The Future According to an Interactive Guru

Q&A: Norm LeHoullier Says TV Will Keep Losing Ad Dollars to the Web

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CINCINNATI (AdAge.com) -- One sign interactive marketing has reached maturity is that the guy at its inception and many of its watershed moments just retired.
Grey's interactive guru Norm LeHoullier recalls P&G's Ed Artzt call to action and Dell's rise and why the medium is once again considered a medium.
Grey's interactive guru Norm LeHoullier recalls P&G's Ed Artzt call to action and Dell's rise and why the medium is once again considered a medium.

Norm LeHoullier in 1993 convinced Grey Advertising CEO Ed Meyer to fund the first interactive unit for a major agency. He was consulting on interactive marketing (gratis) a year before Procter & Gamble Co. Chairman-CEO Ed Artzt issued his industry call to action on the subject and two years before Netscape's browser appeared.

Mr. LeHoullier would lead Grey Interactive to become P&G's first interactive agency of record, develop Dell Direct's online mass-customization system, and do the same on a very different playing field for Mars' M&Ms. He also has helped lead an industry effort to give the slippery concept of engagement meaning and metrics.

Perhaps most amazingly, he stayed at one agency, Grey, his entire 30-year career. Then he recruited John Paulson, who just helped marshal DDB's acclaimed interactive-led integrated effort for Philips Bodygroom, as his successor as managing director of the recently redubbed G2 Interactive.

In an interview with Advertising Age, he describes where interactive media has been, and where it's going.

Ad Age: How did you ever stay at one agency for 30 years?

Mr. LeHoullier: In the very early days, I took jobs no one wanted. ... My first assignment came in a meeting with the VP-marketing of Timex. He had two assignments around new products. One was a low-cost stereo system. The other was a large-scale integrated circuit. Everyone's hand went up for the stereo. ... Because I was the lowest guy on the totem pole [I got the integrated circuit].

That turned into a project I did as a consultant called new applications of microprocessor technology. I had all these meetings with [companies] about new products that could come out, like digital watches and home computers. ... All those things came together to where I had a weird skill set that fit where the world was going.

Ad Age: How did Grey come to have an interactive agency so early?

Mr. LeHoullier: We had a heavy-duty consulting arm, doing a lot of work with IBM. The [American Association of Advertising Agencies] created a new technologies committee, and I was chairman. Grey had US West as a client doing an interactive television effort I was consulting on ... and working with Procter on an interactive television test with Time Warner in Orlando. I told [Ed Meyer]: "The good news is we made $10 million consulting for all these clients. The bad news is it's about to affect our industry. But I see an opportunity to create a company called Grey Interactive."

Ad Age: How influential was the Artzt speech?

Mr. LeHoullier: P&G likes to shape the industry so that it creates an environment that's positive for them to do business. And when they speak ... it causes a lot of companies who are followers to say this must be important, so it becomes a self-fulfilling prophesy.

What I've learned over time is that there's a difference between when people say things and when they do things. I think that speech had more to do with shaping the industry than with announcing P&G was going to get involved in the business heavily.

Ad Age: Why hasn't interactive become a bigger part of the mix for P&G or some other established marketers?

Mr. LeHoullier: The [package-goods] clients, particularly the smarter ones, are extremely metrics driven. Brand managers have tools at their disposal that forecast volume based on certain media spends. Those tools have not kept pace with the changes in terms of media fragmentation.

One of the reasons I helped form the [industry's MI4] engagement initiative is that a bunch of agency CEO types were talking about why more dollars had not been flowing into [newer media] and we came to the conclusion that it was because everything was being judged as an impression, even though some impressions were much deeper than others.

Ad Age: Has lack of continuity at marketers held back interactive?

Mr. LeHoullier: It's a huge issue for all clients. [At P&G] the half dozen or so people who led the interactive effort, each of them saw it differently. Initially it was a medium. The next manager saw it as a distribution channel. Then it was seen as a relationship-marketing tool. And now it's seen as a medium again. The people who saw it as a medium came out of the media group. Those who saw it as a distribution medium came out of sales. The ones who saw it as relationship marketing [specialized in that area].

With direct marketers it was different. The business model was more easily ported to the interactive side.

Ad Age: How did Dell's online-ordering system come about?

Mr. LeHoullier: I got insights about Dell from other places. When working with IBM, whenever asking a mass audience about PC brands, Dell was always significantly worse than IBM or Compaq. However, if you asked a Dell user, their image was in the stratosphere. If you customized a Dell machine, you saw it as your brand. The goal online was to get the majority of consumers to customize, because brand loyalty was almost double if you did. The configuration model was always there, because the [Dell] telephone operators needed it. But only about 40% of people customized on the phone. Online, almost everyone did.

Ad Age: Why didn't the model travel well to other categories?

Mr. LeHoullier: Customers have to be assured of the results. If you're buying a computer or a car, you know what the end product will look like. If you're customizing perfume, you don't know what it's going to smell like. A coffee marketer asked evaluative questions about a person's personality and attempted to recommend the right coffee. Those models didn't work.

Ad Age: What's the role of interactive today in marketing?

Mr. LeHoullier: Five years ago, [ Saatchi & Saatchi CEO] Kevin Roberts gave a speech at AdTech and said the internet is going nowhere until it can convey emotion. ... It was a real downer at the meeting. But no one would be making that argument today. The functionality component [of the internet] is staying there, but the ability to deliver an emotional impact and persuasive experience is also there [thanks to video].

I can envision a future where the dominant advertising-supported medium is the internet, because on the television side, the percent that's ad supported is rapidly declining, and with mobile media, that's going to accelerate dramatically.

Ad Age: So who should own web strategy within an agency or marketer?

Mr. LeHoullier: In my mind, you're moving into a more collaborative model where the question of who's in charge [of all parts of marketing] will always get in the way. One model is the client as integrator. Mars does this best of any client. ... All the agencies come to the meeting with two or three ideas each and put them on the table. They're tested with consumers and the trade. Everyone is free to come up with a generic idea, knowing they'll get the chance to execute within their discipline.
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