on right now is pushing endless paper back and forth -- although I can understand why some people may think now’s a good time to do that… part of CYA is looking busy, right?

6.       Consumers are becoming more fearful of how their data’s being used for marketing. Joe Consumer is being bombarded by advertising now more than ever before. His cell phone, his Facebook, heck, even the tray he uses for his luggage at the airport is barking brands at him. Of course, there’s still one company resisting the urge to sell out to marketers, but that won’t last any longer than 140 characters, er… more days. Overlay this with all the noise in the press from the consumer privacy advocates in response to cookie-targeting and you have a recipe for disaster. At one extreme it’s complete consumer tune-out and at the other it’s sweeping government shut-down.

No More Sitting on the Sidelines

With these trends not showing any signs of slowing, I decided the time was right to venture out on my own and see if I couldn’t create a model that would address these challenges. Thus was born Connectual, a company I launched earlier this week that delivers consulting and representation services for marketers, agencies, media companies and technology providers.

Even though I’m no longer a full-time exec at a leading search marketing agency, part of being Connectual means staying on top of the companies and products moving the needle in the digital marketing space. Clearly, there’s no discipline better positioned to make that happen than SEM so I’m looking forward to maintaining my status as a Search Insider and getting Connectual with all of you.