Meet Geoff at the 41st FIPP World Congress, 9-11 October in London, where he will speak more about eMarketer’s subscription-based business model.
• For more about the Congress and to book your tickets, click here.
Tell us about your early career and how you came to eMarketer…
I have had three careers in my life. The first, believe it or not, was as a professional magician. I did close-up magic in restaurants and clubs with a little stage magic thrown in as well. I became a professional magician at the age of 15, which I think showed my entrepreneurial bug even back then. From there, I went to NYU, where I majored in marketing and management and, as a result of that, I went into my second career – advertising. To me, it was the best confluence of the creative side of me. It wasn’t as much about data back then. There was some data, looking at market research, but it was more creative. So I spent 17 years working at very large New York shops – including Ogilvy & Mather and TBWA. But I got to a point where I felt that although the career worked well for me, it wasn’t a perfect fit. So, I transitioned to eMarketer because I wanted to get out of the big shops – the big bureaucratic corporate holding company shops – and try working for a smaller, boutique advertising agency. eMarketer was a small 15, 16 person shop and it had very similar values to me. This was around the mid ‘90s, and there was a great deal of excitement. This was the time when the internet was just becoming a viably commercial vehicle, and all of our clients were demanding that we create websites. They didn’t know why they wanted websites, they just saw their competitors doing it so they wanted a website themselves – much like everybody needing an app today.
How did that lead to the eMarketer we know today?
So… the owner of the advertising agency, essentially my boss, had this brilliant idea that we create a business portal for all business-people who wanted to understand where this whole internet thing was going (and, I have to say, I had the unbelievable vision to say that I wasn’t sure this internet thing was going anywhere…!)
From there, I suggested I do some research and write about it. I was going through masses of information – news releases, press releases, studies from Gartner Group, Forrester, Jupiter. There was just this huge outpouring of information and data from research firms and trade associations. Everybody was throwing out information. And there were a lot of conflicting numbers.
I started writing these articles that looked at the different points of view, talking about the forecasts for how fast ecommerce was going to grow or what percent of sales were going online, or how much was going to be spent on digital advertising. As I was writing these articles, we noticed that we were getting a tonne of traffic. People were interested in somebody critically analysing all the different research sources –not just the numerical forecasts, but also the different opinions about how marketing as we know it was going to be upended, or how eCommerce was a whole different way of doing business.
At that point, we weren’t making any money from these stories, we were just getting a lot of traffic. So my boss suggested that I write a market research report. So, I holed myself up in my flat and worked very, very long hours and cranked out this first eMarketer report that essentially has all the elements of an eMarketer report today –third-party data from multiple sources, analysis of that data and what the implications were.
When we put that report up we didn’t know what to charge for it, so we threw up a price tag of US$295 and it was flying off the shelf. Of course it was a PDF file, so the cost to us from there was marginal.
From there, we started hiring other people and all of a sudden we had entire teams to do the research. We then developed a forecasting team and a team to interview people, so we had qualitative information mixed with the quantitative – and it just grew into a business all based on the process of aggregating, filtering, organising and analysing information from multiple sources. we have a philosophy that our clients buy into, which is that if you’re trying to understand what the truth is, or get a better fix on where things are going, it’s better to look at multiple sources and have a critical examination of those multiple sources than any one single source. So it doesn’t denigrate any single source it just means that you get a better perspective when you look at multiple sources.
***Subscribe to our free, weekly FIPP World newsletter to get stories like these delivered to you via email. Click here to sign up***
From that point, you had to steer the business through the early 2000s, the most difficult climate, with downturns and uncertainty. Can you give me a sense of how you steered the business through that period?
I’m very lucky to have had two partners on the business. The first partner, who I’ve alluded to, was the gentleman who came up with the idea. The other, Terry Chabrowe, who is now CEO, had the absolute complementary skillsets to me in that he’s extremely process oriented, he’s very operationally gifted, he’s very introspective and he’s very quiet – he is not a public figure. I’m a good leader but not a good manager, and so the combination of the two of us gave us a good focus on where the business should be going and a clear mission – to help businesses navigate through this constantly changing, evolving world of digital.
I will say that, in 2001, at the beginning of the market crash, when the internet crashed, we hung on with our fingernails – because the advertising revenue that we had started to make just went to hell in a handbasket. The report sales all of a sudden dropped off a cliff, because anybody who had been reading those reports before then saw what happened with the Stock Market and said, ‘oh no, that internet thing was a fad, I’m not touching it’.
But my partner was really good at managing the books and making sure that we were holding up our accounts as much as we could – holding off as long as we could to pay the bills so that we could make the pay cheques for our employees.
My partner and I were shelving our pay cheques. And for a year or so, all of the expenses of my travelling just went on my personal credit card. So it was a very challenging time. Having come out of that, having just kind of squeaked by for a few years, we started building up the revenues and therefore we became profitable again – so by the time we got to the great recession in 2008, that was like a walk in the park. We’d already been to hell and back and we’ve never had to make layoffs since September 11, 2001.
Can you share some specifics about market trends you saw during those years and how your work changed?
You know, it’s funny because we got worried around 2005/06, because we felt like there was almost a kind of lull in terms of the drive towards the internet. We’d gone off the cliff with the dotcom bust and then there had been this slow evolution forward. Our name was eMarketer, so it was very much about digital, and we started to worry that people would feel that digital had run its course and that while everybody was using digital, it wasn’t changing anything anymore. We were worried we were going to be in a situation where nobody cared anymore because everybody kind of knew what they were doing. Of course, that was absolutely what did not happen and now we’re starting to see disruption on a much greater scale – as the car manufacturers are not just competing with each other but they’re competing with Tesla, they’re competing with Uber and Lyft, they’re competing with Waymo, which is the division of Google that’s developing driverless cars. And I can tell you that as an example, BMW or any other clients we meet with, are freaking out and realising that they can’t do this on their own. Whereas German car manufacturers are really good at engineering, they don’t really understand digital, certainly not at the engineering level, so they need to partner with companies that understand digital. Media and marketing was probably impacted very early on and very heavily, because when you think about what media marketing is, it’s images or photos, it’s text, it’s numbers, it’s video, it’s things that can now be reduced to zeroes and ones. So as an industry that was disrupted early and hard, we are in a position to help other industries as they are disrupted now.
The business was obviously acquired by Axel Springer in June 2016. So where does the business go from here?
Well, I’m no longer losing sleep at night due to concerns that things aren’t changing, which would remove the need for us as a business. Every time you turn around there’s a new trend sneaking around the corner that grabs you and demands that you pay attention to it. At the moment, those things are virtual reality, augmented reality, artificial intelligence. We’re now writing reports about those because they are new and people need to understand them and put them into perspective. The interesting thing is that they’re also tools that eMarketer can use in terms of how we render information or display information. So, we’re spending a lot of time with product development, trying to think of how we can arrange our forecasts so that people who have a subscription can go in and call up specific charts or have charts essentially custom-built before their eyes – by selecting the metrics they want and the countries they’re interested in.
So there are all kinds of things that we can do to use the technology that we write about in our own reports. Creating video segments is an example of another way young people might want to consume our reports. So there are lots of exciting opportunities from a product standpoint. One of the reasons we chose Axel Springer is that they’re very strong in Germany and Western Europe, and that’s where we’re trying to grow our business. We’re strong in the US, strong in Canada, strong in the UK, but then there’s the rest of Western Europe. Asia is also a territory we haven’t begun to really tackle yet. So there are lots and lots of white space ahead of us.
And do you see yourselves continuing to be a subscription model moving forward?
About 80 per cent of our business is from companies paying for the information increasingly through an eMarketer PRO account, which gives open access to everyone within an organisation. That’s important because the internet permeates every aspect of a business now, from supply chain to advertising and marketing, to packaging. CRM just touches everything. So 80 per cent is subscription and about 15-20 per cent is advertising revenue from our free newsletter and other free products that we put out there. It’s a kind of freemium model where we create huge awareness on a worldwide basis and then monetise that free information through advertising.
Join Geoff, 80 speakers and 700-800 international delegates at the 41st FIPP World Congress, 9-11 October in London.
• For more about the Congress and to book your tickets, click here.
More like this