DM Visionary Assesses Digital Landscape

April 1, 2005

BY MICHAEL KRAUSS

Maybe it was the music from The Motorcycle Diaries that got me thinking about Howard Draft. A song from that movie, “Al Otro Lado Del Rio” by Jorge Drexler, won an Oscar. Listening to it I started recalling serial revolutionaries in the worlds of politics and marketing. I kept thinking about the translation of the song’s title: “At the other side of the river.”

Early in his career, Draft crossed over to the other side of the marketing river. While others sought the comforts of a career in general advertising, Draft headed for the new frontier of direct marketing. Along the journey, he conquered direct marketing and digital marketing.

Draft is an entrepreneurial capitalist who studied philosophy at Ripon College in Ripon, Wis. I don’t know if Draft can ride a motorcycle, but I do know this--at 51, Howard Draft has lived through multiple technology marketing revolutions and prospered.

Draft started in direct marketing in 1977 when it was considered a backwater. He esteemed pioneering direct marketers like Lester Wunderman and Bob Stone and cast his lot among them.

“They were the first to go from the old ‘down and dirty’ direct marketing to consulting for Fortune 500 companies on how to use direct marketing,” Draft says. He began as an account executive making $12,000 a year at Stone & Adler. For a $2,000 raise, he joined a fledgling direct marketing agency called Kobs & Brady. Soon it became Kobs & Draft and then simply Draft.

After growing the agency, he sold it to New York-based Interpublic Group of Cos. Inc. in 1996. Today Draft serves as CEO of the global agency he built.

“I was lucky to work for Bob Stone for a year. I probably learned more in a year working for Jim Kobs and Bob Stone than I learned at any time in my life,” Draft says.

“I couldn’t get a job in a general agency,” he adds and subsequently received numerous offers to run general advertising agencies. He’s turned them all down.

His exploits as a direct marketing pioneer and his agency’s work for such tech clients as Verizon, HP and Computer Associates make Draft an important spokesperson on the future of technology’s impact on marketing.

“If you think about how Michael Dell started his business,” Draft says, “he started doing direct response print ads for computers. He built a brand using direct marketing.”

Draft’s point: Media rates for splashy prime time 30-second commercials have skyrocketed. They don’t necessarily sell all that well. In the last 15 years there’s been a paradigm shift. You can build a brand using direct marketing. You can build a brand and boost revenue and profits. Tie in the Internet and the solution is even more potent and effective.

“Look at Verizon,” Draft says. “Five years ago Verizon didn’t exist as a brand. Eighty commercials are produced a year by Draft. The general agency produces two or three annually. The brand was built off of 60-second direct TV spots and newspaper ads that had a call to action … direct mail … Internet advertising.”

“Verizon was smart enough to realize the power of what we do is build a brand and generate sales at the same time,” Draft adds.

His career spans a unique period of time in modern marketing from the era when television advertising was supreme to the rise of direct marketing to the dawn of the digital age. Today, some young novices might think marketing is entirely about selecting Google ad words. Their parents thought it was all about 30-second “slice of life” television ads.

Both are wrong. Draft is pulling it all together.

“Today, you use television, you use mail, you use print; your goal is to drive the consumer to the Web site,” he says. “If you drive the consumer to the Web site, you are building an even stronger relationship with that customer.”

Draft believes most forms of advertising are suspect in the consumer’s mind. He feels company Web sites have more persuasive power. “When a consumer goes to his computer and gets online and is reading stuff about the corporation, I think psychologically they are more likely to believe it is the honest truth,” Draft says.

“That’s my next revolution,” he goes on, “To understand the psychological difference of a consumer that has been driven to a Web site and how much more loyal they can be with a product.” You can see Draft building quantitative revenue models in his mind factoring in the impact of increased loyalty rates for consumer impressions gained at Web sites.

Draft sees the power of the Google revolution. “I think it’s brilliant. You know key words are critical,” Draft says. Even with search advertising, Draft sees the power of the marketing mix as crucial.

“Being able to get keywords that drive people back to a Web site is a lot of the future of this industry,” Draft says. “How do you get far enough up on the decision so that your company shows up? You are still going to have to use other media to build the brand so the customer can find you.”

What does this revolutionary see happening next?

“There is going to be some intersection between digital television and the digital media itself. I think segmentation will continue to become much more effective. There will be more ability to segment more quickly, less expensively. There’s going to be some mix between streaming digital media and television,” Draft says.

Where would Draft go if he were just getting started today? Instead of crossing a river, he’d cross the ocean: “If I were 22 today, I would work for a communications company in China. I would spend a couple years doing that and I would start my own business in China.”

Draft likes to quote an old adage, “Be in businesses where the wind is at your back. When you are in a business where the wind is at your back, even the average succeed,” he says.

I guess having the wind at your back doesn’t hurt when you’re crossing to the other side of the digital river.

Michael Krauss is a partner with Marion Consulting Partners based in Highland Park, Ill., and can be reached at Michael.Krauss@Marionpartners.com or news@ama.org.