By Antoinette Siu • July 10, 2024 •
Ivy Liu
With greater economic pressures and competition from consultancies that doesn’t appear to be ebbing, media agencies are expanding their arsenals with financial and business intelligence for clients. The tactics range from collaborating with consulting and private equity firms to developing business and artificial intelligence platforms to analyze client investments and customer data.
In the case of growth marketing agency Markacy, cofounder Tucker Matheson sees the goal as combining media buying and digital strategy, with the aim of bringing a financial and strategy lens to boost profits for clients.
“Instead of the traditional agency model, where it’s just managing spend and testing creative — we obviously do those things, but really are much more of a fiduciary for the business,” Matheson said.
Finance experts
Markacy uses an approach it calls finance-based marketing, an in-house process working with a client’s leadership to integrate profit-and-loss forecasts, inventory and margin goals into the media planning/buying and growth strategies. It also formed joint business relationships and partnerships with other consulting firms and agencies that focus on strategy with clients, while Markacy handles the marketing and media management. Matheson said it’s an important way to diversify the agency’s capabilities beyond traditional media buying and grow its client base.
With client Malbon Golf, for example, the agency was able to increase the client’s sales more than $7 million in 2022 by helping build out a 2024 e-commerce forecast. It did so by scrutinizing customer data to create retention strategies or loyalty programs, which differs a bit from the traditional agency approach, Matheson explained. This year, to boost further sales with Malbon, the agency invested in athlete partnerships and The PGA Tour as the brand tries to scale in the U.S. and abroad.
“We’re actually 50/50 participants in that,” Matheson said. “[The client will] take a first crack at it, and then we’ll opine on, [maybe] email revenue here is understated … [or] we’re allocating too much budget to Meta and Google.”
The agency also works with clients on media key performance indicator modeling, attaching hard numbers to customer acquisition cost ranges or media efficiency rates, as well as incrementality testing and full-funnel optimization. This includes using a proprietary toolkit to move money where there is most added value or less overall reliance on paid advertising — all with a focus on generating revenue from earned channels and existing customers to maximize the bottom line, for instance.
Lauren Bush Lauren, CEO at fashion company FEED Projects, had previously been working with another media agency and wanted to change the company’s marketing approach to increase profits, and ultimately chose Markacy as AOR.
“They have been a great partner for us and we have increased profit per media dollar exponentially and established better website, media and CRM (email/SMS) practices and experience,” Bush Lauren said. “I feel like our direct-to-consumer business is in a much healthier place than a year ago.”
The finance expertise stems from Matheson’s previous experience in strategy consulting at PwC. Currently, about 70% of its business is with consumer brands, including companies like Willow and Tamara Mellon, that range from $20 million to 50 million revenue accounts. The others include larger and mid-market enterprise clients like Mars and General Mills, with some 30% of clients in the B2B categories, such as health care or financial tech, Matheson noted.
Another way agencies can focus on client financial goals is through developing specific business and AI tools. Stagwell Media Network’s business agency Gale in February launched its AI-powered business intelligence platform, Alchemy, which helps marketers focus on the bottom line by aggregating data across different platforms to sync with their client’s business performance data.
Brad Simms, CEO and president of Gale, says agencies need to drive growth now by having a very “detailed level of the client’s business. … Guessing is not a strategy.”
Nine Gale clients currently use Alchemy, and the goal is onboarding all 40 of its clients by October. The process is also helping the agency broaden its education with research firms and partners as they build out the data and models. The tool was previously used by the data science team, but AI features make it accessible to everyone now.
The platform uses an identity graph to connect thousands of data points to 250 million Americans in a secure data environment, and each client can connect customer transactions or engagement data. The Gale research team then fills in missing attributes with scaled surveys, cleans up the data and ingests it to identify trends.
For instance, different clients, from a restaurant to a resort, will have different metrics to focus on based on their goals. A restaurant’s goal could be getting more reservations and traffic, while a resort could be increasing customer’s checkout basket size. Alchemy AI models the client’s business and inputs the outside feeds and data, like specific levers that are driving growth in order to make marketing recommendations, Simms explained.
Instead of spending time every week on those tasks, Gale said it can spend more time learning the client’s core business – and was able to cut down 25% of the time spent previously on social analytics, sentiment or financial research. Agencies have limited resources and have to choose between using generative AI to create assets, or using the resources and time to deeply understand the client’s business.
Said Simms: “We don’t have the luxury of doing both.”
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