Continued from Part 1

In the giddiness of the initial “dot com” boom, every new company believed in the mantra of “get big fast” and Mercata was no exception. Our board wanted us to rapidly acquire customers and to build national awareness of the company and we had the marketing budget to do so. I managed annual marketing budget of $36 million—which was just a few million less than one of my old advertising clients, Procter & Gamble, spent on its Crest toothpaste brand back when I worked on the account in New York.

We did billboards, ran radio commercials, took out full page ads in the New York Times and Wall Street Journal, and, of course, used TV commercials to build awareness. Most of the other new dot-com brands ran commercials designed to be as different and shocking as possible (not unlike Groupon’s 2011 Tibetan Superbowl ad fiasco) and so the public was treated to a plethora of commercials with sock puppets (Pets.com) and gerbils being fired out of cannons (Outpost.com). But I was planning to take a different approach.

Because we were asking people to buy relatively expensive merchandise like big screen TVs and high end baby strollers, I wanted customers to trust us and I wanted our brand to project credibility. We were a new company, offering an unfamiliar way to buy. We couldn’t afford to be wacky. So no sock puppets or gerbils. Instead we hired Ed Grover to be the voice of Mercata on our TV and radio commercials. You might not know Mr. Grover’s name, but you’d recognize his voice. He’s been the announcer for many top brands, including Apple (voicing their classic “1984″ commercial), Nissan, and most-famously Visa (“It’s everywhere you want to be.”). Mr. Grover was initially leery of lending his voice to a “dot com” company (understandably), but because he and I had worked together for many years on Bank of America’s commercials, he decided to take the gig.

Our initial campaign featured the slogan “Down is Good” to reinforce the fact that with Mercata, prices went down in real time.

With all the noise of hundreds of new “dot com” companies competing on the airwaves, we wanted to see if we could generate some viral buzz with our commercials. So the next spot (which only aired after 10 PM) pushed the boundaries of what you could show on TV.

Our media strategy involved targeting specific cities and markets where Internet usage indexed higher (this was back when “Internet penetration” was a meaningful metric). We would build upon our marketing efforts in existing markets with outdoor, radio, and print. In new markets, we often started with an explanatory spot like this one:

Results from all this marketing were great. Within 12 months, Mercata achieved national awareness as a Top 20 online shopping destination and one of BRANDWEEK magazine’s top brands of the year. We also received numerous awards and kudos for our customer service, shopping experience, advertising, and our business model. Gomez ranked us as the #1 online buying service and Nielsen/NetRatings named Mercata as the #1 site for electronics. But most importantly, we were acquiring hundreds of thousands of customers, scaling up our product selection, and gaining the momentum we needed to go public. At least that was the plan.

Continue to Part 3