 7 From
Seven Featuring Greg Stuart
President and CEO of DeltaClick
By Pamela Parker
Managing Editor of
ChannelSeven.com and Internet Advertising Report
3/09/01
It's a tough time for a start-up company to be coming out of the gate,
but the folks at DeltaClick feel that the timing is just right for
a performance marketing-oriented firm like itself. Through a browser
add-on that gives users content related to the site they're surfing,
DeltaClick allows marketers to reach people with contextually-appropriate
messages.
For Greg Stuart, the advertising and direct marketing veteran
who's heading up DeltaClick, it's a prime opportunity to use the knowledge
he's gained over the years. In this week's 7 from Seven, Stuart
discusses how he found his "birth family" in the direct marketing world,
and shares his thoughts about the future of CPM pricing.
- Could you share with us your earliest experience on the Internet?
What did you think then, and was there a "eureka" moment when you
thought you just HAD to work in this new medium?
I was doing interactive television projects as a part of Young
& Rubicam and I was pretty clear that interactive television was
not going to be a big deal -- even though there was pent-up demand for
it -- because it required two things. One was huge, expensive,
technological infrastructure, and the other was standardization. But
neither of those existed. So, when the Internet came along, with HTML
and HTTP protocols, these were standards and it was clear that this was
going to be the solution. That was my "aha" moment.
Initially we were working with Prodigy, which was client of
ours. I knew about CompuServe because a friend of mine worked
there, and then there was this tiny service in Virginia called
AOL. We were doing marketing on the big online services, of
course, but not AOL yet.
My first introduction to the Internet, actually, was when we paid
Larry Chase [editor of Web Digest for Marketers] $200 for
the afternoon to come in and tell us about "this WWW thing".
- You started out at more brand-oriented agencies, then
transitioned to Wunderman Cato Johnson (now Impiric) in 1993. Why did
you make that choice?
Well, the first answer is that Wunderman had asked me to come
in and figure out "this interactive thing". They wanted me to come in
and help guide their clients in interactive. And, at the time, it wasn't
any more defined than that. However, when I went to Wunderman it was a
giant "aha" moment for me, in that it made me realize that there was a
much bigger world than just brand and image advertising -- and that
there were clients determined to get results.
It was also clear eventually that the Internet was going to be a
major solution for direct marketers. When I was at Wunderman the
Internet at a commercial level didn't really exist, but from the very
beginning it was obvious that Wunderman and direct marketers would lead
brand guys on the Internet.
- What was it like being at Wunderman Cato Johnson at the dawn of
the Internet age? Did people "get it"? Were there any things you
expected that turned out to be dead wrong? What did you learn there that
has contributed to you career?
At that time, I realized that the Internet was going to be bigger
than anything we'd ever seen before, and yet we still didn't see how big
it was really going to be. It was a very clear that it was going to
touch on every part of every consumer's life and impact every business.
That was amazing. So from a career standpoint, it was the most exciting
time ever for me.
I would say the biggest regret I have is that we didn't do more
faster. That's the biggest thing. From that side of the bubble, we
should have been more significantly aggressive. We can pick on it now,
but there was a lot of money to be made and a lot of exciting
developments to be done, through the bubble. Part of the issue was that
Y&R was prepping to go public, and weren't willing to do the
investment spending that was being done on the Internet at the time.
It's funny because their prepping to go public allowed us to miss the
biggest opportunity ever.
The other error I made is that I underestimated the power of AOL.
They had 400,000 subscribers at that time, and Prodigy was our client
with a million, and we were sure Prodigy was going to dominate. I would
say that was probably our big mistake. We underestimated the growth and
scale that AOL was going to have. We also didn't give enough credit to
their desire to be overly simplistic in everything they did, because we
had the understanding of technology.
- Could you talk a little about your experience at Flycast? What
did you learn along the way in your role as VP of business development?
What was the environment like there?
The thing that Flycast taught me was that contextual targeting
-- the ability to create relevance to the user -- is what's most
important. People who don't come from advertising and marketing tend to
think that it's all about targeting demos, and it's not. No media has
ever been bought on demos. It's always been bought on the context of the
message, and that's all about trying to catch consumers at the moment
when they're most receptive.
There's such a big push around data, and no one has really proven
that data is better than context. Flycast did contextual marketing in a
very simple but effective way.
It was very exciting to be a part of a company going public. It was
exciting to watch that, and it was exciting to watch a business that had
struggled to find the right model for years finally take off like a
rocket -- which it really did. They really did struggle to find their
niche in the marketplace and really make that work. It wasn't until
George Garrick got there that they really did that.
- Post-Flycast you served as an entrepreneur in residence at a VC
firm. The venture capital mindset, of course, is blamed for some of the
overspending and fast-paced growth that's now resulted in a bit of a
slump. Could you comment on that, from the perspective of having been
inside one of those firms?
The unfortunate thing about venture capital is that it often seems to
be about following the herd, and chasing trends. And it's less about
really supporting innovation and new business creation. That's partly a
result of the fact that VCs -- most of the time -- have limited
knowledge about what they're investing in. One example is that none of
them had any concept of what it meant to build a brand.
I honestly have a lot of respect for the challenge that they face.
They just couldn't not participate in the gold rush. Honestly, though, I
don't think that they overhyped it by any means. Sure, the market has
turned, but I don't think we've even begun to see the innovation and
transformation that will result from the growth of the Internet. We are
in the golden age of innovation and development for the Internet and
that will last a decade or more.
I still marvel at what change the Internet is going to bring to our
lives, and we've never had anything that touched so many people and so
many businesses. Television didn't even do this, I don't think. It's
amazing. It's an amazing time. Frankly, I think it's the greatest place
to be and the greatest business to be involved in. The hell with the
market.
The thing that concerned me most about our business at one point is
the extreme arrogance that began to exist in the industry. I would
single out an event -- when I saw the 60 Minutes interview
with Josh Harris and Razorfish -- when I knew trouble was
coming. It made me cringe. I was horrified to be a part of the business
when I saw that. The great thing about being in an agency or any
consulting business is that you get to see the mistakes that a lot of
businesses make. The single item that will most crush a company is
arrogance. It kills them every time.
- You've positioned DeltaClick as a means for publishers to offer
advertisers non-CPM-priced inventory. Do you think the days of CPM-based
pricing are numbered?
No, I think CPM will always exist, but only to meet the aims of the
marketers. What the Internet has forced us to do I think is to move more
quickly to provide accountability to marketers.
The issue is that CPM is the right measurement for companies that
want to influence consumers attitudes -- who only want to do that, with
the thought that it effects subsequent purchasing behavior. Performance
pricing is more in line with the thinking of marketers, who want to
influence behavior fist and attitudes second. Marketers have always
wanted to do that, but they've never had the medium to do that.
Marketers are businesspeople and businesspeople must have ROI, It's only
advertisers who were never concerned about return on investment.
When I was 24 years old and working in the advertising business, I
was spending $50 million a year, and I didn't have a clue to what any of
it was doing. And that scared me. That's why when I went to Wunderman
and discovered direct marketing, it felt like I was adopted and I'd
found my birth family. I felt like I belonged.
That's not to denigrate the value of a brand, but I think the brand
is built in large part by the experience of the customer with a company,
not just from advertising. All the advertising in the world will not
overcome one negative experience with the company and it's products. I
watched lots of my clients get crushed by consumers, because their
product didn't do what they said it did, and the quality of the
advertising didn't make a difference.
- Tell us a little bit about yourself, personally. What do you like
to do outside of work?
I spend time with my one-year-old daughters and my wife. I used to
have hobbies, and now I have one-year-old twin daughters and my family.
So beyond that, you know, I go skiing when I get a chance. I actually
really love my business. I do it most of the time when I'm not spending
time with my family. I'm lucky. My work is what I love to do.
Would you like to put this article on your site or
in your newsletter? Click
here for plug and play code. Enhance your site with
ChannelSeven.com content.
|
