"Most of them were interested in investing in us, opening offices all over the country and then having an IPO," says Aronson.
Aronson, on the other hand, wanted to control his own destiny and that of his firm, something he figured would evaporate once investors sunk their hooks into the company. So he endured slow cash flow, lean paychecks and all of the other pains involved in bootstrapping a business.
It paid off, and in a sense, Aronson now has the best of both worlds. In December 2003, 100-employee i-FRONTIER was acquired by aQuantive Inc., a public company based in Seattle that functions as a holding company, with several divisions that provide digital marketing services including software, online marketing and advertising, and purchasing and reselling online ad inventory. It maintains offices in more than a dozen major U.S. markets.
Aronson says some i-FRONTIER clients, among them Alaska Airlines and pharmaceutical giants Wyeth and Aventis, wanted to continue to do business with i-FRONTIER but also wanted to work with a firm with deeper resources to serve their needs. That led to the sale to aQuantive, a deal that gives clients access to the more comprehensive capabilities offered by that firm. Part of the deal, says Aronson, was that i-FRONTIER wouldn't be simply swallowed up by the 800-employee parent.
Aronson retains that autonomy as head of the Avenue A Razorfish Philadelphia office, the name the company adopted earlier this year. Avenue A Razorfish is the online advertising and marketing division of aQuantive. The relationship, it appears, couldn't be better.
Says Aronson: "I told them that to be successful, I need to be able to run the Philadelphia business. I need to have some autonomy, and they have completely delivered on that."
Aronson talked with Smart Business about how i-FRONTIER made a pioneering effort in online advertising, what makes for successful interactive marketing and the importance of taking careful measurements.
What factors were most critical in growing i-FRONTIER?
Something I think that has helped us a lot is that when I've looked at hiring, especially when we were small - we were completely funded through cash flow, never had any investors, never took out any loans, so we grew from my bedroom -- and when I looked to hire people, I tried to hire people who were a lot smarter than me, and I tried to think of what takes up most of my time.
So during the time period when HR took up most of my time, that's when we hired an HR manager, and when negotiating media buys with sites like Yahoo! and AOL took up a lot of my time, that's when we hired a media director. And then those people built their teams so that there are a lot of experts running their departments much better than I ever could.
How did you manage to grow i-FRONTIER during a period that included wild speculation in online ventures, the Internet bubble and a sluggish economy?
Prior to starting i-FRONTIER, I worked in direct response marketing, so when the company was founded, we really took an approach of trying to measure everything we did, so we weren't just trying to do things that were sexy or flashy, but implanting strategies and tactics that would sell product for our clients and deliver bottom line results.
And we've always had a focus on analytics, so we've been able to track that, and that was really helpful because when there was the downturn in the economy, for a lot of our clients, we were able to show the impact we were having so online wouldn't be cut from the budget. However, that being said, we did have a number of clients who went out of business.
We had to supplement that by going out and finding more stable companies to work with.
How did you handle the fast-growth periods?
There were definitely tight periods. We would do the work for a company and we wouldn't be able to bill them until 30 days into doing a job, and they would take 60 days to pay us, so there were cash flow issues. We had a line of credit with our bank and just managed it extremely tightly. And there were some years when I had a very minimal paycheck.
How are the major players like AOL and Yahoo! affecting your business and online advertising in general?
We work closely with publishers like Google and Yahoo! As an example, Google just had an executive summit where folks went to learn about what's next in their business. What we look to do with publications is to give them our input, what types of things would our clients spend more on online.
So when we see that something works really well for us as an ad unit or tactic, we'll go to someone like Yahoo! or The New York Times and see if they would be interested in implementing that on their site as well. So together, hopefully, we're driving the industry by pushing for innovation and really impactful, effective ad units, and also making sure that we have the right measurements in place so we can benchmark how well things work.
How do you integrate online advertising with traditional advertising media?
Actually, I think to really leverage a campaign, you have to integrate it. I think it's something that can be done and something that many people are doing really well. You get a lot from learning about your customer, so when you're doing an ad campaign and they come to your Web site, you can see where they go on the site and see what their interests are.
Most of our clients do surveys of the people coming to their site and they find out how to fine-tune the message and what the real hot buttons are, if we're missing them in our advertising, and then also, of course, when you can measure results, it can impact what clients might expect from their other ad buys.
What do businesses need to keep in mind when they are creating an online advertising strategy?
First and foremost, you've got to start with a clear idea of what you want to do and what you want to accomplish. It should be related to your core business. Some of the biggest failures that I've seen are when someone's in one business and they decide, because of the Internet, they could get into a new business.
Companies need to do the things they're good at. If my company sells home improvement products, the focus of my online presence should be selling these products; that's my business.
I need to figure out how I'm going to measure success, and it's not how many people come to my Web site. It's really about how much am I paying for every sell, and what's my profit for every dollar spent for my online marketing effort. A lot of folks think that they should start in a really big way. What's great about the Internet is that you can test. You don't have to start with a giant investment for your advertising.
Companies should think about what works. What works really well is building a house e-mail list and sending out e-mail messaging, because your current customers are typically your best customers for up-selling and renewals.
After e-mailing your house list, we find that search advertising is the best because it's very targeted. So not only are you getting someone, but you getting them at the exact time they're searching for '
'hammer' or 'home improvements' or some other relevant word. So you know they're in the right mindset.
Also, you've got to have a plan for optimizing. What's great about online is you can track results and fairly quickly change to improve on what you're doing.
What technical advances have been most critical in moving online advertising forward?
Targeting and segmenting have been enormous, so instead of just broadcasting your ad, you can really segment your message so that people who are your current customers see a different ad than people who have come to your site and never purchased vs. peopl e who are within your demographic but you haven't done business with them before.
What have you learned about online advertising since you started i-FRONTIER?
If we look at the early days, companies looked at it as an R&D experiment; let's put some money into the Internet and see how it works. And now, everyone knows that it makes money for business. It's at the table when people are making marketing decisions as a main tactic.
We've also learned that, unlike a lot of other media, where the consumer doesn't have control, it's kind of just pushed to them, online the consumer controls whether or not they interact with ads. They decide if they click, they decide if they go to a Web site, they decide if they fill out a form.
So, instead of just pushing a message, what we've seen be most successful is providing value in the ads, and value can be entertainment if that's what a consumer expects from your company ... or it can be a discount or it can be targeted offers relevant to what someone is searching for or relevant to their needs. And I think if you look at trends in offline, it's also going in the direction of more consumer control.
Take Tivo, for example. If you watch Tivo, you can fast-forward through advertisements. Tivo did a study and found that more than 80 percent of their users fast-forward through the ads. It has the ad community really concerned, because as Tivo gets greater penetration, and as other digital video recorder devices emerge that are similar, what we're going to see is more and more people skipping through the ads.
The question becomes, how do we create engaging ads, and for online, that's been the question from Day One.