State of the Industry – Marketing Companies in the Inc. 500
Every year, the INC 500 comes out, and the issue and list of the web’s fastest growing companies is full of interesting takeaways and company profiles – given that it’s a list of the businesses that have grown fastest within the current conditions of today’s economy and evolving market. To not take this list, assess it and learn from the top companies can – and will – likely leave your business in the dust.
Even if you end up not directly taking action on the results and information from the list, if nothing else, it undoubtedly serves as a boost of motivation, as any competitive business owner or employee can fuel the fire with the fact that A) they weren’t on it B) someone else there is outperforming their current revenue numbers.
For the purposes of this audience (and my own knowledge), we’re going to focus on the marketing/advertising companies on the list – the specialization we likely best associate with and can learn from. If you weren’t aware, the INC 500 is a list of the highest growth companies (who submit their financials) over the last three years. The companies are ranked not in revenue, but rather, the percentage growth they’ve experienced in the past three years. For this reason, the companies are generally younger (explosive growth is harder to sustain at larger numbers).
The Inc 500 – Notable Marketing/Advertising Companies
The advertising/marketing sector this year is compromised of 57 companies, with total employment of 2786 employees, and $769.2 million in revenue. This equates to a median revenue of $8 million for the group, and an outstanding growth rate of 1832.6% over a three year period. The diversity of the group is significant – from software to SEO companies, the information is revealing – and insightful, to say the least. Some interesting data about the 57 companies:
- Two of the top five companies (RateSpecial and Spongecell) create interactive advertising campaigns.
- 12 of the top 57 describe SEO as being one of their primary services.
- Three of the top 57 describe social media as being one of their primary services.
- Two of the 57 are reputation management companies.
- The top five businesses in the marketing/advertising group all have a non-service based offering.
- No company in the top 15 (and top 97 of the INC 500) describes any offline service as a primary offering of their business.
- Eight of the top 15 marketing companies are based out of California.
- One of the 57 (Jess3.com) describes itself as an infographic development company.
- 14 of the 57 have been on the list in the past. Only one company, face-to-face marketing specialist Deluxe Marketing, has been a two-time honoree.
These numbers might not be surprising – software scales better, digital scales better than offline, and SEO is primary arm of the list. However, there are some interesting outliers – reputation management is a real concern and pain point for people, and otherwise, interactive marketing continues to be a lucrative offering, indicated by high ranking positions – although it is likely the gross profit is lower than other companies (depending on the sales model).
It should be noted that the actual numbers may be different from above in terms of who offers what – the numbers I calculated/companies I highlighted below are based on how a company describes/positions its offerings in the magazine version of the list.
Beyond the high level information about the companies, though, what can we learn as marketers? Let’s dive in and see what the INC 500 had to teach us this year.
Retargeting is a legitimate (and profitable) method of marketing
AdRoll operates a management platform for retargeting campaigns, and their #1 spot in the Advertising/Marketing category makes it clear that utilizing the ability to remarket to customers through display is a smart – and profitable option for many businesses.
There has been concern that retargeting is “creepy”, but for the majority of businesses, this is not a large issue and there have been no outstanding public problems with this service.
Online businesses can utilize pixels along different points of their conversion funnel (and on different category pages) to do micro-analysis of customer interest to do better, smarter demographic targeting with their display ads – allowing for a profitable method of retargeting those who have abandoned conversion – and/or might be interested in another.
Lead generation/affiliate marketing expands growth opportunities
Lead gen as a business expands marketing possibilities without having to create the product itself. Because businesses have the opportunity to generate leads on their own properties, buy leads from other companies and flip them, and also utilize their marketing skills to do it, the potential to scale is more likely than other service-exclusive marketing businesses.
There are still risks, however. You have fewer potential customers in a B2B environment, the competition is extremely tough in the most lucrative industries (insurance, mortgage, credit cards, etc), and there are often legal implications that come with operating as a third party.
Reputation Management is a lucrative niche
If a company and/or person’s reputation is damaged, that can potentially cut a large gaffe in their revenue. Managing that reputation online and/or offline – and having the skills to do so, can make for a high-dollar business, because of the potential implications of leaving that “scar” on their record. Some businesses (the slimy ones) can pay close to $50k monthly engagements to battle back against the rising tide of negative press.
For marketing companies, it would be a smart move to offer and/or start promoting this as a service, if they feel as though they have the competency (and want) to fulfill the needs of this segment.
SEO is still a growth industry
Despite the recent turmoil in the sector around the Penguin update, the high number of SEO companies in the Inc. 500 (9 of the 57 describe it as a primary service offering in their INC 500 description, with many more offering it as a service on their website) show signs the industry isn’t going anywhere, and is in fact still a source of strong growth.
Even though Google continues to chop away at organic search results, SEO is still the most profitable form of online traffic because of the low cost of inbound marketing relative to outbound marketing channels. For a long time to come, it will behoove marketers to heavily invest in this channel as a method of traffic and/or service offering if they want to maintain strong margins.
How Marketers Get On The List Next Year
There’s no easy answer, but if you analyze the list this year, it should be obvious that there aren’t many tricks. Most of these companies are extremely smart iterations on the typical marketing conglomerates you already know – they’ve built businesses by rigorously adapting their processes and leaning on their own strengths, and then leveraging their own skills (and smarts) to get listed on a platform like the INC 500 – which, no doubt, will only serve as a catapult for more growth in the future.
If you want to get on this list, you study this list, see what you can grab from it, and then use that knowledge and smarts to inspire you to do similar with our own business. There is no shortcut.
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