by Herman Manson (@marklives) Demographica has been through an interesting, unconventional evolution: from a technology shop building databases for clients, building massive consumer databases for itself and selling advertising, direct marketing business and finally to becoming a specialist agency. The business, positioned as a B2B and niche-market agency, turns 10 years old in November 2016, but it’s only existed as a proper agency for three.
Founder Warren Moss was the general manager at Digital Planet, an early South African consumer ecommerce play, before he launched Global Acquisition, a forerunner of Demographica. With Global Acquisition, he applied the lessons he learned in e-retail, especially concerning databases, which is what his new business built for clients.
Running a good business
Soon he was building mass-consumer databases to own and selling advertising through them, evolving into a direct-marketing business, which he branded Demographica. But, says Moss, just because you are making money doesn’t mean you are running a good business. Over the years, he had watched the results for campaigns running on his platforms decline. The databases were degrading even as revenue increased, a situation he realised would not be sustainable.
The penny dropped when one of his biggest clients called him up to complain. Moss says he had been watching the stats decline and had been waiting for three years for that phone call. Once it came through, he had to fundamentally change how his business operated.
He and his team had built up a core capability in building and managing databases. Moss had also developed an interested in anthropology. Moss decided to mix his various passions into one company — anthropology, data and insight — and he was back in business. Moss also realised that, the more niche the campaign, the better the results he was able to achieve for his clients.
Results of between 40–77%
Demographica now focuses exclusively upon B2B and niche markets (eg reaching medical specialists, property developers, selling very high-end cars, etc) campaigns. That doesn’t mean it only works on niche brands: because of its powerful offering, which sees results tracking at anywhere between 40% and 77%, Demographica counts Standard Bank Business Banking, Old Mutual Corporate, Zurich South Africa, Investec and Nedbank Business Banking as part of its client base. It also manages niche campaigns for Pearmont, BMW and MINI (it recently worked on a campaign for the 7 series).
Moss says there is massive demand for B2B advertising but very little B2B competency in the mainstream ad agencies. A print ad in trade publication no longer guarantees results, as measured in phone calls and business leads.
He names one banking client as an example. Its B2B account was managed by a well-known ATL agency. The client wanted to reach developers whom it hoped would make use of its financing facilities. Its solution was to place print ads in trade media. Demographica convinced the client to give it a shot at the business. It built a database listing all commercial property developers in South Africa. Then it removed the brand’s existing customers, did research, came up with a strategy, outsourced the creative (more on that later), and made contact with FD- and M- level personnel.
Yes or no measurement
The results were measured in a simple yes or no: yes, they would take a meeting with the financial services brand or, no, they wouldn’t. Sixty two percent said yes. The brand’s R1bn-in-new-business target was blown out of the water.
Moss believes the category continues to be under-serviced, not only in South Africa but world-wide. His research indicates that Demographica’s tech-savvy B2B model isn’t being replicated elsewhere, so he is looking at ways to export the business into new markets — including developed markets. One global client is already taking the agency into several of its markets, including one in Europe.
Demographica is an agency that’s disrupting the big-agency approach successfully, says Moss, which also means that the networks have come knocking. Part of his business model that appeals to them is that Demographica outsources creative to small specialist shops it knows work well in specific sectors. Of course, networks see a large amount of money going out of Demographica’s accounts and into creative agencies: a nice revenue loop for them, if ever there were one.
No timekeeping
According to Moss, there’s no timekeeping software in his business. No client is billed for time as this misaligns the needs of client and agency (agencies want to build in time to bill more; clients want agencies to spend less time so they get billed less).
Instead, Demographica works on an outcomes-based billing model: it sets an outcome and price, and then it becomes the agency’s problem to meet said target. All the client needs to do is decide whether or not it is willing to pay X for result Y.
Essentially, marketing becomes a business decision. The onus to deliver lies with the agency — it shouldn’t be the client’s problem if the agency can’t crack the brief, says Moss.
Herman Manson (@marklives) is the founder and editor of MarkLives.com. He was the inaugural Vodacom Social Media Journalist of the Year in 2011 and has, over his 20-year-plus career, contributed to numerous journals and websites in South Africa and abroad, including AdVantage magazine, Men’s Health, Computer World and African Communications.
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