Ep 004: How Owen Loft Manages Almost $1 million per month in ad spend

All right guys, welcome back. Episode 4 of Growing Your Agency. I'm your host Ryan Shank. Today I have the founder and CEO of Grade Media Group, Owen Loft. Owen, thanks for joining us today.

Happy to be here. Happy to get in on the ground floor of this podcast.

Yeah, I mean, this is, you know, in the single-digit episodes right here. This is good stuff. So So, Owen, tell us a little bit about the business, but I'm also curious how you got into the marketing game and why. Just interested in learning that.

Sure. So just a quick story. Graduated from college, worked in finance in New York City for about a year. On the side, I was playing online poker. I figured I was good enough and could make enough money there to be a pro, and I quit my job, did that for 6 years, traveled the world, had a lot of fun, kind of lived the, uh, the Dan Bilzerian life. No, not like that. I wish. But no, like, you know, the digital nomad kind of typical thing. So that was fun, that was cool. Was ready for some more stability, wanted to get into the startup world. Tried coding for a bit, learned a little bit, but wasn't something I wanted to do every day. And so I learned digital marketing and then I joined like a good reputable agency. I was the oldest intern in company history, but I quickly rose the ranks. I was there for a few years doing only paid search, went to another agency where I was doing more Facebook, paid social, CRO type work. And then just over a year ago, started my own agency. So that's the, the one minute version. And that's how I ended up where I am today.

Interesting. So, so just diving into that a little bit. So you said you learned digital marketing before you were an intern at the agency. Where, how did you like, why and how, I guess?

I mean, I didn't really know it well enough to do anything effectively. I basically went to a General Assembly class, which gives you a good overview. It was like a 10-week program. Where you kind of like learn the different channels. You learn like what a UTM is and that kind of thing, how to segment the different areas for growth. But I really didn't like get any hands-on experience until I started this agency. And, you know, just started like everybody else doing negative keywords, uh, SQRs, learning how to build campaigns from scratch. And, uh, yeah, so it was a good training program. Within 3 months, internship was over. I got a full-time role and was like managing my own accounts within the next few months after that.

That's awesome. And it's always nice when you're at the agency because they kind of feed you the accounts and you can really specialize. And I think that's where, you know, once you start your own agency or you go out on your own, it's like you suddenly become, you know, you got to do everything. You got to send the invoices, you got to go and get the clients, you got to manage the accounts, you got to do the reporting. How are you managing it? Um, you know, how, uh, curious time allocation, but also tell us about, I guess, how, you know, how do you think about going after new business versus managing, you know, the clients that you currently have?

Um, yeah, so that's kind of like a breakdown of working on the business versus working in the business, uh, and that kind of fluctuates depending on how much client work there is. But I think what you said earlier was kind of interesting. It's like once you've kind of built yourself up at an agency and you're managing big clients there, and then you're dealing with sophisticated accounts, high budgets, and then you go out on your own, you're kind of starting from scratch again. So you're taking this, like, good knowledge, and then you're working with these kind of small clients where you do have to do more. Like, I mean, I have done some WordPress development and helping people set up email templates. And when you're first starting out as a business, you just have to kind of do what it takes to get your clients results. So it's been a lot of that. It was a lot of that in the beginning and now it's just more kind of search and social focused, which is good because it's more of like my bread and butter and what I'm good at. But in terms of answering your other question, how much time am I spending on the business versus in the business? I would say right now, the last like 2, 3 months has been almost 100% in the business. I've just been in like full work mode sprint, just all client work.

Existing client work. Because I actually think there's a difference between on the business and in the business. Meaning I would say on the business is more strategy where you're planning, but I, I was more referring to like, I guess kind of what you're saying, client work, existing client work versus going out and getting new business. Because I know a lot of marketers, one of the big pain points is turnover and churn, especially with SMB clients, which, you know, I'm also curious, uh, to know type of clients that you're working with, but But, you know, so that's the biggest question I think I have of like, you know, going out and getting new customers versus managing existing accounts.

Right. So I've been lucky to have some good referrals coming in, but basically when this 3-month sprint started, it was kind of a big pitch for my small agency for a client, which I ended up getting right after that. They're a luxury hotel chain. Okay. So they have like 15 properties. Right after that, I ended up getting—

And how did you get them?

Referral? Believe it or not, they were, they posted on Upwork. And so I think Upwork for getting clients is usually a giant waste of time. And I don't know what made me go and look on there that day. It must've been a slow day in the office, but yeah, I just, I, at my old agency, I actually used to manage a luxury hotel booking site. And so I really liked the, the world of that. I like the industry, and so it seemed like a good fit. Hopped on the phone with them, did my pitch, ended up getting the contract. And then right after that, like the week after, two weeks after, ended up getting a client who's a huge Series C e-commerce startup. And that's been, you know, we're talking $500K in monthly spend. Wow. And so that's been a big kind of ramp up. And then right after that—

And you just take about 10, 20% of that, just $50,000, $100,000 a month management fee?

No big deal. No, I wish. No, but, and then right after that, it was a, I got a SaaS referral. And so that just started too. And with paid search, especially, I think—

Was that from me or is that another one?

That was you.

Nice.

Cool. That was the Ryan Shank referral. But yeah, I think it's, with new accounts especially, like there's so much work that goes into setting them up, getting them where they need to be. It always helps if there's existing data. But one of the things that, like, one of the reasons why I'm in business pretty much is because almost every single time that I look at an account and an audit or whatever, I just see like tremendous amounts of ad spend being wasted or misallocated or things aren't being segmented properly. So there's always a ton of upfront work. That's why I've been in this kind of 3-month sprint. And now I'm hoping to shift, like working on the business kind of going forward strategy, long-term planning, trying to get that into like the 20% range. My first hire, and then really kind of create a financial model and roadmap for growth next year.

So you're mainly managing paid spend, right? 'Cause I think that there's a lot of agencies out there and some are branding only, some are creatives, and then there's some performance-based agencies that are doing a lot of like just paid search, right? Whether that's, you know, ad, Google Ads and Bing, and then maybe some Facebook. So what's, what's the bread and butter?

Are you mainly AdWords, mainly all performance, all performance, mostly AdWords and a much smaller percent Facebook? I would say that like my core, like my best skill is totally paid search. I would say that like, I'm not total, total expert level at Facebook. I think I'm probably top 5%, but not like top 1%.

Sure.

So, and honestly, I prefer working in AdWords more. I like the interface more. I'm more familiar with it. I don't like building things in Facebook. I actually don't really like using Facebook as much. So that'll probably be like higher number 2 is getting somebody who's just like a total Facebook stud.

I think it also depends and, you know, curious to hear your thoughts on this, but I think it does depend on the actual business. Like a few episodes ago, uh, we had on Will, and he, he manages the spend, uh, for a canvas, um, an art company. You've probably seen them on Instagram called Iconic. They just raised a bunch of money from Gary Vee and Scooter and everything. And that's, that's not something you're necessarily searching for, right? Like motivational wall art, like for apartment. Like, I don't know, maybe there is search volume, maybe there's not, but it's something where you're kind of like shopping and you see it versus like seeking it out. And I think like, you know, there are a bunch of verticals and a bunch of products that I think are going to be better on Facebook versus in, you know, on paid search like AdWords.

I totally agree with you. I mean, ultimately, like what channel works really depends on what kind of business it is. With something like that, I listened to the podcast with Will. I think that makes total sense. He's probably crushing it there. And if I was, managing that client, if I got that referral, I would recommend, you know, almost all Facebook, maybe some Google Shopping. But yeah, it's much more of a visual thing. I think just with the way it's worked out with my current clients, there's just not as much Facebook activity happening. I am only really managing Facebook for one e-commerce client, and then I'm doing kind of like dynamic remarketing or just regular remarketing for several other clients as well. But yeah, ultimately it comes down to the business. I think mostly e-commerce is better for Facebook, whereas like B2B SaaS, it's like, tends to be a lot more difficult.

Got it. So you're managing hundreds, you know, greater than $500K for the one client plus all your other clients. You're probably managing what, almost $750,000 a month in ad spend? Ballpark? That's, that's, that's pretty good for one year in and branching out on your own. So tell me about, so you said Upwork, you said some referrals. What other channels have worked for you? Because I know, by the way, just so everyone listens, I met you at an event in New York where you went to like a Techstars Demo Day event, right? So I'm assuming you went there for networking, um, potentially. I don't know, you know. So I'm curious to know channels where you're acquiring customers.

Honestly, like, I am, I am not good at acquiring customers. Um, I met you through that event. I've gone to other conferences, events. I ended up meeting you actually in because I started using PhoneWagon as a service for one of my clients.

But did it really start because you saw us there?

Yeah, I saw you do your pitch on stage where you did, you created a dynamic phone number and somebody called you while you were on stage to show how easy it was. Yeah, it was, it was like magic. No, I'm just kidding. Yeah, I don't know. I've been really lucky to get referrals. You were talking about churn before. A lot of my clients, I've only been in business, like I incorporated October 3rd, 2017. I'm in my 1-year anniversary with several clients.

Yeah.

So I haven't had a lot of—

that's actually really impressive. And I think the barrier to entry is so low that that's why people see churn because people are, people are getting into the space that like aren't at the top 5, top 1% like you. And then, you know, they're not delivering. Results and then, you know, they're seeing high churn. I think also I'm curious to know what you do with this is educating the client, you know, about the results. How do you report back to them? Are you reporting on clicks, leads, calls? Like, what are you doing?

Sales? Curious. Yeah, it's— the KPIs are different, but it's always performance-based. So it's, you know, leads, uh, for like a lead gen business, this number of leads, and then if they're turning into customers, e-commerce is much more straightforward. And then sometimes there's like an additional email capture. But yeah, I think there is a lot of education involved. Like I would say that most of my clients would know what RLSA is and Dynamic Search Ads are. Like they wouldn't know how to go into AdWords and do it themselves, but they get—

By the way, I hate when people talk in acronyms.

Okay.

No, no, no, not like hate like that. But it's like, I feel like people almost try to over— I hate it. The dynamic of when you do it as a marketer to a business owner, like don't expect them to know it. Like, Rosses and stuff like, talk to them like a human being. And it's like, don't try, like, I get it. Either you either are trying to sound smart or like maybe you just really talk to your friends like that, but like people, you have to dumb it down in my opinion.

There's tons of education involved. And it's also, if you're in a room with several different people and one of them might be the marketing manager, one of them might be the CMO who used to know AdWords, but has been since removed. So like when I'll say something that our quality score improved, I'll say, and as a reminder, quality score is how Google judges, you know, how relevant our keywords are to our ad copy and to our landing pages. And the higher the quality score, the lower we're going to pay for clicks. So I'll say the acronyms or whatever, and then I'll usually do a little explainer. And then judging by how many times I've said it to the person, I can drop the explainer after a while. So yeah, there's—

yeah, that self-awareness I think is important of like, hey, I'm— I say it, I'll, you know, this is what I do, and then explaining to them and just having the context for them, I think that's great.

Yeah, like I said, most people can't navigate their way around AdWords too well, but I think that most of my clients know the tactics and that sometimes come to me with different ideas based on things that they've learned along the way. So now the education component's big, and then also in terms of, of churn, I don't sign any long-term contracts I did with the hotel company, but that was their request.

What's a long-term contract?

A year. A year. Yeah. And then, but usually I'll do like 2 months if it's a brand new account. And then after that, it's like, if you wanna fire me, that's fine. And you have, I have like a 1-day out clause. Like I'll transfer all the assets, get out of it and son. Thankfully that hasn't happened. But yeah, no, so sales is something I really have to figure out. I know you're the sales master, you're the grinder over there, so you're going to have to give me some tips when that time comes.

Yeah. So what, talk to me about pricing. How are you pricing? Are you doing percentage of ad spend? Are you doing just flat retainers? Is there like tiers based on scope? What do you, how do you think about pricing?

It depends a lot. Based on the different clients and the different strategies and the level of sophistication, but usually it's based on like a flat fee per channel. So if it's search and Facebook, you know, that would be two different fees. And then sometimes—

regardless of spend, the same flat fee for all clients?

No, it does depend on spend. And then sometimes there's a percentage of spend involved, which I think is, is I'm not, I don't know. I think it can be good and bad. Sometimes scaling up, like especially on something like Facebook where you can find something to scale and just hit go. And then you're like making all this money without a whole lot of extra setup and fees, or sorry, a lot of like setup and work. So maybe it's not the best there. I don't know. I don't know if there's like, It's hard to predict. I think people do the percentage of spend because they expect as the spend increases, there's going to be more work, but it's usually not linear. But then if you also do the—

like, do you have it tiered down? Like, so let's say it's, you know, up to $10K, 10%, and then it's like a greater than $10K, like 5%, or no?

I've— at my old agency, I haven't done it at my current agency, but At the first agency I worked at, one of my accounts was this like insurance comparison site and they would spend anywhere between like $300K and $900K a month and they were on a tiered system and it actually turned out that if they spent $900K a month, they were paying us less than if they were spending $300K to $400K. Like I didn't do this—

Less on a percentage basis or less on an absolute dollar basis?

No, less total. I didn't negotiate that contract. But yeah, and I was just, the tiered spend can create like a weird system where the marketer could potentially be incentivized to spend less. I mean, ultimately, like I'm not pushing budget unless I'm getting results. I've definitely audited accounts where it's clear that they were working on a percentage of spend. I audited one account, which is now I think they're like valued at like a billion dollars and they started out as just like a, hardware startup, and I looked at their account. They had spent— the old agency, which is actually a pretty big, well-known agency in New York, they had spent about $90,000 in the last 2 months on display prospecting, and they were bidding—

not retargeting, just pure general prospecting, throw money in the garbage.

And they were doing a max CPC of $6.50. Which on the Display Network is absolutely crazy.

Yeah.

And, you know, they were probably making a percentage of that. Like the customer, they got no, I mean, you can call that brand awareness, but it's just really like lighting money on fire. They got no conversions from it or anything. So in those cases, yeah, like if you're doing brand awareness or something, percentage of spend is just asking for trouble. But if it's performance-based and you can't spend unless you're like hitting your goals, then it can make a little bit more sense there.

Yeah, see, I think that's where it makes sense. If there's some kind of levers in there that is checks and balances, right? It's like, you know, you're only going to continue to spend if we're continuing to get some type of conversion rate or some type of acquisition cost, target cost to acquire the customer as the checks for that. So what kind of tools are you building? Obviously the e-commerce has their own site. How do you think about kind of breaking out the scope of work? Like, what do you do with creatives? Are you doing the copy on the sites and the landers? If you're doing the landers, what kind of software are you using? Are you using like an Unbounce? Talk to me about that.

Yeah, I'm not as much of a creative type, so not doing a ton of like the copy or any of like really the creative work. I'm more of like a data numbers guy. I can give direction based on you know, things I've seen in best practices, but I usually leave the implementation up to the clients, or I can recommend, you know, different contractors or freelancers if they need that. But in terms of tools like Unbounce, definitely, um, for, for like landing pages, A/B testing, um, other tools that I just kind of like use all the time that I couldn't really live without, uh, Supermetrics, which is It's like API hookup to AdWords, Analytics, Bing Ads, LinkedIn Ads, Facebook Ads, everything. And you— it hooks up to Google Sheets so you can just create these automated reports really easily. It also hooks up to Google Data Studio so you can set up reports that way. But that's good for client reports, it's good for daily budget tracking, it's good for pacing, it's good for a lot of things. So I use that a lot. Good old-fashioned AdWords editor, use it all the time for like bulk editing, getting things done quickly there. Pretty much.

What about keyword research?

You know, I've flip-flopped a lot. There's not— I don't think any of the solutions are that great. They're all kind of directional. I like this thing called Keywords Everywhere, which is a Chrome plugin. And as you're just searching Google normally, it'll tell you what the average CPC and volume is for that search. And I think they connect to like SEMrush or something like that. And then on the side, they'll list a whole bunch of similar keywords with volumes and CPC estimates. So I think that's good. I think SEMrush, they have this like keyword magic tool, and I think they're actually really good if you're building out an account from scratch that doesn't have any history. They're really good at finding and anticipating negatives before they even happen. Because you can use their tool and they'll just give you all these searches and you're like, wow, that would definitely show up for my phrase match or broad match keyword. So you can kind of get the jump on that. But in terms of actually doing competitive research and seeing how much other people are spending and what they're spending it on, I don't think there's any solution that's like really that great.

Got it. I saw Neil Patel just launched a keyword— I think it's a keyword research tool similar to like SEMrush or Ahrefs. I haven't checked it out. I think it's that. I actually haven't even like really looked into it, um, that much. All right, uh, this is awesome. So we're just gonna wrap it up with 3, 3 questions. Uh, first question: what is your morning routine?

Morning routine is— it's kind of a work in progress. It used to be really bad. It used to be, uh, me waking up to my phone alarm clock, sneezing a bunch of times, and then picking up my phone and actually using it in bed for half an hour before getting out of bed. So now my phone charges in another room at night. I use an old-fashioned alarm clock.

Oh wow.

Yeah, it's good. No, no iPad, no phone anywhere close to bed. Um, and then try to work out in the morning before work, like once or twice a week. That's really ideal. Like if I could have an ideal morning, it would just be wake up. Um, what time are you waking up? It depends. I try to get 8 hours. So sometimes if I'm up later, I'll wake up later, but usually it's around like 7:30, I would say. Okay. It used to be more like 9:00 and now, um, I don't like getting to the office at 10:00 and like working for 2 hours and eating lunch. It's not like super productive. So, um, I'm trying to like get to the office a lot earlier and like get a lot of stuff done in the mornings. Um, yeah. So that's, and then I don't eat breakfast. I have, 2 caffeine pills and I'm just ready to go. No coffee, caffeine pills, just sometimes coffee and caffeine pills. Depends how much sleep I got. I'm on, I'm on 3 hours of sleep last night. So I've had about 3 coffees this morning.

So, oh wow. And you were 4 hours the night before.

I know it's a bad week.

That's crazy. Um, second question. If you were a lot of people listening, watching, following along, they want to break into the scene. If you were, you know, one piece of advice, what would you do to get started? How would you get off the ground? How do you become, How do you do what you're doing? How do you get your first client? What do you do?

I would say, um, before you kind of quit your job to get a couple of freelance clients that you're working on after work, that's how I got started. I had like one client that was paying me $1,000 a month. And then I got a second one that was paying me something similar. Uh, I probably quit my job a little too early, but I have some, some risk in my DNA, so I didn't mind. And the first month that I actually quit, I pitched one of my, my 1K clients a $20K web redesign package that I've just figured out how to do, and they accepted it. And so that got me on my way. But I would say try to get some clients on the side before, you know, going out on your own completely, because sales I don't know. I think for some people it might be more natural. For me, it takes a little bit more time. And I think once I get the connection, like once I get the referral, I usually do pretty well. And I think my close rate's really high, but, um, just getting that initial meeting or having a big network is like something that I don't really have.

Feeding the top of the funnel. So you're good.

Yeah.

Middle funnel.

That's why I'm doing this podcast right now. Yeah.

It's going to feed the top of the funnel. Um, all right. Awesome. Owen, appreciate you, uh, you joining us. Where do we find you and how can people connect with you?

Um, people can just email me directly, owen@grademediagroup.com, or, um, just give me a call, 347-636-4175.

Awesome. And your website?

It's grademediagroup.com.

Grademediagroup.com. Awesome. Owen Loft, Grade Media Group, thank you so much for, uh, for joining us. And, uh, that is the 4th episode of Growing Your Agency. Thanks, Owen.

Thanks for having me.