Online Ad Agency: Princeton Partners

Corrections or additions?

These articles by Barbara Fox were prepared

for the May 23, 2001 edition of U.S. 1 Newspaper. All rights

reserved.

On the Web & On the Go

Last year many dotcom companies found themselves on

the bottom of a rubble pile, but firms that use the Internet on behalf

of pharmaceutical clients have survived. One in particular —

Simstar

International — claims a spot near the top of the heap. "In

the pharmaceutical marketing space, we are agency of record for more

brands than any other company out there," says David Reim, the

founder. "We like to think that makes us the best."

Eight years ago David Reim’s young company was doing digital work

for pharmaceutical companies by making CD-ROMs. He got written up

in 1993 as "an entrepreneur of the 1990s" by futurist John

Naisbitt. Then Reim put up what is arguably the first innovative

website

for a drug brand, for Claritin.

Now Simstar represents 27 pharmaceutical brands and 10 of the top

20 pharmaceutical companies. Its most recent work can be seen at

www.glucovance.com

for Bristol-Myers Squibb, www.detrolla.com for Pharmacia, and

www.effexorxr.com

for Wyeth-Ayerst. Other clients include Aventis, Bayer, Hoffmann-La

Roche, Johnson & Johnson, Pharmacia, Sanofi-Synthelabo, and

Schering-Plough.

With 105 employees, Simstar has been named both an Inc. 500 and a

Forbes Deloitte & Touche Technology Fast 500 company, and it just

landed a $10 million private equity minority investment from

Connecticut-based

Catterton Partners. In June Simstar will double its space with a move

from 16,000 square feet Class C space Research Park to 30,000 feet

of Class A space at 202 Carnegie Center. For the fourth year in a

row, it expects to double its revenues, which were $9.6 million last

year.

Many would take Simstar out of the dotcom category — the web

portals

and E-commerce retailers. It is a pharmaceutical services company

and — unlike most dotcoms — has no red ink. "We have been

profitable since day one," says Reim. "When I first heard

of how dotcoms were burning money, I had to read it 12 times. I never

understood how you could run a business without being profitable."

Reim justifies his June 8 move to the Carnegie Center, as a "step

wise investment decision" and notes that he is funding it out

of operations, not venture capital money. Bill Barish of Commercial

Property Network helped find the space after an 18-month search.

Simstar

has a 3 1/2 year sublease on already-furnished RCN space —

ordinarily

worth $30 per square foot and presumably costing somewhat less on

sublease.

Reim is fairly fierce about protecting profits. Three years ago, at

the launch of healthcare websites like WebMD (which lost more than

$1 billion just in the last quarter), his clients were sitting-duck

targets for unproven strategies. "When healthcare dotcoms were

rushing to pharmaceutical companies saying give us a million dollars

because we have licensed a good name like DrKoop.com — I said,

let’s slow down," says Reim. "I was concerned that pharmas

would spend a lot of money building the dotcom’s equity, rather than

their own brand equity. In many cases, those dotcoms did not survive

and I am proud to say that our clients did not lose significant

money."

"One thing I really liked about Dave was that the majority of

agencies told you to do what benefited their pocketbook, and he was

not afraid to tell you when he thought an idea was stupid," says

Rob Rebak, who used to work for one of Simstar’s clients. He left

his product manager’s job to buy into Simstar and now is Reim’s

partner

and senior vice president of strategy and development. "When the

Internet was really growing and nobody knew anything about it, Dave

was a big thought leader in the space," he says.

"In contrast to an agency, in which the Internet is just another

media channel, we spend most of our efforts leveraging the marketing

efforts online," says Reim.

When Internet spending was limited to pilot projects, nobody paid

much attention to it, but spending attracts attention now. "As

the budgets in E-marketing go up, we are getting onto the radar screen

of the CFOs, and they are asking more questions about what value the

Internet-based efforts generate for the company," says Rebak.

Simstar’s answer to such potentially uncomfortable questions is a

new trademarked program, Combinatorial E-Marketing (CEM), a tool and

methodology built on six years experience — that’s 60 years in

Internet time. "Introduced last November, CEM is what our most

forward-thinking clients are adopting," says Reim. "It

represents

only 20 percent of our business; it’s pretty cutting edge."

Most traditional E-marketing is based on metrics — the numbers

of signups or the numbers of visitors. But CEM takes a novel approach.

Like combinatorial chemistry, in which computers crunch numbers to

create limitless formulas for molecules, the CEM platform looks at

lots of different permutations of messages that could affect

behavioral

change. With tools of personalization, content management, analysis,

reporting, and campaign management, it analyzes the return on

investment

as "velocity of assimilation" or the speed at which the

website

affects behavioral change.

"CEM measures the behavior and the change to behavior — to

cause someone to see the doctor, change a medication, or take a

medication

— and how these changes have value to our client," says Rebak.

If a pharma’s prescription drug is about to go off patent, for in

stance, it would be very valuable to influence a patient to bypass

a generic drug in favor of taking a new form of the prescription drug.

CEM’s "fuzzy" mathematical models makes sophisticated guesses

about which customers have the most potential. It assigns dollar

values,

from zero (a person who is totally ignorant of the drug) to someone

vaguely interested in it (hypothetically $50), to the top value, the

$20,000 jackpot person who will use the drug properly and tell all

his friends about it.

CEM’s real-time software tool observes the behavior of a website

visitor

and determines where that person fits along the behavior continuum.

Another tool offers content and messaging intended to push that

visitor

to the next level on the behavior continuum. All of this without

requiring

the visitor to fill out a form.

"Based on our industry-leading experience, we have found that

more than 90 percent of pharmaceutical website visitors are reluctant

to register or provide personal health information online," says

Rebak. "Our implicit measurement tool should play a major role

in improving the online marketing practices of pharmaceutical

companies

by measuring, analyzing, interpreting, and driving consumer

behavior."

"You can make a case for the way a person surfs the site being

directly related to the quality of the prospect," confirms Tom

Sullivan, head of the advertising agency, Princeton Partners (see

sidebar). "This sounds like an additional tool for companies to

optimize web strategies. But it cannot be an panacea because different

target markets behave differently, depending on the level of need,

education level and economic status of an individual."

David Reim comes from a Silicon Valley and computers

background, and Rob Rebak from a New Jersey pharmaceutical family

— a useful combination for Simstar. Rebak is the oldest of three

in a family that emphasized both optimism and competition, and Reim,

the oldest of four, was raised in an uncompetitive environment and

is an optimist only by reaction.

Reim remembers his pessimistic father railing against the trials of

his acoustical engineering company. "I swore I would never be

an entrepreneur because my dad came home every night and complained

about his company. I vowed that whatever I did I was going to have

FUN and be happy in it."

Reim was the first in the family to graduate from college, majoring

in computer science at the University of California at San Diego,

Class of 1985, and then working for Apple Computer. "It was late

in college when all of a sudden I met some optimistic Silicon Valley

people. I thought it was a cool way of looking at the world, and I

determined to work in a place where people were having fun."

He met his wife at Penn when he was getting a Wharton MBA — not

in entrepreneurism but in large company management. Now he and his

wife Jennifer, who has graduated from Robert Wood Johnson Medical

School, have four children under the age of six.

After Wharton, Reim went to work for Sun Microsystems and then decided

to go off on his own — in spite of the fact that he had promised

himself he would never be his own boss. "But I felt like I was

working really hard and doing a really good job for a really big

company.

And I said, `Why don’t I do it on my own?’" He is one of just

two percent of company founders in the Inc. 500 who started a firm

alone, without a partner.

When Simstar began in 1993, CD-ROMs were getting very popular "and

I realized I was in the hotbed of healthcare." So he did CD-ROMs

for healthcare companies, for sales training and patient education

in the doctors’ offices.

"Early in 1996 Claritin was looking to establish the first

pharmaceutical

website, and the product manager asked around among the traditional

agencies who could do this, but back then the other agencies couldn’t

even spell Internet. He hired a consultant to find someone to do it

for him. We launched www.claritin.com in 1996, and then we focused

the company on Internet and pharmaceuticals."

Rebak started with Simstar in 1999. Rebak’s father, an All-American

swimmer and pharmaceutical executive, started two Inc. 500 businesses.

"My goal was to go in and run that family business. It was a nice

vision, but as it got closer to becoming a reality, I decided I

preferred

the father and son relationship," he says.

So after graduating from Vanderbilt in 1989, Rebak worked for Pfizer,

earned an MBA from the University of Chicago, and then worked for

Bristol-Myers Squibb. "What led me here was that I was a client

of Simstar’s and became real interested in Simstar as a company and

Dave as a person," says Rebak. Joining Simstar in 1999, he brought

subject matter expertise, introduced marketing and sales savvy, and

diversified the client base. (He also contributes his marketing

expertise

as a board member at T2 Ventures, the Momo brothers’ restaurant

enterprise.)

With Simstar’s growth has come the inevitable conflict of interest

problems. "As a result we have had to turn down some

business,"

says Rebak. Half the business is in software development, where

conflicts

of interest are not serious. "But if you are in a straight agency

relationship, clients tend to not want you to take on a

competitor."

So Simstar wants to emphasize strategy in the manner of the big

consulting

companies like McKinsey. "Just building websites will become a

commodity," says Reim. "What is important is to maximize

return

on the Internet." Possibilities for Simstar might include:

Establishing a publishing arm of the strategy business.

"We are doing it now for current clients with position

papers."

Offering a strategy service, "taking leading edge

thinking and wrapping it around the client."

Licensing CEM as an E-marketing effort, selling it as

a framework and a software. But not, Rebak hastens to add, shrink

wrapping and selling it to anyone who will pay.

Until now most pharmas limited themselves to pilot projects

on the Internet. "Now some are really picking up their

investment,"

says Reim, "for real strategic uses, and they will have higher

needs. Once again we are on the cusp of a first mover

opportunity."

Customer relationship management (CRM) across multiple touch points,

including the Internet, is one of the new big ideas. "Most pharmas

have had product/brand teams, not customer-oriented teams, covering

more than one brand," says Rebak.

"We are very much seeing them look product to product and within

franchise," says Reim. He points to the new federal guidelines

linking high cholesterol to both stroke and diabetes. "You can

bet the big pharmas, with all these products in their customer

relationship

strategies, will be thinking about those patients with those

co-morbidities."

What customers can the Internet influence? Physicians (tracking

prescription

writing and educational support), consumers (making them aware of

a certain product), and managed care organizations (to facilitate

relationships).

All three categories are worried about privacy issues, and to deal

with that, Simstar appointed a privacy officer, Mario Cavallini, who

evaluates and issues white papers about privacy policies.

Reim says his major worries center on organizational

issues. "In the Silicon Valley we had a habit of reorganizing

our companies, even large companies, on a regular basis. This is

something

that the pharmas have never seen. But I believe it is hard to have

the same organizational approach year after year. I am focused on

how our organization can be the best." That may mean he gets

replaced

as president.

"I’ve enjoyed the operational aspect of the business," says

Reim. "I try to have fun and create an atmosphere where other

people have fun. But my passion is finding ways to innovate for our

clients,"

"We have brought in senior people," Rebak points out, "who

are able to grow the business, which frees Dave to be the CEO and

visionary and think of the future of the company.

Rebak’s own worries center on the failed dotcom companies, "trying

to figure out what they did wrong and making sure we don’t follow

in the footsteps." But Simstar has been able to hire dotcom

refugees,

people who didn’t want to return to a stuffy corporation but wanted

to continue in an E-business culture. "They are interested in

what we are doing, and that we are able to move fairly quickly, and

pursue interesting things."

He also focuses on competition. "Before we were flying below the

radar screen. Now the IBMs and the Accentures (Anderson Consulting)

are on one side of the equation and the big agencies on the other

side, and as this space we will find our place."

He’s not that worried. "Not a lot of groups are capable of

producing

the size of pharmaceutical E-marketing solutions that we can,"

says Rebak. "We have consultants, web designers, software

developers,

healthcare agency people, and content developers — we have built

from the ground up to do this."

— Barbara Figge Fox

SimStar Internet Solutions, 1 Airport Place,

Princeton

08540. David Reim, president. 609-252-9741; fax, 609-252-1425. Home

page: www.simstar.com

Top Of Page
Online Ad Agency: Princeton Partners

Back in 1993, Tom Sullivan says, he was promoting use

of the Internet to a major client who should have leaped at the

opportunity

but did not. "I was crying in the wilderness to find new ways

to reach markets," says Sullivan, who bought the 30-year-old

agency,

Princeton Partners, from founder Cathy Mathis earlier this year.

"I

tell people we had the third website for an advertising agency in

the country — I started working on it in 1994." Three years

ago the agency hired Veronica Fielding as director of interactive

services, and the firm is happily ensconced in the web space with

a medical device client, Unilever.

Princeton Partners does the E-commerce and E-marketing for Unilever’s

ClearPlan, Unipath Diagnostics’ device to assist women in getting

pregnant (www.clearplan.com). "Our website generates 45,000

visitors a month, and their E-commerce sales

are up 250 percent since last June," says Sullivan. "We have

doubled the amount of time visitors spend on the site and created

relationships in the community. We manage the site and the Internet

effort as a whole."

Relationships are a powerful motivator for someone who is trying to

get pregnant and can’t. "The important thing was not to sell the

product but to focus in a high touch way on how people need to share

information around an important personal subject. We are integrating

PR with marketing in innovative ways, like sponsoring a live chat

with a star of `Days of our Lives,’" says Sullivan. "Couples

compete to test the equipment and share tips and stories."

Several full-time E-marketers work to create relationships and do

affiliate marketing for the agency. The agency is also in charge of

running an international conference in Santa Fe in June on behalf

of the Marketing Advertising Global Network. "It has energized

our staff, and we now have relationship with top internet marketers

and sharing strategies and tactics and they are feeding off of each

other."

Princeton Partners Inc., 2 Research Way, Princeton

08540. Thomas M. Sullivan, CEO. 609-452-8500; fax, 609-452-7212.

Www.princetonpartners.com


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