Less complicated, certainly to its client base of small local companies to national corporations, is the Inter/Media model works. By going after remnant inventory, television time can be bought at a reduced cost, saving money for the client yet still giving much needed exposure for their product or service.
"We are paying such a low amount for the ad we are able to achieve our results," Yallen said.
Founded in 1974 by the late Sydney Yallen, Encino-based Inter/Media now has multiple subsidiaries that include an online division and its own production and post-production capabilities.
Robert Yallen joined his father at the company in 1985 after practicing law for a year. The third generation is represented by Lindsay Fontaine, Robert's daughter who is a media buyer.
While advertising dollars have shrunk during the recession, Inter/Media prospers through the diversity of its clients and subsidiaries. Growth areas include the newly created Inter/Media Music Group that will provide expertise to sell music offerings; and the American Target Network of cable stations throughout the nation for which Inter/Media aggregates the local media to create own unique footprint.
"We're looking now to branch out to broadcast networks, which, by the way, have tremendous inventory now because of fragmentation of media," Yallen said.
Question: The Inter/Media Group is made up of multiple subsidiaries. Does being that diversified help during a recession.
Answer: Yes. What is interesting about our organization is that we have done well in an economic downturn. Throughout the different cycles of downturns we've gone through, which this might be the worse I've experienced, we've always done well because of the mix of type of clients that make up our book of business. For example, we represent a proprietary secondary education organization. What do you do if you are out of a job, you retrain. Their business is thriving in the downturn. A lot of our clients do well in an economic downturn. Also our model of buying efficient media, buying the media better, even companies that might not do well can now do well because you are able to promote them more efficiently. All of our companies are doing well but it does help to be diversified. Not every company would want to spend whatever it takes to do television advertising so our digital organization becomes an alternative.
Q: When things turn bad is advertising one of the first expenses to be cut and is that a good move?
A: It is one of the first things to be cut because it is one of the easiest things to cut. I believe it's a bad move because you're not looking to the future. My dad (Sydney Yallen) would share a very interesting story about an old cigarette company that decided to cut its advertising budget, they didn't need to promote anymore. They took a big line item out but then what happened was they lost their market share. When they finally decided they needed advertising again they could never recover. It's a dangerous option to cut advertising. I think what you need to do is use a model like ours. We are buying efficient media that you can optimize, you can analyze as opposed to cutting the whole line item out. What are the options in an economic downturn? Well, one, instead of running 60 second spots, run 30 second spots so you can reduce your budget a little bit. Buy more efficiently. Use a model such as ours where you are buying remnant inventory that there is plenty of. Cutting out an entire advertising budget, I don't think a company could recover.
Q: In this downturn do you have to go to clients to convince them to continue advertising?
A: It depends on the client. Some are doing very well because the nature of their business thrives in an economy like this. We do have a couple of clients that are traditional retail clients whose first kneejerk reaction is yes, we need to cut advertising. What we're saying is that advertising dollars are stretching even more let's take advantage of this marketplace and let's build market share. One thing about our business we are able to determine on a daily basis how well we are doing. We know how it's affected sales and if we are making the right decisions or not.
Q: How do you track the results of ad campaigns?
A: We're looking at the direct channels. If we are running advertisements that have a direct channel such as an Internet component, an 800 inbound component, or a retail component we're looking at those sales on a daily basis. We're attributing to what media are we running. The subcategory of that, is each individual ad we are running whether it be print, Internet, television, whatever. So we are able to identify it and report back to our client how well we are doing.
Q: Is print advertising dead?
A: Print is a major challenge. I think you need to have a niche publication. If you are talking about global information, that is a really tough field right now. They are struggling tremendously. I've never seen print publications feel like they feel right now. Usually the old adage was broadcast was negotiable as far as rates go and print publications never went off rate card. That is not the case. They need to embrace a changing environment.
Q: Your online advertising presence is still fairly new. How is that going and what changes were needed in your approach to that?
A: It's by far the most challenging of all of our subsidies. Internet advertisements in the digital space I think are overrated in many instances. I think the typical Internet person doesn't understand the whole picture. They don't understand they are just one component. Media needs to be a cohesive effort. Response rates from online advertising are challenging, and they are even more challenging to identify truly what motivated that purchase or interest by the consumer. Did that person all of a sudden just Google that company's name? Did they go their site and their offerings? Or were they motivated by other media? That's what we try to identify. When I'm saying the digital space is challenging I believe it is challenging to expect an online campaign on its own with no other media support to provide a positive (return on investment).
Q: What is your role at Inter/Media?
A: What we've basically done is create a holding company and I am running the organization. My father passed away (in March), which is obviously my biggest challenge in life. I've now taken over all the strategy. I rely heavily on Malena Cruz, who is senior VP and CFO. My role is creating these new entities, running the organization and a lot of new business development because that is the growth. I've moved us away from being thought of as a commodity and tried to create real media assets. It's being able to have a menu of offerings that other companies don't have from technology to our own media platforms.
Q: Was your father still involved in the day-to-day operations of the company?
A: My father had a stroke on the way to work. My father was this company's biggest asset. My father was able in two or three words or the nod of his head to close a piece of business or close a contract with a client, where it takes me a long time to explain it to them. It kept him going.
Q: Does having one your children (daughter Lindsay) involved in Inter/Media give a different perspective?
A: Absolutely. When my father graduated college he had to do a business plan kind of like as an undergraduate thesis that was a marketing plan. What was missing from it? Television. It was just at the threshold of television becoming a real medium. So in the Eighties, when I'm getting my college degree and I'm doing my paper what is missing from mine? Online. Now my daughter comes into the business and does her paper and she has online. When you look at the three generations and how we move toward combining a totally integrated plan; there is a totally new perspective even though it is the same metrics, it is still the same analysis. She brings another level; she has grown up in a totally different environment, an integrated environment, a mobile environment. I rely on her, other than having a business degree and understanding business, bringing this new thinking into the media equation.
SNAPSHOT: Robert B. Yallen
Title: President / Chief Executive Officer
Education: B.S. Business, California State University Northridge; JD Southwestern University School of Law
Most Admired: My father, Sydney Yallen. My father was my best friend, mentor, business partner, and a key to my success. He taught me the importance of reputation having earned the respect of an entire industry.
Career Turning Point: Being able to leverage the resources of an organization once we exceeded $100 million dollar barrier. Passing this "growth" barrier has given us the ability to scale and grow our organization now with ten separate business units.
Personal: Married to my wife Linda; daughter Lindsay Fontaine, a media buyer at InterMedia on a path to assume executive leadership in the company; and son Jordan Yallen, attending Gonzaga University on a baseball scholarship and drafted by the Chicago White Sox in the 2009 draft.