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The Truth About Digital: Mitchell Reichgut, CEO of Jun Group

September 01,2016

In this week's episode, we host Mitchell Reichgut, Founder and CEO of Jun Group. With over two decades of applied experience, Mitchell explains how advancements in mobile and digital media are transforming the way brands communicate with consumers. If you like our podcast, please subscribe and leave us a rating!

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Mitchell Reichgut: In all the years that I've worked in digital media, I have never seen anything like the rapid and complete change that mobile has brought.

Bill Gullan: Greetings, one and all. This is Real-World Branding. I'm Bill Gullan, President of Finch Brands, a premier boutique branding agency. Thank you for joining us for this week's interview with Mitchell Reichgut, who's the CEO of Jun Group, a New York based but with offices all around, a real pioneer of ad tech with an advertising platform to help brands get their messages across in the new world.

Mitchell's going to take you through his own career, but, interestingly, began on the art direction and creative side in a traditional advertising environment at Grey, obviously, a well-known and cherished name in the American advertising landscape, but quickly gave way to a fascination with digital, as he was there in the early days of designing the first websites that brands like the Wall Street Journal and Reuters and others put into the marketplace in the mid-90's.

From there, shortly thereafter, he was at Bates, which was also a well-known ad name, running really the digital and what they called the interactive side of the house there. For the last almost 15 years, starting in his house, founding Jun Group, and he'll take you through the growth of the brand. Mitchell Reichgut, CEO and founder of Jun Group.

Here we are through the wonders of Skype with Mitchell Reichgut, who's the CEO of Jun Group in New York and wherever he happens to be any given day. Thank you for joining us, Mitchell.

Mitchell: It's a pleasure. Glad to be here.

Bill: Good. We're grateful for your time and for your insight. Perhaps a good place to start would be a bit of discussion about your own career journey, which has been a fascinating set of positions that you've had. We'd love to hear a bit more about some of the milestones, if you don't mind.

Mitchell: Not at all. Happy to talk about it. I started my career as a creative guy. I was an art director in advertising. I was fortunate enough to be able to create print ads, television commercials, and outdoor ads for some big brands early on in my career. Quite by accident I fell into this thing called, ‘Internet web development,’ in 1993.

Bill: That's early.

Mitchell: It is. I built the very first website, not by myself, but with a great team, the very first website for the Wall Street Journal, for Reuters, for Rodale Press, Men's Health, Women's Health, and a number of other brands back then. It was really fun.

I did a bit of a tour of Silicon Valley as it was all just starting. It was a thrilling time, really just halcyon days of change, and wound up running the interactive group within the United States for a global ad agency then called Bates Worldwide.

I was in my late 20's by then, and it was a dream job. I stayed there for four years. It was wonderful. Toward the end of it, it got to be a lot of New York advertising stuff, where it was a lot of pressure. I had a wife and two kids by then and a house and a mortgage, and I decided it would be a good idea just to leave.

Bill: Right. Very responsible decision-making; right.

Mitchell: Exactly. My wife was great about it, really supportive. I honestly didn't know what I wanted to do with my career at that time. It was a bit of a crisis for me, because I had achieved what I wanted to achieve. I didn't want to go back to advertising.

It's hard to believe, but internet experience at that point was almost like a black mark on your resume. This is post 9/11 now, right after the Web 1.0 crashed, so I started Jun Group out of my house. I did so as a way to earn a living while I wanted to figure out what to do next.

I had never had any dreams of being an entrepreneur, no ambition to start my own company, and yet when I did it, I found that I really liked it, and I just kept doing it. I learned some important lessons, that fear and pain are wonderful motivational tools, gets you right out of bed in the morning.

I've just been doing Jun Group ever since, and that's really it.

Bill: What a story. I think sometimes the accidental entrepreneur is the most compelling story, as opposed to today, people coming out of business school knowing that that's what they want to do and looking at white spaces on a board and all this data. What a great story. Here we are. ‘Jun’ means ‘Truth.’ Tell us a little bit about the development of the company into what you all are doing and focusing on today.

'Anyone who's worked in branding knows that it's all about finding that kernel of truth within the organization that you're working for.’

Mitchell: Sure. Early on, as I said, I was just trying to make a living, so I did the stuff I knew how to do. I did advertising. I did brand development and brand strategy. Anyone who's worked in branding knows that it's all about finding that kernel of truth within the organization that you're working for.

I'd studied Kung Fu for most of my adult life. I once met a guy, a Chinese guy, who said his name was Jun, and it was spelled J-U-N, and I asked him what it meant. He said, ‘Truth.’ I never saw him again, but eight or nine months later when I started the company, I thought, ‘Wow, that's a great name for a company that is going to do brand strategy,’ and I've just kept it all this time.

Over time, as I decided to become serious about running the company and really growing it, I didn't want to just be an advertising agency. Back then they used to call it, ‘Integrated advertising.’ I met my now partner, Corey, who was at Sony, and he started telling me about peer-to-peer, which at the time Napster, LimeWire, Kazaa was 60% of the internet's bandwidth, and that was our first distribution platform. Then we, together, had this vision of taking a file and getting millions of people to see it, and that was the birth of the modern company.

Bill: Obviously, when it comes to creating value in the enterprise, the ad agency business or the brand consulting or agency business that we're in, is services-driven. You have growth. You throw people at it, and it's a growth challenge. In terms of the platform work that you've been doing, how has that evolved, and how do brands today fit you into their roster of key relationships?

Mitchell: It's funny, because the technology's changed about a dozen times since we started, but our mission hasn't really changed all that much. Our promise to our clients is that we will get millions of people, the right people, to engage with your content.

We've been doing it over social media. We've been doing it over mobile for a number of years and across channels. The technology is less important than the delivery of the goods.

When our clients use us, they know that it's simple to understand. They know that we're honest people and that we're going to put their best interests at heart and really deliver for them. As much as the landscape keeps changing and the technology keeps changing, and all this stuff is dizzying, really the core tenets of the business have remained the same all these years. We say everything about our business changes except our values.

’If you think of a mobile phone, that is for most people now the first screen, and it functions completely differently than any other computer that's ever come before it, so I've never seen anything so dramatic.’

Bill: Right. Right. That's helpful. Speaking more generically, beyond obviously the experience that you've had, being part of the tip of the spear as the web was forming, as a commercial enterprise beyond just information and CompuServe disks in the mail and whatnot, AOL disks, how has the shift from what at the time was overwhelmingly traditional, then broadly digital or integrated, to use the word that we've heard a lot and that you mentioned earlier, and now obviously mobile has changed things yet again. How has all of this shaped the way that brands communicate and engage with those they seek to attract?

Mitchell: In all these years that I've been working in digital media I have never seen anything like the rapid and complete change that mobile has brought. It has absolutely fundamentally changed the internet. It has changed culture in general. It's changed the way we communicate. It's changed the way we interact with one another and interact with computers. It's actually staggering.

I think the results of what's happened over the past 24 months are only now really starting to become appreciated by brands and advertisers. If you think of a mobile phone, that is for most people now the first screen, and it functions completely differently than any other computer that's ever come before it, so I've never seen anything so dramatic.

Bill: At the same time, you also spoke about the primacy and eternal nature of values. I would imagine when it comes to great brand communications, regardless of the platform, that there are some common denominators, regardless of the form of media. Is that still true, or are all the rules different than they used to be?

Mitchell: I can answer that in two ways. One, absolutely, it's the same as it ever has been. Number two, there really is a big shift. It's the shift that, I think the promise of digital is that we can finally leave the Wanamaker story behind us.

Just for those who don't know that, famously, a man named Wanamaker said, ‘Half my advertising dollars are wasted. I just don't know which half.’

Bill: John Wanamaker, by the way, a Philadelphia-based department store magnate, so we'll take some regional pride in that quote, but continue. Sorry.

Mitchell: That's right. You guys are in the Wanamaker Building, aren't you?

Bill: We're close. We're actually seven or eight blocks from the Wanamaker building, which is now a Macy's. We'll see how much longer.

Mitchell: Yeah. There you go. The internet's changing that too. In that way, I think what we're slowly starting to see is brands demanding business outcomes instead of media outcomes. In other words, I give you half a million dollars. Okay, great. You can show me this number of impressions, this many views. They want to see how did it affect my sales. We're just beginning to be able to deliver on that, which is really exciting.

’We're slowly starting to see brands demanding business outcomes instead of media outcomes.’

Bill: No, absolutely. It used to be, to the point about Wanamaker, things like 800 numbers and coupon redemptions, were the traditional way for folks to try to tie in some degree of accountability, but reach and frequency only goes so far. Ad equivalency, on the PR side, only goes so far, and to have all of these tactics that have built-in metrics, all the way up to clicked and transacted, is a powerful answer for those of us in the marketing realm who have often over our careers faced that question of ROI.

Mitchell: I tell you what, it's the promise, and the actual delivery can be somewhat different, because it's worth noting that right now Google reports 46% of online video is not seen by a human being. The AMA (American Marketing Association) says that ad fraud will cost the industry 7.2 billion dollars this year, so it's not all sunshine and daisies.

Everybody in black jeans and a blazer in ad tech says that they're going to deliver X, Y and Z to the right person at the right time, etc., etc., but there is a lot of shakeout that still needs to happen in this industry to really fully realize the promise that, I think, is what we all want to capture.

Bill: No, absolutely. You look at YouTube. You look at pre-roll in general. We talk about the connection between new media, so to speak ... not really new anymore ... and traditional media. You see oftentimes if you look in your pre-roll, it's a TV campaign that's been re-purposed. It's a cheap way, you've produced it already, etc.

With the explosion of mobile and digital, what's your outlook on traditional? I know, a bit outside the lane, but where you started, traditional media and the role of new, and what we would call old media, in terms of getting across key messages and overall brand values?

Mitchell: It's funny. I think all this ad fraud has been great for television. Television CPMs are going up. Advertisers can't put enough money into TV, because they know what to expect there.

I think the ad tech community has let them down to the extent where they really don't trust it, and they shouldn't with numbers like the ones that we quoted earlier, and there are several others. Everyone always says TV is dead or whatever. Personally, AM radio is something that I listen to all the time, and I think it's still a really powerful, viable medium. I think traditional media is going to be A-OK.

Bill: No doubt. When it comes to content, and you mentioned ad fraud. You mentioned other threats to this value proposition that either come from inside or outside the mobile and the digital marketing realm. What are some things that are working really well? You talk about video in some cases not working, but the biggest trends you're seeing in terms of best practices on the content side of the types of content that's breaking through in this new alignment of publishers and sources that consumers can access from anywhere.

Mitchell: It's interesting, because somebody at our company framed 2016 this way, and I think it's really adept. It's a battle between opt-in and auto-play. If you look at what Facebook is doing, it's auto-play; right? You see all those ads that appear in the stream of someone's social profile as you breeze by on your mobile device, and that's been enormously successful. They've captured a ton of market share using that tool.

Yet there's a whole school of thought, of which our company is a part, by the way, that doesn't believe in that. I don't like interrupting people. I think that if you look at younger consumers, they demand not to be interrupted. We can talk about ad blocking [for hours].

Opt-in, how do you present ads to somebody in a way that's non-interruptive? We're big believers in what's called value exchange, where you get something in return for your time. We've seen results of that for years. I think you're seeing the great battle between those two schools of thought this year.

Bill: Right. It used to be, with the history of this thing and the golden age of television, all these shows were brought to you by ... and that was the implicit, A, it was obviously fresh and new, but it was implicit that this is what kept the medium free was because advertisers, and then you see moves in the direction of product placement. Now as technology is, there's all sorts of new-fangled issues related to opt-in and everything else. When it comes to pioneering new forms of unobtrusive, yet effective, media approaches for brands, what are some of the core principles that you counsel your clients to embrace as they think about content?

’One of the things that's changed so much is the customer journey, the consumer journey.’

Mitchell: The first thing I tell them is to fish where the fish are. What I mean by that is, I mentioned this dramatic change. One of the things that's changed so much is the customer journey, the consumer journey. Not too long ago, in 2014, it started with a Google search that led you to an HTML page. You hyper-linked to another one and another one and then back to Google. That really is a small percentage of what happens now.

Ninety percent of what goes on in a mobile device happens in an app. That journey is completely different. In-app advertising is critical to success. Apps are not editorial-style websites. They're just totally different. To understand the moors and the culture around apps is to understand your user and to have a much better way of contacting that person.

Bill: You talk about obtrusive versus unobtrusive and opt-in versus auto-play. Just in my own traipsing about through the apps that I value, the games that I play or whatever, there seems to be, it's certainly clear that people haven't figured this out, or that some have but many have not. You see folks who have the advertising approach for an app, for example, where it pops up and it takes you right to the app store. All the technologies that have been created, as you say, around ad blocking, etc. have been positioned as allies of the consumer who does not want to be interrupted.

When we look at the future, we've talked about the incredible changes that mobile has wrought, obviously going back earlier in your career and mine, the changes of just basically the commercial internet, that those were created, and none of us can perfectly see the future. What's next? Is it another era, or is it individual changes as we all catch up to this?

When you and your futurist colleagues of Jun Group are helping counsel brands for how to get ahead of these things and to get ready for what's next, what are some beliefs that you have about what's going to happen and how the future will unfold for all of us in this industry?

Mitchell: I think you can look really clearly around right now and see the future taking root in the present and these dramatic changes still continuing to happen. If you said the word, ‘Television’ to a guy like me even five years ago, it was a physical thing that lived in my living room with a little cable box under it. You say that to my kids, they have no idea why I have that thing hanging there.

Television is a style of content for them that they can enjoy over any device they wish whenever they want to. If you just look at that one facet of what's going on right now, you see the television transforming into the internet. That is an enormous massive change. You look at the way people communicate with one another, especially ... I have two teenage boys, and you watch ten of them in a room, all of them on their devices, talking to one another over their devices. It's absolutely amazing.

Bill: Right. Yes.

Mitchell: It's just phenomenal. The cultural changes, the way we interact with each other, the way we interact with brands, it's changing before our eyes. If you take these things that you see in the present and you project them just a little forward, it makes for a future that's really exciting in some ways and a little sad in other ways and still hard to predict. I can't tell you the next Snapchat that's going to pop up. I don't even understand that fricking thing.

Bill: You're not alone. Not alone.

Mitchell: There was a wonderful article, if anybody's interested, in BuzzFeed about that several months ago, where a 30-year-old was tutored about how to use Snapchat by his younger sister who is a teen. I watch my kids on Snapchat, and it's a whole different thing.

That kind of stuff is unpredictable, and yet the larger media trends and social trends, I think, don't happen as quickly as everyone thinks they do. Apps didn't just happen. It took three or four years.

Bill: Bringing that into the workplace, yours and mine, you built a company here. As you think about creating workplace culture and team alignment, there are, as we experience too and our clients do also, there are generational forces that shape what the workplace is like, that shape how folks expect their professional careers to unfold, and what they need to feel actualized in the workplace with the company that they may have chosen.

As a Gen-X-er like me, looking at those teen boys sitting around the sectional, looking at how they're interacting ... You didn't say it, but I will. I'm completely befuddled and in many ways scared for the future when you look at something like that, until I can talk myself off the ledge. Key principles that you've employed as you built your team and your culture that may have to do with the multi-generational workforce and changes in expectations that that brings?

Mitchell: It is a real challenge. The latest generation of people to enter the workforce right now, they are wired left and right, up and down. They bring a skillset that is unbelievable. They are often rather entitled, I think, in general. They have a high expectation set that we've not seen in the workforce before.

What you have to do is find the work ethic and the passion, because the skills and the talent are almost baked in. You find people that are passionate about what they do, and you can really hit a home run. We're so proud of the team we've built here. We work really, really hard to make sure they get the support they need and the understanding they need and the tools they need. Then we just sit back and learn from them, honestly.

Bill: Natives in the technology, no doubt. Do you think, and I've been thinking about this a lot ... I don't know what the answer really means or if it even matters, but as an intellectual exercise, when folks ... We've always thought young people are knuckleheads, whether it's millennials today or back then when we were the knuckleheads, and the generation above us thought we were knuckleheads. Will folks today, understanding the different realities of how they communicate and all that that means in terms of social styles and work-styles, when they reach that next phase in their career, in their life, and they begin to mature and see the future a little bit more, will they become a digital version of what we became, or is there something fundamentally different about younger generations today given what they've grown up with and what comes naturally to them and the expectation that that creates?

Mitchell: That's a great question. I think there's something fundamentally different. I think that when you look at people that have grown up with cell phones and grown up with digital media in a way that you and I did not, they function in a different way, and they have capabilities that are just beyond the stuff that you and I have.

Snapchat is perhaps the best example of that. If you watch a teenager use Snapchat, it's actually scary. In a space of three to five seconds, they can answer eight or nine snaps. That is a skillset and an understanding and a state of being that I'm never going to accomplish and probably you won't either.

I think that our job is to harness that as much as we can, and that's what we do here, is learn from these guys as much as we can and direct that energy and that passion that they have and that expertise in ways that are beneficial. The stuff that you and I can teach them is, ‘Hey, if you send a paper thank-you note to someone, they'll actually remember you.’

Bill: Right. Right. I get a lot of eye-rolls around here. My kids are three and five, so they haven't quite figured out how to roll their eyes, but they're going to get ready for Dad talking about the good old days. In that spirit of the path that you followed, that you took us through and from being on that, the vanguard of website creation for various entities that were figuring it out, and you were figuring it out too, coming from a design background, all the way through to what you've built it at Jun Group. Any words of wisdom that you'd like to share with those who've been inspired by the path you've taken, beliefs that have served you well that are core to who you are as a business person as well as a leader?

Mitchell: Oh, yeah. It's funny, because, and you referenced this earlier, starting a company now is a hip and cool thing to do. I will tell you a quote from AC/DC, ‘Folks, it's harder than it looks.’

Bill: The philosophers of our modern age; right?

Mitchell: Exactly. I forget who it was, one of my early bosses, said, ‘You have to give advertising everything that you've got, and if you don't give it, advertising will take it anyway.’ If you want to start a company, it's quite simple. Just don't stop. Just give it everything you have. The temptation to quit, to feel sorry for yourself, to just wilt, is overpowering at times. It's a simple principle. Just keep going.

Maybe the corollary to that is, you head off in a direction that's almost always incorrect. There are very few people that see the future of their company and get to the right place. Even Zuckerberg famously made some big changes. People that are successful do those two things. They just keep going, and then they make the changes that need to be made at the time that they need to make them. Neither of those two things is easy, and running a company is not easy. If you're looking for an easy life, don't start your own ad tech firm or any kind of firm.

Bill: No doubt. Thank you so much, Mitchell, for your time and your insight. We'll close with this, unless I lie and something else comes up, given how you answer it, but when you think about how you've evolved as a leader, and you're at a point and your company's at a point where clients are coming to you often, I think, with palms up, likely expecting and seeking expertise and counsel in areas that they may not have a great deal of comfort, and I would imagine those in your workforce, that may be a new experience for them, or one that the date on their birth certificate may not indicate that they would have this level of expertise and be sought after the way that they are.

One of the challenges, I think, at Finch ... ‘Challenge’ isn't the right word, but one of the things that people who join our team need to get their arms around pretty quickly, even though they may not feel like experts, they're being consulted for their expertise, and often the product becomes us. It's different for somebody who may have started their career in retail or as a brand manager at a CPG company or whatever, they weren't the product.

This is a long, rambling way to ask the question, are there particular leadership lessons or team development lessons for folks who on your team are in a client interaction situation, who are really being relied on to be both client satisfiers but also experts and trailblazers and ideators and creatives when it comes to helping clients supercharge what they're seeking?

Mitchell: Yeah. Over the past several years I've come to value the idea of clarity. I think that when you can provide clarity for anyone, whether they realize it or not, they're so grateful. Clarity does not come easily. It takes a lot of thought. There's a particular thrill that comes with solving a problem, whether it's an internal company problem or a client's problem.

Yeah, the folks that we have here who really run our business every day on the account services side, on the sales side, on the operations side, they're making big decisions. These are young people, frequently that millions of dollars ride on their expertise and their decision-making. Part of the reason that they chose to come here is because we entrust them with that, and there's nobody more capable.

Alongside that comes some pressure, and that's not always easy to deal with. You just made a mistake that could cost hundreds of thousands of dollars. That's not an easy thing to have on your head. Yet, that's how you get better, by facing those demons. I think as I've grown as a manager, that's one of the things that I've learned is important, is helping people cope with the pressure that comes along with success. Success looks great on a television show. In real life it's not always easy.

Bill: To your point, there are probably moments ... You said just keep going. I think another thing is don't look down. When you're up at the top of the cliff, they always tell the climbers not to look down. When you're in a situation like this where you're being called upon to direct, whether it's a lot of money or manage a key relationship or whatever, there are moments when the gravity of that rises up, wells up within you, and you are either fueled by that, or you're petrified by that.

Either way, both of them are natural. Yeah, to your point, in those moments of awareness and those moments of having to rise to meet the moment or the situation, it probably helps to hear what you like to share with folks at those important times.

Mitchell: Yeah. You have to show them how to do it. That's not something you can tell someone. When a client is really upset, when something's gone wrong, when you're having a problem, how are you as a leader going to react? Are you going to be calm? ‘Okay, let's think this through,’ or are you going to lash out at someone or blame someone? I think that it is the key lesson I have learned is coping with that fear, that pain, that thing that we all wish we could avoid, and yet it's so integral to our success and our health really, is coping with that kind of stress. You have to embrace it. When you do, it makes you feel better.

Bill: No doubt. Perfect place to stop. Mitchell Reichgut, CEO of Jun Group. Founder, entrepreneur, digital pioneer and visionary, thank you so much for your time and insight, both about your own career and the things that have helped you grow, and also just about the industry that everybody watches and is in, either as consumers or, in your case, certainly in our case, to a degree, as practitioners, so much change, so many fascinating ideas, some of which amount to nothing, others of which absolutely change everything. Thank you for your time and being with us.

Mitchell: Gosh, it was such a pleasure. Any time. Thank you for having me.

Bill: Thank you, Mitchell, for your time and insight. The work we're doing here at Finch is, I guess we would call upstream often. We're focused on the strategic and creative elements of how a brand connects with its audience and how it defines who its audience is and how it puts forth what it values and how it seeks to be perceived. For our clients and brands across the world, the downstream conversation includes how to get these messages across, both in terms of selecting the right platforms and putting forth the right content.

The digital world has changed just in my own career, first of all, it was created, and it's changed so much and within one-, two-, three-, four-year increments, everything we thought we knew is different. There are parts of the toolkit that remain standard for winning brand communications no matter the media that's selected, but there are other things that are equally vital that, again, change with every new innovation. Mitchell's perspective and insight on that, I think, is tremendously helpful, as our listeners think about how their own brands and careers can take shape in and around digital and particularly mobile. We really appreciate your time.

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Podcast/ Branding/ digital/ Marketing