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Martin Nisenholtz was there for the birth of teletext, videotex, kiosks, personal computers and interactive TV. From NYU to Ogilvy, Ameritech and now The New York Times, he's had a ringside seat for the past and present of interactive marketing. He wants you to know that the "future" has about another twenty years to go.
"Not to be a wise guy," Nisenholtz jabs with a mischievous grin in his voice, "but who's reading your webzine?" The interview is off to a stellar start. But as the give-and-take unfurls, it becomes increasingly clear why he opened with the good-natured broadside.
Perhaps more than anyone else in interactive marketing, Martin Nisenholtz has "yeagered" (as in Chuck) his way through it all. The good news is, he sees today's failures as the cornerstones of tomorrow's breakthroughs.
Why did you join The New York Times?
The ability to have an impact in a place like this is an opportunity that not many people get in life.
The Times is the single-most important, in my view, news operation in the country. It's certainly the most influential. All the broadcast operations basically take their cues from The New York Times.
Being able to successfully transition a brand that's 145 years old and has been so consistent in its view of the world, literally at least over the last 100 years, into a new distribution channel with very different kinds of capabilities, is a significant accomplishment.
That said, it's still very early. It's still too early to declare this thing a success. We'll see whether two or three years from now whether this accomplishment will have withstood the test of time.
Beyond that, I would not have taken this job at the Times if I did not really connect with and feel very strongly about the people who hired me. When the Times first called, I basically gave the headhunter the names of a bunch of other people.
Like most good Jewish boys I thought I was going to be a doctor. But I always had a real desire to create new things and was always experimenting with things. I always liked businesses and was always creating little businesses when I was a kid.
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And then they came back at me and convinced me to meet with Russ Lewis and Joe Lelyveld. And that's when the chemistry really started to work. The two guys who hired me, Russ and Joe, I feel very strongly about. And Arthur Sulzberger and Janet Robinson, as well.
So I have the opportunity to create something new at an institution as socially and culturally important as the Times. But that's not enough. You've got to have people you really like working for, and that's the other half.
There's so much white noise about the Web. What's it all about, and where is it all going, in your opinion?
It's all part of the same continuum that began in the late 1970s. There is a lot of white noise. You have to keep your eye on the ball. And basically -- and I've been saying this consistently now for 17 years -- the ball has to do with the gradual and increasing of digitization of media content in the world.
That's the ball that began with, in a broad-based way, with terminal- based systems in the mid-70s. As I've told most people, I think it's roughly a forty year transition. We're roughly midway through it, it'll take another twenty years to complete it. And when it does, the world will look very different than it did in the mid 1970s.
The Web is part of that transition. It's just a group of standards that allow for the ubiquitous design and access of information.
That's what the Web is. Just as personal computer evolved as a form of stand-alone delivery, in the early part of the 1980s, the Web continues to evolve. It's just all part of the broad change in the history of technology.
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Do you have any favorite Web sites?
It may be surprising to many people, but I'm not very impressed with the development of the World Wide Web as yet. I think it's very much in its infancy.
I tend to view the Internet at this stage of its development as more of a tool than as a habitual media experience like a newspaper or a television show. I don't think it's ready for that, so therefore I don't use it that way. That doesn't mean that some people can't use it that way. I think people will use it that way and do, at this point. We have many people who use us on The New York Times that way. I'm not a user in that way.
I think the most interesting application of the Internet right now is the ubiquity of email. I think email is truly important and in some ways at an evolved state of development. It's changed the way people communicate, and the way businesses communicate.
Browsing can be fun, but I don't find it something that interests me very greatly. I don't have a lot of time to do that. Obviously I use The New York Times on the Web every day because it's something that I have a personal interest in. But that's about the only Web site that I use every day.
I do competitive scans regularly. I look at all of the other news sites at least once a week, but I can't say that I do that because they're my favorites. I do that because I'm in business to make sure we're in reasonably good shape -- just like people in print product look at their print counterparts.
I had an interest very early on in photography. I was a photo journalism intern at The Philadelphia Inquirer.
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We recently announced a new service in collaboration with FIND/SVP that will allow any user of The New York Times on the Web to input the question they want answered and actually have a human intermediary go out and do all the filtering and find the right answers. In some cases you'll get the answer directly, in others you'll get the references on the World Wide Web that you need.
So, for example, if you're interested in going to New Orleans, and you type in "New Orleans," at Alta Vista today you'll probably get 150,000 answers. Our new service will cull through those answers and get those that are most appropriate for your specific question. So, it's a very special service, we think.
Generally speaking, do you think ad agencies are on the right track or the wrong track where the Web is concerned?
I think ad agencies are in very, very different places relative to one another at this point. It depends which one you're talking about. I'm not sure there is one proper approach. You need a variety of approaches going at the same time. You need to have core competencies inside the agency.
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There are people who would disagree with me on that. These are basically the same people who would say, "Look, when direct response advertising first got going we didn't have core competencies for direct response within the agency. We bought direct response agencies and they became part of our network."
You need to have a two-tier approach. You do need to have competencies within your company to understand the impacts of these technologies on your traditional businesses. With the right kind of organization, you can both have that as well as create the entrepreneurial businesses that you need in order to actually operate in this environment through a series of acquisitions. You can have your cake and eat it too. You can continuously adjust your strategy as you do that.
Now, the downside to that is that it's a financially more expensive and risky approach. Most agencies aren't willing to go down that road. So if you're not willing to take a risk, your options are very, very limited at this point in time.
There's been much talk about the blurring of editorial content and advertising on the Web. Can you bring some focus to this blurring?
The blurring becomes a natural consequence of the technology. Once everything is basically digital it becomes hard to keep the barriers up because it sometimes seems artificial.
My favorite activities in photography were simply to document the lives of people, especially people in critical moments and big events. Unfortunately, you can't do that and hold down a job at the same time.
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But I think from the consumer's perspective it's a continuum. It's not like it was in 1955. The consumer is really smart when it comes to what information is sponsored and what isn't and how that information is going to be used by them. One of the most important things that's happened over the last thirty years is that consumers have really become very finely tuned and trained. They are very skeptical about what they get from the media.
It's perfectly legitimate for advertisers to offer interactive content to consumers. I mean, I pioneered that. Much of that was done by me in the early and mid 1980s for the first time. But it's not the same as getting that information from an unbiased, objective observer. Both of those kinds of information can coexist in the same distribution channel very easily. I think most people can make that distinction.
What are you proudest of?
Keeping interactive marketing alive through a period when the number of people who were supportive could be counted on one hand is something I'm proud of -- keeping the state of the art going, keeping it as top of mind as it could be in the agency community during that period of time.
So I think, broadly speaking, keeping interactive marketing going was pretty important in terms of where we are now. There's definitely a connection between all the work we were doing at Ogilvy in the mid 1980s and the kind of stuff that's going on now. It didn't just happen in a vacuum. It happened because people pioneered it and made it happen.
Red Burns of the Alternate Media Center was the first and probably most important person I worked with. Larry Cole, Spence Hapoienu and Shelly Lazarus at Ogilvy were very important. There was a whole group of people at Ox Direct: Jerry Pickholtz, Pam Reece. Then Pat Campbell at Ameritech and Russ Lewis, Janet Robinson and Joe Lelyveld at the Times.
I mean, that's a group of very, very classy people. That's been the most important luck that I've had.
This notion that advertisers are going to become content providers is fine within the confines of what the consumer is going to allow from their own perspective.
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Graham Phillips, too. Especially during the early and very difficult years of 1986 to 1989, Graham Phillips at Ogilvy was so consistent in his strategic view of where this was all going, and wanting to keep it going. He could have shut us down in a heartbeat anytime he wanted and he didn't. Although I didn't work directly for Graham, there's no doubt but that he kept the thing alive there during those difficult years.
A lot of people would have preferred to shut it down. A lot of people.
Though you maintain a youthful appearance, you clearly qualify as one of interactive marketing's "graybeards." When, where and why did it all begin for you?
I was an aspiring academic at the University of Pennsylvania in my Ph.D. program and was asked in 1979 by a recent Ph.D. named John Carey to join him for a year at the Alternate Media Center. We were going to work on a new technology called teletext, which the British had invented probably a year or two earlier and were attempting to import into the United States.
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This project was funded by the National Science Foundation, among others, and the grant went to the Alternate Media Center, a unit of New York University. During the same year, NYU was starting up a new graduate program called the Interactive Telecommunications Program, which is now the leading graduate program for the professional training of new media people in the country.
That was the first year of ITP, so I was asked to do two things. One was work as John's research manager for this teletext project, the other was to help with the startup of this new interactive telecommunications program and be a faculty member, a junior faculty member in that program.
That's how it all started for me. It was supposed to last a year, but at the end of the year I had no intention of going back to Philadelphia. I loved New York and so I continued to do that. I also began to work on other, new emerging technology projects, including one that I initiated with the National Endowment for the Arts to train artists, writers and journalists to start to work in interactive media. That was in 1980.
The fact is, everybody today looks to advertising and promotion as the ticket to make this whole interactive world come alive. It's very easy to say that in 1997. It was considerably more difficult to keep that vision clear in 1987 when no one believed that.
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The NEA project was the first in the world that actually looked at interactive media as a medium, rather than as a technology. It really started a whole series of things. Once we began to train these people and they began to go from that sort of laboratory environment into the real world, the Alternate Media Center became known as a place where the focus on content was more important than the focus on technology.
The next phase was that all of the major publishers began to create videotex services. And that started an era which I'd characterize as the videotex era.
One of the companies that was interested in exploring this area was Ogilvy & Mather. And so when the government funding ran out for the project in 1982, we began to look for corporate sponsors. One of the corporate sponsors, including Citibank, ATx and others, was Ogilvy, which had actually found me through this NEA project.
And so I was initially brought into work at Ogilvy for a guy named Jerry McGee, who was a creative director at the time, working principally on General Foods. He brought me in and I started to talk to the Ogilvy clients and get them involved in the various trials at the time.
About six months later, the agency gave me a job offer and I started working for Ogilvy & Mather. So that was how the whole thing started.
In 1983, we formed the Interactive Marketing Group. It got moved from the creative to the media department. It existed in the media department from roughly 1983 to 1986, when videotex plummeted and the first cycle of interactive media in the United States came to a close.
ortunately, we saw that happening long before it did and we had already transitioned into the second cycle, which was about personal computing. We initiated a number of "firsts" in that area, including the first portable sales support program for the Equitable. Their agents lugged around these big computers and actually took their clients through automated selling messages.
We initiated the first sponsored chat service with ATx on Compuserve as well as the first retail point of sale system with General Foods.
I wrote a novel that was completed during the second year of my graduate school. I was clearly itching to get out of academia. Had I not gotten into this career, I probably would have taken a very serious go at being a novelist.
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We moved beyond the videotex era into what I would call a whole range of promotions and sales support technologies, which were standard on the personal computer by 1986. At that time, the agency was also, under Spencer Hapoienu, forming a new division called SAGE, which was a business incubator.
In 1986 we were moved out of the agency media department underneath SAGE, and I started reporting to Spencer.
From 1986 to late 1989, we were part of that SAGE network. We did a lot of pioneering work in the whole retail point of purchase arena, in the sales support arena, all consistent with SAGE's mission. When SAGE was shut down in 1990, I believe we were the only unit to be brought back into Ogilvy.
This time, instead of bringing us back to the ad agency, they did something really smart, which was really Shelly Lazarus's move. They brought us back to Ox Direct.
In early 1990, we won the ATx interactive television business, which started the third era -- the first being videotex, the second being point-of-purchase or kiosk systems, the third being interactive television. And we worked extensively on a number of ATx initiatives, including probably the only successful field trial of interactive television that was ever launched -- the Chicago trial of ATx's RCTV in 1992 and '93.
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Again, I sensed that was going down the tube because it wasn't a cost-effective solution. We began to work on the Internet in late 1993 and that started the fourth era, which is the one we're in now.
In 1994, after doing a number of initial pioneering projects on the Internet, including having written the guidelines for the way advertisers should operate on the Internet, which is largely forgotten but still holds true. It was published in Advertising Age and then re-published in The New York Times in June or July of 1994.
I then was offered a job to run the content strategy operation at Ameritech in Chicago. Ameritech was interested in creating a content portfolio under Pat Campbell, who had come over from Columbia Tristar to lead that whole effort. He tapped me to run the content piece of it.
I did that for a year, had a fascinating time in Chicago and we did a lot of interesting things. But I missed New York. When The New York Times called, I was sort of seduced back here by them and started working here in July of 1995.
We're doing a lot more than interactive at The New York Times. One of our major initiatives at this point is television, taking the Times brand principally into cable television channels, though I think we'll be exploring broadcast as well.
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What's the most important thing people should understand about interactive marketing?
We're in the middle of a long, long-term -- forty to fifty year -- cycle. All the excitement about the World Wide Web will pass, and maybe much sooner than people think. When it does, it will be unfortunate because expectations are so high and people are going to get hurt.
We're already seeing many of the start-ups not being able to reach critical mass and going out of business. We also have the Internet breaking all the time and consumers becoming upset about it being slow. It's probable that the excitement will fade, the growth will stop significantly and there will be a pretty major shake out.
There's an inherent tension between the downward part of the cycle and the opportunities it presents -- almost in a seasonal way -- that is moving the entire process into its next phase.
Just because the Web may move downward, that doesn't mean it isn't going forward. That's the irony. The first part of the downward cycle in the 1980s led to the growth of the first wave of on-line services -- America On-line, Prodigy, Compuserve and the like. That wouldn't have happened if the services that came before hadn't paved the way.
I just think that people need to be prepared, but at the same time understand that these downward cycles lead to much greater things, even more profound shifts in the way information is communicated.
That's what's exciting. It's possible I'll go through my whole career before the full cycle is completed. I may retire just as it reaches its full bloom. It will be very interesting to have spent a career playing an important role in making the next wave happen.  |
