Greg Stuart: The Innovator.
When we read that the Interactive Advertising Bureau (IAB) announced the appointment of Randall Rothenberg as president and CEO, we thought it would be a perfect time to check in with Greg Stuart. He hands the IAB cockpit over to Randall as of January 8, 2007, who takes control of the association at a time when there are nothing but blue skies ahead.
The forecast looked very different when Greg headed down the run way. Back then all of Madison Avenue saw the storm approaching; the sound of thunder from an industry which had just crashed and burned. Greg began his stewardship during that dark and stormy weather. One of our editors, Tim McHale, who's known Greg for many years talks about how Stuart wasted no time navigating the Interactive Media business back on to its proper course. He shares this about one of Greg's many initiatives:
"Back in 2002, Greg had recruited a number of people to help launch a new trade campaign for the IAB, "Interactive. The Active Ingredient." IAB member media companies donated literally millions of $$ in media space to promote it. This was a crucial effort because - at that time - the dot.com bubble burst caused advertisers and agencies to steer clear of anything having to do with the Internet. He instilled a sense of purpose into everyone who touched that project. He made it all about innovation; like we were doing something important. It was quite exciting."
Tim: Let's begin with your immediate future. You're about to change lifestyles to some degree. You're moving on from the IAB after, what, 5 years?
Greg: Actually, I'm not really so sure my lifestyle's going to change. I enjoy working and put in a lot of time and energy into it. As Confucius said, "If you love what you do, you don't work a day in your life." I don't know how that's going to be different when I go on to something else
Tim: Have you decided what you're going to do next?
Greg: I think the likelihood is that I'll end up go running either an early stage business in the Interactive Media space, could be B2C or B2B, or it could be the Digital arm of a bigger media company. I have been involved in Interactive Media since 1993; at an Ad Agency, within Content companies, at an Ad Network, a Classified company and served as a Venture Partner in addition to running the Trade Association that oversaw Search, Display, Video, Email and Lead Gen sectors.. Plus, I have been CEO, CMO, Head of Business Development and head of Ad Sales. Net, I have seen it all and done a lot of it.
Tim: I find one difference with being an entrepreneur is that my energy and my ideas drive the work rather than pushing it out.
Greg: Yes, I have always been driven and taken on more than was required in any role and I have always looked for the bigger opportunity. Not sure why, Maybe cause I was first born. I didn't just go to college, I wanted to serve as president of the student body. In high school sports, I was captain of the track team. For me, I always seem to end of taking on more than required. It just is my nature; And in fact, where I've always been the most successful is when the company gives me the room to move the ball forward fast and hard. Just what the Board of the IAB let me do.
Tim: Is that the reason you wrote "What Sticks?"
Greg: Not so much. I had an agenda with the "What Sticks" project. Really, I did the book because I love advertising. And I love the business, and I love the people in it. I am really fortunate in that regard. But I think the business is killing itself. At the end of day, the business we are in doesn't seem to recognize it's killing itself. And so I hope "What Sticks" can be a part of what causes great change in the industry. I hope it's in the beginning of a giant revolution in advertising as important in the creative revolution that happens back in the '60's. And so the Book is what you might call an intervention.
Tim: Do you really think so?
Greg: Yes. Because I think that that's really what's needed. We all know that there's a little trouble. But, you know, like those in denial for anything, it doesn't mean that necessarily everybody jumps on board with that solution and acts right away. So that's what's going to be interesting to see what happens.
Greg: And "What Sticks" is meant to be a prescription. My co-author and I decided we could have gone into greater depth on a single topic. Originally, we thought the one way would be to "just attack the business." Based on what we witnessed, we could have done that. But, we didn't really want to write that kind of book. So we agreed to try to chart a path for success. That said, I don't think "What Sticks" is the final answer. We're hoping that it creates more discussion and debate and that more people will work for the solution. Because at the end of the day, I don't really care how the industry necessarily gets recovery, just that it gets it.
Tim: : I'm not sure I agree with you in terms of recovery. I think that you're putting it in a dramatic sort of way. At the end of day, I think advertising and marketing are Darwinian.
Greg: : I don't know, Tim. It's pretty bad. Roughly $112 billion in annual ad spending is wasted each year. We came to that figure based on 30 research studies that we did against a billion dollars in advertising. I don't know of many studies that have the opportunity to closely monitor that amount of spending over 30 blue chip brands,
Tim: I can't think of any.
Greg: So in truth, the waste is probably significantly higher than $112 billion. I'll tell you Tim it's very clear in talking to marketers. They really don't know how advertising really works.
Tim: Okay, I agree with that.
Greg: There are series of misnomers and half truths and poor logic that rule in the business. It's pretty bad. Our research also found that 47% of the marketers we worked with either did not get their motivation right nor did they get the message right. In other words the message didn't resonate with consumers. That's the nature of denial.
Tim: Let's switch over to your experience at the IAB. Clearly that view led you to the conclusions you've made in the book. Besides working with so many advertisers you've overseen many different task forces to tackle specific issues. I mean, in 2002 when you and I began working together the IAB had just a handful of committees. How many are there now?
Greg: We have 700 people involved in our committees today. The last time I counted there were about 18 committees plus or minus.
Tim: I wanted to ask you, with every committee formation, were there a few similar factors in each that prompted you to say, "Okay, let's pull a group together and study this issue."
Greg: You're asking me how do we decide which committee to start?
Greg: It's less science and more art. Certainly, the biggest challenge is that an industry as early stage as the internet ad industry is, there's no shortage of things that need be done.
Tim: I agree with you there.
Greg: So, what we try to do is go through a process of looking at a combination of things where we think there was high value and where we really believe that we could be successful. It's a combination of both those things. Let's make sure that we're going to solve a real problem here or fix something that we'll have substantial impact on the business. But let's also make sure that if it's going to be painful, let us make sure that we have a reasonable threshold of competence with the right group in place that we can succeed at it.
Tim: You're saying, "Create a ground swell of interest to bring the right companies and people together to do more than just having a standing committee as a political decoration."
Greg: That's true. There have been cases where we walked away from some things. When I didn't sense that there was enough motivation by the participants. If I didn't hear a real commitment from that group in very short order to get together and work on something, then I have abandoned some of those projects in the past. If those that will benefit directly are not really committed or don't have the resources and the time, it's just not worth it.
Tim: Let me play devil's advocate for a minute. In each committee, you have companies who are in competition with each other. How were you able manage the self interest of a company participating to keep focusing on the enlightened self interest of the industry coming together versus fighting to skew an issue to benefit them versus the other guy.
Greg: That is the magic of my job.
Tim: What do you mean?
Greg: We would often look for projects or initiatives where we could find strong individual self interest that was sufficiently motivated to take on a task that actually melded with the greater good.
Greg: That is of course the goal and intent of a trade association. We've always aimed for the greater good. But it's got to also operate it sort of an individual company's self interest. If it doesn't then, you know, this is not going to work and we may not get done what we set out to do.
Tim: Right. You know, we've talked a lot about fears and predictions of Hollywood taking over Madison Avenue. The creation of content over advertising. To some degree, I've seen them exaggerated. What do you think?
Greg: You know, I'll tell you what makes me nervous about Hollywood getting involved in the business. I'm happy if somebody thinks they can prove me wrong. In my opinion, it's not about creating content, it's about selling. That is the message of "What Sticks." We, an industry, are not focused on selling. I'll give you a perfect example. We had a number of the 30 companies come back to us at some point after we did a post of their campaign tell us that the campaign had been successful because the press has covered it because they got a lot of publicity for the campaign.
Tim: I saw that in your book. That was great!
Greg: And yet I have never in my life - in my 25 years in advertising - ever seen a creative brief state that the goal was publicity for the campaign.
Tim: That's hysterical.
Greg: That's retrofitting goals to meet success when we should be really clear of what the goals are and then let's be sure that we're meeting that goal. Tim, I'll guess your experience is like mine, it is not until you run a business that you get a real sense of clarity about goals and sometimes say, like I have, "Oh, my God. We're got all the resources focused on the long goal."
Greg: I've been in a meeting and watched the CEO of one of the domestic auto companies ask his head of marketing the same question five times. And that question was in essence, "What do you mean that we spend hundreds of millions of dollars and we don't know what it does?" That's a problem.
Tim: Got it.
Greg: So, to answer your question, Can Hollywood sell? I don't know. I'd loved to see the ad business to get more focused on getting motivations right and getting the message right. "Results" is what will keep us ahead of Hollywood's intrusions.
Tim: What you're talking about is the ability to measure the impact of something, the quality of the research, depending on how you measure it.
Greg: Right. And just be clear, you know, I'm not trying to take the art out of the business, the problem is that, you know, right now, it's 95% art and 5% science and that's absurd. That's absurd when you're spending money. I think the CEOs and CFOs are fed up with it.
Tim: But isn't the CFO the main driver of many companies today?
Greg: The business has changed. Advertising is just not as important any more. Many companies don't let sales and marketing people run businesses anymore. They're letting finance people go run the business, where everything is "Six Sigmatized." where they figured out how to squeeze every bit of operational efficiency.
Tim: Uh-huh. Which brings us to the next question. The IAB is works with both big and small companies. What's the difference between working with each? Is there a difference between how you deal with the major companies versus those with a small but important niche?
Greg: Well, they have different assets and different needs to bring to the table. The big companies are focused on sort of "uber" issues, you know, grand standards that require significant changes in the way that the business is conducted. That becomes really important to them. Whereas the small companies tend to – and by small I mean companies which think, "Where do I get my next million dollars of revenue?" - They're looking for some innovation and insight in a way that the big companies aren't focused on.
Tim: They say that the biggest inhibitor from a small company growing beyond it's threshold size is the ego of the founder. They can't get out of the way, they can't let go to give it on to somebody who can then take it to a higher level.
Tim: Clearly, you have a lot of entrepreneurs who are members, who are adamant that their way is right, even though either the marketplace or the committee is going into a different area. I'm sure that can sometimes create a fair amount of tension in any committee. Now you're about to become an entrepreneur. This is not the first time, is this?
Greg: No. Before the IAB, I was running the venture back business on San Francisco.
Tim: Right. Okay. So, you have that experience on both sides.
Greg: Yeah, let's talk about that because it's relevant to this issue. I only agreed to do the IAB in an interim basis but then once I was in, I was very excited by the challenge and what we could really accomplish. My thinking was based around a number of things. First, I saw a big opportunity to serve. I've always been kind of oriented that way. I like helping to resolve people's problems. It was clear to everyone ultimately that this is what was needed. Also, from the beginning, the board agreed to let me run the IAB like an early stage business.
Tim: They backed you up.
Greg: Part of that was the raising the $5.8 million in investment capital. Tell me another nonprofit that ever done that. I've never heard of it. I call the association of associations, the ASAE and they had never heard of a non profit doing that. We used those funds to accomplish initiatives for the IAB and we used it to build out businesses at the IAB. The result is that we used to be 100% dues and now we are only 55% dues based. We have four separate business lines at the IAB that the team here built out.
Tim: That's unique for an association.
Greg: And, you know, some of those are now recurring revenue streams that will go on for years that will be evergreen for the IAB. Because at the end of the day, having resources is what was critical to fix with the industry.
Tim: That makes the IAB a case study for reinventing the association. I would imagine a lot of industries would have a real problem with that, especially when 45% that are not coming out of dues. They might be threatened somehow. I don't know.
Greg: Well, you know, change always creates angst. I guess is that's part of what you're saying and change can create a certain amount of uncertainty for sure. But it's a testament to the board that they remained committed to really pushing the envelope very hard. I don't know if I said it before but the IAB is up 500% revenues since we started the turn around five yeas ago.
Tim: I know. It's tremendous growth.
Greg: In four years, that's a phenomenal shift. Tell me any other business that's going 500% in four years. Right? There's not many, it's a short list. And so, you need to have a certain amount of courage, you need to have a certain amount of commitment to go do that. And you've got to have a board to support that vision.
Tim: Let me ask you this; with regards to government, I assume the IAB has been a driver in getting consensus from the board on particular issues. The biggest issues are tax and privacy based issues. Is that how you see it?
Greg: Washington has become interesting. We're in the process of setting up a public policy of the IAB and trying to identify a leader for that space right now.
Tim: A lobbyist?
Greg: But I wouldn't label this position like that. It'll be head of public policy to bring the membership together to solve common problem and address common issues with a Washington focus.
Tim: I would imagine other media companies which already have representation will be working in concert next to the IAB public policy. I would imagine that a public policy leader would be more of an advocate role rather than someone who is going to be contributing PAC funds.
Greg: I think that we need to of set that strategy, to determine what are the elements for success. I think the overriding theme to all of this is that the IAB have been focused on helping to build the industry. Most of what we have done is focus on growth. The industry will become $17 billion strong this year versus $6 billion when we started. A lot of our efforts in the first few years in Washington will be just around simple education.
Tim: Do I think the government has been hands on?
Greg: Not necessarily hands on but we have had to deal with more pressure from Washington. I'm incredibly concerned about the whole Washington arena and have been for some time at the board level now for four years. The board is now taking the importance of public policy and government relations much more seriously. You know, when you see issues like net neutrality which I think is terribly misguided. And the before that, the whole cookie debate. Washington blew that way out of proportion and made it really problematic.
Tim: You know, years ago, after Apple, Steve Jobs was able to hit another homerun in the number of businesses he created, though for many leaders, that's more the exception than the rule. So, after being CEO of the most exciting and exhausting new industry association, what could possibly capture your interest and get you excited because of all you've and touched already?
Greg: Right. That's actually a really good question . I love that. You know, I had one of my board members say something to me recently, "Greg, what's your passion in life?"
Honestly, you know what? It's really what I do right now; interactive digital marketing that supports some of the most radical consumer have had in getting information and communicating with each other as happens via the Internet. This is really what I love to do. This really is my passion. I do what I love to do. So there isn't anything else other than that. I would say the thing that really gets me going though is similar to the IAB; a transformational opportunity. I've had three or four of those in my life so far. One at Y&R, one when I was a student body president and now this one at the IAB. These have been great transformation roles. I had a real opportunity to play a big role in really changing the world. And so for me if I can find something that also as transformational that would be really exciting to me.
Tim: What do you think that will look like?
Greg: I want to run a business. You know, my next one is I want to run a business of 100 to 200 people. And then I hope to grow it to grow that business to wherever it goes.
Tim: What else can you tell us?
Greg: I'm talking to the VC's right now. I've been asked to join a number of boards at this point. I think there are seven companies that have pursued me about board roles. I joined the Board of Directors for Rapt, the Advertising Inventory Monetization company and also the Board of a Chinese Internet venture called Allyes, that is very much like aQuantative but in China. Watch them as they are doing some interesting things. I also have joined the Board of Advisors for a Video company in LA called Veoh, where Ted Mesiel of Overture is on the board as is Michael Eisner. Plus, I joined the Board of Advisors for Adify, which are my old friends from Flycast.
Tim: Very nice!
Greg: And so I'm pursuing that because I'd like to keep my hands in a couple of different sectors. You know, I'd like to be involved in wireless. I'd like to be involved in iTV. I'd like to be involved in user creative content. I'd like to be involved in broadband video. I am in final discussions with a click fraud company, a research company, and more in the categories above. Like I said, too I really like emerging markets like China. Net I will take on probably a couple of board roles in addition to finding an operating role.
Tim: Well, my view of just hearing that is your hands on all of the different process of the business is not going to change. You're just not going to be doing it from an association standpoint as much as from, you know, doing it from the private sector.
Tim: What has been like leading the IAB, what's been your most satisfying experience and at the same time, your most challenging experience?
Greg: I would say that there's a couple of very fundamental things that we did that really helped transform the business.
Tim: And they are?
Greg: Raising the money was incredibly satisfying.
Tim: No doubt.
Greg: I would say XMOS - actually getting the XMOS studies done was incredibly satisfying because that is landmark change the world kind of stuff in XMOS.
Greg: I would say doing the global measurement standards which really gave the Internet industry to take advantage versus all of the media and really settle a whole new high bar for media measurement. It was electrifying. That has set a high bar for the industry. If I can someday tell you all what it really took to accomplish that - you would understand too. You know, those are things that will impact the business for maybe 100 years to come.
Tim: What advice could you give to people getting into the business?
Greg: You'd be crazy not to. You know, I can't imagine a place that's more fun with more excitement and more opportunity. And honestly I've never found a better group of people than what I found in the Interactive Ad Business. Absolutely.
Tim: How about to the next IAB CEO?
Greg: Don't be afraid to do the right thing.