Hidden Hills’

Robert Yallen

President, Inter/Media Group

By Jackie Lapin

The Inter/Media Group of Companies® have sprinted to the top on innovation, initiative, creativity, clout, and sheer drive…the same drive that powered Yallen to the top of the All-American rankings. The company today counts among its clients the U.S. Army, Neutrogena, Johnson and Johnson, Ubisoft, Budget Blinds, Biotab Nutraceuticals, Video Professor, Marinello Schools of Beauty, Caribbean Cruise Lines, and Corinthian Colleges, among others. The cornerstone of the company’s business has been blending direct response advertising with general market resources and techniques. Yallen, who resides in Hidden Hills, was one of the first to perceive the value of direct-response advertising—which requires an 800-number or Website call-to-action—for major brands as a cost-effective marketing strategy, and then began mining that territory for business. Until then, direct response was solely perceived by business and the TV viewers as late-night sales of slicers and ab rollers—the home of pitchmen such as Ron Popeil. But Yallen had a bigger vision. He perceived that traditional advertising failed to ask for the sale in strong enough terms and that direct-response could be adapted for major advertisers to deliver powerful and media-efficient brand messaging, as well as product sales.

The rest is history. What began as one single advertising agency has now morphed into 10 unique business units, each operating both independently and synergistically. Yallen is a revered and feared competitor in the business and despite the difficult times of the past year that has thrashed the advertising world, he has kept Inter/Media, which is headquartered in Encino, thriving against tough odds.

Relaxing in his office surrounded by family photos, display of client products, and an array of sports and business awards, Yallen radiates energy. It is clear he relishes his work and the opportunity to make Inter/Media a leader in its field. Two factors have fueled the 52-year-old Yallen’s success—focus and family. He demonstrates an innate ability to laser in on the components of a challenge and to innovate solutions to resolve complex issues.

Equally important has been the family legacy that inspired and equipped him for the leadership of an industry-leading company. Yallen joined the firm initially established by his father in 1981 after completing his undergraduate degree at Cal State Northridge. He then went on to get his law degree from Southwestern University and pass the bar before joining the firm full-time. After first learning the business from the ground up, Yallen became president, demonstrating exceptional proficiency in new business development, operations, and the ability to create additional revenue-generating business units. During the period of the company’s rapid growth, Yallen’s father, Sydney, served as CEO until his death in February 2009. But it was more than passing the baton; father and son worked in hand-in-hand to grow the company. “My father was an advertising and media icon. He was my partner, my best friend, my mentor, and the company financier. Losing him was a tremendous loss both personally and professionally. It’s my role to continue to grow what he envisioned for us,” says Yallen.

Yallen comes by his advertising genes naturally. A media innovator since the late 40s, Syd Yallen originally began work in the broadcast and advertising industries at the age of 13 as a part-time office boy for KFWB radio in Los Angeles. He worked his way up through the news, production, promotion, advertising, and sales departments eventually to station manager at KFWB, which was a station with a music-news-sports format that ranked fifth in the greater Southern California market. In 1958, Yallen introduced “Color Radio-Fabulous 40” to the Southern California listeners, which was at the time the most successful advertising promotion campaign ever conducted by a radio station. In only five weeks, KFWB became the number one radio station in Southern California. After another 16 years in radio and television syndication and media buying, Syd launched Inter/Media.

“My dad started the company in 1974 as a media buying service,” says Yallen. “The traditional model of an advertising agency at the time was full service including creative, but he foresaw that many companies didn’t require the spectrum of full service, and thus, didn’t need to pay the full 15% commission. He pioneered the concept of an agency solely engaged in media buying, which then could charge a fee for service at less than 15%.

“Inter/Media evolved over the years because we discovered that our clients wanted more. When I came in and started pitching business, I realized it was often easier to pitch creative, because it was more engaging to the client. So our first venture was to create a production company, rather than go outside for that ability. When it became apparent that production was moving to a new digital format, we created a digital post-production company, which not only serves our needs, but also has a full slate of its own clients.

“We keep adding assets for our clients as we see needs, such as our Inter/Media Interactive® Unit (online services), Media Point Network® (performance-based or per inquiry advertising) and InterQuantum® (retail distribution). We do so because we need an edge for our clients, as well as an advantage in competing for business in the highly competitive advertising marketplace. We’ve created unique media assets like American Target Network™, which allows advertisers to buy cable networks in a customized 55-million-home-footprint at as much as 80% less than network equivalents. No other media organization can offer the ROI and cost-efficient footprint of ATN, and you can only buy it from us.

“Technology is another asset. Our InfoTech Development™ is another prime example everything is driven by technology with our clients. Having customizable technology makes sure that we can maximize the client’s expenditure. One of our proprietary technologies is AccuTrak®. We use it to determine the effectiveness of every advertising dollar. Everything we do involves tracking analysis and optimization--which media are drawing, which spot is working, what offer gets the greatest response? We’ve spent millions of dollars to create a program that delivers real-time, valuable data, and allows us to put money where it optimizes the investment. We have another program, IQ Plus®, which looks at the exact levels of media to run to support retail sales when you are rolling out a product in stores all across the country.

“These are the kind of factors that have set Inter/Media apart, and that’s how we’ve become more than an advertising agency. By being a half billion dollar media and marketing group of companies, we can de-commoditize what we do and take it out of the realm of just paying for media time. We are building a synergistic group of companies that continue our legacy of bringing added value to our clients.”

The legacy, it appears, will not end with Robert Yallen. Daughter Lindsay Fontaine has joined Inter/Media as a media buyer and is already making her mark. “Lindsay brings a new perspective to our organization and a tremendous skill set of valuable business and marketing assets. She has brought great vision and an innovative Gen Y approach to media buying, laying the groundwork for her long-term growth in the company, ” says Yallen.

On the Recession

One of the reasons the company has weathered the financial downturn has been its diversification. And some of its resiliency has been the kind of clients it serves. Says Yallen, “Many of our clients thrive in an economic downturn. For instance, our client Corinthian Colleges, which offers post-secondary education career training, does well in a recession because people lose jobs and need to retrain. But economic times like this are often good for our business—as well as our clients. Media units are treated just like any product – all based upon inventory levels. The only distinction is that at the end of every day – whatever inventory remains unsold – evaporates not unlike Cinderella’s mythical carriage that turns into a pumpkin at midnight. Therefore, our model is based upon obtaining remnant media time – unsold inventory -- at significantly reduced rates. Further, as media becomes more fragmented with a multitude of media choices, there is more inventory and thus we are able to buy better.”

For Yallen, this is also a time to investment spend for Inter/Media’s future. Instead of cutting back like a lot of company CEO’s today, Yallen sees this as a time to grab market share. He has hired a top VP from another leading agency to head sales across all companies and opened a New York office. Yallen reports that Inter/Media has had one of its best years ever, and has recently won a $20 million account for a Neutrogena brand competing against 12 agencies. With vision and confidence, he is leading the company through a five-year plan that will lay the groundwork for future expansion in client service, advertising innovation, and client acquisition.

On Breakthrough Advertising

Over the past eight years, Inter/Media has been presented more than 75 prestigious advertising awards. When prompted, Yallen points to programs he considers two of the company’s showcase successes. The first is ExtenZe®, male enhancement products. “We built the brand over seven years,“ says Yallen. “Initially this client started off running inexpensive infomercials on very small stations. As we planned an infomercial roll-out and expansion into traditional commercial length media, our initial challenge was getting station’s ‘Standards and Practices’ to accept the advertising because of the sensitivity to the category; plus the name of the product created even more resistance. But through a tremendous amount of media optimization and tenacity, we have succeeded in landing the top spot for EztenZe® in the 2009 ranking of direct-response TV commercials. We’ve also taken the brand into the retail channel through our InterQuantum subsidiary. ExtenZe® has become a mainstream brand carried in more than 40,000 store locations. Getting it into Wal-Mart, the ultimate family store, I believe is a major coup. Then you add in CVS, Rite Aid, GNC, and Walgreens. It’s now a $150 million brand. And our entertainment division just signed former two-time Super Bowl winning coach and broadcaster Jimmy Johnson as the brand’s main spokesman.

“One of our other great success stories is BreathAsure. We worked with the founders Anthony and Lauren Raissen, who are now our partners in InterQuantum. The BreathAsure campaign was highly innovative for the time. We involved radio personalities around the country and used George Kennedy as the spokesperson. In order to telescope the growth process, we maximized the efficiency of the direct-response channel income while at the same time building brand awareness, the combination of which drove distribution and finally trial at retail. That company grew to $40 million a year in sales in less than two years.”

On What It Takes to Stay at the Top

Staying on top in today’s economic climate is never easy, but Yallen says that his competitive background has been the key. “You can spend hundreds of thousands of dollars to pitch a new prospect at this level of advertising and marketing, and you have to use every competitive edge to vanquish your competitors,” he says. “I get so passionate about winning a new piece of business! You have to really understand how to compete, often hit unreasonable deadlines, come up with a creative edge – something that your competitors won’t offer -- and you have to be willing to work till 2 a.m. knowing that the prospect will throw curve balls at you at the last minute.”

As an all-American sprinter, Yallen took his athletic background to compete under extreme circumstances and pressure, and redirected it into the other aspects of his life, applying the same disciplines. For example, he made law school into a competition—with goals, objectives, and tactics, evaluating his competition for the top grades. He then translated that commitment into business. “That’s one reason I like to hire athletes; they know how to compete,” Yallen says. “The advice I would offer anyone is to learn how to focus with passion….how to commit yourself, come up with a plan, and make quick decisions.”

On Looking Back and Looking Ahead

In retrospect, Yallen says, there are a few things he might do differently if he were to do it over again. “I’d have more faith that everything will have a positive outcome. I would have diversified Inter/Media earlier, and I personally would have acquired greater financial skills,” he notes. “Finance is the root of everything. We could have been bigger and better sooner. Once we reached $100 million, growth became exponentially faster due to an array of resources and financing options that we had developed. We were thus now able to attract larger more mainline clients as well as diversify into various synergistic business units. What also separates our organization from other companies in our space is that I am a business person first and foremost. This has helped our clients in that we run everything from building blocks of their metrics. It’s also provided the drive to diversify into new non-media areas – such as real estate, which has now moved our organization into more of a holding company structure “But I’m really proud of we’ve done it and that we achieved this ourselves, without going public or selling out to one of the major conglomerates. My goal is to become a billion-dollar company within the next five years, and we are half-way there. But I’d also like to grow our non-profit, the Inter/Media Foundation so we can continue to give back to the community and people who are less fortunate. We have the assets to help an organization that has a celebrity spokesperson do TV and radio campaigns at no cost to the charity. We’re still seeking to assist more organizations that fit into that framework.

“Today, I’m very confident about meeting clients’ expectations, however, my main challenge is managing the very large overhead because we tend to over-service our clients. We have to make sure that we have the right people with the right resources to do a great job and still be profitable. Making sure we are meeting our financial obligations and collecting receivables is very stressful. We have a lot of employees and an army of lawyers, financial advisors, and other specialists to support us.”

Yallen releases his stress by riding horseback on the trails around Hidden Hills with his wife, Linda. He also takes an avid interest in his son Jordan’s sports career. Jordan was a highly regarded high school baseball star who was drafted last year by the Chicago White Sox, and true to family form, is known for his blazing speed. The outfielder elected to accept a college scholarship at Gonzaga, and when he’s home from school, father and son take swings in their backyard batting cage. All four of the family work out with their son’s strength coach to stay in shape. And the entire family shares Robert’s enthusiasm for collecting sports memorabilia and art. But the one hobby that he keeps for himself is collecting and driving elegant sports cars.
For Yallen, the backbone of his achievement has been family. “My father was my role model and a key part of my success. But another critical reason for my achievement has been my wife, Linda. She is entrepreneurial herself, running a successful physical therapy practice, and she is my greatest source of support. And now with my daughter Lindsay coming into the business, I will be able to rely upon her to diversify and grow the business just as my dad did with me.”