Nov 5, 2020
David Sonn is the Founder and President of Arc Intermedia, a HubSpot certified, digital only agency that focuses on “customer acquisition using digital strategies and digital tactics.”
David ran a web development company for 13 years but found that he and his partner had become “production monkeys,” delivering a commodity and competing with offshore developers. “You never want to sell or have to build a model based on price,” he says.
Ten years ago, when people started requesting Search Engine Optimization, David found his niche. Intrigued by the ability to precisely measure results, he founded Arc Intermedia -- and got out of the website building business and into the business of building businesses.
David may have started his agency “really slow and really small,” but he didn’t start “really cheap.” He hired the most experienced SEO and paid search experts he could find, people who could lead practice area development. He says, “When you’re a somewhat small agency that we are, every person counts.” Hiring and investing in the right people is critically important.
In this interview, David provides a wide range of tips on building a strong digital business.
Marketing initiatives need to start with strategy. When clients try to tell Arc Intermedia what they want the agency to do, David says it is critically important to understand “the good, the bad, and the ugly” about that business, to get to know the client well enough to discover things of which even the client may be unaware, and to know the client’s goals – what the client is trying to accomplish – before building the strategy and implementing the strategically determined tactics.
As many people in marketing say, content is king. Marketers need to know how to leverage that content through SEO, distribution, credibility, and across social platforms.
While a variety of tactics can be used get leads, to drive people to a website, to fill out a form, to give them “stuff,” people often resist filling out forms because they don’t want the sales calls that immediately follow. David recommends giving people something of value in exchange for their personal information.
The key to building customer relationships is nurturing potential clients through broad exposure on a variety of platforms and providing a variety of (non-sale) interactions. Use marketing automation to nurture clients to help close the deal.
Clients often come to Arc Intermedia and request adding a particular tool, such as SEO, to their marketing mix. David reminds us that today’s digital marketing requires an integrated process to succeed. SEO, social presence, publication on an industry website or blog . . . these things “loosen the soil” and build the familiarity and credibility that makes a paid search or display ad work.
Customer acquisition is what “moves the needle for the bottom line of a company.” Paid search has evolved to a high level of sophistication. Precise targeting produces a wealth of data. Advertising on social platforms – Facebook, Instagram, Twitter – should be backed by “great strategy.” Knowing when to pivot, why you need to pivot, and having the ability to pivot is critical.
David describes paid search as a “sprint,” and SEO as a “marathon.” He feels that it is important for both parties to set their expectations realistically about what’s going to be accomplished when. He requires SEO contracts to be for at least 12 months – SEO takes that long to show a return. After a year, when he shows clients where they were in month zero and what has been accomplished in the year that followed, “the contracts basically renew themselves.” SEO on paid media optimized for terms and topics in high demand? He says, “It’s infinite traffic if you do it correctly.”
David can most easily be found on his agency’s website at arcintermedia.com.
ROB: Welcome to the Marketing Agency Leadership Podcast. I’m your host, Rob Kischuk, and I am joined today by David Sonn, President and Founder of Arc Intermedia based in King of Prussia, Pennsylvania. Welcome to the podcast, David.
DAVID: Thank you. Hi, Rob. How are you? I appreciate you including me today.
ROB: Great to have you here and have a little pre-call with you before this. Tell us about Arc Intermedia. What is this agency, and how did it get started?
DAVID: Arc Intermedia is what I call a digital only agency. Why I need to make that designation is I’ve been around the block for a while, so I have experience in traditional advertising and that kind of thing, but with this agency, when I built this agency 10 years ago, I wanted to hyper-focus only on digital strategies and digital tactics.
We basically will come to a customer that needs more customers. I don’t care if you’re Apple Computers or you’re a two-man band working out of a garage; everybody needs more customers. So we built this agency on customer acquisition using digital tactics.
ROB: Got it. How long has the business been around?
DAVID: I founded this 10 years ago. Oh, by the way, we’re 10 years old this year.
ROB: Happy birthday. Anniversary, whatever you want to call it.
DAVID: Thank you. [laughs] Yes.
ROB: The digital tactics even over that time have changed a lot. What were the tactics on Day Zero when it’s you and – were you by yourself? Did you have partners in the earliest stages of the firm?
DAVID: I’m going to back up and tell you a little different story. I promise, promise, promise to get there. Before I had Arc Intermedia, back in 1996 I founded one of the first interactive firms in Philadelphia. When we went into business, and I had a partner at the time, we built websites. At the time, 1996, a lot of companies didn’t even have websites yet. There was no roadmap whatsoever. We thought this was a fantastic idea. We thought, hmm, this internet thing has a chance to stick around.
So we built a company around it without a real plan. We raised some money from friends and family and just got after it. We made a lot of mistakes, but it was all good. 13 years of success proved that out.
But I did find that when I had that web development company, we basically became production monkeys. Clients began to tell us what they wanted, what colors, this, this, and this, and we just became builders, not thinkers or advisors. When you’re in that space and you begin to try to build a commodity like that, you’re now competing against the whole world. And oh by the way, it’s really hard if you think you’re going to compete against offshore solutions on price. You never want to sell or have to build a model based on price.
I began to look at the business and say, hmm, is this really what I want to continue to do? Near the tail end of it, we began to get more and more requests for SEO, search engine optimization. We were building these websites, but no traffic was coming to them. Clients wanted us to do SEO. I began to get my hands involved in SEO, and then jointly, paid search – way, way, way back, the origin of that was – I don’t know if you remember the GoTo Network? It was the beginnings of all of it.
ROB: Oh yeah.
DAVID: I got my hands involved in the GoTo Network, and I got real excited. I’m like, look, we can build out some strategies. We have some money, and we instantly can begin to drive traffic to these websites. Then I had clients calling me up and telling me that they were getting all these sales leads and things were changing, and what was going on at the website?
That was a light bulb moment for me. I really didn’t want to be involved in the web building business anymore. I wanted to be in the business building business. I got real excited. Being an entrepreneur, I started to get that itch again. I’m like, I built this company and it’s now been 12-13 years. I think it’s time for me to bust a move into something else that I want to do. This customer acquisition piece – the part that actually moves the needle for the bottom line of a company – became very exciting to me.
Then I did, and now back to your original question, I began to explore some of these original tactics much further. I didn’t see any companies out there specializing in it. The agencies of the land, the traditional ad agencies, still wanted to spend your money on radio and TV and that kind of stuff and things that couldn’t be measured.
As scary as digital is in that you can measure right down to the penny, to the click, to this, to that, that actually was really, in some weird way, extremely enticing to me. That we could see it, we could measure it, and I could stand up and find the client and say, “I succeeded” or, hopefully not, “I failed.” But for some reason that was an incredible, incredible attraction to me.
I decided that it was time to dissolve the web development company, and I launched Arc Intermedia, but this time I decided to start really slow, really small on purpose. It was myself and Mike Maier, who came over with me. It was just the two of us, and we started the company. We hyper-focused on some of the basic tactics of the day. There was SEO; it was much different than it is today, but it was SEO, and there was the paid search and that piece.
Then as I began to see what was working for customers, the different technologies and tactics that were evolving, I began to build the experts around it. I went out and got one of the best SEOs, Ron Sansone, in the Philadelphia area, and he began to build out our search practice. From him, I added more people with SEO experience, paid search experience. Rasheed Hendricks heads up our paid advertising department, and he’s just absolutely fantastic. That piece is ever-evolving.
And then, as you probably have heard from doing many of these interviews, content is king. You need to know how to leverage content. Content can be leveraged from an SEO standpoint, from a distribution standpoint, from a credibility standpoint, from a social standpoint, all of it. You and I were talking a little bit about how we’re HubSpot certified. Katie Schieder on my team is in charge of content and content marketing, and she does a fantastic job with her team.
There’s a lot of different pieces, and I know I’m maybe sounding like I’m rambling right now, but hopefully I answered your question.
ROB: One thing I hear in there is a strong recognition and appreciation for a team of experts in the different subject areas. One thread I want to pull on a little bit that’s unique about your story is you mentioned in your previous business, the web development shop, that you had investors. We talk a good bit about investors, but what we most often talk about on this podcast is people who are proud and grateful to not have investors, and maybe sometimes a chip on their shoulder because they know other people who have raised money and have gone out of business.
What did you learn from having investors, and what would you say to other people who think they wish they had investors? You mentioned it was friends and family, so we didn’t go out and raise $100 million, but still there are entailments to that.
DAVID: There is nothing – nothing – sexy about having investors. Zero. Now, I was super fortunate that we ended up raising money through friends and family. And oh by the way, that was because no bank would touch us. When we had a plan to build a web development company back in 1996, every bank says, “Oh, that’s fantastic, but I need a 150% collateral that we are going to freeze for every dollar that we give you.” If I had a 150% collateral that I could do, I wouldn’t be sitting at that bank looking for money. That was just silly. So obviously that never went through.
But we were fortunate that we were able to do it through friends and family and a lot of people who supported us. I will tell you, there’s an incredible extra weight on your shoulders because you don’t want to fail them. In my mind there was no chance, ever, in any way, shape, or form, that I wasn’t going to return every dollar back to the people that invested in us – and then some, of course. My success was definitely going to be their success, and I was going to make sure that happened regardless, even if it meant that I was going to pay that money back personally. I was going to get it done. When you’re taking VC money, that’s a different approach and you can’t always do all of that.
But having investors is not sexy or anything that you should really go for unless you absolutely have to. Now, when I had Arc Intermedia, the one thing that was to my benefit was that I was going to start small, and I’m also now a little bit older, a little bit wiser. I self-funded my whole thing. The beauty there is, I never had anybody standing on my shoulders. I never had anybody that I had to answer to in that regard.
So my advice would be try, try, try to do it on your own or figure out a way to do it on your own or try to figure out where you can get investment from people that trust and believe and love you, and then the VC thing is separate. Last.
ROB: Right on. I think I would perceive in the web world, when you talk about the ’90s, you’ll hear a lot about some of the sticker prices people paid for pretty simple websites by our standards. You’ll hear half a million, a million, 10 million. You mention competing with offshore now and this race to the bottom. Certainly it has been cheaper and cheaper to get a pretty good website. You can pay a kid from a high school and get something pretty decent. You can pay a pro less than you would pay one person in a year for sure.
You don’t see that same race to the bottom in the marketing world. You can’t get 10 times as much marketing for the same price as you could 5 years ago. What do you think it is that keeps it from becoming a race to the bottom where some high school kid can hop out and just crush your B2B marketing?
DAVID: Because there’s so much more that goes into it. The tools now are very sophisticated with paid search and all the data you can get back and the targeting you can do, if you’re going to do advertising on social platforms – Facebook, Instagram, Twitter, all that. But at the end of the day, there has to be some really great strategy in there, and there has to be the ability to pivot and the eye to know when to pivot or why you need to pivot.
Then the other part of it is the customer. Can the customer tell you what their cost of acquisition needs to be? Or can you then prove it out? For example, Rob, if I said to you, “Hey, you give me $1,000 bucks, and for every $1,000 bucks you give me, I’m going to give you $10,000 back in business,” you would do that all day long. You would figure out how many thousands you could give me so I could give you tenfold back.
To answer your question, I think that only happens if you really have the people that have the expertise and the daily eye on this stuff to really know what works. The customer acquisition piece and the journey and all the points in between, it doesn’t happen by chance. It’s not by luck, and it’s also not subjective. You used websites as the example. We can sit here and argue that the homepage needs to be a shade of blue or maroon or what have you, and maybe we’re both right. Who knows? But at the end of the day with digital marketing, either I’m driving results and giving you a positive return or I’m not. I think that’s the difference.
ROB: That makes sense. There’s infinite rounds of competition, and there’s a level of spending that’s always going to meet the value. The value of what people buy online keeps on going. People are buying more stuff online, and you need smarter people to drive those tools as you go.
You mentioned some key folks that you have on your team, and you had clearly built a team before with your web dev shop. How did you think about assembling your team differently as you were building your second business?
DAVID: This is probably an old adage that you’ve heard before, but it’s always hire slow, fire fast. Thank God, I’ve not had to fire anybody at Arc Intermedia. I’ve got that great of a team. That’s actually one of the things that I really do hang my hat on. In 10 years, we’ve never had anybody leave but one person, and it was more or less just a career change in that case. We still remain friends with that young woman to this day.
But hiring the right people on the front end and making an investment in the right people is critically important. What my process was – and I’m going to use the SEO one as an example because it’s clean and easy – I began to see in the marketplace that SEO was critically important, but I also could see that I could build a business around it.
When I wanted to go and build the SEO, I didn’t want to just hire a mid-tier person or an entry-level person or something where we were going to, together, learn it on the fly. Rather, I thought the most important or better move was to make the investment in a senior level person who had been doing it and we could build off of that person and let that person build out the practice, if you will.
That’s my approach. When you’re a somewhat small agency that we are, every person counts. We’re mean and lean and there’s no place to hide, and everybody has to be able to show for what they bring to the table. My entire team, basically, is built with fairly senior level people that I would say are experts in their field. It’s just been a much better approach than what I’ve seen others do.
ROB: How do you think about positioning? When you have a senior person, that SEO offering also has to be a little bit of a premium offering. SEO certainly can have one of the highest long-term ROIs, but it can also be one of the slowest marketing tactics to start to bear fruit. How do you walk a customer along expectations around the sticker price you need to show them to bring the team that you have to bear on SEO?
DAVID: You actually used my word, expectations. You’ve got to set the expectation correctly up front. As a joke, we say SEO is the marathon, paid search is the sprint. If you begin to lay out and set those expectations, both parties can get their head around what’s going to be accomplished when.
Part of that is, with SEO, we will not take on a contract that’s less than 12 months, and the reason being is it is completely unfair to judge us on anything less than 12 months. 3 months in, if you were to look at what we were doing, you’d say, “You guys don’t know what you’re doing” or “This is a complete waste of money.” And they’d be right, because there wouldn’t really be the return in 3 months. Wouldn’t really be the return there in 6 months.
But what you’ve got to do is look at a plan that’s been executed correctly over a 12-month period, step back and say, “This is where we were month zero. Now look where we are.” Honestly, the contracts basically renew themselves because once you can show what can be delivered with SEO – and the beauty of SEO on paid media – it’s infinite traffic if you do it correctly. If you’re optimizing for terms and for topics that are in high demand, you can drive a great deal of traffic.
And then if you have set up your customer journey correctly on the website and begin to show those conversions and whatever it may be, whether it be ecommerce or registrations or sales leads or what have you, it kind of sells itself if you do it correctly.
Now, as far as a high ticket, SEO is a very difficult industry. It’s getting a bit better, but we’re constantly up against the – I don’t know what to really call them outside of where they begin to make promises for SEO for $200 a month. We’re always fighting against that. But our price point – and you’ve got to remember it’s all labor-based, so people need to get paid. Especially when you have senior level people that you alluded to, they’ve got to get paid and you’ve got to offset those costs.
So yeah, good SEO is not cheap, but I will tell you this: look at an SEO contract for 12 months, the cost of it, and compare that to some kind of media play. Compare that to a TV or radio campaign. Or even sometimes the money we really need to move the needle in paid search just because the search terms may be very costly, and if you don’t have X amount of dollars, you’re spitting in the wind. You’d be foolish to think you’re going to get any kind of return because you can’t drive the volume to get the return. In the grand scheme of things, SEO is actually not expensive if you’re comparing it correctly.
ROB: Right, it just doesn’t track as quickly. “I did X dollars of SEO this month and it generated this amount of results.” You have to be more patient than that. We have talked a good bit about SEO. I know that is where you started, but I know you’ve also been thoughtful about layering in other service offerings to the business. What have you added in, and how did you reach those decisions of starting to embrace something where a lot of times agencies will partner on offerings they’re not ready to do or ready to do yet?
DAVID: I often find clients will come to us, and sometimes they will have a need. The need may be that they need more sales leads or they need to sell X amount more widgets. But often they come to us with a tactic in mind. For example, “We need to do SEO.” “Why do you need to do SEO?” It’s just because that’s what they’ve been told, that’s what they’ve heard, that’s what they may not be doing. They may not be coming up in the search results, so they think that’s what they need.
But really what we’re seeing today now in digital marketing is it’s more of what we call an integrated approach. It’s the SEO, it’s the presence on social, it’s the being published on an industry website or a blog that begins to loosen up the soil so that when we do finally hit them with a paid search ad or a display ad, they’ve seen us before. There’s some kind of credibility that’s been built up just because they’ve seen us in multiple places, and we’ve nurtured them along and we can close the deal.
Many of these things now work so hand-in-hand, and again, we always want to start strategy first. Don’t tell us what to do; tell us what you’re trying to accomplish. Then once we understand the goals and we’re all on the same page with the goals, we’ll build out the strategy. Then the strategy will dictate the tactics. That then leads into, what did we think made sense to bring in-house?
With SEO, the counterbalance was the paid search. We had started doing some paid search from the very beginning, but not to the level of what we’re doing today and what we needed to. That was a no-brainer, to make sure we headed up that department with paid search. Paid search is nice because people are looking for your exact service. In fact, paid search is one of my favorite forms of advertising because it’s people actively looking for what you have. You just need to get in front of them. Conversely, people who are a bit more passive or are not actually searching, we need to prospect. And the best way to prospect is through display advertising or social advertising and those kinds of things. Again, having that piece of the pie just made a ton of sense of another piece that we need to layer on.
Now, we can talk all day long about different tactics of driving people to a website, to filling out a form, to be giving them stuff, but the place that I see people now fall short of is you’ve got the sales lead; now what? The customer fills out a form. One of the reasons they don’t want to fill out a form is because they know immediately they’re going to get a phone call from a salesperson, and that’s the last thing they want. So you’ve got to look at it a bit differently. “Hey, fill out this form and I’m going to give you something of value.” I always say you’ve got to give something to get something. Maybe they fill out the form to get some kind of a free tool or a download or a piece of advice or a consultation or something like that.
But if you’re really, really going to do this and you think you’re going to get a return on that initial investment, you’d better be able to nurture. The nurture piece comes in with this marketing automation. For example, I know I’ve already said it before, but we’re HubSpot certified, and that platform allows us to do a lot of different things. We can do email marketing and we can manage the workflow all the way through. If they open this email and they click on this, we know that they’re demonstrating X interest in something, and we can then take them down the next path of providing them the next piece of content. We can nurture and we can build that relationship without the phone call, without the salesperson getting after them.
So having the marketing automation piece was something we absolutely needed to bring in because we were doing such a fantastic job with driving leads on the front end that we needed to have the nurturing piece on the back end.
ROB: It seems like you not only are comprehensive in the different services you provide, but you have to be comprehensive in your understanding of the business to be able to nurture leads along. You can get a first conversation, but to be able to nurture and build trust and credibility with somebody else’s customer is not something you can get from just an onboarding form for a new client. How do you get to that depth of knowledge where you’re actually building trust on behalf of a business that’s not yours? That’s a challenge.
DAVID: You’re right, it really is. I’ll tell you, we get down into the weeds to the nth degree of some stuff that I never thought I needed to know about, from tuberculosis testing to hospice care to minor league baseball to all kinds of stuff. If you’re willing to make a commitment to a new client – and to be honest with you, we do say no. There’s times that we’re like, “This isn’t going to be a fit for us for XYZ reasons.”
But when you finally say, “I am going to commit to you,” commit means I’ve got to learn your business, and I’ve got to find the skeletons in the closet. I’ve got to understand the good, the bad, and the ugly. Honestly, it’s a constant learning process. We often will do onboarding with a client and we’ll try to learn and glean as much information as we can, and as we launch programs, we begin to understand that what they were telling us is completely wrong. And they didn’t even know it. So there’s that piece of it too.
Also, there’s times where we’ll do pilot programs of things just to begin to gather data. I’d like to believe that our team is very smart, and we have a lot of experience to begin to make some great guesses. But at the end of the day, we’re not always right. You’ve got to look at the data. You’ve got to really look at what’s happening in a given space and then be ready to pivot and think about things completely differently than when you went into it. But it’s ongoing. There’s no end to it. I’m still learning about tuberculosis and all those kinds of things. [laughs]
ROB: It’s more and more valuable for more and more people to be marketing online. David, when you are looking at what is next for you and what’s next for Arc Intermedia and marketing in general, what are you excited about?
DAVID: One of the things I’m excited about – we’re in a horrible global pandemic, and one little tiny, tiny good thing that’s come out of this from a digital marketing standpoint is I’m now having clients who we’ve been talking to about this for a long time understand that the lion’s share of the budget really does need to start going to digital. Digital can deliver. It can be measured, and it’s the one actually bringing in the leads.
Just in this past 6 months, we’ve had a number of clients tell me that they’re going to do major shifts in their budget for 2021 more towards the digital space. Why that makes me excited is if you give me more budget, I can do more things. I can expand out that integrated approach. I can go deeper in different tactics and strategies that we maybe have been pushing for that we couldn’t just straight up because of budget. We can get after more of the content marketing piece, the content distribution piece. We can begin to see how we can tie different paid tactics to some other things that we’re doing on the site. We can also look at different offer types and incentives to help ring the bell.
ROB: That makes sense. The margin for execution on a small budget – there’s just not a lot of room for mistakes or a lot of room for experimentation. I can absolutely see where having real digital budgets is a meaningful thing.
David, when people want to track you down, when they want to connect with you and with Arc Intermedia, where should they go to find you?
DAVID: Of course, we have that wonderful website that we’ve just done some updates to. We’ve even got our anniversary video out on the homepage, so I would direct everybody to arcintermedia.com. A lot of people find me on LinkedIn because that’s a super easy way. Occasionally some people may find me over on Twitter. But I would say website.
ROB: [laughs] Sometimes we find a different version of ourselves over on Twitter.
DAVID: Yeah, I think I’m pretty good on that front. [laughs] For the most part. You won’t me on Facebook, I will tell you that.
ROB: Got it. Just have to have a shadow account to manage some of the client relationships? [laughs]
DAVID: We have a love/hate relationship. I love the data that Facebook gives us to market on behalf of our clients. I’m not super fond of participating on Facebook myself.
ROB: I understand completely. Even after they ban QAnon, who knows what’s next? Or if they’ll actually accomplish that. Who knows? Anyhow, David, good to connect with you. Good to have you on the podcast. Congratulations on 10 years of Arc Intermedia, and really of making a living going out and killing your own food for much longer than that with the web dev shop before that.
DAVID: Yes indeed. Working without a net.
ROB: [laughs] Indeed. Thank you so much, David, and be well.
DAVID: Rob, I really appreciate your time. Thank you.
ROB: Thank you for listening. The Marketing Agency Leadership Podcast is presented by Converge. Converge helps digital marketing agencies and brands automate their reporting so they can be more profitable, accurate, and responsive. To learn more about how Converge can automate your marketing reporting, email firstname.lastname@example.org, or visit us on the web at convergehq.com.