Part 1.0: Mr. Smith Goes to MadAve!
Dave Smith may not be Jefferson Smith, the character played by Jimmy Stewart in the film "Mr. Smith Goes to Washington," but he's had as much of an impact on the 21st century new media business as Stewart's character did in the 1930's-era United States Senate!
My purpose in sitting down with him was to learn more about his company's knowledge base of "Emerging Technologies," (ET) which he has produced into specific programs around 25 new media platforms. As founder and CEO of Mediasmith, his company offers its clients insight into everything from widgets to mobile; from social media to digital television.
But first, I wanted to learn more about how Dave got from there to here. His story is not unlike Frank Capra's Jefferson Smith. Both tell the story of young men who came east to learn the tools of their trade. In doing so, once they decided to head back west, they brought back the experience of a lifetime!
Tim: How's it going?
Dave: It's going well.
Tim: How was your 2007?
Dave: We had one of our best. I have the tiger by the tail!
Tim: And why is that?
Dave: Well, we've added a variety of talented people to the company. They've really helped us develop a very good program. We now have the bandwidth to reach out and talk to new companies with the kind of things we think they could use.
Tim: How about 2008?
Dave: For 2008, we're looking at high double digit organic growth. In terms of new business, we'll be taking an even more ambitious role in this area. There's a lot of interest out there, particularly because we're an independent company
Tim: Okay, before we get into industry events, tell me a little about your career background; how you got interested in media and the path you took to bring you to form Mediasmith.
Dave: Of course. You know that I worked in media since I got out of college. In fact, I first began working in an ad agency media department while I was in college. It was in a 4A's intern program. The agency was called, Botsford, Constantine and McCarty. Today it's called TBWA/Chiat Day.
Dave: Yes. Over a period of time their name changed from Botsford, Constantine and McCarty to Botsford, Ketchum to Ketchum and then to Chiat Day/Ketchum and then to Chiat Day and then to TBWA/Chiat Day. That was in Seattle where I was going to school. I had the opportunity to work in all of the various areas of the agency. I particularly liked the media area. So I talked my boss into letting me work there in afternoons during my last year of college. It gave me a frame of reference about media that helped me when I came to New York looking for my first job. I joined Benton & Bowles and have been student of media ever since.
Tim: Talk to me about Benton & Bowles. I know it was a breeding ground for much of the structure that was used to evaluate traditional media in the 1960's and 70's. What was it like being there then?
Dave: Benton & Bowles was an incredible place at that time. It's where I feel I got my MBA in media. I worked with people who had an instrumental effect on the business. People like Bern Kanner, Dick Gershon, George Simko, Larry Lamantina and Phil Guarascio. Their standards were incredible. I like to say I worked for them and survived!
Dave: Which not everybody did!! There were many other people who went on to do great things. It was a place where Procter & Gamble and General Foods were among the accounts. It was an agency where the media department was incredibly strong. In those days they hired a fair number of assistants. The pressure to quickly understand and engage in the media planning and buying process was much higher than it was in other shops. If you survived you moved up quickly.
Dave: The people in the media department took a great amount of responsibility for helping to manage the accounts. The reason is that Procter & Gamble and General Foods were very strong in media themselves. They placed a great amount of importance on media research, which was just beginning to establish itself as a reliable tool. They both had internal media operations. It helped us from a connectivity standpoint.
Tim: But now you're headquartered in San Francisco. Why?
Dave: It was first a life choice. I'm originally from the West Coast and I moved back to have a balance in life. In the 1980's we saw the emergence of technology companies in the Bay area. It gave me great incentive to stay in the San Francisco Bay Area. Interesting enough, you could say that a lot of what we are doing right now in the new media business started here.
Tim: Why's that?
Dave: Well, San Francisco and Silicon Valley are where many of the new technologies are abounding. The innovations we see first-hand out here enable us to see the convergence between traditional media and interactive better than from any other geographic area.
Tim: So you took your training and moved out to San Francisco. Was your background helpful in establishing yourself in New York, especially with the emergence of the Internet?
Dave: It was crucial. You could argue New York is where advertising and technology got started. DoubleClick for instance is a New York company, but the idea for DoubleClick came from Dave Carlick out in San Francisco. Mr. Carlick was someone I had helped introduce the Osborne with back in the 1980s. Many people don't know about the Osborne. You could say it was the first hit computer that wasn't an Apple. It preceded the IBM-PC.
Dave: I knew Dave. We worked very well together. He brought me into a company called I/PRO. It stood for 'Internet Profiles." I/PRO was the first to measure the web. We had to establish a new language for media usage. We came up with many of the terms that are commonly used today. Terms like "visitor" and "ad view."
Dave: It was. I had lunch with Dave one time where he talked about his concept of Internet-based advertising sales networks. Nobody had done that. He understood that the web needed to reach mass audiences, so he established the first ad network. In a meeting we had at I/PRO a month or two later, he mapped out on a white board the concept of a 3rd party ad server. And then he went out and merged with Kevin O'Connor's Internet Advertising Network to bring network sales and ad serving together.
Tim: I did not know that.
Dave: We continued to talk. When I saw him I said, "You're pretty far along with this idea. I have a feeling you even know what you're going to call it." He said, "Yes I do. I'm going to name it as if it were a broadcast entity. It's going to be called WCLK as in a TV company name. I asked, "Does the CLK stand for click or Carlick?"
Dave: He said, "That's the question, isn't it?" That's a true story. WCLK became DoubleClick.
Tim: I never heard that story.
Dave: You're not alone. Many of the people at DoubleClick don't know how their company actually developed its name. So WCLK became the name DoubleClick. That's just one example of the kinds of people we had relationships with. It was a very exciting time to be in the Bay Area.
Tim: Right, you just automatically assume it's because of how we use the mouse as in double click.
Dave: There were people like Dave and Kevin always emerging on the Bay area scene, just as there are today. Today, the people creating new companies like Quantcast and ClickFacts and VideoEgg are examples of technologies that we meet at Mediasmith in San Francisco. It's still very much located here. Even though the media business is headquartered in New York and the many tech companies have set up their business in New York, the creation of technology and the companies who fund these companies are on Sandhill Road. They're centered in the Bay area. So this is a great place to be, from the standpoint of seeing very early what will impact our business down the road.
Tim: Yes, but before the emergence of the Internet, being in the media business out in San Francisco versus New York was somewhat of an anomaly. You personally got the training you needed in the media planning and buying business in New York, but no one could ever get or give you that experience here.
Dave: Sure, my time in New York really jump-started my career. I came from the west coast; got my media training and then returned to the west coast. When I returned, the people who I would have ordinarily worked for were now working for me. Coming to New York, working at Benton & Bowles, getting - as I said - my MBA in media, really helped me leapfrog my career ahead.
Tim: Tell me about the name Mediasmith, the origin of the name, what it stands for.
Dave: I was a partner in a small, hot creative agency in the 1970s. I ended up running the place as president. I realized I liked managing a company but I preferred specializing in the media side of the business. It was more interesting and fun than creating a full-service agency or a creative boutique. I had a second generation group of partners who were not as exciting to work with as let's say the first generation group of people. I woke up one morning and the idea of developing a media operation came into my head.
Dave: As you know, I'm a planner by nature. In those days the media agency businesses, Vitt, MBS, ICG, TBS and Western International were primarily just spot TV buyers. Their raison d'tre was, "I can get it for you cheaper than the big guys."
Tim: I remember them well!
Dave: Right. But I'm a planner, or as we're calling it these days, an "Architect of Media." I wanted to start a company that approached it from architectural standpoint versus a contractor standpoint. I did not want to be somebody who was an executor. I had been trained to look at things from a bigger picture. That's what I knew. That was my something I liked to do.
Tim: Makes sense.
Dave: From there, I began thinking about starting my own company. And I learned that the most valuable thing you can do before you actually go into business for yourself is sit down with your attorney and your accountant before you get too far. In fact I would advise people who want to start a company today to get the lawyer and accountant in the same room!
Dave: They each have their checklist. And to some degree they are duplicative. A lot of the work to set up a company can be done by those two specialists. I have always believed in using specialists as a specialist myself. The accountant at that time said, "Dave, what are you going to call it?" I said, "I'm working on the name." He said, "Why don't you use your name?" I said, "I don't want to call it David Smith & Partners. There are too many David Smiths out there." He said, "You can use your name. What does your name mean?" I said, David means "Beloved son in Hebrew. There are many people named David. I don't think that's going to fly." And he said, "Okay, but Smith. What is the origin of the name Smith? There a blacksmith. There's goldsmith. Why don't you call it, "Mediasmith?" My eyes opened wide and asked him, "Can I use your phone?"
Dave: He said, "Sure." Tim, you see I had a creative guy working on the name; a good friend of mine. His name is Dennis Thompson. Dennis wasn't available. So I said to his assistant, "That's alright. Just tell him Mediasmith called."
Tim: That's a great story.
Dave: I knew that once he heard the name he would know should stop working on the name.
Tim: Very funny!
Dave: Later one, after we opened our doors, Adweek referred to us as, "The First Media Consultants in the U.S." They gave us credit for being the first to rise up and out from the media planning discipline.
Tim: That brings us to the next topic. Some of our readers are not familiar with the media landscape; that is the media agency landscape. Could you give us how you see it, and where Mediasmith's position is within it?
Dave: For "the unwashed" as it were, agencies are really divided up into three crucial areas. There are the creative people. A lot of those are writers, art directors and producers. Actually, it's not necessary to be any of the above these days today in order to be a creative director. You just have to have great ideas. Then there are the folks that you see in the movies such as in "The Man in the Grey Flannel Suit." The account guys. Interestingly, in the movies, they are also the guys who come up with the ideas. It doesn't really work that way, but it is simpler to explain it like that. Then there are the people in the media department who figure out where the advertising should run. That's the planning process. And once there's an agreement on the plan, the media team goes out and negotiates the best deal with the media vendors which they feel the advertising should run on.
Dave: However, over the last 25 years, there's been a splitting off of the media department into free-standing companies. And this split, or unbundling as it's called, came to fore in the early 1990's. And it's the reason for the rise of the big media operations within the holding companies and the independents like Carat and Horizon who do it so well.
Dave: Well, we did this outside of San Francisco. The one downside about offering this service being headquartered in San Francisco is that the big business is in New York. We're smaller than a lot of the other media agencies around. But I had made a life choice relative to not wanting to live in New York. I felt San Francisco would be a better place to raise a family than in New York.
Tim: Today, do you come up against the other media agencies in business pitches?
Dave: Yes, we do. Our competitive set is different in every pitch. Strangely enough, San Francisco is one of the last bastions of the full-service agency. Sometimes we come up against a full-service agency. In those cases, we'll partner with a relevant creative agency we work well with. There are a number of them. Sometimes we're in a media-only pitch, where we'll come up against small-sized media operations or mid-sized media operations. There are also situations where we go head to head with the big digital shops. We won an assignment from a major national cable channel last year. Before we were selected they did a year of testing with the leading digital shops. We emerged victorious. We're not nervous about going up against the big guys. We won a major account in the last 12 months which is a leader in its category. It's a global charity-based organization, World Vision.
Tim: I know World Vision very well. That's outstanding.
Dave: Yes. It's an incredible client to work for. Here are some of the reasons why. They are the biggest movers of food in Africa. They drill more water wells in villages than anybody in Africa. They have a long history and knowledge of the issues in that part of the world with Villages, families and children of they need most in terms of support.
Dave: They've recently shipped food and blankets to churches in Southern California in light of all the devastation caused by the brush fires. They're on the ground first when there's ever an emergency and many times are the last ones out.
Tim: From a marketing standpoint, is one of your assignments to help people understand how they are different from organizations such as "The Red Cross?"
Dave: No, we don't differentiate. That's not our job. Our job is to help them with their outreach programs via the net. It's especially effective by using search. People go online and see how they can help. We get the top listings and rankings in situations like, "Hurricane Dean is approaching. Here's how you can help the villages in Mexico." We make sure they have that top position and direct people to them who want to contribute and help out.
Tim: That's great.
Dave: It's a wonderful organization to work with. The interesting thing about this is that their DRTV company is a division of one of the major ad agency holding companies, who are very good at keeping all the media assignments within their own network of service providers. We went up against three or four of that holding company's digital agencies. You know who they are. We're very proud of that.