Canadian Business Magazine, March 15, 2004
Max Valiquette makes youth marketing look easy.
When you're interviewing a company president, you don't want to read too
much into it when his dog steals your boot and romps around the room slobbering
all over it, pees copiously under the boardroom table, then caps things
off by jumping up on you and biting holes in the sleeve of your favourite
shirt. These things happen.
Still, it's hard to avoid the conclusion that Youthography, a Toronto-based
youth marketing consultancy, is not exactly a buttoned-down environment.
The mainly twentysomething staff work in an ultra-casual office that's
more like a campus newspaper than a business. Amid the music and general
buzz, it's no wonder that Seamus, president Max Valiquette's just-adopted
13-month-old black Lab, was so hyperstimulated that he acted out, mortifying
his new owner. Yet it does make you wonder: Can a company where the president's
dog runs loose possibly be engaged in serious business?
Actually, it can. Since its founding in 2001, Youthography has become
one of Canada's leading players--possibly the leader--in the booming field
of selling expertise on marketing to people aged 13 to 29. And its exuberantly
youthful, if a bit over-the-top, atmosphere is a plus for clients such
as Bell Mobility, Molson Canada, CIBC, McDonald's, Hershey, Kellogg, the
federal and Ontario governments, Nokia and Humpty Dumpty. They understand
that Youthography's staff know youth culture because they live it every
day. And they see that beneath the carefree surface are sharp minds offering
consumer insights that help drive sales to a target group more complex
than any other. For instance, John Hillis, director of youth marketing
at Bell Mobility in Mississauga, Ont., a client since 2001, credits Youthography
with helping to boost Bell's market share among youth 16 to 24--who make
up roughly 25% of existing cellphone subscribers and 30% of all new customers--by
fully eight points over the three years ending September 2003.
At the heart of Youthography's growth is a simple idea: if you want to
find out how to market to youth, ask them. If you earn their trust, most
young people are remarkably willing to help. This is a 180-degree turn
from "stealth marketing," a largely U.S. practice based on the
premise that you're more apt to sway people if you don't let on that you're
marketing to them. Valiquette was sharply critical when Dr Pepper/Seven
Up Inc. in the United States quietly paid the creators of five top blogs
(web diaries) to start hyping Raging Cow, a new milk drink. He says it's
fine to, say, hire reps to join online chats, or to give key influencers
products and ask them to tell their friends about it--but only if you
don't hide that you're marketing: "Why would you want to potentially
create something with the consumer that leads them to feel like you've
hoodwinked them?"
Debra Kavchak-Taylor, director of market research at Molson Canada in
Toronto--which has used Youthography since 2002, in particular because
its findings, unlike syndicated research, are specific to Canada--says
young adults are more sophisticated than ever. "Marketing is taught
in school, so it's part of their vernacular," she notes. "As
marketers, we have to acknowledge that and be aware of how savvy and experienced
our consumers are, and not attempt to be dishonest."
While the debate rages over whether to go stealthy or upfront, Youthography's
staunch advocacy of the latter approach hasn't stymied its rapid expansion,
despite sluggish times in the marketing sector. Not that it has the field
to itself. It's part of a new wave of youth marketing specialists, including
Gearwerx of Montreal, and Youthopia, D-Code and Youth Culture in Toronto.
None of them disclose revenues, but Valiquette says his company's are
into the seven figures and growing 30% to 40% per year. Compared to its
rivals, he adds, "we're as big or bigger than any of them"--though
dwarfed by research generalists like Ipsos-Reid.
Marketing professor Alan Middleton at York University's Schulich School
of Business cites two key reasons for the rise of the specialists: baby-bust
youth are less numerous but richer per capita than boomers were at that
age, and they influence perceptions of what's cool for other age groups.
Hillis says they're keen early adopters, especially of technologies like
downloading ring tones, where young people led the way to 150% sales growth
in the year ending December 2003. And Valiquette says the sudden success
of cool youth brands like Jones Soda convinced many big-brand marketers
they needed to better understand the young.
Valiquette brings an impressive, eclectic array of skills to bear on this
quest. He's a former debating champ and TV host (of TVOntario's youth-culture
show Mr. Jones), a sometime sketch comedian who keeps a high profile through
speeches, interviews and articles for industry magazines. His encyclopedic
knowledge of pop culture helped land him a job at 23 with the Toronto-based
ad agency Bozell Worldwide as a "consumer probe" and later "consumer
navigator." In 1999, he joined NRG Group, an Internet incubator in
the city he now says was part of the "dot-com vacuous optimism"--though
he ruefully admits that "to some extent, everybody there drank the
Kool-Aid." As "strategic innovation architect," he ran
the youth marketing division, NRG Solutions, whose revenues grew solidly
while the rest of the company underwent a wild boom and bust. Three Bay
Street veterans--Aubrey Baillie, former deputy chair and COO of BMO Nesbitt
Burns; Robert McLeish, former vice-chairman and director of Merrill Lynch
Canada; and Peter Wallace, former president of Midland Walwyn--bought
NRG, replaced the founders, and last year reinvented it as Welton Energy
Corp., an oil and gas company. Valiquette's division was spun off as Youthography
in January 2001. As the biggest shareholder, he holds majority control
with two partners he worked with at NRG Solutions: Mike Farrell, now director
of products and services, and Rick Tremblay, director of account services.
Youthography's services now include executing marketing programs as well
as research. For example, last year it booked musical acts, DJs and venues
for the Solo Music Series of indie-band concerts in Ontario, sponsored
by Bell's youth brand, Solo. Results were so gratifying that Bell is considering
expanding its efforts this year into British Columbia, Alberta and Quebec.
Even as his company thrives, though, Valiquette faces an unusual challenge:
he turned 30 last May. Ouch. He's moved right out of the youth demo. "Have
I, though?" he counters. "Look at how I'm dressed, at the place
I work. Really?" And there's no doubt Youthography's three lead partners
still live life young. Mike Farrell sings in a punk band called Pariahs,
and Rick Tremblay lives a classic single-young-urbanite life, with plenty
of cycling, checking out galleries, playing hockey and going to bars and
restaurants. They easily find common ground with the thousands of young
research participants. (Youthography surveyed well over 25,000 people
in 2003, had "in-depth conversations" with 2,500, and its "youth
community" of regular e-mail recipients tops 10,000.) Just to be
sure, "when any of us moderate, we swear," says Valiquette.
"We always start off the discussion talking about a relevant piece
of youth culture to connect to these respondents."
Some respondents commit to far more than just a one-off focus group. Adam
Binet, a 20-year-old political science student at Mount Allison University
in Sackville, N.B., is spending a year on a 12-member youth advisory panel
for Aliant Mobility, a BCE-controlled company serving Atlantic Canada.
His work kicked off with a weekend retreat last June in Halifax, and since
then he has averaged two hours per week online answering questions and
replying to other panelists' posts on areas such as advertising, promotions,
phone design, rate plans, ring tones and instant alerts. Binet says all
this focus on cellphone marketing has planted a seed: "It's always
in the back of my mind to a degree."
Yet why help out some big corporation? For starters, the compensation
is OK, for a student. Binet gets 0 per month, plus unlimited cellphone
use for a year. But far more important is the chance to be heard. "When
I see a commercial on television, or an ad in the newspaper, or a new
rate plan, and know that I had a part in this process--really, really
behind the scenes - that is an amazing feeling," he says.
Such enthusiasm may surprise those who see youth as No Logo-ites who
loathe marketing. But that's only true of a minority. What Youthography
participants hate isn't marketing, it's stupid, irrelevant marketing. If
companies are going to market to you anyway, they figure, you might as well help
them be smart about it. Nicole Fawcette, a 21-year-old English literature
student at the University of Toronto, says being on a Youthography panel
was "like working on the inside. Ultimately, if you're a consumer
of the product, why not help make them better, and why not help make them
something that you actually want?"
But this help will only yield usable insights if researchers truly listen.
Middleton says Valiquette is a good researcher because he doesn't have
pre-set views. "Max has the capability of getting more into their
heads, because he doesn't think his beliefs are better," he says.
"He actually wants to understand where they come from."
Andrew Dale, a 16-year-old student at Thornhill Secondary School in Vaughan,
Ont., has been involved in various Youthography research since he was
13. He was especially pleased by the interest food makers and distributors
showed when his four-member panel talked about teens' diverse eating habits
at the Foodservice Interchange Conference in Toronto in late January.
"They were so impressed, knowing what we want, knowing our habits,"
he says. "The response we got was really overwhelming."
OK, so the kids are having a blast, but where's the return on investment?
As with most marketing, it's exceedingly tough to gauge what a single
element adds to sales. "Your clients know if you're contributing
to the process or not," says Valiquette. "Being called on the
carpet--'Can you show me that these specific dollars help?'--no. But do
I know that you will suck more without this? Yes, I absolutely do."
Hillis offers examples of insights that helped drive Bell Mobility to
its eight-point share gain in the vital 16 to 24 bracket. He says the
idea for a just-launched rate plan, All-in-One Lunchtime & After School
Calling, grew out of youth research, largely by Youthography. (Bell also
uses syndicated research.) The offer of unlimited local calls from noon
to 1 p.m., 3 to 5 p.m., on weekends and throughout July and August originated
by asking youth what they'd love to see in a rate plan.
In November, Bell Mobility debuted a North American first, a World Wrestling
Entertainment phone that includes WWE news, alerts about upcoming events
and access to front-line tickets. "We're really pleased with the
market acceptance," says Hillis, which he attributes in part to research.
Youthography project manager Mike D'Abramo, himself a WWE devotee, interviewed
fans at wrestling events last summer to help determine how to craft a
single offer that would appeal to both hard-core and less-committed fans.
It turned out the latter didn't want a WWE logo on the phone, although
diehards loved the idea. Bell decided to put the logo on a carrying case,
knowing only hard-core fans would actually use it. Getting such details
right is tricky, yet essential. "People who are not immersed in youth
culture wouldn't know the fine balance, but Youthography knows it inside
and out," says Hillis.
Youth know when a marketer nails it. Nicole Fawcette says Solo's new ads
are more focused and appealing than the ones her panel tested 18 months
ago, "and I think that's because of us, because we've strained that,
'This is what we want. This is the type of advertising we like.' "
And Andrew Dale says Youthography gave panelists a confidential list showing
how Bell had implemented their input: "It's direct evidence. 'You
gave us this input, and now this ad's out there, now this cellphone faceplate
is out there.' So you see, 'Wow, I helped create that.' That's a really
satisfying feeling."
Young people, it seems, are serious consumers who want marketers to listen
closely, not play them for fools. And that's not bad advice, no matter
which age you're targeting.
Kids buy the darnedest things.
How to successfully market your product to young folks:
1. Don't patronize them. Just because they're young, it doesn't mean their
lives are only about partying. Give them rational reasons to buy your
stuff, not just fun times.
2. Get to know them. Spend the time it takes to build a relationship where
they'll trust you enough to offer you true insights on how to market them.
3. Make it obvious you're marketing. Youth are a sharp bunch. If you try
to hide the fact that you're marketing, you'll likely get caught--and
the backlash won't be pretty.
4. Assume they're marketing savvy. These are people who wrote essays in
Grade 4 media literacy classes on "The brand called me." They
understand targeting and appreciate it when it's done in a smart way.
5. Listen to them. Set your preconceived notions aside and pay close attention
to what they really think. A little R-E-S-P-E-C-T goes a long way.
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