Jacob Baadsgaard:
(silence).
They do advertising because they think they should, not because it's actually driving business value or they don't even know exactly how to do that.
Chris Dreyer:
The reality is they might be spending 20 grand but only need to spend eight grand.
Jacob Baadsgaard:
You don't have to outspend your competition, if you get really smart about where you're spending your money.
Chris Dreyer:
Welcome to Personal Injury Mastermind. I'm your host, Chris Dreyer, Founder and CEO of Rankings.io, the legal marketing company the best firms hire when they want the rankings traffic in cases other law firm marketing agencies can't deliver. Each week, you get insights and wisdom from some of the best in the industry. Hit that follow button so you never miss an episode. All right, let's dive in.
Jacob Baadsgaard is the Founder of Disruptive Advertising. What started as a side hustle in 2012 has grown to a team of over 160, managing over $400 million in ad spend. I'm so excited to have him on the show today. Guys when I started rankings and started to crest over that $2 million mark, I had different challenges and Jacob was the person I turned to. He even introduced me to the Profit First Model. If you haven't read Profit First by Mike Michalowicz, I highly recommend you pick it up. It'll be linked in the show notes. I brought him back on a day to get into leveraging data effectively, what to do before you dive headfirst into advertising spends and how to foster long-term employee retention by reinvesting in their development.
Before Jacob started disruptive advertising, he was the Senior Marketing Consultant at Adobe. What gave him the confidence to go out on his own? Here's Jacob Baadsgaard, Founder of Disruptive Advertising.
Jacob Baadsgaard:
When you look back on the little things that had to happen just the way that they did, it's always incredible to see how beautiful life is at just navigating its way forward. There was two moments where things came together for me. Number one is, in an annual review with my manager, I was the top performer in the department and he was excited to tell me I was getting my, I don't remember, 7% raise or something like that. And I thought, "Oh, no hard feelings. He's doing the best that he can and this just totally doesn't do it for me anymore. It just doesn't do it for me." And so that was the moment when I realized it was time. And because I thought I would be an analytics consultant freelancing, I actually needed to find a job to go past my non-compete period with Adobe.
And so I found a job in between, and some of my friends and former employers, I actually helped them set up analytics just pro bono because I loved them and wanted to help them be successful at their small businesses, and that was my jam. I knew how to connect marketing data and actual business data and the outcomes that it was driving. And so, in some of these situations, I would come back to them with these beautiful reports and say, "Here's exactly what's going on with your marketing. Here's exactly what you should do and you'll perform better as a business." And then what they all said was, "Jake, that's so cool. We don't know how to do that or have the bandwidth or expertise to go and execute that on our own." That's when things shifted from, "Oh, I'm not going to be an analytics consultant. This is actually analytics to get paid media performing better and they need someone to actually run and execute that for them."
And so, in that in-between phase, that's where I realized the real product market fit, I guess you could say, and had enough use cases of like, "Cool. I see how this works." I was past my non-compete, built up a small book of business to the point where I could break off and get going. And that's how the pieces came together.
Chris Dreyer:
I imagine the analytics side really lended itself nicely to growing and scaling accounts and getting to these major spends. We're talking over $450 million in ad spend, so not a little amount of data. Talk to me about that and the early on of bootstrapping the business and these early sacrifices you had to make to hit the ground running.
Jacob Baadsgaard:
Well, I did free work. That was one of the sacrifices that I made was, I got to prove to people that I can actually give them business value. And Chris, what I see always happen with a lot of businesses is they do advertising because they think they should, not because it's actually driving business value or they don't even know exactly how to do that. And so, with the thousands of businesses that we've worked with over the last 10, 11 years, our data shows that 70 plus percent of their ad dollars that they're spending are just totally wasted, because they don't know how to spend it effectively.
And in your industry and in most industries, people get really fixated on a cost per lead, but then never connected to the CRM or the thing that actually shows how many cases, how many business outcomes are happening as a result of that. And so, that's the part where I spent all of my time and energy and once we could connect those dots, and if the business math worked, that's when you can start spending more and spending pretty aggressively, because exactly where to spend it to get the ROI. And so, the word disruptive advertising came from, you don't have to outspend your competition if you get really smart about where you're spending your money. And you can actually get a lot more bang for your buck and not need to increase your budget.
Chris Dreyer:
So you guys clearly do a lot of ad spend for the personal injury attorney listen, you guys do SEO, you guys do some lifestyle marketing. Just give me the gauntlet of what you guys do and just how you're a little bit different than maybe other agencies.
Jacob Baadsgaard:
We're about 11 years into the journey now as an agency, and we are best known for paid media. Think of Google Ads, social media, those types of things, that's what we are the best known for, and I believe the top-rated in the country for, on the paid media side of things. We have expanded our service offering over the years. So we actually take more of the position of, get a performance marketing team in a box that can actually execute in all of those areas for you. And so, businesses that love working with us, are typically more established in that five to $50 million in annual revenue and want to have a marketing partner that can bring the full team to the table to help them succeed. And so, that's where we shine, that's where we thrive.
Chris Dreyer:
I've seen a lot of articles on paid ads, the hourly, you've got the percentage ad spend, you got the fixed fees, you got the performance. One of the things, and I would love because you have the rebuttal, right? You've had this conversation or heard it a million times, is that's counterintuitive. The percentage spend, which is most common, is a little counterintuitive what you said because the reality is they might be spending 20 grand but only need to spend eight grand. And so, is it just, "Hey, you still do the percentage and then there's this huge trust component because, look, I just saved you a bunch of money?" Or how did you approach that decision? Because many of the personal injury attorneys listening, it probably doesn't excite them to spend say, a 20% on 100K ad spend a month versus maybe that fixed fee. And it gets that situation where they're thinking, should I hire an in-house or should I work with someone external?
Jacob Baadsgaard:
Yeah. It's so funny. I had the extreme examples of that is early on with the agency, I did performance only models and it was based on business outcomes. Because I knew that I could figure out what was working in their marketing data. And I had one client that was paying me $4,000 a month and I said, "Hey, if I can drive you more leads at the same quality, will you split the amount of money that I save you on a cost per lead basis?" And he said, "That's a no-brainer. Of course I would do that." And I said, "I know it is no-brainer. You're just going to save money and grow your business." And so, I went and executed, delivered, and it took me from charging 4,000 a month to like $35,000 a month.
And he said... We actually had a yelling match over this in his office. He didn't want to pay me. Because he's like, "You didn't spend that much more time. Why should I need to pay you?" And I said, "Because I delivered the business value, and that's what we agreed to. That's why you're going to pay me." And that's the extreme case of when you go only performance base.
What I've found is that entrepreneurs and business owners say, "Well, I'm running this business and taking the risks so I can get the upside when we have these breakthroughs happen." And so I thought the performance models would be great, but I realized in the end, people always say, "And I don't want to pay you that much." And then when it's just percentage of ad spend, you're correct, all the ad platforms and agencies, get motivated to just have you spend as much as possible, because that's how they make the most money.
And look, I'd be lying if I didn't say, there is some bias on our end to spend more money, which is why we spend a lot of our time and energy in investing and connecting the analytics and the different data sources, so that we can say, "Look, you actually don't care how much you're spending, as long as it's producing the business outcome. So let's get that tracked, so that when we come to you and say, here's how much you spent and here's how much business performance that's giving you, are you ready to grow more or do you want to spend more to actually get more cases, more outcomes, more whatever?" And then it's more of a joint decision.
And ours is, we actually do a flat fee and then usually a flat fee or a percentage, whichever is greater, and that way we can make sure that we can keep top talent on the account, even if we do reduce the amount of ad spend that they they're putting into that. And so, we've tried to find the balance, but, I feel like the data is the way to find that true balance to make sure it's translating into business outcomes.
Chris Dreyer:
I think that's super smart for whatever reason, a lot of times, we've seen it with clients, they'll want to pause and it's just like, okay, well I got to take these people off of this, right?
Jacob Baadsgaard:
Mm-hmm(affirmative).
Chris Dreyer:
I think it's smart. And then also sometimes there's these setup fees that they want to target different practice areas that then you need to go build out all the landing pages and things like that before you can really crank the spin. I like that. I think that's different. That's like an in-between, and I think it's smart to protect both sides. You've really had this tremendous growth trajectory at your company and right now around 160 employees, I imagine it brings all kinds of challenges from hiring and retaining people, shaping the culture and getting everyone aligned. Let's talk about that crucial area. How do you get all those people rowing in the same direction?
Jacob Baadsgaard:
Well, I haven't figured that out completely because not everyone's rowing in the same direction. But the goal is most people are rowing in the same direction, and they're not here too long if they're not rowing in that direction, right?
Chris Dreyer:
Right.
Jacob Baadsgaard:
But the best word to describe it is messy, trial and error. And one of our core values, Chris, is win, win, win. And so, if we can't see how our employees win, if we can't see how our clients win, and if we can't see how that produces sustainable growth and profitability for the business, we will not make the decision. We will not proceed with the change. And that's been our balancing core value, that when we say, hey, we want to grow by this amount next year, or we want to prioritize working in these types of industries, we always come back and say, does this contribute to a win, win, win? Because if it doesn't, it will be short-lived.
If it does check the box on all three of those things, the business, the employees and the clients are winning, then it actually feels great and people are more naturally incentivized to row in the same direction together. So we're not perfect at that, but that is the core value that we lean back on to help us navigate moving the business forward, and I think we do a good job with it.
Chris Dreyer:
I imagine that that value also contributes to not taking on clients that you shouldn't, even though they may have the budget but, may beat up the employees a little bit or want all this bespoke craziness that doesn't fit the normal things you do.
Jacob Baadsgaard:
Totally.
Chris Dreyer:
You've got over 100 employees and everyone's looking for labor-based leverage. Tell me about just maybe things that you think about in terms of say HR and managing people. So many companies, including myself, I was really resistant to HR because I don't like those non-revenue generating employees, and it's just like, "I don't need that," right? Everyone likes each other and then you need to recruit of a bunch of employees and then you're like, "Well, I guess I'll pay the outsourced company that doesn't have our values," right?
Jacob Baadsgaard:
Yeah.
Chris Dreyer:
Tell me about just how you approach and think about this, about, labor-based leverage and growing the staff and doing your best. Like you said, it's not perfect, but if they're not growing the right direction, you get rid of them.
Jacob Baadsgaard:
It's choose your hard, I mean, I love that quote. There typically isn't a solution that's all peaches and roses and just feels fantastic all the time. Let's talk about HR for just a minute. And I'm pretty careful about that because, it's easy to get a company or HR that tries to start keeping all of our employees happy. And then it starts to become the culture centered around trying to keep people happy. And Chris, when you try to keep someone happy, what I'm actually communicating to you is I don't think you're capable of keeping yourself happy, so let me solve that for you. And that's why it never works because you can't solve that for someone, they have to solve that for themselves. Which again, one of our core values is inside out. We can't feel better on the inside by trying to make everything outside of us change. We actually have to go inward first to solve that.
And so, I want to create a culture that's based on our values and our higher purpose as a company. I think marketers bring a true gift to the world, which is, when a marketer is living authentic to who they are and supporting a business that they believe in, magical things happen. That I cannot replicate with any training program, with anything. That's what matters the most. And our core values and our training is what is centered around, helping marketers remember and live in alignment with who they are. And then, we will only work with businesses that we like the person we're going to work with and the business at least has a good why behind their goals. And then when those things happen, that's how we create a culture that is more sustainable, that attracts and retains top talent and attracts and retains great accounts for us to work with as well.
Chris Dreyer:
Fantastic. Many of your accounts have been over with you for over four years or longer. And in the ad spend. In the SEO space, I know maybe some of those listening may think that there's a lot of turnover. Clients tend to be with an agency longer in the SEO space typically than... At least my experience in an ad agency, it seems like there's a lot more turnover, and that just speaks to what you're talking about is, you're trying to take on the right clients, you're trying to be transparent with the data.
And I bet the personal injury attorneys listening are probably like, "Okay. Chris, ask about ads," right? There's constant changes to Google Ads since we last talked to you. Now there's Performance Max and there's Google Local Service Ads. In the legal space, just as a whole, what do you see as being most effective? Talk to me about just, maybe capitalization, just, overall big picture, what do you see in that space?
Jacob Baadsgaard:
Yeah. I think what differentiates, in any industry, especially with PI and attorneys, is we are moving from a marketing specialty world, where you go and find specialists within platforms that know a secret button or a secret lever that's really going to move the needle for your business. And as we move into a more AI dominated, data dominated marketing world, the businesses that win, have the best strategy and have the best data. Those are the companies that will win moving forward, not the ones that figured out the hacks, because a lot of those levers are frankly just going away. They're just going away as things are more automated.
And so then if the right strategy, paired with the right data, is what allows a business to really hone in on those types of customers, clients that are going to be more profitable, get more of the right business, at the right cost and feed the different marketing ad engines, the data that tells them how to find and acquire those types of leads coming in the door. And so, that's just, from a macro standpoint, strategy and data is what will win, not little hacks within marketing platforms anymore, is what I'm seeing. And that is the hack now.
Chris Dreyer:
I couldn't agree more just from the limited data that we have, the ROAS type bidding, getting the data from the CRM, and the lookalike audiences and everything from that aspect, is just a huge advantage when those individuals have it. And those willing to give access to the CRM to truly understand, "I see a goal conversion, but, was it an actual case?" From what I've seen, Performance Max, which I think it does have a place. I think some of the maybe marketers listening would disagree, but I think it does. Sometimes the data is a little false leading, right?
Jacob Baadsgaard:
Yeah.
Chris Dreyer:
You'll see those goal conversions and you're like, "Oh, I'm doing Performance Max, but it's happening to bid on my brand and my name," right?
Jacob Baadsgaard:
Yeah. You got to tell it to look for the right things. Because the things that are more automated, I always think of Performance Max as like a remnant media approach. It's going to find any remnant media that no one's buying, and try to put your ad there and hope it produces something. Even if it's a low quality outcome, like you said, a lead but a lead that isn't a valuable lead coming into the business. And you can. You can tie in great data to help it know what to look for in the first place, and then it can automate and accelerate and take advantage of those remnant media areas. That does bring in lower cost traffic and potentially lower cost leads, but that can still be quality as well.
Chris Dreyer:
The other thing I've seen too, just on the PI side is, it's Google recognizes who the big media spend and big brands are, so the Performance Max tends to bid on their name, even when they're not doing the keyword selection. So then you've got your Morgan & Morgan and sending out the cease and desist letters to add the negative keywords, even though the individual didn't potentially use their keyword on the platform.
I've always been the mind, if you take a PI attorney and the cost per click in certain areas is extremely high, is it better to avoid it entirely if you're undercapitalized or is there just a different... Obviously you can bid on your brand, or do you wait until you can actually deploy sufficient capital to get economies of scale? Instead of maybe doing a 20 mile radius around the office, you maybe do the whole state. Maybe you can pick up lower CPAs there. I mean, maybe this is just, and it depends type of scenario, but just, what's your thoughts on just the capital side of things?
Jacob Baadsgaard:
Yeah. I've seen a variety of approaches work. From a business standpoint, typically, the business that wins in the end and that dominates the market, is the one that can spend the most in marketing and get enough revenue on the backend. And so that's why the ones that are a good enough business model, will spend more on billboards. Will spend more on paid media online, will spend more... And they'll just own and saturate the market and just leave everyone in their dust. But you can't start there, unless someone just gives you truckloads of money to do that. I think that there's an approach that's just smart, and I think paid media fits in, like you were saying. I actually think it's not the first thing you start with. I think it's the thing that you ease into over time, because we've got a good practice going now. We've got a good close rate on the leads that are coming in. We're profitable. We've got a lot of these things dialed in.
Now we're protecting our brand with paid, now we're doing selective paid media. We're finding that we can put a little more gas on the fire. "Hey, our guys are all busy, we don't want to spend a ton on paid media because, everyone's booked with cases right now. We can turn that channel off for a minute." And then over time you can actually build into a little bit more of a dominating play, when you have a business that can absorb the lead volume, that can absorb a blended return from all marketing channels, and then you can just pick and choose where you want to dominate. And so, I see it more as a progression, and then at each stage in that progression, I think paid media plays a very different role.
Chris Dreyer:
I think that most individuals are funding through bootstrapping, through free cashflow, through operations, or maybe they're taking on a little debt, but it's certainly not a scenario. It may be changing in Arizona for the non-attorney ownership, but in most states, they just don't have the capital to deploy. That's really helpful for the audience. I want to continue on the effective leadership side. I know you have this certification program for your employees or leaders, and I think you were spearheading it and it's a really big passion of yours. And could you just tell me a little bit about that? Because I found that really intriguing about how you're taking the time to try to develop, not only employees, but just better humans at the company.
Jacob Baadsgaard:
Well, we're all in the people business, regardless of what industry that you're in. And the more that people feel seen and heard and appreciated for who they are, the better they're going to perform in life. And over the last 10 years, we actually give everyone a personal development budget in the organization, and then we provide programs that support using that budget. And if we don't provide something that is in alignment with what they're looking for, then they can use that budget to go and get certified in something that we don't provide as a business. And so, there are three pillars that we look to support our employees with.
The first one is personal. And on that one, it's very centered around, helping them remember who they are and living in alignment with that. Think of understanding your personality strengths, think about understanding your personal values, things that you don't compromise. Think about evaluating your environment and making sure that your environment at home, at work, the food that's in the fridge, how money's being spent from the checking account, is the environment set up to live in alignment with those strengths and values? And just seeing cool things like people paying off their debt, not living paycheck to paycheck anymore, making big breakthroughs in their marriages and those types of things. On the personal side, we invest a lot into that.
On the professional side, we want them to be badass at what they do. And so, we really invest a lot in making sure that they understand a business strategy. Because a lot of marketers just do marketing things and the number goes up and they think that's a win, but a lot of the times those don't translate into business outcomes. And so, I try to focus more on, understand business so that when you do marketing for businesses, you high five when the business wins, not when a marketing metric goes up.
And then the last one is, we like to amplify their community impact. This year there was between 30 and 40 of us that went down to a couple of orphanages in Mexico together and just served for a few days. Got to remember all of the blessed and abundant lives that we have and go down and serve and just rub shoulders with each other that way. And so, we really try to focus on that personal, professional, and community impact with our program. And I'm actually launching that in 2024, that will be more public facing, not just for employees at the agency called Disruptive University. And so, that will be live in 2024.
Chris Dreyer:
Man. Fantastic. And having known you for several years now, I've seen the impact yourself too, right? Through fitness, through health, through all things. I think you did a marathon or two. I've seen the lifestyle changes, and it's been really awesome to just see that in yourself as well. Also living those values through those principles too.
Jacob Baadsgaard:
Thanks man.
Chris Dreyer:
Absolutely. Jake, this has been so awesome catching up. Super excited for what you guys are doing and having you back on the show. Where can our audience that's listening go to get in touch with you and connect?
Jacob Baadsgaard:
Personally, LinkedIn is the best place to connect with me. Agency is disruptiveadvertising.com. And then keep an eye out if you're interested in accessing some of the content on disruptiveuniversity.com as well, as we roll things out there.
Chris Dreyer:
Thanks so much for Jacob for sharing his wisdom today. Let's hit the timeaways. It's for the pinpoints. Hacks won't cut it. In today's AI driven landscape, looking for tricks will keep you left behind. You need airtight strategies paired with data to harness the full power of your marketing spend.
Jacob Baadsgaard:
The businesses that win have the best strategy and have the best data. Those are the companies that will win moving forward, not the ones that figured out the hacks, because a lot of those levers are frankly, just going away.
Chris Dreyer:
Don't dive right in, ease into paid ads. Wait until your operations are smoothed out as the business grows, before opening the ads, spending floodgates. Paid ads works best when you have full control over the business fundamentals.
Jacob Baadsgaard:
Typically, the business that wins in the end and that dominates the market, is the one that can spend the most in marketing and get enough revenue on the backend. But you can't start there. We've got a good practice going now. We've got a good close rate on the leads that are coming in. We're profitable. We've got a lot of these things dialed in. Now we're like protecting our brand with paid, now we're doing selective paid media. We're finding that we can put a little more gas on the fire. Hey, our guys are all busy. We don't want to spend a ton on paid media because, everyone's booked with cases right now. So we can turn that channel off for a minute. And then over time, you can actually build into a little bit more of a dominating play, when you have a business that can absorb the lead volume, that can absorb a blended return from all marketing channels, and then you can just pick and choose where you want to dominate. And so I see it more as a progression.
Chris Dreyer:
Assemble a team that stays and plays. Invest in your people through training and development programs. Foster community spirit inside and outside work. This indirect approach yields better talent retention, company culture, client relationships, and sustainable success. Jacob invests in his team through the three pillars of personal, professional, and community.
Jacob Baadsgaard:
Well, we're all in the people business, regardless of what industry that you're in. And the more that people feel seen and heard and appreciated for who they are, the better they're going to perform in life. And over the last 10 years, we actually give everyone a personal development budget in the organization, and then we provide programs that support using that budget.
Chris Dreyer:
For more information about Jacob, check out the show notes. While you're there, please hit that follow button so you never miss an episode of Personal Injury Mastermind with me, Chris Dreyer, Founder and CEO of Rankings.io. All right everybody, thanks for hanging out. See you next time. I'm out.
