April 13, 2010

Tom Deierlein on the Business. The Early Days, Part 1

early111.jpgLink: Original news story on the creation of "Internet". A must-see!

Edited by Paul McEnany

In the last 18 months, many of you have been interested in Tom's thoughts and deeds, beginning with his service to our country in Iraq, his experience overseas and the challenges he's faced upon his return back in the states.

It's not often we have the opportunity to refer to someone in our industry as a true hero. Sure, there are plenty of great men and women, but as noble as our pursuits may be, it's tough to compare to a man who so willingly fought for the safety of our country. And in that light, it's that much better to hear him talk about the other challenges he's faced, the ones on Madison Avenue on the forefront of the new media business. His experience here was also exceptional.

So it was in this spirit that the MadAve Journal had the opportunity to spend time with Tom and get his insights on the on-going debate associated with the changing faces of traditional and interactive media, integration, relevance and the place for social media. As COO of Dynamic Logic, his view is grounded in the effect research has in today's media revolution. From that perspective, he shares what he believes lies ahead for the business of communication.

Tim McHale jumped at the chance to partake in a discussion with Tom. They begin with covering the period from the technocratic early days of online advertising, until today, and the role research expects to play in the future.


Tim: Tom, let's take it from top. What got you interested in the advertising business?

Tom: Interestingly enough, I was in the advertising business for two years before I realized it.

Tim: Oh, really.

Tom: And it's a funny story because I came from a software sales background, but a friend of mine had started at Net Gravity. He was one of the very first sales guys there and he always knew I wanted to get in on an early stage of a company and be part of a fun industry. He said, "Look, this dot com thing is happening and, I've got a job for you. You can run half the United States and you get to work for me." I always had great respect for him from a sales perspective, so it was good fit, and I ended up at Net Gravity as one of the first four or five account managers selling what we called, "Ad Server".

Tim: I remember you came into Blue Marble and pitched us.

Tom: So do I. That was in what, 1998?

Tim: Yes. I remember my team commenting after the meeting was over that we had never seen a presentation as astute and focused as the one you made. We ultimately selected MatchLogic but that was because of P&G.

Tom: Net Gravity ended up getting bought by DoubleClick but the part of the story that's so funny is that I saw myself as a technology sales guy and in the end, I was. It was a mission critical application but all of the sudden, I realized, "Wait a second. I'm talking to Ogilvy & Mather, Young & Rubicam, J. Walter Thompson. I'm having conversations with General Motors and Procter & Gamble and Ford."


Tim: Interesting.

Tom: It was about two years into it when I realized that I had backed into the advertising business. I saw that it was playing an important role in the emergence of this new media platform. Back then I didn't know anymore than the regular person off the street about advertising outdoor, or television, or radio. That was in 1996 so I've been in this industry for 11 years now.

Tim: Wow. I came in from the exact opposite spectrum. I was in media for over 15 years by the time I got a call from a friend of mine at MediaVest who said they're looking for a media director with a traditional background rather than with interactive experience.

Tom: And that's right because as the industry grew up, they realized, "Wait a second. We've got enough of these young kids that are great at this or that," but up until then everyone was scrambling to get people that had technology know-how. Then they realized that they were in the same business as other media and had to begin to act that way.

Tim: Exactly.

Tom: Which brings me to what intrigued me about Dynamic Logic. At that point I'd been in the industry for four years and, while I was working on my MBA, I had seen Nick Nyhan come in and talk to a class that I was taking at NYU. He spoke about getting away from click-through rates, which was a direct response model. I just knew all my clients, both on the media side and the agency side, were desperate for a measurement that could tell them something beyond the behavioral aspects of things.


Tim: That's interesting

Tom: So when I heard Nick's message, it resonated. I think what excited me about Dynamic Logic in the early days is the same kind of thing that attracts people to a lot of jobs. The people, the opportunity itself, and then the industry. It's a question of "If they have the right job opportunities for me given my experience, are they the kind of people I want to work with"? The answer to both of those questions was yes.

Tim: Dynamic Logic was the first. It really legitimized the industry. Let's talk about that in a minute. You said something really interesting a moment ago that you were calling on all the major agencies. You were going out to Detroit dealing with major corporations with Net Gravity. I expect a lot of people felt that new media technologies like Net Gravity made people go cross-eyed. What did it feel like being the groundbreaker? What was it like educating these major companies about a new way of marketing that they had never dreamed of before?

Tom: Well, of course, it was exciting, but back then I was a little too naïve to realize how significant this was. Of course, I enjoyed being in the early stage dot com movement. Like everyone else back then I rode the wave just like a lot of people, but the industry itself was growing up. I didn't realize the macro impact that it was having. I shared the view I had which everyone who was in the business felt. "It's changing the world". But I wasn't really stopping to ask how much it really was.


Tim: I get it.

Tom: You just knew everyone was going online, but I didn't think of it in those terms. Back in the Fall of 1997, I remember Procter & Gamble scheduled a big conference. They invited in Kraft and many other companies, all different types, many who were competing against each other. The reality was, it was almost them saying, "We have no idea what we're doing. Let's all get together and try and figure this out."

Tim: I remember that. It was amazing!

Tom: Things we take for granted today. For instance, observations that behaviors such as frequent flyers or continental.com are not necessarily directly proportionate to people going to PeptoBismol.com. The discussion was incredibly basic on the level that sites as different as these offered entirely different types of information and actionable experience and therefore had to be looked at differently in terms of web development. That's when it became clear that they needed to leverage this new medium with relevant creative. After that, the type of people recruited were people like yourself and people with a creative background who knew how to create relevant messages.

Tim: We so caught up with the technology and, of course, this whole click-through thing. Yet, to Dynamic Logic's credit, I remember after meeting Nick Nyhan that DL was going to help companies educate their staff, mostly of managers with a tech-base. It was DL that began to help change their perspective, to look at the internet's ability to communicate on a 1-to-1 basis.


Tom: It was a little tricky. It was easier said than done. When you talk about Ad Server and Net Gravity, you were asked how the technology worked. But it's different with other media. For instance, you just knew the ad showed up on TV. You didn't ask what a frequency modulation means and what's the difference between 96.7 and 96.9 FM on the dial. You didn't care. You just knew there was a radio show and you wanted your ad to show up there on that show. But everyone was so enthralled with the technology that we were explaining bits and bytes instead of saying, "Look, a million people are going see this ad."

Tim: When I arrived at Blue Marble I could not believe everyone was asking, "What was the process? We've got to create the process," I was thinking, "What do you mean the process? It's about communicating with other people through other media". And then I realized that the expertise I had in marketing was a different language than the people in new media agencies at the time. Dynamic Logic was the most authoritative tool to crystallize the end goal of why the funds advertisers were spending were worth it.

Tom: When we started others were in the game, but they were missing that. They weren't tracking the number of impressions. They were just doing basically a fancy form of digital copy testing. They would show one person an ad and not show it to another. They weren't exposed to it in a natural environment.

Tim: Is Dynamic Logic still independent?

Tom: We're now owned by Millward Brown, and we're part of the WPP family now. It's still run as a wholly-owned subsidiary. It's still its own company.

Tim: So you were part of the group that led the fight to establish credibility in the business and you were on the forefront to help the interactive businesses demonstrate there was something of value. You did all the heavy lifting. Clearly you understood at this point that you had a huge mountain in front of you just because of all the people who were freaking out.


Tom: It was exciting, but I think that in large part, especially early on, people gave us this reputation that we were cheerleading for interactive and they didn't realize that plenty of the studies showed no negative impact. So, as a research company, especially an independent research company, keep in mind that we weren't setting out to be the savior of an industry. We were just trying to make sure that that industry was being given a fair shake and was given the same measurement opportunities that television, print, outdoor, or radio was given.

Tim: I agree.

Tom: But the reason that I find it almost ironic is that we didn't view it entirely as "we're bringing the new media industry forward". In many ways we were bringing it back closer to "old media."

Tim: I never thought of it like that.

Tom: We brought it forward by saying, "Stop coming up with new phrases, new measurements. Let's value an online impression. Let's measure its impact the same way we do on television – brand metrics." And that's why it was almost a simple message. It could be frustrating and I'd go into some meetings and I'd come out thinking, "They didn't get it. Did I not I explain it properly?" Budgets were super tight.


Tim: That's right.

Tom: Back then I'd put a proposal together for $5,000 and it was a major hurdle to get it approved. I mean building a company is fun. It's fun. It's exciting, but there were some people that really were so excited to see us because they didn't realize that this measurement existed. That's what motivated you to say, "Well, if I can work five more hours today that's 20 more people I can reach with a decent message and I might be helping them with their business."

Tim: That's very cool.

Tom: I never felt too much like I was just selling. I always felt like people really needed this and those people that hadn't bought it yet didn't know about it or didn't understand it. I definitely knew that traditional media or traditional large advertisers wanted these measurements, and the industry overall was struggling then. It was 2000, 2001, 2002. People were hard pressed and they were throwing up these little tiles. They would show eight or ten tiles in the upper left corner of the page. We were saying, "We've got to get bolder. We've go to go back to traditional marketing approaches."


Tim: It must have been exhausting at times.

Tom: Personally I was having a blast, Tim. I've got to tell you. The moment I'd step off a plane, I was on the phone. When I'd get to the hotel, I'd be on the email until 2:00 or 3:00 in the morning and I would run from appointment to appointment. We hand-picked every single employee, so that was exciting because you knew you were going to pick that next all-star, because, when you're building a team of 25 people, every one of them has to be an all-star.

Tim: You've had an entrepreneurial experience by being one of the people who really built Dynamic Logic.

Tom: I have great relationships and I've been really thankful for being able to survive. This year, 2007 will be our best year ever. But it's different from being on the forefront. We needed that adrenalin rush because it was so difficult and we were going up against so much.


Tim: Wow.

Tom: Every single deal was so important. Every single client was golden. We hadn't proven ourselves yet, so every single test had to be perfect, which of course was impossible to always deliver. How did we deal with the challenge then? I couldn't have asked for a better boss than Nick Nyhan and I couldn't have asked for a better group of people to work with like Joseph Zahtila and Molly Hislop and Ronit Aviv. I used to tell people, "Look, if I won the lottery, I wouldn't tell a soul because I'd still want to work." Those first three years were magic. They were a really magical time in my life, personally.

Tim: Very nice.

Tom: And every time I'd hire somebody, I'd say, "Enjoy every day because you will never experience anything like this ever again in your life. If you do, you're lucky, but believe me, enjoy every single day that you have here because we're part of something so special it's beyond all of us." And I truly believed that, so it was an exciting, exciting time.

Tim: You're right. What was really interesting about my situation was that before coming into Blue Marble, I had been at my prior company, SFM Media (now MPG) for ten years. From there I moved 3 times in 5 years. From Blue Marble to Agency.com, to i-traffic, to DDB Digital and then to Tribal DDB. Nothing has come close experientially since.


Tom: Wow.

Tim: Every year, I got a better offer to go to another place. The offers were too good to turn down.

Tom: 1998 and 99 were insane. It was insane money back then, too.

Tim: And I was coming in as a senior person because no one had much traditional experience. I created Blue Marble and Agency.com's media department from scratch. Traditional media planning at the offline agencies was a commodity. That business was peeking out, so having the opportunity to jump into new media was important. I was essentially paid to learn a new business. It was fascinating. Simple things that we take for granted now. Like that a media vehicle was also suddenly a direct sales channel. Or that you could capitalize on user action on a daily basis. The first meeting I actually had at Blue Marble was hysterical. I was brought over to Ernst & Young and I was introduced as the interactive media guru. I had been in the interactive business for exactly one day and suddenly I was a guru. I was glad they didn't even know what questions to ask because I wasn't sure I would have known how to answer them.


Tom: No one knew how to answer everything. We were all learning it together and I think that's part of what made it fun. But it was stressful. When I got hired at Dynamic Logic, I set some pretty lofty goals and said, "We're going to go after the top 25 advertisers. We're going to go after the top 25 media agencies." I wasn't going mess around with the small guys, I thought, "I'm going to have to work just as hard to go sell it to these small guys as I am to the big guys. I might as well go sell it to the big guys."

Stay tuned tomorrow for Part 2, Integration and Relevance


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