Scott Paternoster, CEO of Chief Media, Talks About the History of Chief Media and What Makes Us Different
Video Transcript (Edited):
What is Chief Media?
Chief Media is a media buying and management organization. We buy direct response media in Print, TV, Radio, and Online. We offer technology that allows our customers to track their online visits and orders back to traditional media using our in-house proprietary technology that tracks backend transaction reporting and ties it to frontend media. We’ve been around for 11-years now and we’re headquartered in New York City.
Starting Chief Media
In my previous life, I used to sell television advertising. And I used to sell mostly independent and Fox television stations across the country. And I used to sell to direct response agencies in the late 80’s and early 90’s. After I did that for a while, and moved up through management, I left and started a company called Click Now Sales, which was one of the first online media direct response sales companies in the country. That company was sold to a publicly traded company called 24/7 Media. Again, very direct response and technology oriented. And I helped grow that into a company with 25 offices internationally. We had a big focus on direct response. After that, my tenure was over at 24/7 Media and we started Chief Media which is a combination of traditional media and online technology in the direct response space.
What Makes Chief Media Different?
Technology really is the differentiating factor. We’re a very hands on agency. When you talk to us about what we do–you know a lot of agencies in this business buy media very well–we get very involved in a client’s campaign. We break down every single campaign as if we were the marketer. Running P&L’s and projections and financials and cash flows, coming up with offers and different configurations that may get greater profit out of a campaign. Whereas a marketer may have not known that before. We draw from all of our experience, amongst all of our clients, over hundreds of millions of dollars of media spent over the years we’ve been in business, and impart that knowledge on our clients to ultimately generate a greater more efficient ROI for them. On top of that, we layer on all of our technology that we’ve built out. And it’s really unique.
Why DR Technology Matters
The industry, in our mind, is becoming tougher and tougher to make a profit in, from a direct response stand-point, so technology is really needed now. And this system that we’ve tied together, called Continuum, which is a system that tracks all the orders and transactions that happen after the initial sale back to the original media that generated the sale, so you can see a true end-to-end view of the lifetime value of the customer that you are acquiring, is unique in our industry. It’s never been done before. And it allows you to optimize and buy media more efficiently to hit the customers that really make a difference to you. Not the ones who are generating the best cost-per-calls, but the ones who are generating the greatest relationship with you overtime. That’s what makes us different.
Behind Chief Media’s Success
The people that we have at our company is what makes me successful. They really are the greatest. They have been with us forever. We don’t have a high amount of turn over. They all act like they own the company and they take it very seriously. Everyone participates in the success or failure of our company on a month-to-month basis, so everyone is incentivized to make it work. And that really, to me, is the differentiating factor. The areas that we go in, the new technology initiatives that we have, everyone has a say in executing on those plans and that’s what makes us successful. It really is.
The Roots of Chief Media
When we first started the company, one of our biggest clients was a marketer that was new to the industry, and they had a very, very successful fitness product that we were buying the media for. The company, not knowing the business all that well, didn’t understand the cash flows and capital needs, especially when you have a very successful product, so they got into a little bit of trouble. Being a media buying agency, you are buying millions of dollars of media per week that clients should pay you for when the bill arrives. Sometimes, in our industry, that doesn’t always happen. When you have an inexperienced marketer, they can run into issues with inventory, etc. This inexperienced marketer got a little behind in inventory and ended up having a situation that turned into a lot of unfulfilled orders and ultimately returns that drove them into a bankruptcy situation.
Learning DR Inside and Out
We, being a company that was owed a lot of money, were one of what was called an unsecured creditor during the bankruptcy. We became a marketer for the product because we decided that in order to get ourselves paid back, in order to get the other vendors who were not paid back: fulfillment houses, television stations, call centers, etc, we would have to run the campaign at a level that we felt was going to be more efficient than what was happening prior. So, we actually became a marketer by default because we had to pay ourselves back. And it was a substantial amount of money. We got stations paid back, fulfillment houses paid back, call centers paid back, we sourced new product, we edited the show, understood direct response inside-in-out, to a level that we really never anticipated figuring out when it comes to direct response, but that’s what drives the way we do business today.
Numbers Informed by Experience
That experience allows us to truly understand what a marketer goes through and we impart that knowledge now. That’s the root of all of it. Hands on, up-front work that we do for clients. Taking the pain-staking time to make sure that a campaign has the ability to be profitable, by running all the metrics and historical data, before they go ahead and spend any money and potentially lose a lot of money. That process was a real tough time to go through, but looking back on it–it was the best thing that could have ever happened to us. And our clients know that the numbers we put together for them through that process and that we articulate to them prior to them spending a dime with us are the ones that show them making success. And we don’t require or recommend them to spend money unless we can hit those metrics that show them to be profitable.