Why Freeman NYC checks ad claims against the order book
Ethan Marsh is Growth Director at Freeman NYC, a Rutherford, New Jersey agency that manages ecommerce stores, advertising, SEO and ERP and CRM implementation. Marsh explains why checking ad platform reports against orders and product margins matters, and how that approach shaped the agency’s services and client decisions.
Judge advertising by the orders and margins recorded by the business, not by platform reports alone. Calculate the break-even return before making decisions about campaign performance.
What’s the short story of how your business started, and what makes it genuinely different from the other options your customers have?
Freeman NYC started in 2017 in Rutherford, New Jersey, doing marketing for e-commerce stores. What we do now is wider than that, and it came from a complaint rather than a plan. Clients kept asking why the numbers in their ad accounts never matched the money in the bank.
So we checked. On one store, Google Ads claimed 61.6 conversions for the month and Meta claimed 76 purchases. Added together that is 137 sales. The store had taken 124 web orders. Two platforms were each claiming credit for sales the business had only made once, and nobody inside the company could see it, because nobody held both the ad accounts and the order record.
That is the difference. We run the advertising, the store and the ERP for the same client, so we can check a platform’s claim against the invoice. Most agencies hold one end of that, so when a report looks good they have no way to prove it is true.
How did you win your first customers, and where does most of your new business come from today?
Our first real cluster of customers came from one vertical, kitchen and cabinetry. One job led to the next because everyone in that trade knows everyone else, and for a while that looked like a strategy.
It nearly became a trap for a simple reason: in a tight trade, the next referral is usually a direct competitor of the client who sent it. We had to turn work down and explain why to the person making the introduction. The concentration was also a single point of failure. One bad season in one industry would have taken the agency with it.
New business still comes mostly from people who have worked with us, but now across unrelated industries: remanufactured auto engines, apparel, jewelry, cleaning products, cabinetry, a limousine service. The commercial problems repeat, the customers do not overlap, and no client has to wonder who else we are helping. We also run our own site through the same checks we sell, which keeps us honest about what actually moves a number and what only looks busy.
What’s one decision that changed the direction of your business, and one mistake that taught you the most?
The decision was to stop selling single services. A client who buys only advertising gets a report that can look healthy while the store loses money on most orders. On one catalogue we worked through every product: the cost per order was 20.56 dollars and the best gross profit on any single item was 17.00 dollars. Not one of 366 products could pay for its own click on a single-unit sale. Nothing in the ad account shows that. Since then we take advertising work only where we can also see product cost and margin.
The mistake was accepting a profitability figure because it was written down. A brief told us an account needed 2.5x to 3x return on ad spend to break even. Break-even is one divided by gross margin. At the measured margin of 59.9 to 65 percent, the real figure was 1.54x to 1.67x, and the account was running at 1.55x. We were close to cutting spend on a business that was at break-even, not far under it. Now the first thing we calculate on a new account is break-even, before we read a single report.
What has changed in your industry or in what your customers expect over the last couple of years, and how have you adapted?
Two things changed: measurement got worse, and clients started asking us for the ERP.
On measurement, we matched every order on one store against the purchase events the site reported. Desktop Chrome, Edge, Firefox, Mac Safari and Android Chrome lost nothing. iOS Safari lost 36 percent of its orders. A badly configured tag loses sales evenly across every device, so this was a delivery problem concentrated in one browser, and it is not reversing. We now reconcile against the store’s own order record every month and show a blended figure next to the platform figure, so the client can see the size of the gap instead of being told a single confident number.
The second change is what clients ask for. A few years ago the brief was traffic. Now it is as often that stock, prices and orders live in three systems and none of them agree. We added Zoho ERP and CRM implementation because the advertising question and the inventory question turned out to be the same question. If the catalogue carries no cost per item, nobody can say whether a campaign is profitable.
If you were advising someone starting out in your industry today, what would you tell them to do first, and what would you tell them to ignore?
Set your price before you need the money, and write down the work you will not take. Ours is that we only run advertising where we can also see cost and margin. That one rule has ended more bad engagements than any sales process we have tried.
Then learn to read the client’s numbers rather than the platform’s. Break-even return on ad spend is one divided by gross margin. If you cannot work that out in the first week, you cannot tell a client whether the account is good or bad, and you will spend the relationship defending a dashboard.
What to ignore: the recommendation panels. We have seen a platform suggest lowering a return target on an account that was already below the floor its owner needed, which buys volume and moves the account further from the goal. Those tools optimize for spend. You are paid to optimize for the client’s profit.
Also ignore the urge to look bigger than you are. Anyone who wants a large agency will hire one. The clients who stay are the ones who get to speak to the person doing the work.
Thank you to Ethan Marsh and the team at Freeman NYC for sharing what actually worked with Leaders Perception readers.
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