How I Started A $2M/Year Search Marketing Agency In Australia

Nathan Elly

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Published: December 12th, 2019

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Nathan Elly

Founder, Digital Next

$290K

revenue/mo

Founders

Employees

Digital Next

digitalnext.com.au

from Victoria, Australia

started January 2014

$290,000

revenue/mo

Founders

Employees

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Hello! Who are you and what business did you start?

I’m Nathan Elly, branch manager and founder of Digital Next Australia. We’re a search marketing agency with a focus on SEO & PPC. We launched Digital Next Australia in Jan 2014 after working several months of night shifts from the UK.

I completed my placement year at University in 2012 at SEONext with my close friend and now-CEO, Justin Blackhurst. Shortly after completing my studies, I came back to the company with the aim of taking the brand to Melbourne.

We started from scratch and after nearly 6 years we are turning over approximately $2 million per year.

What's your backstory and how did you come up with the idea?

Studying Business and Entrepreneurship at Huddersfield University, on this course it is required that you complete a year in industry. At the time, a friend I’d played cricket with in Manchester had just launched an SEO company.

Everyone has thoughts of grandeur and some sort of destination to work towards but the reality is when starting out there is hard work to do. If you work hard, stick to your ethics and deliver on realistic expectations; the rest will fall into place.

Not knowing much about this marketing channel, but understanding the importance of search, I asked whether I could do my placement with him. During that year of industry experience, I began in account management and later moved onto a business development role.

Working in both of these roles provided me with a useful perspective on SEO and the important role it plays in a modern marketing mix. The account management aspect taught me the mechanical side of SEO and provided me the data to confirm the growing interest from consumers towards digital marketing.

Selling SEO services to businesses gave me a first-hand account, from business owners, of the importance SEO plays in their marketing. And, during this time, which was at the beginning of a big shift to online marketing, an insight into the changing customer behaviour for even small businesses. Google Analytics was still in its infancy, however, the ROI reported from SEO as a standalone channel was greater than anything I’d seen before. There were reports from some clients of multi-million pound revenue wins off the back of no.1 rankings. Account management from this era of SEO was a fascinating experience as a business could be transformed massively over the course of a few months.

After this experience, it was clear SEO would become an essential part of the marketing mix. Taking this knowledge and first-hand experience into my final year of studies, I completed my dissertation, focusing on the effects of SEO on SMEs.

Post-graduation, I was keen on developing my digital marketing skills and pursued the goal of taking the Digital Next brand from the UK to Australia.

Describe the process of launching the business.

The launch phase started with night shifts, building meaningful relationships with the handful of clients we already had in Australia, and attempting to grow our portfolio clients through cold calling and emailing. Building relationships over the phone from another country was actually surprisingly easy, but generating new business from the otherside of the world was a tall order. Although, we did acquire some new accounts, it was clear that people bought into other people and that could only be done by being in Australia.

After months of preparation, we finally touched down in Melbourne on the 1st January 2014 with few connections and two weeks to find a permanent residence.

Underestimating the competitive nature of the Melbourne property market, we viewed over 10 locations before finally being accepted at a South Melbourne flat close to the city. It was here where we initially worked from until we had enough funds to organise a proper working environment.

how-i-started-a-2m-year-search-marketing-agency-in-australia

Once our base was sorted, we then launched our website and immediately focused on organic growth with a short-term goal of increasing rankings and gaining leads through the website. Much of the rest of our time was spent cold calling/emailing and networking.

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Financially, we had no investment and funded all our activity, wages and initial expenses from the limited number of clients we had. This meant that, in the early months, the company’s revenue was around the $5k/month mark. From there it was all about generating cold business until June 2016 when we started to gain real organic visibility and attract a good volume of visitors to the website.

There really wasn’t, and still isn’t, a short cut to generating leads. We had to create a website which was engaging to both people and Google, which can be a difficult task, especially when you are competing with other SEO firms. Thankfully, we’re good at what we do and managed to pick up some good rankings within a year or so. SEO was our only form of in-bound marketing. Cold calling and emailing were utilised to support our SEO, which thankfully we haven't had to do in years, due to the strength of our SEO.

One of the main lessons I learnt looking back was to enjoy the moment and focus on the now. Everyone has thoughts of grandeur and some sort of destination to work towards but the reality is when starting out there is hard work to do. If you work hard, stick to your ethics and deliver on realistic expectations; the rest will fall into place.

Since launch, what has worked to attract and retain customers?

We’ve always had a clear picture in mind of the types of businesses and people we wanted to work with and this has been a core part of everything we do. Identifying business types that benefit the most from the services provided is massive to on-going success. We identified service-based SMEs with 1 - 20 staff members and with at least a year in market as our ideal customers. We used the year marker simply because starting SEO from scratch can be a huge investment for a small business who is yet to prove their viability in the market. Smaller businesses of less than 20 staff are also a much easier sell than larger businesses who generally prefer to work with more well-known agencies. As Digital Next grew, we were able to win and service larger clients.

With our business being new to Australia, there was no pre-existing network of ex-colleagues to tap into, or any brand equity to lean on. Instead, we used a combination of cold calling and networking events to build up our initial client base.

While doing this, we were working on creating a website that was better than those of our perceived competitors, and in our opinion, we achieved this. With an innovative website and our established SEO capabilities, we quickly carved out a presence online for SEO and Digital Marketing related keywords. We targeted ‘digital marketing’ related keywords, the SEO-specific terms as from our experience the leads were of a lower quality.

Being a search-first agency, we wanted to practise what we preach and market on search platforms. We do see a lot of value in Social Media Marketing for agencies, but it didn’t feel right for us, as we felt it would attract business types not suited to our services, an intuition that we feel has been proven right over time.

Since launch, we have tried a variety of different copy styles on our site to better align with our ideal customers. Sometimes this worked and we saw an improvement in the lead quality, other times we went too far and saw the opposite effect.

From this point onwards, it is all about the quality of the service and the results delivered from our campaigns. With a sufficient volume of weekly leads, we’ve been given the chance to grow and invest in quality account managers who can grow and retain the accounts.

How are you doing today and what does the future look like?

We’ve been doing an exceptional job commercially for the past couple of years, with no less than a 10% profit margin (at the absolute lowest point) while regularly exceeding a 25% profit margin. This is healthy margin i primarily due to incorporating task/project management software such as Asana into the management of our campaigns and utilising better tracking and reporting solutions like Google Data Studio and SEMrush.

Our traffic levels and lead volumes have remained quite steady since our second year in business, which works perfectly for us, as we are rarely under-resourced, but always have new accounts on the horizon. Over time, you learn to recognise patterns within your business which allows you to shift focus quickly towards more sales or account resourcing.

An area which has always benefitted us is having staff with both technical and client-facing skills. Having staff with these attributes enables us to shift focus more quickly and with greater efficacy than businesses who hire specialists in every area. We understand that people with these skills are quite rare, but we have always concentrated on this during our recruitment process, as well as our training process.

Our short-term goals are to continue as we are and maintain our steady rate of growth. Overreaching and being too aggressive have significant knock-on effects for account managers, who quickly become overwhelmed and start falling into a negative feedback loop. Our two highest priorities have always been our staff and existing clients. If we are unable to provide a positive working environment for our staff or fail to deliver an excellent standard of service to our existing clients, then we are very far from where we want to be. If you do these two things right, then you will never go out of business.

Through starting the business, have you learned anything particularly helpful or advantageous?

One of the main difficulties we experienced when growing our business was finding the right staff to deliver our vision. There is a fine balance that comes with finding technically-gifted individuals who are also comfortable speaking with clients. These individuals are rare, especially for the salaries we can afford to pay, and in a couple of cases, we have hired people who are too skewed in one of those directions. With our internal structure, it is critical that account managers can strategise, implement and communicate with the client to avoid loss of information. Without one of these skills, the process breaks down.

Partnerships have been huge for Digital Next and have been integral to our growth from our inception up until today. We help numerous agencies deliver SEO work to their clients by managing their link building requirements. Link building is a little behind where it was in the UK, so our service was of great value to some of the larger and more established agencies in Australia. We were quite quickly recognised for this and created partnerships with agencies and SEO managers that still continue to this day. These partnerships create a large revenue boost for us and allowed us to invest in more staff.

What platform/tools do you use for your business?

Tools have created so many efficiencies in our agency that we simply couldn’t imagine life without them! Over the years, we have tried a couple of different project/task management systems and have now settled on Asana, which has been excellent. There is always room for improvement but eventually, you need to settle on a tool and run with it for continuity and scalability.

In addition to keeping track of clients, we need to measure our clients’ campaigns and do so through a number of industry-recognised tools. The tools we primarily rely on include SEMrush, Ahrefs, and the usual suite of Google services. Benchmarking is huge in Digital Marketing to allow for perspective.

SEMrush is fantastic for tracking SEO success, helping to dictate a viable strategy and competitor analysis.

Ahrefs is more focussed on domains and allows us to manage the link profiles of our clients and gain insights into competitors’ campaigns.

Advice for other entrepreneurs who want to get started or are just starting out?

The number one tip we can give is to just start. And that doesn’t mean buying a domain and Squarespace website, we mean really starting. Get your foundations in place and then pick up the phone, hop on Linkedin, start some form of marketing and acquire a client. The second you have a paying client, you will feel the pressure and you will up your performance. From our experience, so many people think having a website is the same thing as running a business. Ideas are easy but actions are hard.

Make sure you do your research, prove the viability of the business model, and put things into action. Google provides a range of tools to allow for some in depth marketing research. Getting search volumes on certains terms gives you a rough idea about the size of the market.

Don’t be afraid to hire early doors but those early hires need to be right. Good candidates often like a challenge and as long as your are open and give people an opportunity to put there own spin on things you should find candidates.