ADOTAS EXCLUSIVE — Nurun is an independent global interactive agency founded in 1995 – practically the Paleolithic Era in the online ad world. ADOTAS sat down with Nurun’s president of North America, Steve Carbone, to see how Nurun has managed to stayed spry, what it still needs to work on — and what Carbone predicts will happen next for Nurun and the industry at large.
ADOTAS: Can you give me a brief outline of what Nurun does and how its mission has changed since it launched?
STEVE CARBONE: Nurun launched in Canada (Montreal) in 1995 as an information technology solutions provider. Through several acquisitions, including Ant Farm Interactive in the United States; Crazy Labs in Madrid, Spain; and China Interactive in China; Nurun has evolved into a global interactive marketing agency with more than 800 employees world-wide, specializing in digital strategies, account service, creativity, online media buying and planning, and search engine marketing. It continues to provide the backend technology solutions, while at the same time, providing strategic recommendations, and the front-end creative solutions for some of the top marketers around the world.
ADOTAS: Steve, can you tell me a little bit about your background and how it’s prepared you to lead the North American office and execute its vision and mission?
STEVE CARBONE: I’m an entrepreneur at heart; I built my first business in college, electronic typesetting for local print shops, taking advantage of new technologies replacing traditional typesetting techniques. Although I spent the majority of my career to date working for a large global ad agency, I never strayed far from my entrepreneurial roots. In the early 1990s, I found the Internet, and with some friends created an online Bulletin Board service. I was fascinated with the behavioral usage online, how communities formed around topics of interest, how there was a propensity to transact, and invite action oriented activity, and especially how the users actions on the board was measured and tracked. Being a direct marketer at heart, this inspired me to write my next business plan around online direct marketing.
In 1994, while working for Grey, my business plan turned into a company called Grey E Marketing, an online transactional-focused digital agency. We built the first lead generation site for both Quick & Reilly Investments, and the Direct Marketing Association. We also had the first online Web application to apply for a credit card through Chase Manhattan Bank. With a great team behind me, we successfully navigated the E Marketing agency through the highs and lows of the Dot Com era, and while the bubble was bursting in early-2000’s, we transformed E Marketing into a fully integrated online/offline agency, whereas traditional marketing channels would drive to a Web-based response mechanism, and online sales. Many traditional catalogers came to us to build their online store and to be their agency of record to drive marketing online via display advertising, and acquisition/CRM email programs. Over the past 10 years, I refined our vision, lead our innovation, pitched and won large client business, and built offices around the United States, managing through local and regional challenges. I also always remained hands on leading my teams in support of our largest clients’ business challenges, driving strategies, and delivering top-notch client service.
With that, I believe my prior experience in founding, and running a large national digital agency, as well as my ability to see new opportunities in the marketplace, and to understand how to capitalize on them has prepared me for this challenge.
ADOTAS: How have you personally seen the advertising industry change? Do you think it’s more or less creative now than it was when you started and why?
STEVE CARBONE: The speed of change, and our conventional process to producing advertising has accelerated ten fold from when I first got into the business. The Internet, and other new technologies have redefined our business. Our old school methods of developing solutions no longer work, online budgets, while still growing, has slowed; measuring response/ROI, and innovation is key.
With regard to creative, the creative of the early-1990s seemed to be one-dimensional. You put an ad or TV spot out there, the consumer looked at it and it registered or it didn’t. The competition for the hearts and minds of consumers stayed within the big brands courtesy of budgets and the media channels available at the time. I believe the creative was a bit more structured. “Out-of-the -box” thinking felt restricted to techniques and tactics used to capture the consumer’s attention.
Today creativity has been up-leveled. The core idea has to work around a multi-channel dialogue that the brand is having with its audience. This becomes a challenge for the creative department in the 21st Century. The core concept has to extend way beyond a clever TV spot. The team is also considering what happens to the idea once it hits the Web or a mobile device. These new considerations can provide hurdles that inspire new ideas and hopefully better creative.
Additionally, today’s creatives have to compete with a force like never before; everyday people are creating ads. In a world of social marketing, user generated content makes everyone a creative. You Tube videos, and online video have become global campaigns, and a top rated Super Bowl spot was born from an online contest. Today’s creative must be all of these things, while still giving consumers what they want in a fragmented media space where they are choosing what media they are exposed to, when, and how much.
The good news is that creativity in general is alive and well in our industry, and today’s consumers will demand that it stay that way.
ADOTAS: What do you think your team’s strengths and weaknesses are … and where do you hope to take Nurun in 2008?
STEVE CARBONE: We have an amazing Media, Search, and Campaign analytics capability, some of the best talents I have experienced in the industry. Their strengths have enabled us to branch out and build strong differentiating E Marketing capabilities across all of our offices. We do this so that our experts in their respective practice areas can not only showcase their abilities to clients, but also bring best practices to different regions of the world. This capability is the foundation of all digital agencies, and it has lead us into Mobile, Gaming, and other innovated technology solutions for our clients. I think our weakness has been in our ability to get the word out in the marketplace of the type of company we are and capabilities we have. Our current clients know us, but outside our existing client base – especially in the United States – there is a lack of awareness about Nurun.
Where I hope to take Nurun in 2008, and where I see us in a position for growth and opportunity is in growing our presence in North America, and mainly the United States. We work with a number of world-class clients – from L’Oreal Paris to Louis Vuitton to Unilever. My hope is that we can expand that global footprint and build the same kind of reputation here in the United States that we’ve achieved in other parts of the world.
ADOTAS: Do you have counterparts in other countries and if so, do you work together on tactical and strategic business decisions or do you work separately? Or does the company end up settling on the best advertising strategy after the various teams go through a period of trial and error?
STEVE CARBONE: Yes, I have counterparts that lead both Europe and Asia who I work with both strategically as well as tactical for execution support. Our regional heads all share a seat on the executive leadership team of Nurun, our executive management team is very close, we meet at minimum once every month, and very often we speak regularly in order to either share learnings, help the other solve a problem, support a new business initiative, and work together on resolving a global client deliverable. I have worked for large advertising global networks in the past, and can easily say that at Nurun, the network is not just offices in an international region I can tap into, it is more a close relationship with a peer who is as fully vested in the success of my region as I am in his. That makes for a very strong global team that clients certainly benefit from.
ADOTAS: Nurun has a global presence with 12 offices around the world. Customs and allegiances to various technologies can be very different city to city, never mind country to country. Do you find that what you learn about, say, viral advertising in North America is applicable to Europe and Asia? Has anything ever been lost in translation?
STEVE CARBONE: All learning is valuable, how we process that intelligence by region becomes the value add. It is very important and worthwhile for us to share different technology and marketing solutions by region. However, one must know that, for example, what is successful about mobile marketing in China is not currently applicable in North America. But that is where our advantage lies, having the global presence gives us an ability to know what will work where, so when we develop a global campaign we are able to leverage the applicable technology, or marketing application that best suits each region we will go in. At no time would we ever take a successful campaign that ran in one region and think it could easily translate to another, but we would adapt the success of each region and integrate them together in order to maximize the best for the client in each country we would market them in.
ADOTAS: Nurun is making a push in North America – are there any advertising sectors you’re concentrating on?
STEVE CARBONE: With the current shift away from Portals as display ad destination sites, and into vertical properties for more industry-targeted media, the staples of our business will remain search, as well as targeted vertical display ads. Now, more than ever, we are leveraging the vast array of ways to utilize advanced targeting – whether that’s through behavioral, demographic, content, channel, keyword, geographic, or creative/site retargeting. All of this is key to targeting media more efficiently and creating higher consumer response and actions.
There are also strong signs of growth in spending on entertainment Web sites, gaming, video sharing, and of course, social networking. Our focus for at least the next 12 months will remain across these areas.
Also, like everyone else we will obviously increase our involvement in SMS and mobile marketing, especially with the launch of 3G in the states this year. Unlike Asia, where mobile is already more mature, in the United States this is still an emerging, and yet to be determined, channel. The launch of the iPhone has done a lot for user-friendly marketing. Nokia has made some strong investments in both technology, and acquisitions of navigational devices that clearly puts them in the opportune space of targeting and tracking consumers.
Additionally, we will look closely at online video, and digital television. All the major networks have now, or will soon have, a digital distribution device for free programming, and as we all know online video production firms continue to launch. We are looking closely at understanding this sector, its advertising acceptance, and then developing the models for these channels now.
ADOTAS: What do you think the strongest and weakest sector (i.e. display/video/mobile) will be for 2008 and do you think that trend will continue?
STEVE CARBONE: Of all the sectors, online video appears to hold the greatest promise for this year and next year. It offers the ultimate high engagement factor with consumers.
Some may argue that video is just a source of entertainment and that it will be difficult for advertisers to find a place for themselves. The industry is still trying to work out the best online video advertising format but early signs indicate consumers are receptive to online video advertising.
This doesn’t mean that mobile marketing isn’t an emerging segment. Advertisers are putting large amounts of money into mobile ad spending. In fact, they are putting slightly more into mobile ad spending in 2008 then online video advertising.
However, the reason it isn’t the top choice is that 3G technology in the United States isn’t there yet to support this growing segment. T-Mobile recently launched 3G in New York City, and AT&T is planning on rolling out 3G but for the most part the network pales in comparison to Europe and Asia where mobile marketing has already taken off.
Mobile marketing is making great strides, but there are also disagreements among the carriers who want to own the relationship and the numerous content, application providers and marketers who want access to those mobile customers.
In terms of the weakest sector, it would have to be widgets. The very idea of a widget is exciting to marketers. The ability to be of use/service to the consumer and become part of their Internet experience is nirvana for many. Some see so much potential in widgets; they believe widgets will actually replace banner ads.
Since Facebook opened its doors to third-party applications in May 2007, nearly 15,000 widgets have been developed. That’s one of the issues with widgets in general. Even today, there are so many to choose from how does one get the consumer’s attention? Weather widgets have become popular and offer a practical use and provide the right context for a brand like the Weather Channel. It makes sense for a weather widget to come from the Weather Channel.
This example highlights marketing’s current dilemma. Connecting the widget to a consumer need while still connecting it naturally to the brand. That’s where a lot more thought and attention needs to be given. Widgets will continue to grow, but this growth needs to be driven by intelligence.
ADOTAS: So many companies are struggling with monetizing social networks; video and online games right now. What do you think the industry is doing wrong?
STEVE CARBONE: I’m not sure anyone is doing anything wrong, they just haven’t changed their paradigm of the advertising model for these mediums.
In a Web 1.0 world you build a site, post content in order to attract visitors, and then sell advertising. In a Web 2.0 world, you build a site, users generate most of the content, focus of user is more on specific content and their interactivity with it, and this drives away the attention from the ads. This issue, as well as privacy concerns of users who participate in a social networking environment causes numerous obstacles for marketers.
The question is whether the current ad networks can figure out a way to leverage the social community sites for what they bring in high content value and targeting, whereas in the ad network the users are far more acceptable in viewing the advertising.
Also, social network site owners need to start looking beyond the ad model to monetize their sites. Is there room for paid services? How about a subscription model? Loyalty type programs, or delivering perks to users for providing content and information? Many offline products that reached a commodity status like credit cards, and airline travel reward their users with points, points translate into other monetized services via co-marketing and joint partnerships, etc.
On the consumer side, we have to ask ourselves: How are we going to monetize a social network so that consumers get real value from it? What new things can social networks create that leverage user generated content? Whatever the idea, it needs work and blend with the consumer and give people a place where they can interact with one another.
Aside from the traditional social networks like MySpace and Facebook, large brands getting into the social marketing arena aren’t looking for a monetizing strategy; they opt for a more traditional brand advertising approach of assessing its worth to their brand. The real value in social marketing is in building and enhancing brand awareness, having a product out there and open to customers gives credibility, and allows for the brand to honestly address issues and ask for feedback. If done correctly, the brand value built, the trust created, and the loyalty extended to consumers via your social network is a high valued – albeit not directly measurable – success metric, just like brand advertising.
With video and online games, there are actually a lot of companies doing it right and doing it well, from automakers to music studios. The key is knowing who your target audience is and selecting the games that fit that target demographic. You have to do your homework, though; companies that jump into in-game advertising without a strong strategy will be very disappointed.
ADOTAS: How does Nurun really separate itself from the pack?
STEVE CARBONE: By being on the forefront of new online marketing sectors, and staying true to our roots as a pure play digital agency that is results driven, and delivers ROI to our clients. Very few agencies would call themselves digital only; almost all claim to do it all. We focus our 800 people around the world on being the best digital marketers we can be. Additionally, Nurun’s core mission has always been about the advancement of innovative creative ideas through digital channels. We’ve managed to be considered among the best in Europe and Asia following through on this mission. Lastly, being independent, and not a part of a major advertising holding company allows us a lot of opportunity to partner with clients without competitive disadvantages, and who need budget flexibility, as unlike these holding company models we are not driven by profit margins or stock price, but by client service and their results.