Through Visits to Tech Hub, Big Advertisers Getting More Than Sales Pitches

by Michael Learmonth
Published: May 17, 2010

NEW YORK (AdAge.com) — How did a completely unknown start-up named Huddler find itself huddled in a Menlo Park restaurant with 26 top execs from the No. 2 advertiser in the world? It snagged itself a stop on Unilever’s tour of Silicon Valley earlier this month.

Big marketers have been taking get-to-know-you tours of Silicon Valley for years, with tech companies literally rolling out the red — or in Yahoo’s case, purple — carpet. They have helped those marketers understand then-new concepts such as online-display advertising, search and social networking.

But today, there’s less concern with just what kinds of ads marketers can buy and more interest in the product roadmap at spots like Google, Facebook and Hulu — as well as lesser-known startups such as Formspring, Millennial Media and yes, Huddler.

Unilever brought its entire global marketing team to Silicon Valley, including Chief Marketing Officer Keith Weed, head of U.S. media Rob Master and global brand managers for products such as Dove and Axe. The more than two dozen execs were interested in the consumer behavior changes that new technologies have wrought.

When Unilever visited Facebook, founder and CEO Mark Zuckerberg sat in and took questions ranging from “What are your plans in mobile?” to “How do I create connections between people and things in a network like Facebook’s?” Because Unilever’s brand managers are far-flung, there was a wide variation in digital expertise present; most had worked with Facebook before, but mostly within their own region or territory and not on a global basis.

More phones than toilets
“What I want to make sure is we are ahead of the consumer rather than being in a position that we are behind the consumer,” said Mr. Weed, who took the top marketing role at Unilever a little over a month ago. “This is a very different type of marketing. We have scale coming into digital now and the whole advent of mobile. There are now more mobile phones in India than toilets. I truly believe it is the defining invention of our time, and we think it will continue to explode, and it is no longer a Western phenomenon.”

Once, Silicon Valley thought of Madison Avenue as a spigot of ad dollars they could just turn on — Unilever being one of the biggest, dropping $7.4 billion on advertising in 2009, according to company filings. But marketers have realized the internet isn’t just a place for ads but a means to create bigger interactive relationships with consumers. For savvy digital players such as Unilever, the digital tour wasn’t about CPMs or page views; rather, it’s about learning how to interact with consumers who spend more and more of their time online, and to discover new social tools to participate in what’s going on there. That, of course, and selling a few more cans of body spray.

That shift in vision and philosophy calls for some sellers to think differently. Take Facebook, for example. While it primarily makes money selling engagement ads that drive people to brand pages, marketers and agencies want it to focus less on selling media and more on helping them solve problems and create big ideas. One agency executive suggested Silicon Valley companies should be incentivized less on ad sales and more on creating bigger programs. In other words, when marketers want to be more than ad buyers, tech companies need to be more than ad sellers.

Facebook has begun to show a willingness to work this way. Many marketers want to be involved earlier in the product launch process, and Facebook began working with some of its biggest marketers on location-based applications before the company rolled the feature out to consumers — and even before it publicly acknowledged it was more than “working on” a product.

The opportunity isn’t about gathering up more ad dollars, though that will likely be the end result. Rather, location-based functionality will make marketers’ brand pages and other interactions on Facebook richer, and their existing ads work better. In another example, Twitter launched its promoted-tweets product with the backing of Virgin America and Bravo.

Beyond advertising
“Digital isn’t just a place to run advertising,” said Facebook head of sales Mike Murphy. “There is huge interest from big brands from all categories about ‘How do we connect with people where they consume media?'”

Increasingly, that connection is about reaching them where they happen to be spending time — which is increasingly Facebook — rather than pulling them out of experiences, Mr. Murphy said.

“It’s not as if this is new to them, but it is this level of commitment that has never been done,” said Michael Kassan, who as a CEO of Medialink, a consultant-slash-digital matchmaker organized the tour for Unilever. He had clients on both sides of the table — News Corp. and Microsoft, in addition to Unilever. The week-long itinerary was break-neck: Unilever met with Google, Yahoo, Facebook, Fox Interactive, Amazon, Microsoft, Vevo, LinkedIn, Formspring, Millennial Media, several venture capital firms and, of course, Huddler.

While the big Silicon Valley players got the whole Unilever team, some smaller startups got to make their pitch at two dinners (at Marche and Iberia), also in Menlo Park. Mr. Kassan put three VC firms on Unilever’s itinerary — Sequoia, NEA and Physic Ventures. That’s how Dan Gill, Stanford grad and CEO of Huddler, ended up at a dinner with Mr. Weed, Mr. Mason and Unilever product managers from around the world.

Huddler is a software company that built a platform for online-discussion boards. Its model is to find the ones that have scale and would make sense for an advertiser segment such as electronics or parenting, and bring them onto a software platform that allows advertisers to join the conversation. “We are aggregating millions and millions of unique visitors a month moving from old discussion forums [to Huddler],” Mr. Gill said, “communities around a particular hobby or lifestyle that involves lots of products.”

In other words, social media isn’t just about Facebook, and Mr. Gill got a chance to deliver that message to just about everyone Unilever sent to the Valley that night because Mr. Kassan shuffled the tables before every course. “I was surprised how open-minded they were to how people are spending time online,” he said. “Keith [Weed] was saying, ‘We’re the second-largest advertiser on the planet. How do we be sure we stay fresh, relevant and on the cutting edge?'”