Agency Profile: QFactor
Johnson, a former stockbroker, and Uhalley, trained as a lawyer, started by immersing themselves in clients’ online activities. “We wanted to understand their needs and then figure out what value we could add to the equation. We wrote strategies, helped clients traffic ads, managed their creative agencies in terms of production schedules,” and much more.
Soon they discovered the greatest value they could add was in the areas of planning and placing online ads. Keenly focusing on those two functions, webnet-marketing’s billings jumped by more than 90 percent from 1998 to 1999, and Johnson reports this year’s increase will register an impressive 288 percent.
Emerging as specialists in online media buying, the principals found their original agency name was somewhat misleading and redubbed it Qfactor.com. The agency, with headquarters in Bethesda, MD and offices in San Francisco and New York City, currently handles online advertising for clients who include Network Solutions, Talk.com, BET.com, Cablevision, and Washington Post Newsweek Interactive.
Neither Johnson nor Uhalley came to the business with prior advertising experience. “We built an agency that didn’t know the rules of agency management. Others started out as creative agencies and later added online planning and placement. We started with the quantitative element and never sought to deliver the creative component to our clients,” explains Johnson. Visitors to the offices will find multi-discipline teams staffed with specialists in media, client performance (backend tracking and reporting), and client services (account management).
“We enjoy the freedom of not having a creative department in-house,” says Alison Mittelstadt, vp of client services. “That can tether you to embracing a specific creative concept because it was invented there.” Creative work is outsourced to a dozen different agencies. “Our shop is a bunch of numbers-oriented, quantitative geeks,” admits Johnson. “There’s a calculator within five feet of anyone at the agency.”
One thing the staff calculates is how well online ads are performing. Unlike traditional media, “The work done after the buy is tremendous,” says Jed Breger, svp and media director, who created the interactive media-buying group at Messner, Vetere, Berger, McNamee and Schmetterer before joining Qfactor. “In an interactive shop, there’s constant client advocacy, commitment to functionality, and monitoring the performance of the campaign.”
“Our core value to clients is that optimization becomes the primary objective the minute a campaign is launched,” adds Johnson. Qfactor’s optimization—of the creative, the media, the revenue response, and the product mix—continues through the life cycle of a campaign. Daily, weekly, and monthly reports are generated and shared with clients.
Such microscopic attention to responses and the frequent campaign adjustments they engender seem more like traditional direct marketing than brand image advertising. And they are. “While interactive is effective as a branding medium, it’s far more effective as a direct marketing one,” notes Johnson. “Interactive is the most trackable medium, and that also makes it easier for a client to internally justify the spending.”
Before any media buys are made, intense negotiations take place. “We represent a large enough critical mass in billing and strong enough potential going forward that we do well as negotiators,” admits Johnson. “About a year ago I had someone do a quick analysis of what percent of rate card we paid…and it was 38 percent.”
This tough negotiator also insists on trying before he buys. “We’ll do a one-week or one-day test to get a statistically valid sampling of site performance, and then I go in with the price I’m willing to pay.”
What’s more negotiable are the terms and conditions of an advertising contract. Sites typically charge a higher CPM for optimizing, and media director Breger says the price is well worth it: It’s important to “negotiate the interchangeability of specific portions of an advertising agreement and change the proportion of the value as you go along, based on performance,” he believes.
Network Solutions, the Web’s leading domain name registrar, is the firm’s oldest and largest client. It went from having zero competition to a field of more than a hundred today. To help it stay on top, Qfactor secured key portal placements and negotiated some of the largest online ad contracts in the marketplace. According to a recent Ad Relevance report, Network Solutions ranks No. 1 in its competitive set in online impressions. To stay close to the account, Qfactor maintains a marketing associate onsite at Network Solutions. Having just merged with Verisign, the online security and encryption service, Network Solutions is currently generating a slew of new products and services, which Qfactor is also advertising.
Thanks to the coming election, another of its clients, Washington Post Newsweek Interactive, is also heavying up online ad spending. Subsite OnPolitics.com is getting the lion’s share of attention, with creative broadly distributed across some 60 sites. The objective: To position OnPolitics as the definitive source for news and information regarding the presidential campaign. The effort thus far, consisting of animated and HTML banners (creative work by Proteus and in-house), has increased visitation substantially.
“I am the last person to say the banner ad is dead,” says Johnson, whose firm also plans and buys buttons, text links, sponsorships, pop-ups, interstitials, webmercials, and transactional banners that keep a viewer on the original site while enabling a purchase. “For some clients, a static banner ad works better than interactive pop-ups. It all comes down to testing and optimizing.” Qfactor’s bottom line: “It doesn’t much matter to us what type of unit we produce—as long as it delivers.”
Susan Breslow Sardone can be reached at email@example.com.