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[Marketing & Selling]
Who’s Hot: Orb
Hed: Surviving the Shakeout
Deck: Orb is standing its ground with ROI marketing and sticking to the basics.
Pull quote “The Internet runs 24/7 with constant traffic. We wanted to fine-tune our
marketing in the same way and Orb helps us do that.” -- Michael Tive, Sony Electronics
e-Solutions
Marketing is a game based on hunches, which doesn’t always bode well for the business
involved. As someone once said: “Ten percent of my marketing is working really well. I
just can’t figure out which ten percent.”
For Laura Berland and Andrew Pakula, trading hunches for in certainty was the key to
building Orb, their 4-year-old online marketing technology firm. Based in New York, Orb
scored big in 2000 by wooing the prestigious Forbes.com and Sony Electronics eSolutions accounts away from other marketers.
Their “no-hunches” policy figured in two ways. One was the co-founders' novel approach
to Internet marketing that favored real-time ROI (return on investment) research
technologies instead of time-consuming paper methods. It’s won them some enviable
praise. Says Michael Tive, marketing VP for Sony Electronics e-Solutions, a billiondollar company: “Orb spoke more intelligently and were focused. They have a reasonable
experience base that gave me confidence.” And Orb’s software was the only one to track
marketing effectiveness in real-time, he adds.
The second was their radical way of growing Orb itself: digging into their wallets instead
of relying on outside money. The duo finally took the jump this year by allowing minority
investors in, but they’re still grateful they didn’t ride the Internet roller-coaster of the last
18 months. Their commitment to profitability has allowed the company, now with 30
employees, to stay solvent since its inception. In 2000, Orb had revenues of $14 million.
No Guts, No Glory
ROI marketing is based on the concept that marketing should be planned, measured and
evaluated to determine its effectiveness. While traditional ROI marketing typically takes
months, Orb has created a niche by crafting software (aptly named “Orbit”) that speeds up
the process by allowing e-businesses to measure marketing effectiveness in real-time and
make changes on the fly. It tells clients immediately what visitors are doing after they
click through online advertisements, tracking them from their first click on an ad or Web
site to a final transaction.
The technology was spawned by another hunch: that the business world would soon tire
of Internet marketing promises and instead seek a firm that could prove its marketing
worked and be accountable for the marketing messages it created. Orb wanted to be that
firm.
With a combined 40-plus years executive-level experience in marketing, Berland and
Pakula decided to stop working for others and form their own marketing firm. During the
high-flying days of the Internet when venture capital funding was often cemented over a
beer in a bar, the two instead eschewed investors and launched Orb in 1996 with just
three clients.
“We built Orb the old-fashioned way,” says Pakula, now president and CEO (Berland is
executive VP). “It was a challenge not getting sucked into the Internet funding craziness,
especially when you’ve got to pay the electric bill. We had to watch every dime, meet our
goals and reinvest our profits. But we founded this company on the premise of
accountability and we stuck to that.”
The two initially sought out technology firms to help it develop the Orbit software. When
it could find no takers, the company hired its own software engineers and developers.
The Buck Stops Here
The first few years, Orb concentrated on building a strong foundation and establishing a
reputation by hawking Orbit everywhere. In 2000, as other online marketers and
advertisers without real-time ROI-marketing lost steam, Orb increased its profile by
landing a few well-known accounts. Earlier last year, they lured the prestigious
Forbes.com account away from online marketer Avenue A. Orb also won the Sony
Electronics eSolutions account in late summer from 24/7 Media, another online marketer.
Those big accounts like the new way of testing the success of their adverting. It was
quicker than the normal cycle of ROI marketing, which involves painstaking rounds of
research. “With Orbit, we’ve sped that cycle up to real-time," says Berland. "You see
instantly how your strategy is working and can change it immediately if you’re not getting
the kind of response you want. It’s Web-based, so it’s pretty easy to use.”
A bakery might use ROI-marketing to help it run smoothly during holiday rushes.
“Placing targeted Web-based ads that offer free cookies or cupcakes to customers who
order early can help with inventory and staffing control,” says Pakula. “You’re trying to
engage the customer outside the store and bring them inside with incentives.”
If the bakery discovers more customers are responding to the free cookies over the free
cupcakes, the ad can be instantly changed to delete the cupcake offer.
By blending marketing and technology under one roof, Orb took things a step beyond
tradition, allowing the firm to draw on in-house expertise as needed. It also helps
customers understand how the Internet can be used as a smart marketing tool, says
Berland. “Clients have marketing and technical needs that we can put together for them,
allowing both of us to react more quickly to changing situations.”
Many marketing firms have proprietary tracking software, says Sony’s Tive, and most
handle marketing basics in a similar fashion. But Orb offered a superior product, he says.
“Orb’s software seems more functional. Their ability to swap creatives -- ads, banners,
etc. -- in real-time is something most advertisers are only now beginning to understand,”
he says. “The Internet runs 24/7 with constant traffic. We wanted to fine-tune our
marketing in the same way, and Orb helps us do that.”
Calculated Risk
Orb seems to be on to something. “The whole point of ROI marketing is to provide
statistical feedback,” says Jarvis Mak, Internet analyst with NetRatings in Milpitas, CA.
“ROI marketing can target and bring in qualified buyers to a given market. It’s starting to
gain steam on the Internet as more companies learn how it can benefit business.”
But while Web site use is up, a surprising 60 percent of the sites do not even track hits,
which is a bare-bones method of determining Web site marketing effectiveness.
That will likely change. A recent study by Ketchum-Pittsburgh, a worldwide marketing
firm, showed that 54 percent of businesses plan to expand their use of research to
evaluate marketing ROI by 2002.
By its own admission, Orb isn’t well-known yet. But slowly, more clients with Web sites
are finding their way to the tiny marketer. From Internet startups like mySeasons.com to
established blue chips such as Sprint, Citibank, Time and Sony, client word-of-mouth is
beginning to spread good things about Orb.
Licensing Orbit is becoming a stronger cash cow for Orb. Companies with their own inhouse marketing department, for instance, may not need Orb’s marketing help. But the
idea of licensing Orbit to analyze their marketing is catching on, which is a boon for Orb's
revenue stream.
Orb is now eyeing several other options. It recently agreed to a strategic partnership with
CheetahMail, an e-mail technology vendor. The partnership will provide an added aspect
of ROI marketing to Orb customers – opt-in e-mail marketing, which allows customers
the choice of receiving feedback via e-mail.
The company’s software engineering department is now waiting for broadband speed to
improve and Internet telephony – which allows voice traffic to be routed over the Internet
or a corporate intranet – to become commonplace. “We want to take advantage of new
distribution lines,” says Pakula. “And we want to work with more and more companies
that know they should be marketing on the Internet but just don’t understand the
complexities yet.
Being called a just couple of marketers who learned technology is fine with both the
founders. “We understand marketing and we understand the Internet,” says Pakula.
“That’s what our clients need.”
Today’s New Economy seems to have plenty of room for small businesses with oldfashioned business ideals and some technology savvy.
At a Glance
Name: Orb
URL: www.orb.net
Location: New York
Founders: Laura Berland and Andrew Pakula
Founded: 1996
Industry: Marketing
Employees: 30
Revenues: $14 million in 2000
Related Links
<a href="http://www.orb.net">Orb</a>
<a href="http://www.netratings.com">NetRatings</a>
<a href="http://www.sonystyle.com">Sony Electronics e-Solutions</a>
<a href="http://www.ketchum.com">Ketchum</a>
SOURCES:
Jarvis Mak, Internet analyst
890 Hillview Ct., Milpitas, CA 95035
408-941-2964
[email protected]
Michael Tive, VP of marketing, Sony Electronics e-Solutions Co.
155 Tice Blvd., Woodcliff Lake, NJ 07677
201-930-7719
[email protected]
Mark Deasy, VP, Ketchum-Pittsburgh
Six PPG Place, Pittsburgh, PA 15222
412-456-3843
Laura Berland and Andrew Pakula, co-founders, Orb
276 Fifth Ave., NYC 10001
212-684-8335 x11
[email protected]