The billion-dollar one-person SEO agency: Fiction or the future?, and CNET is sold for a $400M loss

You have this one on the billion-dollar one-person SEO agency. What's that?

Yeah, so there was this article on Search Engine Land that talks about a billion-dollar agency. You already know what this is about. We've talked about this a little bit. You know, will someone be able to create a massive agency with AI without headcount or people?

Okay, so what do you think about that?

I don't think it's possible, but I think you're more on a different spectrum than I am.

I don't think it's possible either. I think you need to— so one thing I've been telling my team is that, you know, we have to continue to keep the talent bar unreasonably high, not just high, unreasonably high. Because my take on it, and I'm exaggerating a little bit here when I say this, but we can only afford to hire the top 5% of talent over the next 10 years, right?

Yeah.

And this top 5% of people, they're going to be managing 1,000, tens of thousands of agents, and a lot of the resources that they needed that they've been constrained by will be unconstrained. So I think headcount is going to be smaller. I don't think a lot of companies— headcount is going to be smaller for a lot of companies and they're going to be able to do a lot more. That being said, I still think there are going to be big companies too.

Yes, and I think you're spot on in which companies with amazing talent are going to be very, very valuable. We are just scratching the surface with AI. But a lot of people are like, oh yeah, AI can do all this stuff for you in marketing and you don't need any people and you can just start cutting it down. You and I and most people in marketing have not seen any of that yet. I know a lot of creative shops that still do extremely well in doing all their work manual. Yes, they're using this technology to help them become more efficient, but they're still getting paid an arm and a leg for strategy, which is where the majority of the profit in a creative agency was anyways.

Yeah.

And when you look at that, It's hard to do that with AI. Like, if you look at the responses that it gives you, it's nowhere near what you need it to be for it to create a strategy and have you be able to compete at a very high, very competitive level with everyone else in your space.

I think we're going to see billion-dollar one-person companies. I don't know if it's going to be an agency or an SEO agency. I think it's tougher to do with SEO. I think you might be able to do it with some type of agency where you build like a lot of agentic workflows and tie them all together and then charge on a performance basis or like a little usage basis and you just have a bunch of them tied together. I think that's possible if you're some kind of mad genius. But by the way, you talked about, I think the numbers were from Accenture or maybe from Deloitte, but they've done billions in revenue off of GenAI already. Do you know they're making more money than the AI companies themselves?

Yes.

Yeah.

By tacking it on as a service.

Yeah. Or like the strategy piece, right? AI transformation, right?

That's where the money is. But speaking of performance stuff, I think you had it in here. Was it CNET that ended up selling for a $400 million loss?

Yeah.

They got originally— you want to talk a little bit about it?

Yeah. So Kevin Indig tweeted this, why is Red Ventures selling CNET at a loss? So just so everyone knows, Red Ventures, they own a portfolio of websites. They own a lot of different sites. A lot of it's affiliate income, right? So they bought— so Red Ventures, they sold CNET, one of the largest publishers on the web, to Ziff Davis for $100 million after buying it for $500 million.

Before you go too far, just so you guys have an understanding of who Red Ventures is, they're one of the biggest players in marketing space. It is more of an affiliate model, but some of their brands are CreditCards.com, Lonely Planet, The Points Guy, Bankrate, like BestColleges, which is extremely popular in the education, AllConnect. Like they have massively popular websites.

Yeah. So by the way, do you want to explain Ziff Davis as well?

Ziff Davis, I don't know too much about them. I just know it's a publishing company.

Yeah. And I'm surprised Ziff Davis bought them and unloaded it for— or I'm surprised that they unloaded it for such a loss. Because Red Ventures has been known to do pretty good deals. And their sites, they're pretty savvy when it comes to SEO. I remember talking to their head SEO guy, so they know their stuff.

Well, they must have lost a lot of SEO rankings for them to sell it.

Well, yeah. I mean, you look at this graph over here just going down and to the right from SimilarWeb. And we'll show this graph on YouTube, so subscribe to YouTube. So it looks like it was at 30-ish million per month visitors, and now it's at 12 or so. So over 50% drop.

Yeah. That sucks.

Yep. Oh look, I can make it bigger.

Haha. Oh yeah.

Yeah.

Dude, and didn't someone put a comment in that tweet? I saw the same tweet. Someone was talking about, wrong, Red Ventures met with Market Brew in February. Oh yeah, yeah, yeah.

Scott Stouffer. So this guy is founder of Market Brew, Carnegie Mellon search engineer. Okay, so this is wrong. Red Ventures met with Market Brew in February and we revealed exactly why they were failing down to the actual algorithms. The team so far decided not to engage us, not sure why. So like, I don't know why that's a wrong thing. Market Brew's advanced search engine modeling revealed several critical factors contributing to the drop in CNET's traffic. Our platform excels at identifying algorithmic changes and their impact on search rankings, providing precise recommendations for optimization. Unfortunately, despite the clear insights, there was no follow-up interest from Red Ventures. It's worth noting that major industry players recognize the value of our technology. So this, I guess, is kind of becoming a pitch. Market Brew's unique predictive capabilities can give any organization a significant competitive edge in the ever-evolving SEO landscape. So it becomes a pitch at the end. And then Bill King, one of my friends, he works for Kraken. He's just like, LOL.

Kraken, the crypto company?

Yeah, yeah, yeah.

Yeah. How's Kraken doing, by the way?

I think they're doing all right. They're still alive and kicking. Yeah, they had to deal with the SEC for a little bit. But anyway, so what's our key takeaway for this one? CNET sold for a $400 million loss. The affiliate game ain't that easy. Buying a website ain't that easy.

Big takeaway, Red Ventures is an A-class company. They're amazing at what they do. But even if you're amazing at what you do, you're going to have failures as a business or even as an entrepreneur. Elon has had failures. Bill Gates has had failures. The Google founders have had failures. Mark Zuckerberg has had failures. You and I, you know— Plenty of failures. Exactly. And I can't speak for you, but, you know, I'm nowhere near the level of these other guys.

Countless failures.

Tons of failures. And it happens to all of us. Not everything will be a win. If you do deals and you do business assuming everything is going to be a win, oh, you're in for a rude awakening, dude. It—

some— sometimes these failures take years to clean up. It's coming from, coming from real experience. I'll tell you that much.

So yeah. You want to go into some of the ones you did that took years? You don't have to give the names.

I'll go into, I'll go into one of them. It was an agency acquisition. Okay. Um, and I don't blame, I don't blame the sellers at all. It's, it's, you know, at the end of the day, it's my responsibility, but man, to, when you don't, when you acquire an agency that doesn't quite fit in, um, the amount of cleanup without going into too much detail.

What do you mean by it doesn't fit in culturally, client types, service types?

Culturally, service types, everything. And also like, Keep in mind, I hired a CEO at the time that ended up stealing, right? And so that's a whole nother thing to deal with at the same time. So you're fighting battles on multiple fronts, right? Because by the time I'm involved, it's like—

It's too late.

The well has been poisoned, right? Um, the clients have been stolen. Some employees were kind of, you know, um, told the wrong thing and they moved to another agency and they eventually like, it didn't work out for them either. Um, and so, but at the end of the day, it's like, It took 3 years to clean it up because one, the culture changed drastically. Two, there are people from the acquisition that didn't exactly fit our culture. But then, like, you know, even if you cut some, there's still some that stay. And then it creates this drag on the organization. You can't just cut all these people at once, right? Ideally you do. If you're like Elon, maybe you just cut 80% at once. But even him, he did like 4 or 5 cuts, right, over time.

Yeah.

He didn't cut them all at once. And so it took us like a couple rounds of doing it. And then now I would just say we're stronger than we've ever been. This year, I think we'll grow the fastest we've ever grown. So yeah, that's what I'll say. How about you? I got to take a minute to tell you about the Agency Owners Association. This is a peer group for agency owners. Think YPO or EO, but for agency owners. And I just wanted to read you a couple of testimonials. So this first one comes from Carrie, and we asked her, what do you like most about the group? She said, having a group of people to discuss and bounce ideas. The leads are great too. Yes, we share leads in this group as well. This one from Aliyan, he says, the ability to really post whatever I want and need and the group responds. Great experienced members, getting a lot of insights from conversations with other members, getting a lot of value from sessions from Eric, getting advice from others as well. And so if you want to grow your agency faster and you want a peer group to do so, just go to marketingschool.io/agency. This is a group that both Neil and I created, and our hope here is to to create a vibrant community of agency owners and do a lot more with it in the future. So again, marketingschool.io/agency, and we'll see you inside.

The biggest, most recent mistake, I would say that, well, it took us a while. In the marketing world, we all saw a COVID boom, or majority of us. If you didn't see a marketing boom, you did something wrong. And we grew at hockey stick levels While still being bootstrapped. And things were extremely good. And I remember I was like, okay, I want to take this business to the next level. We're in a few countries. I want to be in 50+ countries.

This was you recently or 4 years ago, 3 years ago?

Like maybe like 3-ish years ago. Yeah, right. 3, 3-ish years ago, maybe 4. Yeah, about 3, we started really spending the money.

Yeah.

And I was like, I want to be in 50+ countries. That's how you get the massive like $20 million, $100 million contracts. And those are big contracts, like to get a $100 million contract from one company paying you, but you need regional capabilities and you need to be in every major country. So then people were like, all right, well, you can't do 50 at once. I'm like, yeah, I know that. No crap. That's obvious. So we're like, how do we do 10 and then the next year get to 20 or 30 and just start compounding? And I started picking a lot of countries and some of the countries I picked weren't necessarily the right countries from a strategic fit, not knowing. And I didn't hire someone who, who has ran regions like Europe. We now have someone in charge of Europe who's run Europe for some of our competitors. And I started going into regions that, A, don't really produce tons of profit and revenue for competitors, and it doesn't really produce some of those big global RFPs that I was looking for. And all it started doing was burning tons and tons of money. And I was expanding so fast, I started hiring people that didn't always have the exact experience I was looking for, but they were hungry and close enough. So it caused the burn to be higher for much longer.

Hmm.

And it just takes a long time to clean up everything and make sure things get right, you know, back on track and then grow with sales. And a great example of this is my co-founder, Mike Camo, started having calls with all the international leaders being like, how are you guys doing sales? Oh, you're doing it totally different than what's worked. And we've already tested all this out, follow this process. And then you have to listen to recorded calls and, you know, get authorization to record calls from people, listen to them, critique. And sales cycle's long, so it takes a long time to fix these things. And when you try to do that in like 12, 13, 14 countries at once where you're fixing, because some of them were doing exceptionally well really quickly, it's just, it's not just a lot of work, it burns a lot of money and it takes a lot of time to fix. And it's hard to fix a lot at once versus going slower and getting it right and creating more playbooks.

Yep.

And then when you hire and expand, be like, this is the playbook. Your first month, you actually have to spend going through all of this, doing mock pitches and all this to make sure you're doing it the way we want, and then you can start.

Yep.

Right?

And— How long did that take for Mike?

He's still doing it. He's been doing it for probably 6+ months.

Yeah. Well, I thought he was doing it longer. You told me just like a year ago, he just got involved again and like had to clean up a lot.

No, no, no. 6+ months just on the sales training.

Got it. I thought he got really involved, like we're talking a year and a half ago.

He did, but that was for other stuff, like in the regions, like how are you guys collecting a lead?

Lead time.

How are you doing the qualification? How many of them do you call and get on the phone with? Now he's getting involved in, let me listen to the call and see how you're actually pitching.

Yep.

So think of it as a funnel, but the last 6 months has been spent more on closing. The previous maybe 9-ish months before this 6, spending on, hey, you got all these leads, what are you doing to nurture the leads? and educating and warming them up? What are you doing, you know, within the region to build a brand name, get us the right type of RFPs? So, and then now that we're getting enough of those, he can spend the time on closing.

All right, quick note. This is about my company. It's called Single Grain. And Single Grain is an ad agency where we're focused on driving innovation. I want to talk about a couple of new strategies. And if you need help with marketing, great. If not, here are a couple of new strategies that you should try out. One is programmatic CRO. So we are doing programmatic conversion rate optimization on our site. So it's building products that will automatically optimize your site to increase conversion rates. We're also auto-optimizing, auto-updating from an SEO standpoint, and we're constantly thinking about what else we can do in terms of enriching the visitors that are hitting your website and also tailoring custom messages for them using AI. And so there's a handful of things that we're doing from a marketing standpoint, and our mission is just to drive more innovation. So if you want to learn more, just go to singlegrain.com— grain like rice— so singlegrain.com to learn more. And we'll see you inside. You know what it is? So we've talked about this. It's you can't just be the businessman that just delegates everything. You have to be the working businessman. You have to be involved in the business to drive the pace. You're driving the pace. Mike's driving the pace. This is why it's really helpful to have a co-founder. If you're not there to drive the pace, everything becomes a circus and everything slowly starts to crumble. But as long as you stay involved, you should be able to— and you stay alive for a very long time, you should be able to grow a pretty significant business. The one thing I want to leave you with before we move on with this one Let me tell you a story. Did I tell you this story? No, we haven't talked for a while. So, okay. Um, I met with a friend last week. So he says, okay, he sees this really beautiful woman, um, in Europe, right? And the woman kind of condescendingly is like, so what kind of watch is that? Right? Like walks over, what kind of watch is that? Right? And so he's like, you know, he tells her what the watch is. And then in his mind, he's like, well, she's being condescending to me. Like he kind of thinks she's like a prostitute or something. Right? So then He goes to her and he's kind of like, so what do you do? Right? And then she's like, well, then they kind of go into it. Turns out she is divorced from her husband. She runs a company that's not a billion valuation. It does a billion in revenue every year, right? And what ends up happening is they start talking about this book. And I'm not going to bore you with the details because you'll never read this book knowing you. It's a 36-hour audiobook, right? So anyway, I started— so they start talking—

What's the name of the book?

It's called Reality Transurfing. Guaranteed you'll never read it.

Okay.

But it's really thick too. I bought the physical copy too. But let me just ask you this question. In your life, whenever you've desperately tried to control the outcome, meaning you put enormous importance on the outcome, how did it work out for you?

Usually does not work out the way I want.

Why?

It's just some things in life you can't control.

Exactly. So it's in the book. This is one of the key takeaways, right? And I realized that you applied to business, you applied to relationships or whatever. Anytime I place too much importance on something, they call it in the book, it's kind of like this quantum physicist wrote this, right? It's like, if you try to control the outcome too much, then balancing forces will come in and balance it out, and they will put obstacles in your way so you won't get what you want. So the best thing you can do is just keep doing what you do and not care too much about the outcome.

Yes.

And that's— and whenever you do that, whenever I do that, everything just happens, right?

Yes, especially in dating for you. If you don't care for the person, exactly, they're more likely to like you.

Exactly, 100,000%, which is like— we're not going to go into detail, but we just kind of talked about it. It's like, whoa, what's happening, right?

Yeah. But yeah, anyway, yeah, Eric has a really cool personal life. If you ever get to know him, there's much more behind, uh, the scenes when it comes to Eric and business. Like, he has a Really cool personal life if you ever get to know.

Anyway, let's move on.

They create great stories.

We'll leave it at that. Yeah. All right, guys. That is it for today. Please go to marketing school.io agency to learn more about the Agency Owners Association, and please don't forget to rate, review, subscribe. It helps us grow. Please help us balance out the the people that don't like the new format. Tell us you like the new format. Alright, we'll see you guys later.

Alright, we'll see you guys later.