Interview with Jessica Hawthorne-Castro, CEO and Chairman, Hawthorne

On Marketing Technology

MTS: Tell us about your role and how you got here? What inspired you to join a marketing analytics company?
I started my career on the client side as an agent for the talent agency William Morris Endeavor, and when I made the transition over to Hawthorne, I very quickly saw the huge opportunity in attribution systems, advanced data analytics and accountability in the advertising industry.

From the very beginning, over 30 years ago, Hawthorne was determining each campaign’s ROI by developing some of the first attribution systems in advertising. We’d air something on TV and be able to track the response and orders, usually with a direct 800 number associated with the campaign and continuity tracking to calculate the media efficiency ratio of client product sales per media airing. It was a simple form of tracking back then, but it helped determine the exact ROI for every dollar of media being invested on our clients’ behalf. Hawthorne was unique in ROI tracking for advertising, and when I joined the agency over 10 years ago, this became a passion of mine.

MTS: Given the changing dynamic of online engagement with customers, how do you see marketing attribution models evolving by 2020?
Touchpoints with consumers are becoming more and more specific and customized. That’s the natural progression and it’s not new. With that customization, every other piece of the engagement puzzle feels the impact of a tenfold increase as well. So that means your creative becomes more specific and targeted to the consumers, which means an increased investment in creative and resources as well. You can’t just create one campaign for the entire brand. You must create multiple creative and digital elements for a specific type of person customized for how they want to interact with the brand. Your creative has to be on steroids and you have to have multiple versions and iterations of it.

Those touchpoints are impacting the media as well. Virtually gone are the days of “adults 18-35” market segmentation and hyper segmentation is in place. You’re just not going to hit everyone in that bracket anymore. Content is customized across each platform and you have to be coming at it from every angle. For example, if your target customers consume content on any type of video platform, that can include traditional TV and video viewing on over-the-top devices or video-on-demand, and that could be through a physical television or a computer or a smartphone. By 2020, consumers will be tuning in to content across all platforms and channels on connected TVs allowing options on Huffington Post as easily as ABC.   People are still consuming a lot of content, so it’s not that content is going away, it’s just more dispersed based on consumer choice now.

From a marketing perspective, everyone is working harder because the consumer is demanding that they work harder. Consumers aren’t as interested in a brand as they used to be. A recent article in Ad Age about the “millennial dilemma” basically said millennials don’t care about your brand. That’s true. It is the “Me” generation so that’s how you have to go about it. It does mean more of an investment either from the agency or the brand side, and it may mean smaller margins for people who were used to making more, but you can’t fight it. That’s the way the world is going, and it’s why you have to think a little bit smarter and incorporate things like advanced analytics for targeting and automation to get some economies of scale in terms of the investment.

One thing with analytics is that very smart teams of data scientists are working hard at constantly improving it, but at the end of the day the next big iteration will be artificial intelligence (AI). An automated analytics program that “learns” and naturally becomes smarter and smarter will be the next big shift for data analytics. We’re not quite there yet, and there are a lot of conversations among some of the top scientists in the world about the meaning of AI to humans right now. It’s important that we set the ground rules now so we’re not acting out a real-life Terminator movie in the future. So, AI is not here yet, but it’s certainly on the horizon.

MTS: How does Hawthorne extend the benefits of audience attention and conversion analytics to businesses for maximum ROI in media and creative?
Because of the multi-platform reach that’s necessary for today’s advertisers, analytics need to be more robust. This means the investment on the R&D side with data and analytics is very heavy. Analytics have to continually become smarter and smarter to keep up, so R&D investment is vital for us here at Hawthorne and for our clients.

Hawthorne has a long history of accountability and we invest our R&D to build more advanced attribution systems and proprietary analytics. When we’re building an advertising campaign, we’re building a company and a brand as well. All types of advertising demand beautifully-branded campaigns, but they also should demand accountability. That accountability is what drives revenue; after all, the client should make money on their campaign.

If a company sees direct financial growth from their campaign, it makes sense to keep investing in it. I’m a straightforward Midwesterner, and this seemed very simple to me: If you advertise you should make money on that advertising and your company should grow. That’s what we do for our clients, and today we can track data from a number of sources to make clear connections to the campaign’s ROI. From web data, to POS data, to where their leads are coming in, everything is tied into our system so we can see the exact ROI for every dollar of media investment. It’s pretty exciting stuff.

MTS: How should CMOs leverage customer intelligence and intent data to deliver better omnichannel personalization and customer experiences?
A CMO’s job is to create a personalized interaction for their brand with the audience which should ultimately drive both engagement and revenue growth for the brand. And it’s the agency’s job to put forth a strategic creative and media plan for engagement that covers all of the touch points and interactions to facilitate that personalized interaction for the CMO.

MTS: What’s the biggest challenge that cross-screen attribution models fail to address in measuring media trends and buying behaviors? How does Hawthorne help overcome these challenges?
There is still a feeling that the ultimate “holy grail” of attribution models has not been created yet. That’s partly because mobile data is not accessible. The cell phone companies own that, so there’s a gap in being able to bring in that piece. Let’s say a spot runs on an offline platform and you search for that product on your phone or computer. We can attribute that individual situation now, but there’s no formal way to do it on a mass scale yet. Although engagement can be measured across screens and devices, there are still limitations on the transactional conversion to a sale.

Hawthorne has very advanced analytics and attribution with our existing tools today that covers an extensive amount of data attribution. Right now, we take web and digital information, such as every time someone is logging on to the brand site, and we can track it from beginning to end, from the initial touch point to where they go on the screen, to when they sign out. We have heat-mapping and we can see where they are hovering their mouse. We take all of that input, the media data, demographic data for the media, spend, all of the POS data, any of the data we can identify, and we run it through our attribution systems to pinpoint that type of person. We can also do it by IP address. We pinpoint that type of person, identify what creative is working and what’s not, and alter a campaign if needed. That’s today’s recipe for advanced analytics and attribution. We’re seeing, quite literally, how much money a client is making on their media investment by evaluating all of those inputs and breaking it down with advanced analytics.

MTS: Could you quote a few examples from the industry?
The very basic challenge is that people are trying to fight advertising, so advertisers must adapt, become more creative and give consumers the information they’re looking for.

Today, in order to see content, you often have to sit through some type of ad or message that a company is paying for, like with YouTube. Netflix is an anomaly in that model, but you’re seeing some of the big companies like Disney stripping their content away from Netflix and still focusing on making money through advertising or ticket sales in the theaters where the consumer is paying for the content. Netflix has started creating their own content to fill that gap, and Hulu+ has a blend of this model with some ads incorporated and some not for primarily mainstream network shows.

Content is not going away. People want it. And in order to support the high production values consumers are looking for, someone must pay for it. The other option is cheap production value like YouTube through user-generated content. At the end of the day though, everything is still being paid for by the brand. Even on YouTube, the video game walkthroughs that are so popular today are often sponsored by the video game companies.

MTS: What startups are you watching/keen on right now?
The automotive industry is very disruptive right now. With options like Tesla’s self-piloting cars on the horizon and the rise of Uber, my son will probably never drive a car. People who own self-driving cars will be able to send their cars out to work every day, renting them out as yet another transportation option while making some extra cash on the side.

Extend the automation to trucks moving across the country, and consider drone delivery as a replacement for localized truck transport. The way transportation is going to change across all of those platforms is going to be huge. Moving products and people will be a completely new and different landscape than it is today, and it will have an immense impact on business and consumer behaviors. I don’t even think it’s that far out. I think that three-to-five years from now things will look completely different.

MTS: What tools does your marketing stack consist of in 2017?
Data scientists and tech experts are the new rock stars of the age right now. And on the physical platform, you can never have enough servers, automation, programming, etc. Those are things you can’t live without and that we need on a day-to-day basis.

At Hawthorne, we build it all in-house. There are no vendors that we use. If anything, it’s just the relationships with our media partners, those who we buy media from, across all digital platforms, traditional stations, any OTT providers and then obviously the brands. So, our relationships are with people more than with outside technology elements. We joke that even though we have all these advanced analytics, it’s still people that are programming all of these things. And we’re not at that artificial intelligence place yet so it’s still very focused on people and relations.

From an operational perspective, we use collaboration platforms, a program like Jira for example, helps track all of your initiatives. You need employee platforms for them to collaborate and work when not face-to-face. And people are a huge part of this too. These platforms are only as good as the people using them, and if they’re not used properly, they won’t work for you.

MTS: Would you tell us about a standout digital campaign? Who was your target audience and how did you measure success?
Our client Equifax wanted to diversify its B2B model with a direct-to-consumer monthly monitoring service designed to prevent credit fraud and identify theft. But there was a challenge. Equifax needed the right messaging, delivered at the right time, to compel consumers to take action.

We developed 22 videos promoting the product. The creative spots opened with gripping facts about identity theft and credit monitoring and relied heavily on customer testimonials. We also created two different narrative-only spots with an educational-based approach.

To target the ads, we used insights gathered during the testimonials to determine the right creative message to deliver to the right device and channel, resulting in a robust digital video plan. The plan used both post-view and multi-touch attribution (MTA) reporting, so we could track and attribute consumer touchpoints along the entire path-to-purchase. This made it possible for us to optimize the plan on a daily basis and further refine the video campaign.

The campaign was a huge success. Cost-per-sale conversions more than doubled within 90 days of launch, and when we used multi-touch attribution to view the results, the cost-per-sale was halved, and the client decided to ramp up its media budget and run a much larger second flight—which contributed substantially to the overall success of this marketing initiative.

MTS: How do you prepare for an AI-centric world as a business leader?
Don’t deny it’s coming. Try to be involved in the conversation in knowing what the rules of engagement of AI will be. That’s why I network and attend things like TED conferences and thought leader events so I’m involved with what’s happening.

Work is becoming more and more about what people are demanding, so AI is necessary. Otherwise doing everything manually that people want or are demanding as individually would become impossible and nobody would make any money because it’s so labor-intensive.

That said, the personal touch is still important. Developers haven’t figured out how to touch humans with deep emotion through AI, so connecting with people deeply and having creative that can do that alongside AI programming is a critical step.

This Is How I Work

MTS: One word that best describes how you work.
I work hard. I’m efficient, I’m forward-thinking, and I’m always looking three-to-five years out.

MTS: What apps/software/tools can’t you live without?
My phone is vital, as is the case for many today. Everything is on there, from social media platforms and applications to all of my consolidated email accounts in one spot. I use search apps on my phone to find best-rated resources in an area, an app for my son’s school communications, and Google search and maps. Collaboration tools in the workplace are also key.

MTS: What’s your smartest work-related shortcut or productivity hack?
I use a free note-taking application called WorkFlowy that I love. It uses bullet point organization and you can expand, condense, move things around, store things and tag items for quick search later. It’s very simple so that’s how I take general notes across all points of my work and personal life.

Also, I get through all of my emails and tasks every day, so I get my inbox down to 30 or so emails that are critical things that I’m in the middle of dealing with. I have to start every day completely fresh without any leftover tasks from the prior day bogging me down, otherwise, I can’t work as efficiently and effectively. That’s not really a hack, but rather it’s discipline about being extremely organized.

MTS: What are you currently reading? (What do you read, and how do you consume information?)
I’m reading a book called Traction, by Gino Wickman. It covers a methodology of how executive management teams can work together in the most simple and effective way and essentially quickly gain traction. I’m also reading The Big Leap by Gay Hendricks, which is focused on the topic of going beyond your internal self-limiting beliefs to live your authentic greatness.

MTS: What’s the best advice you’ve ever received?
That advice concerned problem-solving, and it was actually back in my agent days. The advice was that there will always be problems that you encounter, and nothing will ever be perfect, but it’s not about how the problem inhibits you emotionally or bogs you down in the moment, it’s about how you move on and quickly find solutions. This carries through to my management style today. I always tell my team “don’t come to me with a list of problems without coming with a list of solutions.”

MTS: Tag the one person whose answers to these questions you would love to read:
Elon Musk. He looks at things in the world and says, “what are the things that are going to make an impact in the world?” And that’s what he pursues. You’ve got to have these big ideas to get to the next place, and Elon Musk and other brilliant, big thinkers like him, use their companies as a vehicle to accomplish the big things they’re trying to achieve for humanity.

MTS: Thank you Jessica! That was fun and hope to see you back on MarTech Series soon.