MEDIA's Agency of the Year 2010: Independent Media Services: TargetCast

Old school collaboration gets cool

1800flowersTargetCast tcm entered 2010 as something of an anomaly: an old-school independent media services agency. The kind that used to be quite common in the advertising industry during the '60s, '70s, '80s and early '90s, before the mega agency holding companies began unbundling their media services into free-standing units, which in turn began acquiring and consolidating the best of the media independents. The old-school positioning was by design, because TargetCast founders Steve Farella and Audrey Siegel - renegades from big Madison Avenue shops - saw it as a unique opportunity whose time had come - again.

"It was an old playbook," Farella acknowledges, one he watched work successfully time and time again during his career at mainstream Madison Avenue shops. The original era of seminal independents like SFM Media and Dennis Holt's Western International Media, which were ultimately sold to the big holding companies (SFM became part of what is now Havas' MPG, while Western is part of the rootstock of Interpublic's Initiative), transitioned into a period marked by entrepreneurs like the late Gene DeWitt who founded an agency that is now part of Publicis' Optimedia and Richard Kostyra who founded one that was absorbed into Interpublic.

"We had to create something that hadn't been done in a long time: the first successfully launched media agency in 15 years," Farella boasts. Not surprisingly, there is a fair amount of Madison Avenue-esque hype in that claim, as independent media shops of varying degrees of success are launched all the time, especially digitally focused ones. And last year, MEDIA recognized Dennis Holt's second act, U.S. International Media, as its independent media services agency of the year, based largely on his tenacity and the fact that he has stuck with a practice of bypassing third-party TV- and radio-station sales reps to get his clients better deals, effectively busting the reps' stranglehold on the business.

But there is no denying that Farella and Siegel have done, in eight years, one of the best jobs of building an organization that is most akin to the classic independents of Madison Avenue lore; you could almost see how that "playbook" would ultimately play out: TargetCast would continue to grow by winning business from next-tier "challenger brand" marketers who weren't a good fit for the agency holding companies until it and its client roster grew to a point where one of the majors ultimately acquired it.

And it surely has been on that trajectory, growing between 15 to 20 percent every year since it launched, including the industry's black recessionary hole of 2009. With more than 90 people, TargetCast is now hovering around a half-billion dollars in media billings and has been picking up strong, performance-driven clients like, 1-800-Flowers and New York Life.

But just as TargetCast entered 2010, its story took a 360-degree turn that effectively changed its playbook. It acquired Triumph360, a spunky, pure-play digital shop that was founded by an old Madison Avenue colleague of Farella's, Steve Minichini. Sure, other "traditional" media services shops have acquired and integrated digital agencies to accelerate their expansion into new media and marketing services, but the effect that Triumph360 has had on TargetCast has reshaped the core thinking of TargetCast in a way that has altered its playbook, doing it in ways that even Farella may not fully understand.

Minichini may have his roots in traditional Madison Avenue agencies, but he talks, thinks and acts like a digital native, speaking about advertising and media services in what could well be digital code. He looks at all advertising and media, not just digital, the way a Web development shop might, talking about "design," "interface," "information architecture" and "CMS," or content management systems, which are the core elements of a successful Web publishing or app development enterprise. While that's nothing new, the way Minichini has been fusing that logic into TargetCast's traditional systems may well be and to see Minichini presenting the agency's case alongside Farella and Siegel is like watching an organization with a foot planted firmly in two different worlds that are actually coming together.

Siegel says the change is consistent with TargetCast's core mission of "innovation," and the fact that it will embrace and utilize whatever tools give its clients a competitive edge in the media marketplace. The first round of innovations has dealt primarily with developing better strategies, insights and planning and buying systems to leverage traditional media more effectively - superlative communications planning systems, research and analytics, and, of course, strong planners and buyers who can execute on them.

"What makes us a different kind of agency," Siegel says, "is that we don't just talk about understanding the consumer's purchase path and what their aperture moments are. We can also deliver the right messaging for our clients at the right moments." Siegel says this approach takes media planning beyond the conventional notion of "targeting" and creates something she calls "sequential targeting," or a dynamic living process where the media plan literally evolves with the consumers it is trying to reach and influence.

Most agencies say that, or something very much like it, of course, but the TargetCast team is premised on it and everything it does is for that end goal. And that's where the acquisition of Target360 starts to get interesting.

Siegel notes that TargetCast had already been building a pretty strong organic digital practice within its original holistic team, as part of the normal evolution of media planning and buying and the fact that digital is becoming more of the general plan. But she and Farella realized they also needed to accelerate their digital progression and that the only way to do that would be a mashup with a digital native organization like Triumph360.

The result is that Minichini's thinking and technological savvy is infusing every facet of TargetCast's processes and services and he's got a toolbox full of proprietary systems and dashboards to prove it. Importantly, they are not all simply for planning, buying and managing digital media, but for offline media as well.

One of them, dubbed Hotspots, is a proprietary media-trading platform that Minichini's team built to improve the workflow between TargetCast's traditional media planners and buyers, and the media vendors - typically TV- and radio-station sales people - around a crucial element for the agency's clients: "opportunistic inventory."

Hotspots serves as an online clearinghouse where reps can post offers for the kind of remnant, last-minute inventory that typically consumes hours of phone call time - often at the end of a business day or just before the weekend when a planner's mind or a client's approval may not be most available. When a vendor posts an offer in the Hotspots system, it automatically and seamlessly pings the appropriate planners and account groups via a cloud-like interface, alerting them on their workstations, as well as their mobile devices. Like other in-house, Web-based agency trading systems, Hotspots is capable of processing digital media buys, but its real power is in its ability to facilitate the kind of offline back-and-forth haggling that can eat up time, which isn't a good thing when you're working with valuable, but perishable inventory like last-minute TV or radio time.

Minichini notes that the system is completely transparent and doesn't have any of the negative auction-based functions that media vendors fear can commoditize their inventory. It's also capable of creating so-called "private markets" between TargetCast and media suppliers for specific campaigns or clients.

Importantly, he says, the system does not replace human judgment calls, but allows people on both sides of the table to make, accept or reject offers more efficiently and expediently.

"We love technology and we're pushing and developing our own technologies to make the process better," notes Farella, adding, "but at the same time, technology cannot replace the thinking of smart people who understand the media marketplace."

Some organizations get "technology happy," he says, "and they forget that industry history with a brand and the marketplace. What we're doing is infusing technology to make that work better and faster than we could before."

That relates to online media as well as offline media. Minichini has built five proprietary tools, including Hotspots, which enable the agencies' planners and buyers to move quicker, smarter and more effectively on behalf of their clients' campaign strategies. Increasingly, that goes beyond conventional media services to include creative. As part of its acquisition of Triumph360, TargetCast also integrated a creative team. The team is focused primarily on digital media campaigns, which is the norm in the interactive agency business; but over time, those creatives and the systems they use could well impact the ability to adapt the creative messaging of offline media as well.

A good example of this is TargetCast DCV, which stands for "dynamic creative versioning." The Web-based system enables TargetCast planners, buyers and creative to instantaneously modify content on-the-fly, across some or all of the places they are running online at any given moment.

As an example, Minichini mentions World Vision, an aid organization that literally has millions of online display ads running on a continuous basis, much of it donated inventory, but all of it mission-critical for some humanitarian relief effort aimed at helping children in need in some part of the world.

If a natural disaster develops, say an earthquake or a tsunami, the TargetCast team can instantaneously update the headline and copy of World Vision's banner ads automatically via a simple text message from their mobile phones.

"They love this tool," Minichini says of clients like World Vision, "and there is no other technology like it in the market. It allows us to immediately update the text in an ad without pulling the ad down."

Minichini says the DCV system can do that, because it "sits on top of an ad server," acting as a traffic cop and ensuring that the right copy is served, preventing older copy from appearing on Web sites and Web users' browsers.

"Within 15 seconds, across millions and millions of ads, we can change the message and make it live," says Minichini. "This to us, and to [our clients], is a safety net that goes beyond their expectations."

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