Above the Norm: the building of DAC Group

The Drum caught up with Hagarty, post-celebrations, to ask him what the key to the agency’s longevity has been. It seems flexibility, adaptability and a little disruption along the way – predominantly by Messers Google and smartphone in Hagarty’s opinion – have all been vital ingredients which the CEO has demonstrated himself and taken on board throughout his time at the helm of DAC Group.

After training at Pepsico, Hagarty spent a decade in the heart of ad-land with JWT before he joined DAC Group in 1996. At the time, the agency was still focussed on North American directory advertising. Digital marketing was still in its infancy, but Hagarty recognised things were shifting quickly and in 2006 he and his management team acquired the DAC business from the founders. The transformation that would see the group become a digitally-focused hyper-local marketing specialist with offices across North America and now Europe began.

“Making it to 45 years in business doesn’t happen every day and we are pretty proud of reaching that milestone,” says Hagarty. “When I joined the agency in 1996 we began to invest quite heavily in the internet. What I was certain about was that we were not going to become a creative-focussed agency. We would still operate in the transactional field – with name, address and phone number (NAP) advertising – which is DAC’s heritage. Around 2005 we began to build our own digital technology. I just felt at some point that directory advertising, which in our case was Yellow Pages, would die or significantly decline. We had to be prepared and that meant hiring people with new skill sets.”

Local knowledge

Hagarty trawled the Toronto market and began to assemble a team of experts who understood what digital performance meant and more importantly how developing new online technologies ahead of the curve could make a huge difference for their current and future clients.

“Going though that growth process in Toronto meant we had to really dig for talent – and commit to cultivating our own. We already had offices in the US at the time, but I really wanted to keep the experts we found close so that our team could learn together as we grew the business.”

As Hagarty explains, what DAC recognised was that the internet was tailor-made for local and hyper-local marketing campaigns, perfectly suited for multiple-outlet businesses – enterprise-level businesses with multiple locations such as big retailers or service companies in particular – to make the most of its ability to serve up the right information at the right time to the right people – in the right place.

The first product DAC created was a landing page technology that allowed businesses to easily build out non-duplicate content pages and serve customized messaging to multiple cities, towns and even neighbourhoods at the same time.

As Hagarty explains: “Our first foray was a landing page technology that allowed us to produce local landing pages for distributed clients. Nobody was doing local search like that at the time. At that time if someone in Tampa Bay wanted an oil change they would be sent back to the dealer locator, where they would have to recreate the search. Our new technology allowed us to develop thousands of landing pages. We had landing pages for oil change in Tampa Bay, oil changes in Dallas and so on.

“Then we learned how to put paid search into our local pages and our results from that were – and continue to be – game changing. We took conversion rates, which for us at the time was a phone call or a form fill, from 3% to 30% for the client. Today, with mobile, we can be well over 50%. It was a real evolution and we had to be willing to invest. We took our transactional platform to deepen our local focus and built a business on it.”

Another game changer for DAC Group was the advent of Google Maps, which again gave the agency’s hyper-local NAP focus a massive shot in the arm and its widespread adoption by consumers looking for everything from divan beds to cars, from the tastiest chocolates to the latest fashions, has again reinforced Hagarty’s initial strategy of having the agency remain in the transactional realm.

Global reach

Change is always tough and naturally there have been challenges along the way. Fortunately, in the early days Hagarty convinced some of DAC’s clients to give his agency a chance and as results rocketed his hyper-local theory was proven right and the agency’s growth continued. DAC Group now employs close to 400 people internationally and in more recent years has enjoyed expansion through acquisition in the UK and Germany, a joint venture in Spain and a sales presence in France. More European expansion is expected in the near future.

But what have been the biggest challenges along the way for Hagarty?

“Talent is always a huge challenge,” admits Hagarty, who in his day to day role still remains very involved in the hiring at the agency and spends a lot of his time talent spotting and developing his people, and actively participates in the interview process.

“After talent, watching the market move and change is also an ongoing challenge. There’s no venture capital in our company, we are debt-free, and we invest our money back into the company, so we have to listen carefully to what our clients tell us and then decide where we feel the market is going. Like any agency, the other challenge is simply bringing in new business. Convincing people that what we do at the enterprise to local level can make a big difference to their businesses nationally and internationally. We now represent a number of clients as agency of record and with local and digital playing such a key role in marketing plans across the board, we are working on expanding that business as well.”

DAC Group remains an independent agency and that is a status that Hagarty is fiercely protective of, as he explains: “Being independent gives us an advantage. We can invest our money where we see the clients and the markets going. I don’t have to go to a holding company and try to convince them. We can hire the talent we need and not worry about what our salary to cost ratios are in the short term. It allows us to be a lot more focused and agile.

“We don’t have any money men holding us back and we cherish that. It is a tremendous strength. I suppose one disadvantage is that some clients may not see us as being truly global, but clients do love that independence because they have been through the holding company grind. Clients know that holding companies traditionally don’t do a great job in performance digital marketing. Some of their digital work is not up to par because it is still very much a broadcast world. We think that by being specialists and the way that digital is turning we can really drive clients’ business without being a part of that holding company type structure.”

Future expansion

Hagarty makes it clear that in approaching expansion, he has been making a point of seeking out independently-owned agencies with similar values and agility he holds so dear.

As DAC expanded into Europe with the acquisition of Make it Rain in London and Ambergreen in Edinburgh, Hagarty appointed former Mediacom senior executive David Jowett in 2015 to spearhead their growth across the Continent.. So, where will Hagarty look next to take DAC?

“I believe that India is a tremendous market for us,” he says. “Digital growth in that market is huge. Mobile phones are the way online business is transacted and it is a very localised country, so we believe that our hyper-local platforms are ideally built for countries like that. Moving beyond Europe is what we want to do, but we have to be careful that we grow appropriately.”

“I would like to broaden our footprint. I believe we have opportunities in the kind of markets I described and I think there are some markets that are a little bit behind on being online so you can create some opportunities there too. We want to continue to advance our local technology and that’s driven by what the online publishers do. As local search evolves we’ll evolve our technology and our thinking around content at the local level and how media, search, content and maps gets integrated into that.

As Hagarty can attest, consumers will always need to find information about products and services and where to buy them – whether that’s in-store on online. As he outlines: “Our job at DAC remains simple, it is to stay a little bit ahead of the consumer. The consumer doesn’t adapt to new technology immediately, so we will always have time to build new platforms as the consumer continues to move forward.”

And moving forward while navigating change is what Hagarty and DAC Group will continue to do. The next milestone of 50 years in business is only five short years away. And, as we know, in this industry a lot can change in five years.