Dennis Troyanos (DT): Welcome to this edition of Game Changers Live. This is your host Dennis Troyanos. Today I’m talking with Nick Nocca the CEO of Mercury Media. Nick was formerly the President of Company C a leading integrated marketing agency in NYC. Over the course of his career Nick has held leadership-marketing positions at Diageo, Kmart and Gannett.
Nick, welcome to Game Changers Live!. Mercury Media refers to itself as a performance media agency with a heritage in direct response. What does that really mean in the current communications environment?
Nick Nocca (NN): Performance media is a term that gets thrown around a lot. We think of it as a way of managing the complexity and the reality of how consumers consume media today and how they make purchase decisions. It’s a lot different from the days of direct response when you had a very straightforward system of stimulus and response. See the ad, pick up the phone, place an order. The world we know is now different. You see an ad, you do a Google search, you check social media, you visit a website, maybe you’re not ready to buy at that particular moment, a week later you’re in the car, you hear an ad on the radio and then you pick up the phone and you make a call. To be able to orchestrate those different messages, those different media across platforms; to be able to identify what’s really driving a sale is very complicated and it’s a combination of art and science. And that is what we refer to as performance marketing. What we do for our clients is we help them navigate through those complex decisions. We help them to allocate their resources in a way that makes sense for them; in a way that delivers maximum return on their dollars.
DT: How much of performance marketing is based on data, analytics and customer insight ? From what you are saying, it sounds very behaviorally driven, correct?
NN: It is indeed. Data and analytics is at the heart of what we do. Early on you’ve got to decide how to allocate the resources. That’s the planning part of what we do and that involves targeting based on value, based on behavior. It involves understanding how different individuals consume media and understanding how to reach and motivate them. On the back end, it’s about attribution. It’s identifying not only which individual channels or touches are influencing behavior but which combination of channels and touches are driving behavior. So in the previous direct response paradigm it was easy. I sent a direct mail package. Did they respond, yes or no? Is that working, is it not? Now you’ve got to look at combinations of media and messages, and that’s a lot more complex and that’s where data and analytics come in.
DT: Nick, you raise a really interesting issue in my mind as a recruiter because we go to clients who talk about digital marketing and frankly, what we hear is very reminiscent of some of the fundamentals on direct marketing. Do you find the two disciplines to be similar?
NN: Absolutely, the direct response heritage is something that we embrace and we build upon. It’s about a scientific method. It’s about accountability, testing. measuring, learning. Mercury Media brings that orientation to understanding the way people shop today. We’ve got to be accountable. We have got to be measurable but the variables are complex and the ecosystem is tough to pin down. So that’s why this evolution from direct response to performance marketing is, I think, so relevant and so necessary. Our clients are struggling. They know that it’s not just about brand. It’s not just about response rates. It’s not just digital. It’s a combination of so many elements that drives success. I think that the science, discipline and the precision that we learned as direct marketers is incredibly relevant to how we are evolving as an industry into performance marketing.
DT: Let’s talk about the ongoing fractionalization of media. There are clearly more and places that people have an opportunity to view merchandise, to research it etc., before making a purchase decision. How does a company like yours anticipate this massive fractionalization and try to focus in on how the consumer will behave?
NN: You know I’ve heard the term “fragmentation” of media; “fractionalization” is probably more accurate, because it really has become complicated. And not only are there more different types of media, more platforms, but then you’ve got people consuming and at the same time they’re watching TV and they’re on their device. Consumer attention is divided, it’s a moving target and it’s difficult to plan against. Programmatic buying has certainly helped on the digital side where we can target audiences and purchase audiences, and that has helped to manage some of that complexity, but on the TV side we’re still buying the same way that we have for years. On the TV side that’s why the upfront t analytics are so important and the backend attribution so critical. We need to understand the influence that a TV spot would have on a web search, for example.
DT: Do you see more and more “classic/mass marketers”, the P&Gs of the world, trying to get their arms wrapped around this change in consumer behavior or is it primarily for bigger ticket/non-mass items?
NN: Well you know the P&Gs of the world are recognizing that they need to be equally accountable. Everyone deals with constrained resources. They have bigger budgets than some but they still need to deliver, so the difference at times is in the metrics. P&G is sometimes looking more for softer metrics like “engagement” whereas some of the more traditional direct marketers are looking at cost per lead, cost per acquisition, cost per sale. But I think the common denominator is everyone is looking to get more out of their investments.
DT: Who would be a great client for Mercury Media and what would you do for that client?
NN: A great client is a client who is looking to scale their business. It’s not only about optimizing because you can optimize yourself into a corner. You can continue to do look-alike modeling and find more people who look just like your customers of today and you can continue to refine your mix for efficiency and lose the opportunity to grow your business.
There’s got to be some consumers who don’t look like the ones you have today, who you might not reach with your current mix with your current messaging. And yet they might be interested, very interested in buying your product if they were aware of it and if they had the right dialog and right experience. So the perfect client for us is one who is really trying to grow their business and trying to expand their customer base. And trying to think about, not only the last touch, and not only a customer who might be willing to buy at that particular moment in time, but recognizing that there are lag effects. That consumers will take their time to do their research and will take their time to shop. And the perfect client will understand that the answer isn’t quite so simple.
DT: Do you find that there is a similarity or is it a massive dissimilarity between the baby boomer and the millennials in terms of their buying habits in terms of the way they think about brands and products?
NN: I think consumers are looking for value. I think they’re looking for relevance. They’re looking to be entertained, but the way that they go about a purchase is different. Some consumers, and it’s not necessarily by generation, it’s arguably psychographic too. Some will consult social media and value word of mouth. Others will be more inclined to do the research on their own; others want to go to the store and want to touch and feel the product. So it really goes beyond demographics in my view.
DT: When it comes to doing innovative things for clients, share with us a small example of something that you are doing for clients today, that maybe three or four years ago would have been not been possible.
NN: We are focusing on the shift in behavior from linear TV to addressable TV and over the top TV in what’s otherwise known as “advanced TV”, and how people are consuming entertainment. We’re tracking it with our clients, we are helping them navigate that transition. We are working with our clients on the latest and greatest in terms of multi touch attribution. We are working with our clients in focusing on new techniques in terms of econometric modeling and value based targeting. So I would say that we’re bringing a lot of new weapons to bear and a lot of new techniques to bear to be as precise and productive as possible with our clients’ dollars. The other part of innovation is maybe cultural. Knowing what it’s like to be on the other side of the table as a client. Mercury Media‘s approach is to under promise and over deliver as an agency. We are proactive with new ideas and fresh thinking.
This concept may not be the newest idea under the sun but it’s something that I’ve observed can be kind of scarce in this industry. Especially because we’re all under so much pressure on both sides of the table to just get something done and move on to the next. We try very hard to go the extra mile for clients.
DT: Nick, going back to your heritage in direct to consumer insight and behavioral understanding, I would think that you naturally take the long view of investing and partnering with clients versus a quick hit. Is that accurate?
NN: My Mother uses an expression “from your mouth to God’s ears.” We firmly believe it makes sense to work at lifetime value for example. That to me remains one of the most powerful and one of the most underused metrics in the industry, because people are still focusing on next week and next month. But we continue to try to work with our clients to think three or four steps ahead. And, to think about not just acquiring new customers but acquiring the right customers and acquiring the kinds of customers who will stay and who repurchase and who will become advocates. So we absolutely do our very best and work with our clients to take a long view, which quite frankly is probably more like six to twelve months as opposed to six to twelve weeks.
DT: We are unfortunately at the end of this segment, but, what I would love to do is invite you back because I think we just touched on only a few of the areas where your expertise is really very valuable. So if you would come back and do another segment with us, I’d like to talk to you about what the agency model of the future looks like and how an organization like yours is really leading the way in that area. Would you do that?
NN: I’d be happy to do that, Dennis.
Nick Nocca, CEO Mercury Media
Nick leads the agency’s integrated media offering, providing strategic oversight for Mercury’s client portfolio and charting a path for capability expansion and innovation. With more than twenty-five years of experience in direct and digital marketing, he has held leadership roles at major media and advertising organizations including Digitas, MDC Partners, and Gannett. Nick has established a track record of success in the agency business by taking a strategic, data driven approach to a wide range of clients, such as Capital One, Fedex, Weight Watchers, Virgin Atlantic and American Century Investments. He holds a BA from Williams College and received his MBA from the Wharton School at the University of Pennsylvania. He can be contacted at email@example.com.