Podcast Recap: Antonella Pisani Joins Ryan Miller on the Making Billions with Ryan Miller podcast.
The Making Billions Podcast is aimed at helping startup founders and venture capital investors. Host Ryan Miller interviews experts in the field to help others level up.
Here are the highlights from Antonella’s conversation with Ryan Miller on doing digital due diligence and how you can avoid common pitfalls.
Table of Contents:
Introduction of today’s episode
Ryan Miller: Are you an aspiring Private Equity or Venture Capital investor? Do you want to jump into buying and selling businesses? If that’s you, then I have a question: How is your due diligence process? Do you have a way to explore value creation or destruction from digital aspects of a business?
Well in this week's episode of Making Billions, I bring on my Dear friend Antonella Pisani. Antonella is the Founder and CEO of Eyeful Media.
They work with private equity and venture capital investors to conduct digital due diligence on companies. You’re gonna want to listen all the way to the end where Antonella reveals some of the key areas to focus on as well as how she saved a client from suffering a 40% decline in their potential investment.
Buying companies, finding hidden value from Due Diligence, and avoiding 40% losses are all skills we need in our pursuit of Making Billions.
I'm your host Ryan Miller, and today I have my dear friend Antonella Pisani. Antonella is the CEO and founder of Eyeful Media. Her company has been ranked in the Inc 5000 as an elite digital marketing agency. They conduct digital due diligence for private equity investors just to help them complete their own due diligence on digital assets.
So what this means is that Antonella and her team at Eyeful Media understand how to help you find the problems and the profits in any digital business you want to buy. Antonella, welcome to the show.
Antonella Pisani:
Hey, thanks for having me, Ryan. It's been great getting to chat with you over the last few days and looking forward to spending this afternoon with you.
Ryan Miller:
Yeah, it's wonderful to have you. I mean, doing digital due diligence is phenomenal, and we're gonna get into that you're gonna listen all the way to the end.
I'm going to hopefully ask, if I asked nicely, maybe Antonella will share with us some of her secret sauce on how she helps people from all of her wisdom and insights over 26 years of doing this; she's gonna help us drill down on digital assets and how if you have one, how to get better and if you don't have one, how to set it up correctly.
But before we get into that, maybe you can walk us through a little bit. I mean, you've been doing this for a long time, your wisdom is there your experience is there and your clientele is there. I would love to know how did you become an expert in this field?
How Antonella got her start
Antonella Pisani:
Yeah, for sure. It's been a long journey. So I got involved in digital super early and started building websites in 1996, pretty much when the internet was in its infancy.
Even before that, I got involved with marketing back in high school. I was really, really fortunate and got to intern at TransWorld SNOWboarding Magazine. As one of the interns working on an event for them, I got a lot of great marketing experience there.
I Fell in love with copywriting and had the opportunity to be in some of their magazines, and things like that.
Then, as I said, it was actually my work-study job in the end that was gonna lead to a career in digital. After that, I had the opportunity to work for some great brands, so ProFlowers, Guitar Center, JC Penny, Fossil–a really nice mix of private companies, public companies, and private equity-backed.
That included some companies backed by folks like Main Capital, Liberty Media, and other top-notch organizations.
Ryan Miller:
That is cool. TransWorld magazine. I remember reading that when I was a kid. I was obsessed with TransWorld, Thrasher, and Guitar World magazine.
So those are guitars and skateboarding, so you were a little bit of the magic behind my joys as a younger man. So where did it go from there?
Where Eyeful Media is now
Antonella Pisani:
So after a long career on the corporate side, I ended up taking a year off. I'd been doing a lot of turnaround work, and anyone who's done that knows the intensity.
So I ended up traveling and then getting into consulting somewhat accidentally.
A friend who owns a digital marketing agency here in town is on the advisory board of a company and suggested I join them. So you know, for the last six years we've been building an agency.
We've been in the top 11% of the Inc 5000 list, for the last couple of years. We've been on AdWeek’s fastest-growing agency list; came in at number six and number five as a women-led organization.
All 100% off that word of mouth. So really a tremendous journey. We've got folks in 16 states right now, over 20 cities, really fortunate to be experiencing this kind of growth.
Ryan Miller:
Yeah, beautiful. Well, said, so here you are, you're hustling. you're building Eyeful Media. You're doing these wonderful things, you got private equity investors, venture capital people, all kinds of professionals are saying, 'Hey, I want to buy this thing, but I got to make sure that when I open the kimono, so to speak, and do I like what I see.'
And sometimes, to the untrained eye, that's not always obvious.
So you get called in from big investors to say, 'Hey, can you take a look at this? You understand digital assets, SEO, and all of these things. Is there value being created?
Are they being as good as they claim to be?' All of these things and investors want to know, and so I'm curious, do you have an example of maybe a company that you worked on that did some due diligence and maybe walk us through some of the results there?
A case study on organic search and SEO
Antonella Pisani:
So we are really fortunate, we work with a number of big PE firms as well as some smaller guys as well and they do bring us in. One of the things that's really unique about us as an agency is we only use experienced talent, so it's folks with an average of 13 years of experience, and so they trust our team.
Obviously, anytime a PE person or investor is putting money into the company, they need to know that they've got the right team on board. One of my favorite case studies—and I don't know if you want me to share my screen here—
Ryan Miller:
Please. For those of you on YouTube, you're gonna see a little bit of magic for those of you listening, keep listening and then go to YouTube, but either way, yeah, please share.
Antonella Pisani:
So we did a case study on this, and I would say most of the time when we're digging in like we find that it's primarily upsides. But every once in a while we find some things that concern us a little bit, and we bring it to the PE firm and highlight some of the risks for them.
So this one company we were looking at was focused on organic search or SEO. So for those of you that aren't familiar with the terminology, it's really when you go to Google and typically you've got the paid ads up at the top and then the majority of the page is organic search.
You know, it was really interesting, because when we first started looking at it, we were like, 'Wow, these guys really solid. They have very high domain authority,' meaning that Google really respects the site.
We had seen organic traffic climbing in a steady fashion so that looked really good. We were seeing links from really reputable sources, so all of these things that on the surface looked awesome, right?
And to the kind of untrained eye you would think 'Okay, let's check this one off. It looks really good.’ But we kept digging deeper, just knowing the importance of these evaluations. And we found some things that concerned us.
It's called anchor text, but really what it is is the words that are being used when they link to your website and most websites will see that the majority of their links tend to just use the brand name, the name of the site.
So if you're TransWorld SNOWboarding, a lot of the anchor text would say Transworld Snowboarding instead of something very niche and specific. And so we saw a lot of these things that that we flagged as a concern just thinking that because of the importance of organic search to the evaluation, it felt like something that could be penalized quickly. And so we saw some things in the data that just didn't feel great.
We flagged it to the PE firm before we were fully done with the analysis because we wanted to make sure that they knew that we felt like there was some smoke there.
So this was one of the, maybe two or three deals that we've ever said, 'I wouldn't feel comfortable pulling the trigger on this.'
We went back because, look, it's always scary looking at this and your recommendation to maybe not invest in something. So we went back just to see, did we make the right call because you can lose sleep over that.
What we saw was actually that non-brand traffic–so meaning keywords that are more likely to drive new business or anything outside of that brand term–it had actually dropped 40% or more since we had done the elevation.
So we felt like it was the right call. It's always scary making that call, but we were confident in our recommendation on it.
This is probably one of the most extreme cases that we've seen but it shows how important it is to really dig below the surface because that surface-level data looked pretty phenomenal at the time.
Ryan Miller:
So I see a chart there. Where was it that you made the recommendation on this estimated traffic trend?
Antonella Pisani:
So it was right around here. So it's kind of in this part. It was the last...and then it was just boom: a downward slide.
The importance of doing your due diligence
Ryan Miller:
Were able to uncover certain things, so I'm just assuming, keep me honest. So you had a client who approached you. They said, 'Hey, we're interested in this business, it probably, you know, strategically, and their thesis everything seems to fit we just got to make sure that there's value created. Or, at least the value we expect to be created is possible with this company.'
They call in your special teams, you do your research and say, 'I don't think this is gonna give you that.'
Is that a pretty fair assessment of how that went?
Antonella Pisani:
When we present findings to different firms, we're typically saying, 'Hey, here's your top-five upside items, here are your top five risk items.'
They tend to balance each other out. More often than not, we're seeing an upside. When there is that risk they want to know how painful it's going to be to fix this.
Ryan Miller:
And you're able to do that, almost like hiring a very thorough housing inspector, if you're home flipper to say, 'Hey, like I'm a home flipper, I'm not a construction person, but maybe I bring someone who just understands how the best in class is done and how close or how far away are we from that and what's going to be required and then I'll decide whether I get some type of consideration for those things.'
But either way, you got to do your due diligence; there's legal due diligence, there's financial due diligence, and in your case, there's also digital due diligence.
So from all of your experience, Antonella, I'm just curious, I mean, thank you for sharing that story. You know, you've done this; you've been doing this for more than two decades. What advice can you give our fans around the world that you can help them, maybe some areas of, say, where is value created or destroyed in some of these companies, some of the stuff that you look for?
Maybe walk us through some of those hot tips that you've been able to find helpful for investors.
Why holding your own data is critical
Antonella Pisani:
Yea, I'm happy to do that. My favorite little book is called The Go Giver, I don't know if you've read that one. But it's all about creating value, giving value, and so happy to share a few different things.
These are just some of the things that we tend to look at pretty quickly because it's just enough below the surface or it's just things that the PE firm needs to know about really quickly.
You know, one thing that surprises us is a lot of these companies, especially where they're a little bit still immature in marketing, don't actually own their Google Ads account.
So they've hired an agency that set it up for them. But something in the contracts is written that the agents actually own the account. The reason that that really matters is it kind of takes the power away from the client and the company because what happens is if they want to make a switch to a different agency.
To change out their programming, then they're not getting what they want from the agency. It's a little bit of a handcuff because now the agency actually has to rebuild the entire account. You've lost the history, Google's history, right, what they've learned especially through using any sort of algorithmic thing, that logic all gets wiped out.
That's one of the questions that firms should very quickly ask and understand whether the company that they're evaluating actually owns their own data. It shocks me how often it comes up that they don't and so I think that's a quick win.
Ryan Miller:
Holding your own data is critical. So if you hire a third-party agency, just make sure in your contract that the ads belong to you, which is not so much the account but the data that gets generated in the account; you are the rightful owner of that data, is that—
Antonella Pisani:
Well they want to own the account because what happens is if they switch agencies, the company can then just go and invite the new agency and the agency can just take over management and then they just remove the old agency partner otherwise the whole thing needs to be recreated.
So it is actually owning the account and making sure the billing's running through the client, not through the agency, so they don't skip a beat if they want to change. So that's a big one.
I would say organic search is a huge channel for a lot of people, and it's really important because it tends to blend down customer acquisition costs.
A lot of times, people are looking at things like keywords, a percentage of traffic coming in from brand terms versus non-brand, which we talked about is kind of those keywords that people use when they don't know your business, so they're just trying to find your service, so it tends to be the customers.
Look at that data by the age of entry, where people are coming in. A lot of times, what we'll see and people get enamored by traffic numbers, but there's a lot of traffic that is like empty calories. And so what you'll see is sometimes a lot of traffic comes in on blog posts and things like that that don't actually lead to sales.
So I really liked slicing the data and looking per 1000 visits, how much of that is coming in on pages that actually have a chance to convert versus stuff that makes me feel really good because I'm getting traffic but isn't really qualified. So that's another thing to ensure you take a look at data at that level.
How to look at affiliate marketing
Antonella Pisani:
I would say, especially for E-commerce companies, one of the quick wins is often looking at the affiliate channel. For those of you that aren't familiar with the term affiliate, it tends to be your coupon sites, things like that. That's a channel where if you're trying to find the budget to invest in something else, something upper funnel, attracting new companies. new customers to your business, a lot of times that can be cannibalistic.
What I mean by that is you guys have all done it, you get into a website, you put stuff in your shopping cart, you're ready to check out, and you see a little promo code button, and you go off and say I want a better deal, who doesn't want a better deal, so you go off and find that promo code.
What happens is affiliate sites will also launch a browser window that has the same website in it, so what's happening is they're taking credit for the sale. Why that matter is you start not really understanding what is driving the sales, so it can actually devalue things like paid search.
How to free up your marketing budget
Antonella Pisani:
So what you want to look at is the difference between first click data and last click, and what that means is most Google analytics a lot of platforms use what's called last click or last touch attribution, which is saying the last thing that touched my customer before they convert wins.
That doesn't mean it's the channel that actually introduced your client to the website, so you want to look at that first-click data, especially when trying to understand which affiliates are actually driving business to you versus just taking credit at the end.
Because a lot of times you can free up some marketing budget and redeploy that and get a higher ROI on that. So that's another thing we tend to look at.
And then last, it still surprises me that some companies don't do this, whether you're e-commerce and have a high price point or you're b2b business lead gen, a lot of businesses will sell through the phone, especially if they're sales reps.
We've seen so many e-commerce businesses that still have 10 to 30% of their sales happening through the phone because it's a complicated sale, it's a high price point. And many folks are still not very good at attributing phone sales back to the marketing channel.
So if you think about it this way, let's say you're running paid search ads, you're spending $1,000, and let's say 20 percent of your sales are coming in the phone, you want to know that, and you want to attribute that value back to your paid search investment so you can invest more appropriately.
So a lot of times that can actually unlock a budget that's still very profitable but isn't being spent because the company just doesn't really understand ROI.
And so there's a lot of solutions out there one is called Invoca another one's called CallRail.
So there's a lot of solutions there that you can track those phone sales back to a specific marketing channel, a campaign, a keyword, any sort of thing like that. That can be a huge unlock for growing a business once you acquire it.
So it's a good question to ask when you're doing diligence is, 'Hey, are you capturing phone sales or not.'
You don't need to get into the why but it's often a quick plan once the sale closes.
Ryan Miller:
Really a lot comes down from data, and based on that data, you can really drill down on where value is being created or destroyed back to the original, coming full circle on this moment. So as you can see, there are a lot of different areas that you can focus on.
So before we wrap things up, are there any last-minute comments or ways that people can reach out to you to connect with you?
Antonella Pisani:
Yeah, we'd love to help. I can share our website if that's okay; it's EyefulMedia.com.
We work with PE firms and VCs in a lot of different ways, so sometimes it is the due diligence side, sometimes it's needing a trusted partner to work with the portfolio companies so we're able to partner with folks, sometimes even doing interviews of marketing personnel to make sure the right team is on board.
So there are a lot of different ways to partner.
Ryan Miller:
Awesome. I love that. So as we wrap things up, just to summarize, when you're buying a digital company or investing in one, some of the key areas to look out for is paid search–look at how that's being done.
Do they own their own Google Ads account? Have they secured their own data? There's value in that in controlling all the data that comes around your activities.
The other one is organic search. You gotta see where the traffic is coming from, whether you do it or you hire someone like Antonella and her team to do that.
Affiliates can be a good strategy, but it does need to be managed. It's good within a certain parameter and it can be a little cannibalistic as Antonella has taught us today, so affiliate marketing can be good just make sure that it is set up and structured in a way that does add value without destroying some of that.
And then finally, if you have phone sales, if a lot of that company—either that you have or a company you want to buy has—do they have any of those phone rail systems where they can collect a lot of data?
You do these things, and you too will be well on your way to making billions.