Advice from a Digital
September 15, 2009
BY MICHAEL KRAUSS
technology trends should CMOs watch?
marketing, social media, mobile marketing and search marketing
analytics,” says James “Jamie” Crouthamel, principal
of Old Town Capital, a Chicago-based early-stage technology investment
firm, “I’m interested in ‘performance-based
Crouthamel made his
career and his fortune identifying tools and technologies that
make marketers more effective in the Internet age. In 1998, he
founded Performics with the idea of helping traditional marketers
capitalize on e-mail marketing, online affiliate marketing and
then search marketing. Crouthamel sold Performics to DoubleClick
for $65 million in June 2004.
Today, he describes
himself as an “operating investor” and sees plenty
of opportunity in helping marketers respond to Internet and technology
with Adgooroo.com,” Crouthamel says. “[Its] a search
engine analytics and competitive analysis tool for search engine
marketing. They tell you how you stack up against competition
in search, your search advertising share of voice and ways to
optimize spend to increase your ROI.”
Social media are high
on Crouthamel’s agenda.
“People are spreading
all around the Internet. They start at search, but there are a
lot of social media applications out there that are untapped by
marketers. You have to stay focused on social media,” Crouthamel
says. “That’s where the audience is moving, though
ad formats are still shaking themselves out.”
Crouthamel keeps a
focused eye on the versatility of mobile platforms for marketers.
“Mobile can be
a customer-acquisition tool, a relationship-building tool and
a cost-saving tool rolled into one. Customers might use FedEx
because they have a phone ad, but a mobile application on your
handheld will solidify a relationship with FedEx while cutting
costs. You no longer have to call FedEx to pick up a package.
It becomes self service, lowering the cost of customer service.”
A priority for Crouthamel
is tools that help marketers evaluate online and offline behaviors.
“The key is to
understand how search is working with cross-channel activities,”
Crouthamel says. “Customers search online and then go into
a store to buy. They may be influenced by a TV advertisement.
Understanding and tracking that process is where a lot of effort
is being placed,” Crouthamel adds.
Matt McCall, a partner
with New World and Draper Fisher Jurvetson Portage Ventures, has
backed several of Crouthamel’s ventures. “Jamie is
very good at pulling out trends and seeing needs,” McCall
says. “He filters out solutions to address what is realistically
addressable. He keeps things simple and straightforward. Does
it produce results or generate cash? It’s all about performance.”
“There is no
one in Silicon Valley who is a successful online marketer that
does not know Jamie,” McCall adds.
success in building tools, solutions and companies to serve the
emerging needs of marketers are not well known, and Crouthamel
prefers it that way. He doesn’t seek the spotlight. He’s
a builder and innovator.
his undergraduate degree in mechanical engineering from Drexel
University in Philadelphia. He earned both an M.B.A. from the
Kellogg School at Northwestern University and a master’s
in advanced manufacturing.
“I got into the
Internet in 1996 with a B-to-B online exchange call FastParts,”
Crouthamel says. “It was a butterfly model where we were
trying to put together buyers and sellers like an industrial eBay.
We were selling semiconductors. We had over a million SKU’s
but there were always people out there looking for SKUs we didn’t
have. It was a tough model to get going.”
from butterfly models to what he describes as funnel models. He
saw the opportunity to provide software tools and services to
traditional marketers who sought to build their sales funnel through
“I formed Performics
in 1998 and went after the bricks and mortar marketers,”
Crouthamel says. Amazon popularized the concept of affiliate marketing
where a Web site channels traffic to Amazon and receives a percentage
of the final sale (anywhere from 3% to 15%, according to Crouthamel).
At the time, traditional marketers lacked the technology and trained
staff to build and operate affiliate programs. Crouthamel provided
both to companies like L. L. Bean, Eddie Bauer, Spiegel and J.
C. Whitney. His innovation was to take his fee only if he generated
a sale for his client. It was a true performance-based model.
followed Goto.com, which offered advertisers the opportunity to
bid for the position they would appear at as a result of a search.
Goto was renamed Overture, was bought by Yahoo and cut deals with
Microsoft. Then Google debuted AdWords and search marketing took
As the popularity of
search soared with the arrival of Google in the space, Performics
had a base of customers that wanted to sell online and market
through search. As with affiliate marketing, Crouthamel was positioned
with technology and people and a customer base in need of knowledge
to optimize this new technology.
“We quickly became
one of the largest third-party providers in search marketing,”
Crouthamel adds. “Our business really flourished in the
[dot-com] downturn, because advertisers wanted to put their money
on techniques that were performance-based.”
“Within a year,
spending on search went from very little to almost one third of
total online marketing spending,” Crouthamel adds. “One
third of the marketing dollars that were flowing through banner
ads that DoubleClick was serving disappeared. DoubleClick didn’t
have a search marketing product. They turned to Performics and
Says McCall: “From
the start, Jamie said, ‘Online marketing needs a strong
performance element.’ He was smart and observant. He saw
the wave coming. He was well positioned when the Google surge
track record, today’s marketers would be wise to focus on
cross channel marketing, social media, mobile marketing and search
Krauss is president of Market Strategy Group, based in Chicago,
and can be reached at Michael.Krauss@Mkt-strat.com