So we’ve all heard the story. Advertising revenue is way down over the last year and in some channels, like print, it’s a bloodbath. All around us we see evidence of marketing budgets being cut, of marketers are being asked to do more with less, and of those splashy marketing events we all love to be invited to being toned down or just cancelled altogether.
Yet one company remains notable in refusing to throttle their partying – Olive Media, a TorStar Digital and Gesca Digital investment. In fact, last week at Maro in Toronto’s trendy Liberty Village, Olive Media turned up the volume on their annual TO party to 11, quite literally, with a full-on 80's glam rock themed über party.
It was the type of gloriously excessive party that harkened back to more lucrative days for the ad industry and begged the question – from me at least – is this the last days of Pompeii? Or does Olive Media know something that others don’t about the Canadian advertising industry?
To get to the bottom of it, I thought I would do a 5 Question Interview with Olive's President, Simon Jennings, exclusively for the readers here at OneDegree.
MG: Hey Simon, first off great party! Thanks! As I remember it, you had grown a nasty looking beard for the Rock themed party and your boss Tomer Strolight had two full arms of tattoos and was riding a Harley Davidson. Do I have that right? (Incriminating pictures here)
SJ: I can neither confirm nor deny those sightings.
MG: So that wasn’t really one of the five questions, but this one is. Explain to the OneDegree readers what the operating logic is behind Olive Media. Why did TorStar, a traditional media company, decide to launch an ad network in the first place?
SJ: First off let me just note that Olive Canada Network is now called Olive Media. We have been positioning away from being specifically an ad network and would describe ourselves as an outsourced professional ad sales organization rep’ing online branded websites like they were our own.
In terms of TorStar’s logic in launching Olive, they knew that they were late to the digital game and needed a strategy for pulling revenue off the Internet. At that time, the only property they really had was TheStar.com and they knew it would never grow to be a Yahoo!. The game was about scale so they developed a separate digital advertising business with national focus and built up a set of other services around that core business.
MG: So explain to me the business logic around using you guys from the perspective of the branded site and the advertiser?
SJ: For the branded site, the logic is simple. We are a risk-free, guaranteed-upside revenue partner without the cost of running it yourself. Look, this is small country with a fragmented advertising marketplace and a limited talent pool for this industry. If most of these sites were to open an office in Canada and staff it with the right folks you would struggle to make it to break even. For the advertisers and their buyers, we are a one stop solution for over 15 Million unique Canadian visitors exclusively on premium web sites in both English and French Canada.
MG: So Simon, explain to me why in the middle of this recessionary economic cycle when most advertisers themselves are cutting back on the size and scale of their customer events, that you guys can justify partying like rock stars?
SJ: Well first off I would argue that it is too convenient to assume that the contraction in the economy is impacting all advertising here. We have added 20 new sites to our network in the past 3 months bringing our total to 83, we are hiring 12 new people, and have month over month growth rates of 5-20%. We see no reason to cut back on client celebration initiatives. Further, I would argue that there has never been a better time for me to be loud and to do what I do. This is the perfect storm for aggressive players, with international companies like Yahoo! and MySpace making big cuts. It’s a good time to pick up people and assets.
MG: You’re bullish in a storm, a man after my own heart, but clearly this industry is in flux. What do you personally see as the biggest challenge for the industry in the next few years?
SJ: I think traditional media buying relationships are in trouble. Unit costs are falling, ROI and analytics requirements are increasing and end advertisers are getting more knowledgeable on Internet marketing, and yet fee structures between end advertisers and their agencies haven’t changed. The digital media buying arms specifically have a 2 year road ahead of them of change or be irrelevant. From our perspective, it opens opportunities for companies like ours to increase our services.
MG: Last question. So what about Mobile? I’ve been wrongly bullish on mobile for years now. Are you planning a mobile strategy and if so what is it?
SJ: I agree that we just might be turning the corner on Mobile. For the first time in three years, we are actually incorporating mobile into our strategy and expect to have an Olive Mobile product in market in 3-6 months. We will treat Mobile as an R&D exercise for the next 12-18 months. I do believe there is something there and we just need to figure out what it is.
MG: Thanks Simon. Next time, I promise not to wear a suit to your rocker party.
SJ: That assumes you will be invited again.