Adrian: Can you tell us a little bit about yourself?
Patrick: I’m married and have a fifteen-month old son, Owen. I met my wife, Michele, at a summer camp that we worked at. The camp is called the Hole In The Wall Gang, started by Paul Newman for kids with life-threatening illnesses, and it’s really a tremendous place. We worked there for a few summers together while I was in college, then lived in Boston for a while, and eventually moved back here to Philly, my hometown.
Michele provides me in my personal life the same type of support that my business partners, and our employees provide each other at DMi Partners. We all complement each other very well.
Adrian: Tell us how DMi Partners got started and where you are now?
Patrick: We started in 2003. My two partners are Adam Weil, who’s our Chief Marketing Officer, and James Delaney, who’s our Chief Operating Officer.
James and I were actually college roommates at Harvard. We lived together for three years. We figured if we didn’t kill each other then, we probably wouldn’t kill each other later.
We got started with the idea that we would be developing a sales and marketing vehicle with an online focus. We are an agency. We love the agency business, but that’s not the only thing we do. We use that model for client opportunities that aren’t agency related, where we have some higher-level partnerships.
We also have initiatives that we start up, that we acquire, or that we have a vested equity interest in. Examples of that are E-College Finder (ecollegefinder.org), which is our generation portal for the online education space, and America’s Best Barbecue, an online retailer of grilling equipment and accessories that we acquired earlier this year.
Adrian: If someone wants to work with you to get an offer running, how does that start? How do you keep companies from going off and trying to duplicate the work you do in order to save commissions?
Patrick: Taking it from the beginning, we find out what the client’s goals are. If we can structure a relationship in a way where everybody’s goals can be met, we work together. Certainly not every advertiser can set up a relationship that will be beneficial to both parties.
About preventing companies from attempting to broker themselves, the idea is that we’re always adding value. If we’re not adding value, then there’s really no reason for us to be there. We understand that, and hopefully the client understands that. I also hope that we’re performing at such a level that they wouldn’t be able to replicate the success they are seeing with us.
Adrian: Do you generally charge upfront fees or do everything on a rev share?
Patrick: There is no “generally” with us. We do everything, and our flexibility is our competitive advantage. If the client is accustomed to up front fees, then that’s the way we’ll structure it. If they don’t want to do that, they don’t have the cash resources, or they’re somewhat apprehensive about what we think we can do, we’ll put some more skin in the game.
Adrian: Do you find you’re spending more time or less time because you have internal projects?
Patrick: We spend more time because we’re in charge of more components. So, we spend more time because we manage the fulfillment and the finances. However, if you compare the agency advertiser dialogue and the amount of time that we spend for it, I’d say it’s pretty much on par with the other opportunities that we have.
Adrian: One of your clients I’m interested to know more about is J.G. Wentworth. I’m very interested in them because of the structured settlement, which was running, a couple years ago, at 100 dollars a click.
What point did you step in, and have you ever been involved in managing campaigns at 100 bucks a click?
Patrick: Yes, we have been involved in managing campaigns at 100 bucks per click. And at the time, those campaigns were effective for the client. We’re no longer at 100 dollars.
If 100 dollars a click is generating conversions at a rate and value that makes sense, then that’s great. When it’s not, it’s certainly more difficult, because there’s nothing you can do when you’re at 100 dollars per click. You have no further room to go up, and you’re not really competing with anybody, it’s just analyzing the data. When you’re at a much lower CPC, you have to be analyzing the data more regularly. Intraday, day parting becomes important, and you also have to assess the value of those customers.
Adrian: Do you want to talk about some of the other big clients you have?
Patrick: Mitchell and Ness is a very interesting client. We basically manage all of their e-commerce. We manage their call center and the contents of their website.
Adrian: Can you tell us a little about CPA Café?
Patrick: CPA Café is our affiliate network. It’s not a huge affiliate network, but that’s not our goal. Our goal is to build a significant list of affiliates that are specifically targeted to industries where we have clients that have some interest.
There’s a whole lot of websites out there that don’t run affiliate programs that should be running them. The affiliate programs, the way that we manage them, are a tremendous way to aggregate smaller amounts of traffic on sites that you wouldn’t want to pay CPMs to advertise on.
Adrian: Do you ever work with big name brands, such as Home Depot, Best Buy or anyone where, instead of doing everything just CPA, they are going for branding?
Patrick: Well, we do focus on branding for those companies that we talked about. We haven’t really worked with any big name brand to date, and I don’t know if our existing model would work as well for them. But I’d say that the same marketing principles apply, whether you’re focused on branding or profitability.
Adrian: If someone does want branding, you just build that into the campaign. So are you currently managing many campaigns that are dealing with these high branding type CPMs?
Patrick: We don’t do a lot of work in the high CPM world, no. If we’re going to buy mass media it will typically be more remnant inventory, because we’re focusing more on niche customers.
Adrian: To that end, where do you see you guys ending up in five or ten years?
Patrick: I don’t know yet. I know we’re going to have a hugely strong Internet sales and marketing vehicle that we’re going to be leveraging for products and services across a broad segment of industries.
We need to keep focused on the core things that grow our business each and every day and keep growing incrementally, and take advantage of the areas that we see opportunity and make sure that we are able to identify the areas that present risk and get rid of them.
As long as we keep doing that and building incrementally, we’re going to be a very successful company in three to five years.
Adrian: In an email you talked about the three types of relationships that you have with clients. The Mitchell and Ness type is really full service, full service plus. There’s taking an equity stake, such as America’s Best Barbecue, and then there’s the typical agency-client relationship, . Where do you see things going longer term, what kind of relationships are you managing?
Patrick: I think ideally, we’d be doing all three. I think there’s a value to all three as an organization. It’s good to be building the value in the company by growing the brands that you own.
So I think there are varying components that you take away from each of those relationships, and I think having all three will make us a stronger company. So ideally we have all three. But if at some point it makes sense for us to cut out one, or two, or all three and focus on something new, we certainly will. There’s also good and interesting knowledge to be gained from traditional agency relationships, and that the amount of information that you provide companies and get back from companies in a revenue share, a profit share, or a joint venture relationship, is really second to none.
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