Video Advertising Perspectives from Tim Hawthorne, an Entrepreneur Long Before Streaming Video

I thought it would be a wonderful idea to talk to one of the original greats in video advertising, Tim Hawthorne, founder of Hawthorne Advertising, who will be bestowed a “Lifetime Achievement” honor by Marketing EDGE as part of its EDGE Awards.

While we all hunker down, work from home, and stream video content, I thought it would be a wonderful idea to talk to one of the original greats in long-form video advertising, Tim Hawthorne, founder of Hawthorne Advertising. On June 1, Tim will be bestowed a “Lifetime Achievement” honor by Marketing EDGE in New York as part of its EDGE Awards. Here, he shares valuable perspective on a video advertising career in an increasingly rich, ubiquitous medium for consumers, brands, and marketers.

A ‘Love Story’ for Film

Chet: Tim, first of all, congratulations! I’m so happy to see you recognized by Marketing EDGE – with its mission of marketing education and professional development, bringing the best and brightest into the marketing field. When you graduated from college – Harvard University no less, in 1973 (really, I mean, “Love Story“) – did you have any inkling that you would build a career of first in direct-response television (DRTV) and video advertising?

Tim Hawthorne, founder and strategic advisor, Hawthorne Advertising (Fairfield, Iowa), will be honored on June 1, during Marketing EDGE’s EDGE Awards in New York.

Tim:  No, I had no idea in 1968 as I matriculated to Harvard that I would eventually become a pioneer of direct response television marketing. (First of all, yes, “Love Story” for sure. I was wandering through the Harvard Yard in the fall of 1969 when they were shooting exteriors. Not sure, but I might be one of those students hurriedly rushing to class in the background.)

It was turbulent times while I attended Harvard – 1968-1973.  (I’m actually Class of ’68 but took a year off after my sophomore year to teach school in Ethiopia with the Harvard Africa Volunteer Project, so I graduated in ’73.) Initially, I intended to study chemistry, then switched to social psychology, influenced by the turbulent social times in the late 60s. But after getting my hands on a still camera in Ethiopia, I decided I’d take a still photography/documentary filmmaking course when I reentered Harvard in the fall of ’71. I was fascinated with the process of editing film, and then determined I’d pursue a career in filmmaking.

Searching for a job post-graduation in my hometown of Minneapolis, I was fortunate to be hired by the investigative documentary unit of the local CBS station, WCCO-TV. I worked there for almost five years, advancing from production assistant to editor to cinematographer, learning the craft of long-form storytelling. Our unit produced amazing documentaries that were often the No. 1 rated television programs in the Minneapolis/St. Paul market and won multiple awards, including the du Pont-Columbia and Peabody awards. I then became a producer/director/writer when I moved to the NBC affiliate in Philadelphia and eventually worked for a number of LA-based network primetime reality-based shows such as “Real People” and “That’s Incredible.”

Chet: Did you grow up having a love for industrial films of the 50s and 60s – which I think were a great precursor to the infomercial age and video advertising?

Tim:  No, I didn’t have any particular love for industrial films (which in the 50s, 60s, and 70s were the height of boring and simplistic video communications!) It’s my background in documentaries – telling a long form story on people and subjects – that seemed a natural basis on which to pioneer telling long-form consumer product stories.

Like many consumers, I’ve never liked being “sold” especially when I’ve felt manipulated. And of course, short-form TV commercial brand selling is very much about manipulating emotions (via humor, poignancy, excitement) and associating strong positive images (sex, strength, beauty) with a product – a very subtle and often deceptive way of selling.

Infomercial or long-form advertising has always been based on factual selling – the exposition of features and benefits – of course, in as entertaining a way as possible. But at least the channel is up-front about its message:  Here’s a product, here’s what it can do, and here are the benefits to you. This “truth in advertising” has always appealed to me. Producing documentaries is also about discovering the truth about a person, group, or issue.

In 1984, having moved from LA to Iowa for lifestyle reasons (wanting to raise our daughter Jessica in the Midwest where I grew up), I was open for new opportunities.  A local real estate investment entrepreneur heard of my background and approached me about producing a long-form commercial. It would be an hour long … and a challenge. That was November 1984, one of the first infomercials on air. Within 12 months, the infomercial had grossed more than $60 million dollars and dominated the long-form air waves. Fairfield Television Enterprise was the company I formed to market the infomercial and over 18 months we revolutionized long-form TV direct response.

Chet: How did early success stories translate to business growth? Were there mentors you paid close attention to? (Alvin Eicoff comes to mind).

Tim:  Eighteen months after launching Ed Beckley’s real estate investment infomercial, I became disillusioned with the way the company was moving forward. I resigned in April 1986 and took a couple of months off before starting Hawthorne Communications, later to become Hawthorne Direct, and then become Hawthorne Advertising. In late June 1986, I was a one-person company with the goal to persuade Fortune 500 companies to add long-form TV commercials to their marketing mix. We were the first infomercial ad agency in the world and I was confident that virtually all products had, somewhere at their hearts, a fascinating story we tell and hold viewers’ attention for 28 minutes and 30 seconds.

The agency had a singular focus: TV long-form advertising. There was no road map for the industry. We invented it as we went along. Certainly Al Eicoff was the reigning master of DRTV (and his book “Or Your Money Back” a short-form DRTV bible) but his company focused on short-form DRTV (2 minutes or less). So I and my growing team began to innovate, and I began to write about and present the long form story to marketing groups and corporations literally around the world. There was no road map; we were the trailblazers.

A Litany of Firsts and Video Advertising Innovations

Chet: Trailblazer indeed. What are some of the innovations you have brought to the field of DRTV, infomercials, and more recently digital video programming? How has digital disruption affected the traditional DRTV and broadcast channel, from a marketing perspective?

Tim: I’ve been called a “leading architect” of the DRTV industry by producing an impressive string of “firsts”:

  • Co-founder and president of the first infomercial direct marketer to break the $50 million revenue per year mark, Fairfield Television Enterprises
  • Founder and chairman of the first infomercial advertising agency, Hawthorne Communications
  • Produced the first infomercial for: a Fortune 500 company – Time Life; a major music company – Time Life Music; a major credit card company – Discover Card; a major health insurance company – Blue Cross Blue Shield; and a retail driving campaign for a brand name product – Braun
  • Infomercial Agency of Record for the first infomercial for: a major computer company – Apple Computers; and a major weight loss company – Weight Watchers
  • Infomercial Agency of Record for the first “promo-mercial” – a half-hour promotion for a primetime TV series (NBC’s “JAG”)
  • Published the industry’s first newsletter: “The 1-800 Report”
  • Published the industry’s first hard-bound textbook on infomercials: “The Complete Guide to Infomercial Marketing”
  • Created the first long-form TV media buying computer analysis system – “Time Track”
  • Purchased the first long-term cable TV bulk media contract: Discover Network, for $50 per half hour, six hours per night
  • Established the first infomercial agency/traditional agency alliance with Earl Palmer Brown

As for innovations to digital video, Hawthorne was one of the first agencies to actively use video promotion on websites (late 1990s) and we pioneered the “drive online direct sales” with short-form TV commercials, which were designed to motivate new visitors to our web-based clients.

Yes, the digital economy has significantly disrupted DRTV, as it has the television entertainment model as a whole. With a 35% drop in primetime adult (18-49) viewership from 2015-2019, the era of aggregating mass audiences on broadcast TV is long over.

A Family Affair – and an Investment in the Future

Chet: Was it a great leap – or expansion – from Fairfield, Iowa (hey, I’m from Nebraska) to Los Angeles? What brought Hawthorne Advertising to LA (and beyond)? Was there a talent pool you needed there?

Tim: From the beginning, Hawthorne was somewhat disadvantaged being a national advertising agency headquartered in a small Iowa town. We did have a small LA office (two staff) from the early 90s to keep in touch with our West Coast clients. But when Jessica (my daughter) came on board in March 2007, she brought an energy and vision to the company previously unknown.

Her goal was to build the LA office and lead the company into a digital future. And she has done that in spades, making LA our headquarters, while our Iowa office strongly administratively supports LA to this day. Our LA office certainly had access to talent we always struggled to persuade to move to Iowa, as you, being a Nebraskan, are probably aware of. It was a brilliant move by Jessica which has allowed the company to continue to thrive going into our 35th year.

June 2011 Cover - Response Magazine
Tim Hawthorne and Jessica Hawthorne-Castro share the cover of Response Magazine (June 2011) on the 25th Anniversary of the Hawthorne Advertising agency.

Chet: Well now we know why Marketing EDGE named Jessica Hawthorne-Castro a 2015 Rising Stars honoree. (You must be very proud!)

Tim: Yes, I’m very proud of Jessica’s ownership and leadership of the company. And it wasn’t by design. Jessica was a thriving talent agent at Endeavor, one of the few women agents at that male-dominated business with six years’ tenure. But she recognized that industry was missing certain business and spiritual values important to her. In February 2007, I coincidentally asked her if she had time to monitor a commercial talent audition in LA that we needed someone to attend. She did it, enjoyed it, and said she would be open to coming on board at Hawthorne. Over the next five years she soaked up the business, brought much-needed youthfulness to our efforts, advanced from client service associate to CEO, and built our LA office to 50-plus employees, while transforming the agency to a digital foundation.

Chet: As an author of several business books on DRTV and infomercial formats, and likely a bevy of company alumni in the field today, you’ve contributed so much to the professional development of data-driven marketers, marketing measurement, attribution and the like. What part of giving back to the field do you find most gratifying? Is there a particular “lifetime” achievement you’re most proud of?

Tim: My greatest achievement? Creating a company that has endured for 35 years and allowed hundreds of staff to learn, thrive, and grow in marketing knowledge and experience, while realizing greater personal achievement and confidence. We created a company that was a home for our staff to do great work amid friendship and respect. Undoubtedly my greatest achievement, far beyond any creative work for a client.

Thank you Tim – and we’re so happy to celebrate your contributions at the EDGE Awards come June 1.  And much more video success ahead!

 

 

 

To Find Your 2020 Agency Partner, Look Beyond ‘Agency of the Year’

There’s no shortage of agency rankings, highlighting the “agency of the year” for advertising agencies, PR firms, marketing technology vendors, and more. Accolades are important, but often to the agencies themselves, where recognition serves as a recruiting tool and validation.

There’s no shortage of agency rankings, highlighting the “agency of the year” for advertising agencies, PR firms, marketing technology vendors, and more. Accolades are important, but often to the agencies themselves, where recognition serves as a recruiting tool and validation.

When selecting agency partners, you should focus less on who’s the “best” and more on what a great agency partner means for your brand. Look beyond “agency of the year” and strive instead for compatibility.

Finding Your Agency Mate

Before even beginning the search, you need clear goals and must identify what you are trying to achieve by bringing in an outside resource.

Word of mouth, reputation, and recommendations can help narrow the field to a shortlist of potential partners. But what happens next?

5 Focus Areas for Agency Selection

From my experience on both the client and agency side, I recommend focusing on five areas as you assess potential partners: cultural fit, talent, success metrics, adaptability, and unique, specialized expertise.

Cultural Fit

Cultural fit is perhaps the most challenging criteria to define. Agency-client compatibility requires a set of shared beliefs and behaviors. If you aren’t able to see eye-to-eye with your agency, you won’t be able to work together successfully.

Assessing cultural fit requires spending time in-person with the agency team, ideally in their office, and getting to know individuals across levels and functions. There may be people outside of the day-to-day agency team who could shed light on the company culture, including HR and communications. Speaking to client references is another important culture check.

Talent

Strong agencies attract strong talent — at all levels. You need a consistent, tenured team that understands your business. If talent comes and goes, it is a huge strain on the relationship, because you need to invest time and energy in building new relationships at your agency partners.

During the selection process, ask about the average tenure at the agency and learn about their recruiting and training policies. These questions will help you uncover how the agency hires, invests in and retains talented employees.

Success Metrics

Great relationships are formed when the agency and client are jointly successful. Yet success can mean different things to different people. A shared point of view when it comes to measuring success is fundamental to closely aligned agency-client relationships.

Review how the agency has measured success with other clients and research the latest measures being used in your industry and adjacent industries.

Adaptability

If you want the relationship to be long-term, then the agency must be adaptable. Leaders change. Mandates evolve. The industry transforms. Agencies that are flexible and adaptable can serve their clients, regardless of the circumstances.

Request specific examples of long-standing client relationships and ask about the evolution of those relationships. Discuss scenarios that illustrate how their mandate might shift over time and see how the agency would respond to those hypothetical situations.

Unique, Specialized Expertise

Most agencies have a secret sauce — something that sets them apart. If the agency has expertise specific to your industry or competitive set, you will need to decide if the institutional knowledge outweighs the potential client conflicts.

Throughout your discussions with possible partners, dig deep into their unique and specialized capabilities — technologies, data, processes, knowledge, etc. These differentiators could be the determining factor in selecting your agency partner.

Keep an Open Mind

As you search for agency resources, consider unconventional solutions. An agency isn’t always the answer. For example, ask yourself, should I build this capability in-house? Additionally, for some brands, a consultant or group of consultants can provide a nimble, strategic support model.

Don’t get caught up in the “best agency” hype. Seek a partner that is best for you.

Remembering Lester Wunderman, Direct Marketing Pioneer

Lester Wunderman, who passed away at 98 last week, was a quiet giant among visionary innovators. And if the marketing universe looks almost totally different today than it did in the “Mad Men” age of the 1960s, Lester deserves the lion’s share of the credit.

Lester Wunderman, who passed away at 98 last week, was a quiet giant among visionary innovators. And if the marketing universe looks almost totally different today than it did in the “Mad Men” age of the 1960s, Lester deserves the lion’s share of the credit. That he recently saw the legendary J. Walter Thompson merged into Wunderman must have given him no small pleasure.

When in 1958 with his brother and two other partners, he opened the mail order and direct mail agency Wunderman, Ricotta & Kline, in modest Union Square premises, relatively few companies were using the mail order channel and those who were, such as “The Book of The Month Club,” were doing their own marketing. Columbia House, the club division of Columbia Records, was one of the first and for many years, the leading client.

Eras are measured and defined by the magnitude of change that takes place within them and the visionary drivers of that change, whose innovations give the landscape a whole new look. Now, after years as secondary citizens in the marketing community, direct and data-driven marketing have taken “pride of place.” Lester always said it was just a matter of time.

Quoting Publicis Groupe Chief Growth Officer, Rishad Tobaccowala on the reason, MediaPost wrote:

“… conventional brand-building media models aren’t working as well as they used to. It’s because big brands are realizing that the only way to have a relationship with and understand their consumers, is to cut out the middlemen and have a relationship with them directly.”

The essence of marketing has now come full circle from the door-to-door peddler and personal selling to mass marketing and back again to the personal selling Wunderman always championed; albeit, with technologies never dreamed about in the 1950s. In a 1967 speech at MIT, Lester insisted on giving the industry a proper name, and “direct marketing” replaced direct mail, mail order and a host of others. Invited to give a keynote speech to the then U.S. Direct Mail Marketing Association, Lester accepted — but on the condition that the association change its name to the Direct Marketing Association. It was noisy fight but Wunderman won. That he would then become the “Father of Direct Marketing” was obvious.

For over the last half century, Lester was my closest friend and my guru. His humanity went hand-in-hand with his vision. “There is nothing that will not change,” he would say to anyone lucky enough to hear him. “Nudge that change in the right direction, take chances and measure, always measure your success or failure.” Having spent considerable time with his beloved Dogon tribe in Mali, even earning the honor of becoming a tribal Chief, Lester never lost touch with what he saw as real, a primitive understanding of human behavior and a profound respect for human values.

He knew instinctively (and proved over and over again) that a one-to-one relationship between people, be they partners, friends, acquaintances, customers or prospects, had to be more enriching than any distant relationship. His endless curiosity demanded that he know as much as possible about them and as the computer gradually replaced the mechanical card systems, the possibilities to capture data and use it to better serve customers and clients exploded. As increased streams of data became accessible, clients might scream about the cost of keeping and managing it, but that didn‘t deter Lester, who coined one of his best and most lasting perceptions: “Data is an expense” he said. “Knowledge is a bargain.”

Increased knowledge became an endless quest for Lester, and it was a gospel he shared domestically and internationally. Born one summer evening over a bottle of very good wine in my London garden, Wunderman Worldwide was designed to make this knowledge and its marketing uses available to young, ambitious, like-minded marketers — first in the U.K., France and Germany and, if successful, in any countries where it might be wanted. There are now 175 Wunderman offices in 60 countries.

The road to this success was hardly a smooth one. The acquisition by Young & Rubicam in 1973 was more a marriage of convenience than of love: Y&R needed to be seen to have the direct marketing skills it lacked, even if it had a very limited passion for the discipline. WRK wanted access to blue chip clients who were beginning to seriously examine direct marketing.

For reasons never made clear to Wunderman or the industry and breaking every classic rule of branding, Y&R management created a new brand, Impiric, and folded all its non-traditional businesses under this rubric. Overnight, the Wunderman brand was erased from the door. Lester was both personally heartbroken and professionally angry seeing years of brand-building disappear on what seemed little more than a whim.

Fortunately, just a few years later when Sir Martin Sorrel’s WPP acquired Y&R, he searched for the Wunderman company and found it buried under Impiric. As confused by Impiric as everyone else, he telephoned Lester, invited him to meet and, over lunch, both proudly restored the Wunderman brand and appointed Lester Chairman Emeritus of the company for life.

In an Ad Age interview in 2010, newly anointed by WPP, Lester said:

“For me, who started one little office with my brother and myself down on Union Square, to be the chairman of a company that is global, and practicing a high state of art all over the world, I can’t tell you what a revelation, in my lifetime, [it is] to see us go from kind of the horse-and-buggy form of advertising to the Internet. It’s just miraculous. The things we know about people, our ability to make messages more relevant and timely — advertising is just more efficient than it used to be.”

Lester’s creativity and his inventions are legendary. Eager never to leave a client or prospect without something new and unexpected, many of Wunderman’s greatest breakthroughs were brilliant adrenalin-driven responses to momentary problems. With a furious Columbia House client in the WRK conference room throwing on the table “take ones” millions of which had been printed and few “taken,” Lester, coolly walked over to the conference room magazine rack, picked up a copy of TV Guide, put one of the take ones in the center (where it almost fit) and announced that at that very moment the media department was booking this position exclusively for Columbia and all the take ones would be used. That position became one of the most productive DM media buys of its generation.

The Wunderman credo never changed, whether the means of accomplishing it was consumer loyalty programs, subscription club models, newspaper inserts supported by TV spots and toll-free 1-800 customer service numbers. Get as close to the customer as possible, listen to his voice and establish a one-to-one relationship. At an industry conference when others were droning on about postal regulations, out of nowhere, Lester proposed the idea of an intelligent mailbox for each consumer, a mailbox that knew what was wanted and only permitted those special messages access. Today we call it our “inbox.”

An avid tennis player, Lester never let work get totally in the way of play and, until recently, he found time weekly to play singles with the pro from his tennis club. On winter business trips abroad, he could almost certainly be found on weekends skiing in St. Moritz or Davos and in the summer at his beautiful house in Mogins, France. About 43 years ago, when he was courting his wife Suzanne who became both his companion and muse, he interrupted an otherwise important business meeting to carefully write down the recipe for a special dressing he wanted to prepare for the dinner’s arugula salad. The important things for Lester always took priority.

Lester Wunderman was a unique gentleman in an industry not over-populated with them. Read his books, “Being Direct” and “Frontiers of Direct Marketing,” or look deeply at his photographs of the Dogon tribe — his brothers, (in the permanent collection of the Metropolitan) and talk to those direct marketing practitioners who have worked for or with him. You cannot miss his special magical quality.

We have lost a great guru and friend, and he will be sadly missed. We are lucky that his wisdom and teachings are indelibly woven into the fabric of two generations of U.S. and overseas marketers.

Lester Wunderman Rosenwald
Credit: Peter J. Rosenwald. The two of us in 1997 at the DMA Mad Hatter’s Tea Party. Lester (Right) and Me (Left).

How to Negotiate a Risk-Sharing Marketing Contract

The marketing service company’s smooth and promising presentation assures me that hiring it will certainly grow my business. “Trust us,” they say, “We have a winning strategy and we’ll all celebrate the fantastic results.”

marketing negotiations
“Salary Negotiations,” Creative Commons license. | Credit: Flickr by MIke Kline

The marketing service company’s smooth and promising presentation assures me that hiring it will certainly grow my business. “Trust us,” they say, “We have a winning strategy and we’ll all celebrate the fantastic results.”

I want to believe them, but they come at a high price and we are not rolling in cash during these difficult and fast-changing times. If I were the potential client and they offered to minimize my front-end cost and share the risk of under-performance, I‘d find their proposal very attractive and credible. I’d feel comfortable sharing success with someone who is willing to share failure.

Entrepreneurs know that a strong component of commercial success depends upon getting their businesses noticed and engaging customers to buy their products or service. They also know or should know that this marketing and advertising task can consume substantial resources. If they can get their marketing partners to share this investment, through some form of split of the generated revenue, it can be a definite win-win. That’s why revenue-sharing and other forms of remuneration are becoming the new normal.

The historic 15 percent “commission” system was the basis for agency remuneration in the days of “Mad Men,” but tougher times have diminished the number of martinis and brought with them far more competitive systems of compensation. Now they are being asked — compelled, in some cases — to put their money where their mouths are: to mutual benefit. Some of the world’s most successful direct response copywriters have done this for years, and the winners have earned enormous sums from grateful clients who tried and tried, but were unable to beat the controls they created years ago.

Some years past, on a conference panel, I asked an advertising sales director of Globo TV (Brazil’s largest media company) what value he put on a 30-second commercial slot that Globo had failed to sell. Looking at me as if I were an escapee from a gringo nut house, he said it was obviously worth nothing. What, I then asked, if a potential advertiser were willing to guarantee to pay? Say, 35 percent of the normal price for any unsold advertising spots, a standard procedure in the U.S.? He emphatically said he would never even consider it. If he still has a job, it is unlikely he would take that view today, when Google is gorging itself on 80 percent of the fall in broadcast and print advertising.

To make revenue share work, the agency, consultancy or service provider needs to carefully do its homework. This “communicator” will first need to be able to assess the real cost of the time of the professionals who will be involved in the project.

Peter Rosenwald's Chart 1

Using a matrix like this, which sets various ranges of monthly compensation, assumes 1,800 (or some more appropriate number) of working hours per year, it’s easy to see the “Actual Cost Per Hour” for each category of professional. But we all know that 100 percent of the hours will not be billable. (Sometimes, there really isn’t much to do but chat on Facebook.) So we make a guesstimate of the percentage (here, 60 percent) of billable hours and increase the “Cost Rate” accordingly.

And of course we want to make a profit. (That’s the name of the game, isn’t it?) So to establish a minimum “Bill Rate,” we gross up the “Cost Rate” accordingly. And finally, we can round it up if we wish.

The professional responsible for pricing this project only has to input the number of professionals in each category and the estimated number of hours each will have to spend on the project and ZAP, the professional costs (including the percentage for hours not billable and the profit-loaded (29.3 percent) quotation amount for the professionals) is ready and waiting.

Collecting the other costs for the project, data, media, etc., (with or without mark-ups depending on policy and competitive pressure) and then adding them to the professional costs provides the essential baseline for a revenue share negotiation. You know your real costs and you know these costs with profit and the amount you would quote as a fixed fee. The old wise adage says; Never gamble more than you can afford to lose. That wisdom should inform what “revenue share” you are prepared to accept.

Peter Rosenwald's Chart 2

But that’s only from the communicator’s side.

What does the “marketer” have to know? And more importantly, what does he need to share with the communicator?

The answer is simply how much he can afford to get an “open,” a clickthrough, a lead or a final sale. Which of these he wants from the communicator depends upon his briefing of the communicator and whether the marketer knows his historic metrics for the journey from advertising through to the final sale. Keeping it simple, let’s assume that the marketer knows his numbers and has an expectation of selling 500 units at $850 each. He can afford it, but is unlikely to want to pay 10 percent of $85 per unit sold.

Peter Rosenwald's Chart 3

Because the communicator knows that to make his profit objective, he needs $26,125 or an alternative revenue share and must have a minimum of $19,592 to break even, he is well prepared to enter into a revenue-share negotiation.

Let’s look at it this way.

The communicator’s leverage for negotiation is the spread between his cost $19,592 and his quotation amount $26,125. To make its quotation amount, the communicator needs just $52.25 per sale. To cover his cost, he only needs $39.18. If the communicator receives $52.25 per sale, he only needs 375 sales to recover his costs. If the actual sales number is above 500, say, 550, the communicator will receive his full quotation amount plus 50 times $52.25, or an additional $2,612.

The question for the communicator is how much to ask for? Sixty percent of the $85 allowable would give $51 per sale — just short of the $52.25 needed to make the quotation amount at 500 sales: 50 percent would be $42.50. Not bad. Looked at from the marketer’s side, with no up-front cost, sharing the $85 allowable on a more or less equal basis should seem fair.

Peter Rosenwald's Chart 4

I’d argue for $50 per sale as a good compromise, but each negotiation is different and each person will have to define his own limits. Hopefully, the use of these tools and this methodology will help.

Peter Rosenwald's Final

Walk a Mile in Your Client’s Shoes

Agency folks love to complain about the pace of our work, the numerous bosses (AKA “clients”), the often restricted budgets, creative latitude and so on. It is human nature to bemoan the challenges we face personally, but to serve the interests of our clients we also have to factor in the obstacles our clients must, in turn, surmount.

Hipster shoesAgency folks love to complain about the pace of our work, the numerous bosses (AKA “clients”), the often restricted budgets, creative latitude and so on. It is human nature to bemoan the challenges we face personally, but to serve the interests of our clients we also have to factor in the obstacles our clients must, in turn, surmount.

The worst thing an agency partner can do is bring no ideas. The second worse thing is to present an idea, concept or approach to a client that does not fit their strategy or creates a headache disproportionate to the potential upside and opportunity. It’s the headache that often gets discounted or ignored. You’re just bad at your job if you are off strategy — but the risk-reward balancing trick is tough to achieve for anyone without a crystal ball and even tougher without the consideration of internal decision factors that the client may not explicitly divulge. This is where perceptive agency partners take a walk in their clients’ shoes.

Agencies are regularly tasked with helping their clients locate the edge that is relevant, strategic and effective for clients without pushing them over that edge. It’s the proverbial fine line that is influenced by factors well beyond those commonly found in a plan or brief. Marketers confront pressures unique to their particular environment when making difficult and finessed decisions regarding budgets, partners and opportunities. This allows them to make the best decision for their business in that space and time. It may not be the optimal decision according to a sterile predictive model but none of us live in that sterile world.

How can we factor in the real world issues that can and should influence marketing decisions?

Some Things We Can Glean From Historical Response

Have similar recommendations met with resistance or delay in the past? What was the underlying reason for that resistance? Is it likely to change or is it endemic to the organization or industry?

Industry factors like regulatory constraints should be pretty straight forward and clearly considered but companies and individuals have different appetites for risk that also need to be considered. You can moderate the tendency to play it too safe over time by building trust, gaining proof points with successful recommendations and a thorough, objective examination and presentation of your plans.

Free Marketing Advice: How Far Is Too Far?

How much of our intellectual property should we be willing to give away to win a client’s business? Many prospects are willing to pay for creative ideas — some have been shamed into it, while others have finally placed a value on the time an agency will have to invest in conceiving, writing and designing creative ideas.

Email Roundtable: Creative Insights You Can StealAnyone who works in business development at an agency has encountered this dilemma: An RFP includes a request for a detailed set of strategic and tactical marketing recommendations that would solve some very specific business challenges.

But a recent RFP went even further: Forecast the response expected from each media channel recommended, and include proof of concept by detailing how that idea in that channel delivered for another client. Anyone in their right mind who answers this question is giving away proprietary results! Yet, we all know that if we don’t comply with the RFP, we can pretty much count ourselves out of consideration in the next round of reviews. But how much of our intellectual property should we be willing to give away to win a client’s business?

Many prospects are willing to pay for creative ideas — some have been shamed into it, while others have finally placed a value on the time an agency will have to invest in conceiving, writing and designing creative ideas (although we all know we never get adequately compensated).

However, there are other challenges facing our industry on price, value and just plain old fashioned respect. For example I’ve noticed that if someone does ask for some free marketing advice in a public forum, many experienced marketers will provide very thoughtful and insightful answers. But others are quick to dismiss the ideas that others present in order to promote their own answer. After I was publicly shamed for one of my recent responses, I decided the public forum may not be the best place to participate in a thoughtful discussion on marketing challenges.

Many new startups in Silicon Valley spend time on a site called Founders Dating, seeking advice and counsel on everything from marketing to HR, technology to investor-related challenges. Even after I responded to a question that was right in my wheelhouse of expertise, there were over 200 “experts” chiming in with their advice – so how could the individual raising the question possibly know what they should do next?

I’ve heard loads of complaints from creative freelancers about clients who were unclear in their initial direction, but were unwilling to pay for round after round of revision. And other freelancers admit that they’ve done work at a cut-rate price because the pipeline for new work has dried up, so they’re giving away their expertise. Still, others are complaining that all the new grads flooding the marketplace are driving costs down.

Are you feeling the same pinch — the same lack of respect for your experience or ideas? Should we all just retire and open a food truck?

The Importance of Celebrating Great Advertising

Certainly, we’ve read headlines about ad blockers, agency burnout and click fraud — but these challenges are not the reality of our entire business. Yes, each concern listed here needs to be managed, but they hardly define advertising’s truest landscape.

Echo AwardsOn April 7, there is an agency party happening in New York. Creatives and strategists will be in attendance, but what will the party be celebrating exactly? The simple chance to win an ECHO Award, and the call for entries is now.

Full disclosure — I’m on the Direct Marketing Association’s International ECHO Awards Board of Governors (and the only compensation of being a BOG member is the opportunity to see firsthand the greatest advertising idea store in all of data-driven marketing).

What’s so timely or unusual about celebrating advertising now?

Certainly, we’ve read headlines about ad blockers, agency burnout and click fraud — but these challenges are not the reality of our entire business. Yes, each concern listed here needs to be managed, but they hardly define advertising’s truest landscape:

  • Compelling content that drives consumer interest and engagement — and is increasingly measured to prove it. Data wins the purse and the consumer.
  • An economic contribution that DMA identifies as a $202 billion proposition in the U.S. alone, with more than half of that directly related to responsible collection, sharing and application of data. However, the ECHOs are not all data and numbers – they are informed strategies and executions that are breathtaking, first and foremost. They also drive action.
  • Advertising that wows the CMO, keeps the CFO happy and enables the CEO to look good — because it’s advertising that works to meet defined business objectives.

Very few ad competitions explore this angle, yet, this is where advertising is going and growing. An ECHO trophy proves, “We understand where advertising is going.”

Making waves, disruptive, arresting, dominant — the adjectives fail us, but the work doesn’t. Even the ECHOs are transformative this year with 21 categories to conquer tackling sector, channel, craft and special award categories.

Instead of partying in Manhattan on Thursday night, I will be six miles high eagerly flying home, awaiting this year’s stellar realm of dominant ECHO entries to celebrate this fall. Dominators have until June 27 to enter.

Your Best Marketing Investment: Recent Grads

My longtime colleague Jon Roska used to say, “If the army can trust a 23-year-old to drive a $5 million tank, surely we can trust them to write a marketing plan.”

My longtime colleague Jon Roska used to say, “If the army can trust a 23-year-old to drive a $5 million tank, surely we can trust them to write a marketing plan.”

Throughout my career as a marketer, mentor and teacher, I have learned that recent college grads are capable of creating remarkable work if given the chance. “Millennials on Marketing” in the Jan/Feb issue of Target Marketing features four young people who created a plan for increasing referrals for DirecTV that won the Gold ECHO in the Collegiate ECHO Competition. You can hear them tell the story of their winning campaign in this video. One of the comments from the DirecTV team: Cohesive strategy that fit real-world application from assessment, strategic planning, defining objectives, execution, reading results and optimizations.

Of course, the army doesn’t hand the keys to an M1 Abrams tank to just any 23-year-old, particularly without adequate training. Nor should we let just any 23-year-old write a marketing plan without adequate training. Jon Roska was relentless in his quest to prepare recent graduates for success, and those who worked at our agency are making meaningful contributions at the best agencies in New York and Philadelphia, as well as client-side at companies like Ticketmaster and Google.

There’s a lot of talent out there that’s ripe for the picking, and with the proper nurturing, you can reap big benefits from it. Here are five things I learned about nurturing young marketing talent by working alongside Jon Roska:

  • Choose Carefully. Pick those who are both busy and successful in school. Good grades are important, but not enough. You want people who achieve results while juggling several balls at once – involvement in student organizations, sports, internships and employment ensure that you’re getting someone who is dedicated. Screen for desire – it’s the most important component of success.
  • Empower Them. Make them fully responsible for something right away. Start with something small, like creating a weekly report. Raise the stakes quickly as they deliver. Make them accountable.
  • Support Them. Give them access to the resources they need to figure it out for themselves – books, webinars, face time with senior people, etc. Quiz them on their understanding and redirect them, as-needed. Share best-example models of the assignments you give to show them what good looks like. Take them to important meetings to observe and have them summarize their notes to gauge their understanding of the key issues. Most importantly, invest your time in them. You may think you’re too busy, but ultimately, they will lighten your load.
  • Let Them Fail. I don’t mean you should allow them to blow up a major project or an important client. Rather, foster an environment where it’s OK to be wrong. You’ve empowered them, and you can’t expect them to be right all the time. But we learn more from our failures than we learn from our successes. Frequently ask, “What did you learn from this?”
  • Maintain High Expectations. If you don’t expect much, that’s what you’re going to get. The converse is true, as well.

How to Treat a Client

Over the holidays, I relocated my office a few doors down the hallway in order to accommodate some staff changes. While cleaning out a bookcase, I came across a 1991 edition of Courier, the in-house newsletter for Ogilvy & Mather Direct. I had saved it because it was chock full of great tips on Client Service and reminded me of how much I had learned during my days at OMD.

Over the holidays, I relocated my office a few doors down the hallway in order to accommodate some staff changes. While cleaning out a bookcase, I came across a 1991 edition of Courier, the in-house newsletter for Ogilvy & Mather Direct. I had saved it because it was chock full of great tips on Client Service and reminded me of how much I had learned during my days at OMD.

As I reread the front page article, it struck me that the 20 pithy tips in How to Treat a Client, penned by the late David Ogilvy, had stayed with me throughout my career—and, that I espouse them as my own. Given we’ve just entered a new year and there’s always lots of great advice being thrown around, I thought I’d reprint them here as a reminder of how great agencies truly operate. And they are as relevant today as they were 24 years ago…

  1. Never submit an ad unless you honestly think it is good.
  2. Tell Clients what you would do if you were in their shoes.
  3. Always put your Client’s interests above the agency’s.
  4. Never tell a Client a lie.
  5. When you make a serious mistake, tell your Client before he (or she) hears it from somebody else.
  6. Ask your Client for their opinions, and listen attentively to what they say.
  7. Never get between a Client and the footlights. Give her (or her) the credit for our success.
  8. Never miss a due date, even if it means working nights and weekends.
  9. Never get involved in the politics in the Client’s office.
  10. Never leak the Client’s secrets.
  11. When your Client makes a mistake, rush to the rescue.
  12. Know more about the Client’s business than he (or she) does.
  13. Invent new ways to help your Clients grow their business—above and beyond the call of duty.
  14. If you think a Client is a dope, conceal your opinion.
  15. Never use a product which is manufactured by one of the Client’s competitors.
  16. Make friends with your Clients, but never grovel. For example, never thank a Client for coming to a meeting.
  17. Never give a job to anyone in a Client’s family. They are impossible to fire.
  18. Expose your Clients to other people in the agency, in case you are hit by a taxi.
  19. Never argue with Clients about charges. Leave it to somebody in our Treasurer’s department.
  20. If you think you are a bad fit on an account, tell your boss. He can then assign it to someone else.

If you behave like this, you will win the gratitude and respect of your Clients—and of the agency.

Thank you, David. Truer words have never been spoken.

How (Not) to Run an Agency RFP

Over the last several years, I’ve noticed an alarming trend in the RFP process – and I’ll boil it down to three words: Lack of respect

Over the last several years, I’ve noticed an alarming trend in the RFP process—and I’ll boil it down to three words: Lack of respect.

Agencies are always delighted when invited to participate in an Request for Proposal (RFP) process. While many may choose not to engage due to client conflict or the belief that their likelihood of being awarded the contract is nominal—or the budget outlined in the brief doesn’t come close to paying for the amount of work that will be required to achieve the client’s objectives—those that do participate have an expectation that the process will be fair and somewhat transparent.

Any agency worth its salt invests significant time, energy and out-of-pocket expense in a new business pitch. Whether it’s the early stages of completing the “competency” response (where the focus is on written information that provides an overview of the agency, some case studies that are relevant, industry experience, team bios, etc.,) or it’s a later stage when preparing for a face-to-face pitch, net-net, it takes a lot of hard work to prepare a smart, tightly integrated response that will help put your firm in the best possible light with the target decision makers. After all, we’re all supposed to be marketing experts and if we can’t market ourselves properly to a target audience of our peers, what kind of marketers are we?

That aside, recently we were included in three separate searches for a new agency and they shared a common trait—the big, black, hole.

We received the RFP, spent countless hours researching the brand to fully understand their point of differentiation, talked to past and current customers, participated in the Q&A process, coordinated with partners to fill in some capabilities gaps, and attempted to understand the financial metrics to ensure we could provide intelligent and thoughtful solutions that would actually yield a positive ROI. After weeks of work, we carefully assembled our response, printed multiple copies, bound the decks and invested in a courier to deliver it on the designated date to the clients’ location.

The next milestone on the RFP was to notify agencies that made it to the next round by XX/XX/XX.

Despite emails and phone calls to the RFP contact, we never heard a peep … even weeks and weeks after the deadline had passed.

In one instance, we finally got a junior staffer on the phone who told us the search had been cancelled and they renewed their contract with the incumbent—apparently they shopped around and convinced themselves there was no one better, but didn’t have the courage to let each participant know of their decision. But why? Afraid we’re going to try and talk them out of their decision??

In another instance, we finally got an email from a procurement officer advising us that the RFP had been cancelled—period—no other explanation. After a little sleuthing, we figured out the company hired a new marketing director in the middle of the search, and they probably wanted to regroup before proceeding. Fair enough—but don’t leave us all hung out to dry!

In a third instance, we finally tracked down an insider who told us the marcom team was going through a reorganization, and no one knew what was happening. Gosh. So glad I invested in THAT opportunity!

I’ve also noticed that many clients running RFPs are often ill-equipped to conduct the search properly. When we go through the Q&A process, they can’t seem to answer key questions that will drive strategically smart solutions. Or even basic things like:

  • Why are you looking for a new agency?
  • What are the biggest marketing challenges you’re facing today and, if you know, in the future?
  • What marketing efforts are you executing currently that are working and not working and why?
  • Who is your target audience—SPECIFICALLY?
  • What are your business metrics?
    • What is a new customer worth?
    • What is your churn rate?
    • How many products/services does a typical customer own?

The more you can share during the RFP process, the more likely you are to get intelligent, insightful ideas that can make a real difference to your business. And yes, that takes signing mutual NDA’s, investing real time and energy into the review process, and working with agency teams to discover who feels like a good “fit” and brings fresh ideas to the process that seem viable to your business.

It’s NOT a fishing expedition for free creative. (Would you go to a doctor and ask for a diagnosis without paying?) It’s NOT an exercise to freak out your incumbent so they’ll work harder/reduce their fees/change the way they do business. If that’s what you want, tell them that’s what you need, and if they don’t deliver, advise them you’re going to search for a replacement and that they needn’t participate as you have no intention of keeping the business with them.

After all, we’d all prefer not to work long nights and weekends if we don’t have a hope of winning. That’s just plain respectful.