Today’s issue of the Boston Business Journal reports how 451 Marketing has repositioned itself for success. Read the full article below:
Taking the lead: Interactive marketing agency bolsters position with new media strategies
Boston Business Journal
by Sean McFadden
May 15, 2009
A costly error in judgment can cripple a small organization. It can also be a blessing in disguise if that misstep pushes the business to focus on what it can do best.
That’s the lesson the principals of Boston-based 451 Marketing LLC say they learned from a short-lived division of their company last year.
The ensuing financial crisis, says co-founding partner AJ Gerritson, 32, “was catastrophic and almost broke the back of our company. It was also the single best thing that ever happened to our agency.”
As an “inbound marketing” agency, five-year-old 451 specializes in connecting its clients with their prospects when those prospects are looking online — whether it’s through search engines or social networks, says Gerritson, who serves as one of three partners running the agency, along with Nicholas Lowe and Thomas Lee.
The agency’s value proposition, says Gerritson, is that it can help its clients develop quality sales leads using online channels that are typically less expensive than traditional media: “The one thing people seem to be willing to spend money on right now is what we sell.”
While the 15-employee firm’s niche today lies in online lead generation, its focus wasn’t always so defined. Somewhere around the third quarter of 2007, the agency took a gamble on expanding its service offerings by introducing 451 Promotions, a subdivision of the company focusing on events production and promotion. It seemed like a natural extension of the agency’s in-house public relations capabilities, says Gerritson.
Emboldened by the success of two smaller events, the partners decided to tackle something on a much larger scale: a professional boxing event, dubbed the “Celtic Invasion,” which was held at the Orpheum Theatre on St. Patrick’s Day in 2008. Their intent was to fill the 2,500-seat Orpheum to capacity, but only about 500 patrons showed up.
The result is that 451 lost close to $90,000 on that event.
Admits Lowe, 34, “There are things we did well, and trying to extend it into 451 Promotions, I think, was putting too much pressure on our brand and stretching us too thin.”
So, the agency decided to refocus its services in a way that could better leverage the founders’ expertise as tech-savvy marketers; Gerritson and Lowe have 10 years and 11 years, respectively, of interactive marketing experience (Lee, who came aboard in 2007, had a traditional PR background).
The agency immediately suspended the 451 Promotions division and made three layoffs within that division. The partners also tapped into their personal accounts to help cash flow.
It was a familiar self-funding scenario: Gerritson recalls that when he and Lowe launched the firm in 2004, they used their own financing.
Early on, they were involved primarily with more traditional marketing and PR services, such as Web site design and development, and collateral development. Those services evolved with advances in media technologies.
Today, online lead generation, which would include search-engine marketing and social media marketing, now represents 40 percent of 451’s total billings, says Gerritson. Thirty percent comes from Web 2.0 design and implementation; 20 percent from public relations; and 10 percent from traditional creative work.
After hitting $778,000 in revenue in 2007, followed by around $1.17 million in 2008, the agency is targeting between $1.8 million and $2.2 million this year, Gerritson says.
Elizabeth Hailer, vice president of client development and marketing at client Caturano and Co. PC in Boston, says, “Their competencies range from traditional new media marketing communications to innovative, cutting-edge experience in this whole area of search-engine optimization. On the technical side and design side, they’re top notch.”
One of Gerritson’s mentors and advisers, Fredrick Marckini, chief global search officer at Isobar, with local offices in Boston, and founder of iProspect Inc. of Watertown, says, “AJ correctly identified the mega-trends in social media, digital media and search-engine marketing. Two years ago, he was already moving toward evolving his communications firm to leverage digital and combine his existing traditional PR practice with social media and search-engine marketing.”
Gerritson himself believes 451 is now better positioned for growth: “Yes, we took a huge hit last year, but that same hit might be the one that enables us to thrive, I believe, while many firms are struggling.”