Austin Brawner: What's up everybody? Welcome to another episode of the ecommerce Influence podcast. My name is Austin Brawner.
Andrew Foxwell: And I'm Andrew Foxwell. Hey, welcome to all the new listeners we have. How exciting is this?
Austin Brawner: New listeners, welcome. Happy to have you guys here. Yeah, it's exciting. The podcast is growing again, back to month over month, exciting growth. It's a lot of fun. It's a lot of fun to hop on here and chat and know that it's going out to many people out there, across the world.
Andrew Foxwell: Yeah, it really is. I heard from a colleague in Germany, that they were at a bar the other day discussing our recent episode that we had, a couple episode ago, with Susan Wenograd, talking about the changing art of paid social. How interesting. It's so cool how it gets to places in the world and that we're able to help people. Today's topic is personally one of my favorite topics to talk about, so I'm excited.
Austin Brawner: Yeah, it is. It's a topic that I feel goes through every business owner's head at a certain time. It's a question that consistently comes up and it's something that has come up recently in the membership. It's a question somebody was asking me. That is, when is it the right time to hire an agency?
Andrew Foxwell: Yes, exactly. This is something that we get asked about a lot and is a reason we're covering it, right? Knowing if it's time to go to an agency is hard. How do you know it's right, right? How do you know what to look for too, once you get to that point? That's kind of what we're gonna be going over. And it's a common question that a lot of people don't know the answer for.
So, if you've been confused by this, this is absolutely something that we're gonna try to answer. We had a lot of agency connections in the last year as well and that's a big part of what I do now is talking to agencies and kind of vetting them, assessing them out as well. So, I'm getting to know that a lot better too and talking to clients and those agencies what they're each looking for. To make sure it's a right fit is a big part of it. So, that's kind of why we're getting into it.
Austin Brawner: So today, you can kind of expect, we're gonna go through the questions that we would ask for hiring an agency and searching for the right agency, especially if you got into the business in the last couple years and haven't had a ton of experience working with agencies. This episode is gonna be really, really helpful for you. Why don't you kick it off Andrew, and go through I guess how you start thinking about whether or not it's time to hire a Facebook and Instagram ads agency.
Andrew Foxwell: Yeah, exactly. Alright, so first of all, quantifying your time. You have potentially heard our episode that we released recently about time management. A lot of what I do is track my time. The first thing you need to do before you hire an agency is quantify the amount of time you're spending on your advertisements. Now, this doesn't have to be just Facebook and Instagram advertisements, and we're gonna get into more specifics around if you're looking at a Facebook and Instagram ads agency later. But this could be ... let's say you're looking at an STM agency or let's say you're looking at a YouTube marketing agency, right? If you're doing this on your own, how much time are you spending on it? Just gain an understanding of that time and if you can, track your time on everything that you do for one month.
Maybe you want to do it by project, maybe you want to do it by category. If you can't do a month, try a week. Okay, so the first step in this is just understanding how much time you're spending on certain things. This alone, could be a huge piece of advice for some people and it has truly changed the way that I run my business and if a lot of the ecommerce business owners that listen to this podcast would start doing this, I think there'd be a lot of illuminating information there 'cause we all spend time down rabbit holes and that's totally okay and reasonable.
Austin Brawner: 100% it's something that I dive into. I try to track my time for an entire month every couple of months, just to get an idea of where I'm at, what I'm spending my time on. So as you go through this and you quantify the amount of time you're spending on Facebook and Instagram ads for example ... this could really be for any agency, but we're gonna go with the example of Facebook and Instagram ad agencies 'cause that's the question we get the most often. What do you want to look at and what's the metric you'd like to look at to compare to your time?
Andrew Foxwell: That's right. So, let's say you've counted your time, okay? So, then the next question is understanding what your net revenue is. Now, net, of course, would be what it is after taxes and things like that, so how much you're actually putting in your bank account and what that money is, 'cause that's the real money. You could do this on gross as well, but to me, it makes a lot more sense. You could say "Look, I have a one million dollar company," which is great, but that's not necessarily representative of what you're paying yourself. So let's say you're actually paying yourself and you're putting in your bank account $100,000 a year, which is a lot of money by the way. I just want to be clear that, that would be great if you did that as a small business and ecommerce business owner, right?
So, let's say hypothetically, you make $100,000 net per year, okay? So $100,000 divided by 52 weeks of the year ... back in the knack in math. I just want to be clear, I am not very good at math, okay? I had to have some editing on this. If this doesn't make sense, feel free to ask questions. Andrew@foxwelldigital, but this is the way that I think about this.
Okay, so $100,000 you put in your pocket every year. $100,000 divided by 52 weeks of the year is $1,923 per week. That's what you're paying yourself. You're paying yourself $1,900 per week. That's what's going in your bank account. And let's say you work a 40 hour week. Probably pretty common for people. That's the standard work week, right? So, 40 hour week. So that means that you're really paying yourself $48 per hour. Okay, so there you go. So you get to divide by basically 40 hour week, the amount of time in the week. You're working 40 hours, you're not gonna divide by all of the hours in the week, only the 40 hours your working. $48 per hour.
Okay, next step ... most good agencies that are Facebook and Instagram agencies and really SEM agencies too, although SEM agencies can be a lot cheaper. There's a whole bunch of thoughts I have on that, but let's say a really good agency that's gonna help you with your social ads, most of them in the US are gonna charge $3,000 a month. That's a fairly good watermark. You may find some hourly consultants and stuff too that are in between there. But, they're gonna charge probably $3,000 a month, which is about $750 per week.
By the way, this will all be in the show notes, so you can look at this. 'Cause if I'm listening to this, I'm like "Foxwell's drunk right now, this is ridiculous. Way too many numbers."
Austin Brawner: Math is hard.
No, we'll definitely have notes in here, in the show notes ecommerceinfluence.com and you can check it out and see this.
But back to ... it's going to be relatively straight forward, right? We've got the idea-
Andrew Foxwell: Right.
Austin Brawner: ...that basically $48 per hour. Most good agencies are charging $3,000 a month, which is $750 per week.
Andrew Foxwell: Right, okay. So here it is. So here's where the magic comes in. So, $750 per week is 40% of 1,923 per week. Your agency is $750 per week ... that's what it would cost you, is 40% of the $1,923 per week that you're paying yourself, okay? So, if you spend more than 40% of your time messing with advertisements, you want to probably hire an agency. Do you feel what I'm saying?
Austin Brawner: Yeah.
Andrew Foxwell: 'Cause it's gonna be cheaper for you to hire an agency, to hire somebody that knows what they're doing. I was talking to a gentleman last week. He spends $170,000 a month, by himself and he's taught himself how to do this. I said to him "Out of your week, what's the percentage that you spend on this?" And he's like "I probably spend 60-70 percent of my time on this." I'm like ... that's bonkers man, you should hire somebody. It's not gonna be $3,000 a month, it might be a little bit more at agency fees, but still, do that math. It's worth your time and you have to also understand what you and I have talked about a lot Austin. It's something you, I think are really good at getting into, which is take time to be the Executive of your company. Don't just work in the business, work on the business, right?
Austin Brawner: 100%.
Andrew Foxwell: So, that's a big part of it. Basically, take that $750 per week, it's 40% of that $1,923 you're paying yourself and if you're spending more than that, you may want to hire an agency.
Austin Brawner: Yeah, and that is relatively straight forward and simple math. The key is just to really ... if all you're doing is just track your time, figure out how much time you're spending on and start to be reasonable. The fear inside is that I'm the only person ... if you're talking as I'm the only person who could do it as well as I'm doing it right now. That is a purely fear-based thought. You can find people who could do a better job than you can do, especially if you're the CEO of your company and the CMO and the Head of HR and doing all these other tasks.
Andrew Foxwell: Totally.
Austin Brawner: You're gonna be more distracted than somebody who can dial in 100% of their time on advertising.
Andrew Foxwell: Right.
Austin Brawner: So, where do you go from there? So, you've tracked your time, you've taken a look at it, where do you go from there?
Andrew Foxwell: Well, I mean the next thing is ... you may say "Alright look, I don't want to do the math" and I've had people do this. This is the exercise I've walked through with countless people before. A lot of people say "I don't want to do the math", which is fine. What you can do is first of all, just track your time. If you don't want to go through those calculations, just understand per week, how much time you're spending on advertisements, whether it's Facebook, Instagram, whether it's Search Engine marketing, whether it's YouTube ads. Whatever it is, this stuff changes literally every day. This is why you want to pay someone like me to do this, right? Or an agency to do this because there's no way that you can keep up with this and run a business. It's very, very difficult. There's even stuff I found out about some random thing this morning that's brand new. Proportional bidding by a demographic? Didn't even know that existed. That's apparently coming. There's all this stuff that's always new.
I think, at a minimum, tracking your time. If it comes to three hours a week, ask yourself just simply "What else can I do for three hours a week if I wasn't doing advertising, that will impact my business?" That list that every business owner has of things that need to get done, but aren't white hot urgent ... we all have that list, right? It's usually in some ever note list. It's on a whiteboard and you did it one week when you were feeling good. Or as the surfer friends, I now have would say ... when you've been FG. You've been feeling good. You made this huge whiteboard, all these lists of things you wanted to outsource. What about getting to those?
If you outsourced it ... if you have three hours a week, could you get some of those things done? That would really move the business forward. So simply put, if you believe ads move too fast and you're overwhelmed by it and you're constantly feeling behind or there's something you're missing, which I think a lot of people feel with their ads. That alone, even if the money is not working ... maybe it's on the line with the money, that alone might be worth your mental cost too.
Austin Brawner: Yeah.
Andrew Foxwell: Oh like ... I don't know, is this the right thing? Also consider just outside of the financial side, what toll this is taking on your mental capabilities, which I think we don't do that often.
Austin Brawner: Use the example of three hours per week, very few people are running successful advertising campaigns their scaling by putting in only three hours per week. So, if that's all you could put in, for example, you're capped out, then that's gonna be a limiting factor.
Andrew Foxwell: Exactly.
Austin Brawner: So, once you've decided you say "Hey okay, I've ran these calculations, I've run the Foxwell calculations," you think that maybe it's time to move to an agency, here are some of the questions, we want to go through some of the questions that we would ask that potential agency to vet, to see if they're the right fit for the business.
Andrew Foxwell: Yeah. Exactly, so these seven things that we're gonna go through ... some of them are Facebook-specific, some of them are not Facebook-specific.
Austin Brawner: Yeah, some are just agency or hiring specific.
Andrew Foxwell: Exactly, exactly. So once you've decided "Yeah, I want to do this", here are the seven questions you want to get into. I want to be clear, I have spent a lot of time in the last 365 days vetting, talking to agencies and this is a big part of what I do now. I have a pretty good idea of the things that I've heard from various parts of the world and the internet of legitimacy levels, I would say, right?
The first thing you want to ask is a Facebook-specific one, which is "Do you manage my ads in my own ad account or in your business manager, do you create a new account?" Essentially, what this is trying to find out is what I've heard a lot from people is, they'll say "We're gonna run your ads in our account because we have a proprietary methodology and that's something you can't see, but we promise the results are good. We'll send you reports, but we're gonna run it under our own business manager." This is fundamentally flawed. Number one, it's your money. You need to be able to have access to it.
Austin Brawner: 100% almost every nightmare story about an agency begins with them not seeing what's in their account.
Andrew Foxwell: Exactly and that's the thing is like, I see the Facebook agency and business owner relationship, like a financial fiduciary, like you would of a financial advisor. I believe it's the same. They're responsible for your dollars, but you should always be able ... and they may be pulling levers, but you should always be able to login to your account and see what trades they're making hypothetically, right? Or see in this case, what ads they're targeting. What are they putting out there? There is no proprietary thing.
There may be methodologies that people have, that they say are proprietary and I've heard this from huge agencies that, that's a big thing that they sell 'cause there's nothing necessarily that you have as a value proposition over somebody else. Me as a Facebook advertiser, I don't have anything, some secret thing, other than literally just being obsessed with learning and hard work. That's it.
That's what you want to hear. You don't want them to hear "I'm gonna run it in my business manager. You're not gonna be able to see it." That is a huge red flag. There may be people who disagree with me on this. I've had agencies that are friends and they run it under their own account. They have varying reasons for that, but I disagree with it fundamentally because it's your money. You should always be able to see it.
Austin Brawner: I would say there may be some agencies that disagree with you, but I have never met a business owner that disagrees with you because it's very scary and this is ... when I was talking about nightmare scenarios, I've been working with ecommerce business owners for a long time and I've talked to hundreds of people who were working with agencies and the same, consistent ... the quickest question, the first question that I always ask people when they're telling me that they're struggling with their agency, is "Okay, well are you able to see the advertisements that are being run or is that hidden from you because they're running in their own business manager, in their own ad account?"
Nine times out of ten, when they're really struggling with their agency, they have no idea what's going on. This is one of those things that could be a massive setback when you decide that you want to leave that agency and you don't see any of the creative that was used over the previous year or year and a half that you worked with them. It's very tough to then get started and be profitable with your advertising or successful with your advertising if you don't have anything to go off of.
Andrew Foxwell: Totally, totally. So, that's the first one. So, the second one is ... and this is less of a rule, but more of an understanding that you should have if you're gonna go to an agency. The question is, "Do you as an agency" ... "You're" as the business owner asking this, "Do you as the agency create the creative or is that me on the business owner?" In my world, ideally, you as the business owner should be in charge of creating the creative. So, imagery, video. The agency may call creative in and make videos out of it, which is fine, but ideally, you want to be driving as a business owner because you know exactly how you want things to be pitched
Now, the agency may come back and say "Look, this is the way I'm gonna re-write this because it's gonna work a little bit better on Facebook" and that's fine. There's an agency and a client that I just put together and they're doing really good work together and that agency rebuilt their whole funnel based a lot around user-generated content. He then worked with a business owner. Agency worked with the business owner and the business owner got together all of this creative and sent it across and then the agency sent and said, "Hey, here's how I'm gonna put this together."
But ideally, basically, you want to know "Are you gonna be creating it or is that on me?" Because a lot of times what agencies will say is "Well, we're gonna create all of the creative for you. We're gonna put everything together. We're gonna do all of the imagery, all the photos, you don't need to worry about anything." Which sounds lovely, right? However, it removes you from the process and then you may spend more time editing what they created. So, it sounds great, but it actually can be a huge time suck. So, it's better off if you lead that and they basically give you guidance on what they're looking for. That's the ideal scenario.
Austin Brawner: I totally agree and that's every single quality agency relationship that I've seen between a business owner and an agency has been that setup.
Andrew Foxwell: Yeah.
Austin Brawner: I haven't seen the opposite at all, not in a successful relationship.
Andrew Foxwell: Right, right.
Austin Brawner: There may be people out there that ... their agents are good enough, but generally, if you have the strong messaging, you need to be in charge of the creative.
Austin Brawner: Yeah. Number three is the question you should be asking the potential agency, which is "What are your best performing look-a-likes normally?" What do you want them to say, Andrew?
Andrew Foxwell: Yeah, so this is a Facebook-specific one obviously. "What are your best performing look-a-likes or audiences" you can ask them. So you want to hear them say things like "A purchaser look-a-like audience and add to cart look-a-like audience. Best customer look-a-like audience." You want to hear them also say things like "Yeah, you know, we've been doing a lot of testing with broad demographic interest targeting, which seems to be doing well. We've been doing some experimentation as well on broad match dynamic product ads." So, those are the things you want to hear them say in terms of look-a-likes and prospect in traffic. That's what you're specifically looking for.
And the fourth one is also Facebook-specific and ties into that, which is you can ask an agency "How do you normally approach mid-funnel targeting?" This is something very few agencies do, but is a huge part of it. So, you want to hear them say something like "You know in the middle of the funnel, we're using engagement custom audiences" and those are audiences that you can create audiences of people that have engaged with your content on Facebook or Instagram, within a certain time window. Top percentage website custom audiences, so that would be these type of re-marketing audiences that are based on people that have spent more time on your website over a certain time window. So, the top 25% of people over a certain 30-day window, 45-day window, etc. and an email list.
An email list is a great example of mid-funnel targeting because maybe that email list, you want to use to bring people back in. So, many times the model is built on prospecting. The people talk about "We're gonna find you all these new people" and then they'll do re-marketing and they'll set up a thirty-day website visitor re-marketing. But, you miss out on the middle funnel. People liking, commenting, sharing. You want to be able to take advantage of that. Engagement custom audiences, email lists, and those top percentage website custom audiences.
Austin Brawner: These questions are great to ask and just to take a look in your own account, even if you're working with an agency right now. So these are good vetting questions if you're trying to figure out if it's the right fit with the agency you're currently with. You can go in and have a conversation about this type of stuff and look at some of the audiences that they're currently running their mid-funnel ads towards or what look-a-likes they're currently targeting.
Andrew Foxwell: Totally.
Austin Brawner: Number five is a good question and this one is not Facebook-specific. This is gonna be agency specific, which is "What previous experience do you have and can you show me results?" You want them to, this is with any agency, happily give you the emails of previous clients or current clients as references and ideally, they'll send you screenshots with client names blurred out so you don't know specific results matched with a business, but you can see some of the results that they've previously had.
Andrew Foxwell: Exactly. You just want to be able to ... they want to be proud of their work, and they want to be happy to give you names of people. So, if they're not open to that, that's a problem because they're probably hiding something.
Austin Brawner: Right?
Andrew Foxwell: And honestly, I have seen a lot of people doing more screen sharing of results off of accounts and within a certain time window. And that's great because as long as those names are blurred out, it's really, really good to see that because then you're like "Oh cool, that's kinda what they're doing there. That's kinda what they're doing there." That is what you want to have them look at, looking at basically what the previous experience is and can you show me the results?
Now number six is "What are the expectations for performance?" This again is sort of Facebook-specific, sort of not. Generally, with an agency, I like to hear people to use words like "You know, we're conservative in our approach. We don't make big promises, but we are experts at what we do." Facebook specifically, you're looking for them to say something like "We like to see at least 1.5 return on ads spent over a 30 day period on prospecting if you've never advertised before."
Some people will say "You know, we're really looking at the account overall. We're looking as we learn about what you do and how to sell your product. We're looking at maybe 2x as our goal." That's a conservative angle. It's gonna take time to figure out what you do. You want them to basically be pitching the reality of numbers, but also kind of underselling themselves.
There's an agency who will go un-named that has been going around to ecommerce business owners and saying "Hey, how's it going? This is blah blah blah from blah blah blah agency and I cannot wait to crush it for you. We guarantee 3x off the bat, week one." You're like ... what kind of crack are you smoking? That's ridiculous, that's so unrealistic. Maybe you are that good, but why would you lead like you're just gonna blow it out of the water?
So if you feel like you're getting sold up a river, you probably are. You want them to use words like "You know, we're conservative" and kinda underselling themselves. That's really something that I would look for.
Austin Brawner: But ... that have good results and good client references.
Andrew Foxwell: Absolutely, exactly, exactly. If the client references check out and then you're in good shape.
Austin Brawner: Back to your point though on maybe someone is that good ... the easiest sale in the entire world is selling agency services to a business owner who is spending a significant amount of money on Facebook and Instagram. The reason it's such an easy sell is because all you need to do is say "Hey, you're probably leaving some money on the table. Let me do an audit, and I'll show you what you're leaving on the table." From there, people will just look at it and can make some notes that make it seem like whatever they're getting, you can promise to get a little bit better results and that makes the sale relatively easy and that's why when someone comes in being like "Oh, I can get 3x guaranteed" the red flags ... actually, orange flags go up. Not necessarily red flags.
Which, it's like ... maybe, but there's a reason why they're so aggressively pushing in that way is because it is a very easy sell. Everybody wants more out of their account and it's relatively easy to look at what you're currently getting and promise a little bit more. So that's why you gotta be careful about that.
Andrew Foxwell: Yeah, no, I completely agree. The thing that pops into my head when you say that is thinking about the number of times I've heard big promises being made and the natural pattern that happens is people will go and say "Oh, that's interesting. Yeah, I'll sign on with them." They get a "big team" and then the agency sticks the business owner with some 23 years old. Again, not to be an ageist. I was 23 once. But like, some person with not as much experience and they're managing the account. They don't know as much of what they're doing and you never talked to the salesperson you spoke to before. You never talk to the CEO. You never talk to somebody who has a deeper experience.
Not saying it needs to happen ... you need to be speaking to them every day or every week, but you should have access to the people that sold to you, who are the real experts because it's going to be unfair to you if you've been sold up the river and some younger person is managing the account. So, that's why it's just better to lean on looking at the good results that they have, talking to clients, and then you want to hear them say "Yeah, we take it slow. We want to learn about what you do." The quality of time and attention that they're paying to you is a really big part of it.
Austin Brawner: And age isn't necessarily a qualifier, it's really experience level.
Andrew Foxwell: That's true.
Austin Brawner: We could say 23 or whatever, but a lot of it comes down to just the way agencies are built. As they grow and scale, you're going to need to hire people who can come in with less experience and rely on their system to get results. Sometimes, you're paired with somebody who has very, very little experience doing a very important job in your business because that's the way that the agency has to be built in order for them to be able to sustain their growth and scale up. That's why when you have a big, mega-agency, that's the scenario.
Andrew Foxwell: Totally, totally.
Austin Brawner: Number seven, this one is not Facebook specific, but I think this is a really great question for many agency partner type relationship and that question is ... it's asking them "What are your best clients doing and what do you expect us to do if we want to perform like your best clients?"
Andrew Foxwell: Totally.
Austin Brawner: This question is so important to ask because as you're entering a partner relationship with an agency or someone you're working with and they've got a lot of experience ... the thing is, they're gonna have a lot of experience with good and bad clients. You want to end up as a good client because good clients get better treatment than bad clients. So, the key is to figure out the expectations up front and if they tell you "Well, our best clients provide us with a reservoir of creative images, a shared Dropbox folder with a ton of creative images that they're updating all the time. They have a point person who is the communication person and they go back and forth and they get back to us quickly and make changes and accept final versions quickly." What are other good things you would say best clients are typically doing Andrew?
Andrew Foxwell: Yeah, I mean it's basically, I think fundamentally, it's just an understanding of what they want from you. It's not like you get to just tune out. A lot of times what you'll hear is people will say ... the agency will say "Look, we would love creative from you on a bi-weekly basis. We'd love new creative. We'd love new things to try so you're not just depending on one specific product. Maybe if you only had one product, you're trying new pitches, different ways to think about pitching that. If you have other products, here are some other things we're doing, here are some things we want to try.
It's basically understanding what the communication style is of that agency and how often they are gonna need things from you to be able to set that expectation with yourself and what the symbiotic relationship looks like. You want to make sure that you're attaching yourself immediately to one of their favorite clients because if you start to do what that agency wants, it's just like anything else, right? Anything else in life. If you're a pain in the butt, people aren't gonna help you as much, frankly.
So, if you were to say "What do people do that you really like working with and that are really performing well?" And you can adhere to that and you say look, "Here's new content, here's more budget when it works." Here's ... whatever else they're asking for. That's just gonna make things so much better from the outside and that agency will work harder for you too. So, that's basically what number seven is, is "What are your best clients doing and what do you expect us to do if we want to perform like your best clients?"
Austin Brawner: 100% I think that's a good list. I hope that was helpful. If you're in the state of affairs, where you're thinking about hiring a Facebook, Instagram agency or any type of agency, those are our thoughts on it.
Hope that was helpful. If you found this episode, and you're like "Oh, this episode vibed with me" share it with somebody else who you think might also get some value out of it. That's one of the things we're working on this year is continuing to spread the message and grow the podcast. So, I'd love for you to forward to somebody who you think would be able to get some value out of it. Thanks for listening.