Siimon Reynolds – renowned Aussie entrepreneur and adman – has won international awards, written books and burnt a trail on the speaking circuit … but how has he coped with the downturn?
“Advertising is normally the first thing that gets cut when there’s a market correction, when things get a bit tough,” says Reynolds.
His strategy, though, is not simply to survive, but to flourish. And this is not the first time he has done so. Peter Switzer caught up with Reynolds on Sky News Business Channel to find out how he does it.
Reynolds admits he was first bitten by the ad-bug sitting in front of the television. But it wasn’t the commercials he was concerned with – it was the long-running American sitcom, Bewitched and Darrin’s (Elizabeth Montgomery’s on-screen husband’s) day job at an ad Manhattan-based McMann and Tate advertising agency. Set in the same time as the now-cult series Mad Men – the golden age of advertising – it is little wonder Reynolds was hooked.
“At the time, I thought, ‘wow, it’s such an exciting business’,” recalls Reynolds. For him, he adds, it seemed like the perfect way to “make money, have fun, and not go to uni”.
From watching the golden age, Reynolds developed the golden touch: when he was only 22 he earned international acclaim for what’s now widely known as the AIDS grim reaper commercial and went on to co-found the Photon Group.
“Our idea, originally, was to create a conglomerate of online marketing companies,” says Reynolds. But that changed when the tech crash hit. “So we thought we’d better not do that, so we started to build a genuine conglomerate … And then, slowly but surely we built it up.”
Photon has been listed on the Australian Stock Exchange since 2004, which in just over eight years grew from zero to over 50 marketing companies employing over 5,000 full and part time staff.
“We went much wider,” he says. “We originally focused on online, now we’ve got ery strong research, strong field marketing, strong sales promotion and … we’re a lot more global than we were before.”
No longer on Photon’s board, Reynolds is currently chair of Online Marketing Group (OMG), one of Australia's largest online networks, developing over 30,000 websites.
“We’re in a lot of really diverse area of advertising … we haven’t put all our eggs in the advertising basket,” says Reynolds. Instead, the company has a strong digital focus, as well as a firm footing on what Reynolds calls the “strange areas of marketing”, shelf stakes in supermarkets.
“If you’re not in the right part of the supermarket, if you don’t have the right shelf spacing, it’s going to dramatically affect how much you make, no matter how good your product is. So that’s a real war in there.”
In the war for advertising dollars, Reynolds says their key focus is pay for performance advertising – that is, advertising that offers a tangible return on investment.
Compared to traditional mediums, the digital space is perfect for this. Reynolds uses the print medium to prove his point, saying if a brand places a magazine ad, they pay their money, cross their fingers, and hope that it will work. Online, you can see that it works as you can pay per click, or even sale.
For this reason, Reynolds tips the world of online media and advertising will continue to grow, despite tough times, and doesn’t believe the likes of Google is even close to reaching its potential. For this trend, Reynolds says we have the rise of niche markets and trackable results to thank.
“More and more, we’re going to find that the pay for performance model is going to be a bigger part of the advertising budget,” predicts Reynolds
- Don’t place all your eggs in the one basket – diversification is the key to surviving tough times.
- Pay for performance – look for tangible results for your advertising dollars.
Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.
Published on: Thursday, November 12, 2009blog comments powered by Disqus