Tag Archives: AdDept

1997-2006 TSI: AdDept Client: The Bon-Ton

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The Bon-Ton is where? You get there how? Continue reading →

The Bon-Ton was a chain of department stores based in York, PA. For nearly a century the company was owned and operated by the Grumbacher family. In fact, Tim Grumbacher only retired from the company’s Board of Directors in 2017. So, for 119 out of the company’s 120 years of existence members of the family were closely involved with the ownership and/or management of the company.

In the years that TSI was involved with B-T, it was expanding fairly rapidly. I am pretty sure that the original call to TSI inquiring about the AdDept system was received in 1996 or 1997 and came from Jo Harnish1, who was the Production and Finance Manager for the advertising department at B-T. This was an extremely unusual combination of responsibilities. Ordinarily the production manager and finance manager were separate people with markedly different skills.

Doug Pease, TSI’s Marketing Director, talked with her and arranged for the two of us to come to York to make a presentation. We were surprised when they suggested that the easiest way to get to York was to fly to BWI Airport, which is south of Baltimore, MD, rent a car, and drive north for more than an hour. That’s what we did. At the time US Airways offered several nonstop flights to BWI every day.

My recollection is that the entrance was in that little alcove to the right of the Burlington Coat factory. That entire area later was transformed into a Walmart Supercenter.

The address that we were given for B-T’s corporate headquarters was 2801 E. Market St. It turned out to be in the middle of a fairly large strip mall. The door through which we entered was next to a Burlington Coat Factory outlet. There was only a very small sign on the door that indicated that the corporate offices lay within. I frankly wondered what kind of operation we were getting involved with.

Jo Harnish.

I am sure that on that first trip we met with Jo and Tom Vranich2, the Senior VP of advertising. I already knew Tom. My recollection is that I had talked with him briefly at the Retail Advertising Conference3 that Tom Moran and I had attended in Chicago in the early nineties. At the time Tom V. was the Advertising Director at Hess’s, a chain of department stores based in Allentown, PA.

I remember few of the details of B-T’s requirements. I seem to recall that the paper in York still printed twice a day. I am pretty certain that none of the requirements seemed insuperably difficult to me.

I also don’t recall much about the installation itself or the support trips to the Bon-Ton offices in the subsequent years. What I mostly remember was the time in the rental car. The drive to and from BWI was not particularly difficult, but it was time consuming.

I think that the hotel in which I stayed was behind the strip mall in which the Bon-Ton office was located, but the route to get back and forth was circuitous. I probably stayed at the Hampton Inn that was (and still is in 2022) located in that vicinity. I don’t remember any restaurants that I frequented in York. I think that I generally got take-out and ate in the hotel room. On the other hand, I can visualize parts of the highway and the Market St. area rather clearly.

Bethann Matroni.

At some point Bethann Matroni4 became the head of the advertising business office and our primary contact. The only notes that I could locate indicated that in 2001 she requested that we add a third rate for ROP (display ads for newspapers). The two rates that were already on AdDept’s media schedule file and the rate table represented the actual rate charged by the paper and a marked-up rate that was shown to the merchandise departments and, for co-op advertising, the vendors. The former was often called “net” and the latter “gross”, but because those terms were also used to mean something else, we just called them rate 1 and rate 2. I don’t recall that we ever added a rate 3 to these files.

At about the same time I talked with someone named Tina Hagarman, maintained the schedule for newspaper advertising and ordered the ads. According to my notes, she had just returned from maternity leave. I think that I was in York to explain to her how AxN5, TSI’s system for management of insertion orders over the Internet, worked. The Bon-Ton was one of the first users of that system. I also promised to send Tina a copy of the booklet that I had made about inserts, the preprinted flyers that are sometimes included with the newspaper.

I think that I went into this store in Westfield once, but I don’t recall if I bought anything.

In 1998 I was startled to learn that the Bon-Ton6 was opening a store on Route 20 in Westfield, MA, which was not far at all from where my sister Jamie and her family were living at the time in West Springfield. The surprising thing was that it was the only Bon-Ton store in New England. I had to wonder how it could possibly be profitable to run only one store in an area. This was not part of an acquisition either. Someone at the Bon-Ton just decided that it would be a good idea to locate one of their department stores in this strip mall on the outskirts of a rather small town in western Massachusetts. It was also the last outpost of civilization before the sparsely populated Berkshires.

In 2003 the Bon-Ton surprised most of the retail world by acquiring the stores run by Elder-Beerman, another department store chain that had been using AdDept to manage its advertising. This move approximately doubled the size of the company in terms of the number of stores. The signage for the acquired stores still referenced Elder-Beerman, but management of the advertising for the combined operation was done at the Bon-Ton headquarters in York. Because both of the advertising departments already used both AdDept and AxN, the transition was rather smooth. I don’t think that I even made a trip to York to oversee it.

I don’ t know how much the Bon-Ton paid for the logo.

In 2005 Bon-Ton somehow came up with $1.1 billion in cash to purchase the Northern Department Store group from Saks Inc. This group consisted of three former users of AdDept: P.A. Bergner, Younkers, and Herberger’s7. So, for the second time in two years the company doubled in size.

The advertising for this group was run out of Milwaukee. The facility in Milwaukee was much larger than the one in York. It had a large area devoted to the production of ads as well as a photo studio. The Bon-Ton closed the department with which we had worked in York and moved all of the advertising to Milwaukee. None of the people that we knew in York made the move to Milwaukee.

B-T’s incursion into New England did not stop at Westfield. This store in Concord, NH, was closed in 2018.

I knew very well that there was no possibility of persuading the Senior VP in Milwaukee, Ed Carroll, to use AdDept even if we agreed to let them use it for free. However, I did make an effort to contact the newspaper manager to see if we might interest them in using AxN. It would have been difficult to construct an interface, but the new organization ran a lot of advertising in a very large number of papers. If I had succeeded in convincing him to use AxN, TSI might have been able to limp along until the entire Bon-Ton retail empire after many consecutive unprofitable years gave up the ghost in 2018 and ended up selling all of its properties to liquidators.

I might have been mistaken about the Bon-Ton store in Westfield. It stayed open until the Bon-Ton declared bankruptcy in 2018. I don’t know whether it was ever profitable.

1. Jo Harnish’s LinkedIn page can be viewed here.

2. Tom Vranich’s LinkedIn page is here. On it he claims (three times) that he worked as Senior VP at the Bon-Ton for over thirty years. I am almost positive that for most of that period he was actually employed at other stores that were eventually acquired directly or indirectly by B-T. Also, since his name was not Grumbacher, I doubt that he started as Senior VP.

3. The adventures of Tom and Mike at the RAC in Chicago have been described here.

4. I could find little on the Internet about Bethann Matroni. I think that in 2022 she may be known as Bethann Brodbeck.

5. A detailed description of the genesis of the AxN system has been posted here. Details about its structure can be found here.

6. A very detailed account of the long history of the Bon-Ton is posted here. Unfortunately it stops in 2001 just before things got really interesting.

7. Detailed blog entries have been posted about each of these installations: P.A. Bergner, Younkers, Herberger’s.

1994-2000 TSI: AdDept Client: Filene’s Basement

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Bahgains, bahgains, bahgains! Continue reading →

During the period that TSI had a business relationship with Filene’s Basement, the company operated a chain of off-priced department stores. Most of the locations were in New England.

The Basement’s former headquarters now is used by several physicians.

It is pretty easy to guess how the company started. The Filene’s department store in downtown Boston had been in operation for twenty-seven years when, in 1908, it opened up its basement for the sale of surplus, overstock, and closeout merchandise. It proved to be a very popular concept. Filene’s opened similar stores in other areas. In 1988 Filene’s Basement Inc. was spun off as an independent entity with its headquarters in Wellesley, MA.

In 1994 Doug Pease signed up the advertising department of the Basement to purchase the AdDept system to run on one of the AS/400’s that they already owned. In two ways it was an ideal installation. The fact that our proposal included only software made it much easier to justify the cost, and its location within driving distance meant no costly airplane tickets or hotel rooms.

However, the advertising department was much smaller than at our other installations and the analytical requirements were much less sophisticated. There was no co-operative advertising, and the planning was not complicated. We therefore needed to implement some sophisticated interfaces to justify the installation. We could not count on reducing the payroll much.

I announced the contract to the other retail clients and prospects in an issue of Sound Bytes, TSI’s newsletter:

Filene’s Basement, the off-price retailer based in Wellesley, MA, has installed AdDept in its advertising department. The AS/400 on which the advertising programs reside is actually located in the company’s nearby data processing center. The system was installed with the twin purposes of organizing the advertising department’s work and improving communication with the stores about late-breaking changes in advertising and merchandising strategy. The latter goal is being implemented through connections with the AS/400 and other computers (one an AS/400, the other a mainframe) in the data center. When advertising calendars are released from the advertising department they are automatically sent to printers located in the stores. In addition, store managers will be able to view the latest calendars for their region on their own terminals or PC’s whenever they wish.

The communication abilities of the AS/400 are critical to the successful implementation of this scheme. Stores cannot actually sign on to the advertising department system because they are not connected directly to the AS/400. However, because all computers are connected, they get all the information that they need from their own local computers.

In addition to the connection with the stores, we also constructed an interface with the company’s accounts payable and general ledger systems, which, if memory serves were Software 20001 products.

Shortly after I installed the system the advertising director2 revealed to me that he planned to use his staff and AdDept to get other retailers in the area to let the Basement do their advertising for them. In effect, he intended to run an ad agency as a sideline. This was, of course, an area in which TSI was very familiar, and we had written (but never sold) a version of the ad agency system that ran on the AS/400. It was called ADB, which stood for Agency Database. Unfortunately, this was the only time that I heard anything about this venture.

I have only one clear recollection of the installation at the Basement. We had a meeting in a conference room in their office to discuss some proposed change; I don’t remember precisely what it was, but it did not concern accounts payable or the general ledger. Nevertheless a woman from Software 2000 calmly sat through the entire discussion, which lasted perhaps two hours. She said nothing, and she took no notes.

Macy’s somehow staved off this invasion on the upper west side.

At some point during this period I was driving in my Saturn with the radio turned to NPR’s evening edition, I think. There was a nightly economic report done by the Wall Street Journal. The headline almost made me drive off the road. They claimed that department stores were moving back into downtown locations. The devil was in the details. They reported that Filene’s had opened a new store in Manhattan. This sounded preposterous to me. Why would Filene’s want to challenge Macy’s, Saks, Lord & Taylor, A&S, and Bergdorf-Goodman on their home turf, and where would they find affordable real estate in the Big Apple? When I looked it up online, I discovered that it was not Filene’s, it was Filene’s Basement that was testing the waters by opening a small off-price store. The store was closed within a few months..

For several years the installation at the Basement was very successful. We did only a few custom projects for them, but they seemed to be very happy with their system.

In 1999, however, the company filed for Chapter 11 bankruptcy protection. They owed us a few thousand dollars, and they never paid us a penny of it. However, the company continued as a client until 2000, when the business, by then owned by executives of the corporation, was sold to Value City3 in Columbus, OH, which was owned by the Schottenstein family.

I4 flew to Columbus to meet with the IT director of Value City. We thought that we were pretty well positioned. They had AS/400’s, and the advertising department had no software. We expected people from that department to attend the meeting, but none did. This was a very bad sign.

In the late afternoon the IT guy said that he would take me out for an evening on the town. He said that he had “filed a flight plan with the wife.” When I declined his offer, he called me a lightweight.

Nothing came of it. I suspect that I was only invited so that the guy could enjoy an evening at his favorite watering holes or strip clubs when someone else was paying for. If I was going to go carousing, the very last place in the world that I would want to be was Columbus, OH, where someone might ask me where I went to college. I was too proud to lie.

After Doug left TSI he stopped in at our office once. In his new job he had spent a little time with some people who had worked at the Basement. They told him that they never considered abandoning the AdDept system. In fact, they were constantly discovering new ways to use it.

1. Software 2000 (not the developer of video games) still seems to be in business. It is located in Hyannis MA and is a subsidiary of Summit Partners. Its website is here.

2. I don’t remember the name of the advertising director or anyone else at Filene’s Basement, and I could not find any names in my notes. I found this link on LinkedIn for Lesa Anthony. I think that I must have worked with her, but the memories refuse to coalesce. She also worked at Harte-Hanks, which was where Doug went after he left TSI. The quote about finding new uses for the system probably came from her.

3. Value City went out of business in 2008. The Value City Furniture chain is separate.

4. My fairly clear recollection is that Doug was with me on this trip, but he was not employed at TSI in 2000. Perhaps we knew that the sale was coming and went in 1999.

1994-2014 TSI: AdDept Client: Saks Fifth Avenue

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TSI had a long but bumpy association with SFA. Continue reading →

Saks Fifth Avenue (SFA) is more than just a store. For decades it has been a chain of high-end department stores throughout North America as well as numerous smaller affiliated stores. In the early nineties its headquarters was in its famous flagship store on Fifth Avenue in Manhattan. The first Saks store was opened in 1867, and for decades the enterprise was owned and operated by the Saks family. However, since 1923 Saks has been owned and controlled by outside organizations except for a two-year period beginning in 1996 when it was a public corporation. Even then 50 percent of the stock was retained by its previous owner, the Bahrain-based firm, Investcorp.

I, of course, was blissfully ignorant of most of this when, in the early nineties, TSI began pitching the AdDept system to the advertising department of Saks. In fact, my presentation to Saks may have been the first one that had a fairly serious chance of succeeding. I don’t remember the demo, but I surely gave one at the IBM office on Madison Avenue. I also definitely visited the office of the Saks’ advertising department, which at that time was on one of the upper floors of the store on Fifth Avenue to collect the requirements for the official proposal.

It did not take me long to realize that SFA was very different from Macy’s. The Senior VP at Saks was a woman, and her secretary was a man. I am embarrassed to report that I don’t remember either of their names. Theirs was an unusual setup in the early nineties. More surprising to me was the fact that around his desk were posted large glossy photographs of shirtless male models.

Saks’ advertising department was responsible for more than just the Fifth Avenue store. There were dozens of full-line stores that bore the SFA logo strategically positioned around the continent in locations with the requisite number of rich people. They also managed the little advertising done for even more Off Fifth outlet stores that sold the merchandise that had not been sold at the SFA stores. They also had responsibility for advertising for the Armani Exchange stores. I never quite understood why.

This was the OTS at 700 N. Michigan Ave. in Chicago.

For me the most surprising thing about Saks’ approach to advertising was its focus on New York City. Macy’s focus was somewhat similar, but their primary purpose in purchasing AdDept was to be able to hand additional markets. Saks divided their SFA stores into two groups: New York and OTS, which stood for “out-of-town stores.” Their newspaper advertising was heavily focused on the New York Times. They may have used Newsday for the Long Island store, but I don’t think that they used the other tabloids at all.

Saks also advertised very heavily in fashion magazines. In some ways the system could treat magazines as newspapers that only published one issue per month, but in other ways they were quite different. A fair amount of programming was required to handle Saks’ advertising in Vogue and other such periodicals.

Saks signed a contract with TSI in 1994, which was a banner year for the company. I made sure that all of the users of and prospects for the AdDept system knew that Saks was now on our client list by including the news in an issue of Sound Bytes, TSI’s short-lived newsletter.

At Saks Fifth Avenue, the national retailer based in Manhattan, the implementation of the AdDept system is scheduled for May 1. Advertising personnel will be connected to an AS/400 located at the company’s data center in Lawrenceville, NJ, through a Token Ring network. Both Mac and PC users in all areas of the department and the advertising business office will have access to the data. In addition to the wealth of standard features in AdDept, custom programming will provide the department with the ability to produce advertising schedules by store, to track advertising expenses (gross, vendor, and net) by merchandise vendor, and to produce change reports that conform with the way that the department is organized.

Reading this blurb again brought to mind a few unusual aspects concerning the installation.

  • I made at least one trip to Lawrenceville, which is closer to Philadelphia than to Fifth Avenue, probably at the time when the AS/400 was installed in 1994. Almost never did anyone from TSI deal with anyone from that facility, and they had never had a hardware problem. However, several years later we received a very strange phone call from someone there who requested that someone from our office dial into the system over the modem. They said that no one could remember where they had put it; they hoped that the noise produced by the modem—it never answered on the first ring—would lead them to it. Apparently it worked. In 1998 all of Saks’ computers were moved to the Proffitt’s Inc. facility in Jackson, MI. I installed a newer faster machine there.
  • My recollection is that Saks used very little of the custom programming that TSI had coded and implemented at the time of the installation until Tom Caputo arrived eight years later. They mainly used the AdDept system as an easier way to key in expenses for their accounts payable and general ledger systems, which AdDept was designed to feed.
  • The phrase “the way that the department is organized,” brought back memories of the difficulties that I encountered while training at SFA. The ROP (i.e., newspaper ads) manager, in particular, was quite uncooperative in helping me understand how she worked. She evidently considered ROP her own little fiefdom, and suspected that revealing the knowledge of how her area worked might affect her job security. This was by no means the last time that I was faced with this sort of heel-dragging.

I remember a few other details about that initial installation:

SFA on Wilshire Blvd. in Beverly Hills.
  • I heard one interesting story related by an employee at Saks. The person at the headquarters who monitored sales by store had been very concerned because the Beverly Hills store in California had in the previous few months posted much lower sales than expected. A call to the store manager revealed a simple explanation: “The princess died.” Evidently a Saudi princess had been purchasing so much so regularly from the store that her untimely demise had dramatically deflated the the store’s total revenues.
  • Once or twice I spent consecutive days in Manhattan during the installation. Saks arranged for me to stay in a luxurious room at the nearby Sheraton. It was by far the nicest place in which I ever stayed for business.
  • I remember that on one occasion SFA had asked for a day of training, for which TSI charged $1,000. I discovered when I arrived in Manhattan that no one who actually used (or had any intention of using) the AdDept system was available to spend time with me. So, for several hours I “trained” three interns. For all of them English was a second language. One was named Oscar; I don’t remember the other names.

In subsequent years I was not a bit happy with the state of the installation at Saks. It made me realize that the success of our installations was largely dependent upon the strength of our liaison. The person needed to have the ability to grasp the intricacies of the system, a personality adaptable to working with both TSI and the users of the system, and the clout (direct or indirect) to deal with problems once they had been identified.

I very much wanted to use Saks as a reference account, but they used so little of the system that I was reluctant to mention them. I was frankly puzzled as to why it seemed so difficult to get anyone outside of the finance area interested in making the system work for them. The person with whom we worked the most was Jeanette Igesias1. She was conscientious enough, but she had neither the authority nor the inclination to involve any of the other areas more fully.

In 1998 the retail world was shocked to learn that Saks Holdings, Inc., the parent company, had been acquired by Proffitt’s Inc.2, a company that a few years earlier consisted of a set of stores in Tennessee that could have all fit easily inside the Saks store on Fifth Avenue. Almost immediately after the acquisition the parent company’s name was changed to Saks Inc.

Shortly thereafter I was in Birmingham, AL, to work with employees of the advertising department for the Parisian3, a chain of department stores that Proffitt’s Inc. had previously acquired. The corporate headquarters was also located in the same building. I happened to encounter the same Senior VP from Saks’ adverting department whom I had met in the early nineties. She was there to meet with people from what was then still called Proffitt’s Marketing Group (PMG). She knew that I had been frustrated with the pace of the installation at SFA. She even remarked that maybe under the new ownership they could get something done.

At about this time Ava John was hired by Saks. I think that she worked under Jeanette until Jeanette left SFA in 2002. Thereafter Ava was TSI’s principal contact for the part of the system used by the advertising business office, which included recording invoices that were uploaded to the corporate accounts payable system.

In 2008 Ava was arrested and charged with running an embezzlement scheme that netted her and her friends and relatives more than $680,000 over the course of five years. That may seem like a lot, but it was only a little over $10,000 per month, a tiny fraction of what Saks spent on advertising. I discovered a single mistake at another installation that was about as large as this.

At the time I did not hear about any of this, and, to the best of my knowledge, neither did any of TSI’s employees, but the scandal was reported in all three of New York’s major dailies. The Post‘s coverage can be read here. I was unable to discover anything posted on the Internet about the ultimate legal resolution. I also know nothing more about Ava.

In 2001 Tom Caputo, who had been TSI’s primary contact at Lord &Taylor5 for several years, was hired by Saks. He had a number of responsibilities in the advertising department, one of which was to oversee the AdDept installation. Tom’s office was not in the flagship store, but in an office building across the street. I met with him there several times. I cannot remember what projects we did for them, but I remember that Tom seemed frustrated with the situation there, or, more likely with what the world of retail had become in the twenty-first century.

Tom stayed at Saks until 2014, the same year that Denise Bessette and I decided to shut down TSI. I had one further contact with him. He asked me if I knew of any job openings that he would qualify for. I had to reply in the negative. By that time the demand for both people and software that was adept at administering the advertising for large national retailers was negligible. I felt sorry for my many acquaintances who were not able to disassociate themselves from this undertaking as smoothly as we did.

In 2007 Saks was spun off from the other department stores that were part of Saks Inc. The executive who had cobbled together this retail giant, R. Brad Martin, summarily abandoned the leadership of the rest of the stores to someone else and elected to run just SFA. His decision to remove the jewel from the crown was described in this New York Post. article.

In 2013 the company was purchased by the Hudson Bay Company, the oldest corporate enterprise in North America. The company had already purchased Tom Caputo’s previous employer, Lord & Taylor. One of the last projects that I worked on at TSI was helping with the migration of SFA’s AdDept system to the HBC computers located somewhere in Canada.

There are still many Saks Fifth Avenue stores. HBC opened a huge store in Toronto in 2014 and at least two other stores in Canada. Administration of all of the stores seems to be split between Toronto and New York.

1. Jeanette Iglesias’ LinkedIn page can be found here.

2. Much more about TSI’s relationship with Proffitt’s Inc./Saks Inc. is available here.

3. Details about the Parisian installation of the AdDept system are provided here.

4. You can read about this major boo-boo here.

5. The history of the AdDept installation at Lord & Taylor is documented here.

2000-2001 TSI: Bringing AxN to Market Part 1

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Designing our flag and running it up the pole to see if anyone salutes. Continue reading →

By the spring of 2000 Denise Bessette and I had pretty well outlined the steps required to implement TSI’s new Internet product and agreed on the name AxN (pronounced “A cross N”). It was a clearinghouse for insertion orders (reservations for advertising space) sent from advertisers (A) to newspapers (N). It also managed communications from both sides and allowed the newspapers to confirm the orders online. The process that Denise and I employed, including the division of labor, was described here. Details of the system design are posted here.

I should note that neither Denise nor I have a background in marketing. Most of our discussions about this project took place during the period shortly after Doug Pease, or marketing person left TSI. We had not yet replaced him.

The first non-technical question that we faced was how to fund the project. We never really thought about setting aside a pot of money, borrowing from a financial institution, or seeking investors. Instead, all of the coding made use of tools that we already had or were available at minimal cost. We knew that the company would eventually need to spend some money on marketing, but we had no idea how to budget for it in advance.

A critically important aspect was deciding how we would bill for the service. The insertion orders always originated with AdDept programs on the AS/400s used by TSI’s clients. However, for various reasons no more than twenty of them regularly produced insertion orders inside AdDept. We were already charging those companies a monthly fee for TSI’s support of the AS/400’s faxing software. How much more could we charge them? Most of them knew the limitations of faxing, but removing them was not a high priorities for any of them.

In 2022 the Tribune Company owns the Courant. The building that I visited has been abandoned.

On the other hand, the companies that used AdDept ran ads in hundreds of newspapers, and for most of those papers the department stores were by far the biggest purchasers of advertising. It was not unheard of tor some of these companies to spend hundreds of thousands of dollars per month for ads in a single newspaper. In order to assess the situation better I scheduled appointments with executives at the two major papers that were within easy driving distance, the Hartford Courant and the Springfield Union News & Sunday Republican1.

I explained our proposed approach to an executive at each publication.The lady at the Courant was not very enthusiastic about the idea, but she did say that the paper would consider whatever the customers wanted. She emphasized that the newspapers were already paying third-party services in order to receive the ads electronically.

The guy at the Republican was more engaging. He showed me the process of how his employees laid out an issue of the paper. They did not start by placing the stories in a way that would make the paper more attractive at the newsstand. They began by figuring out where the ads from Filene’s2, the May Company’s department store chain that dominated New England, would run. He said that sometimes they did not receive the ads until minutes before press time—or even later. However, they always held the space for every ad that Filene’s had scheduled.

So, both Denise and I concluded that TSI should bill the newspapers for the service and to offer it to the advertisers as an alternative to faxing at the same price, thereby bringing their net costs to zero. The big questions were how much to bill the newspapers and how to frame it. It did not seem right to bill the large newspapers the same amount as the smaller ones. The pricing had to seem both moderate and equitable.

Denise came up with the idea of five or so tiered billing amounts, where the tiers were determined not by a paper’s circulation but by its published column-inch rate. These rates were available in a publication called Standard Rates and Data to which most advertising agencies in those days subscribed. I had seen the huge books lying around at our agency customers. I asked employees at Keiler Advertising if I could have an obsolete copy. They gladly located a fairly recent one and gave it to me. I discovered that the rates3 for newspaper advertising varied wildly. As I remember it, we decided to set the floor value for the top tier of AxN rates at $150. So, any paper that with a standard rate of $150 or more per column inch would be charged $150 per month. Other papers would be charged proportionately less

This proved to be a rather easy concept to explain to the newspaper. Because the advertiser and the newspaper both benefited, the costs would be split between them. The newspaper rates were proportional to the publicly recognized value of the ads in their paper. Our fee was roughly equal to the price of one column inch of advertising space. The size of a full-page ad in a broadsheet newspaper was over 120 column inches. TSI’s fee would be a pittance to newspapers, most of which were still thriving financially in the early twenty-first century. If we could present the system as reducing the number of misunderstandings, the cost for the newspaper could easily be justified if even one free make-good were eliminated every few years.

In 2001 I made two trips to locations of AdDept clients to assess the feasibility of AxN for both the advertisers and the newspapers. The first trip was in January of 2001 to Houston, a city with two large AdDept installations, Stage Stores4 and Foley’s5. I gave fairly detailed demonstrations to the buyers of newspaper space at both locations. I showed the system to Stage Stores first. Here are some of my notes from that trip.

The AxN presentation went pretty well. Becky (Newman), the production manager, made a point to tell me that she was very interested in it. They also gave me a lot of suggestions as to what they needed, especially in the inserts area.

After the demo Becky showed me the AdDirect6 website. It is in many ways similar to ours. They list all of their clients. The only retailers are M&F8, L&T9 (who doesn’t use them), Stage, and Office Depot. The coolest thing about the site is that you can determine which fields are displayed as columns (but not the order of the columns). You can also specify up to three sorting fields. Finally, you can specify a filter to limit the list. Stage would like all of these. They would be less useful to others.

Stage pays AdDirect $10,000 per month. They plan to negotiate the charge down.

… Fort Worth(less) Star Telegram invoice for $500K. Foley’s never indicated that they thought that the papers would be reluctant to pay a little for the IO service. They seemed to think that they would do whatever they told them to do.

Foley’s was under the mistaken impression that all of the other divisions were using AdDirect.

The second trip was to Pittsburgh. I demonstrated the system to the advertising department of Kaufmann’s9, the May Company’s division that was based there. I was able to show the newspaper buyers on their own PCs that very little would be different when they began to use the AxN code that had been added to the AdDept system with which they were familiar. It was really just a matter of flipping a switch for each paper. The system did the rest.

I then signed on to TSI’s AS/400 from one of their PC’s and showed them what orders would look like from their perspective. I showed them in the AxN Handbook for Newspaper Users (posted here) what the orders looked like when the rep signed on with the newspaper’s credentials. They were very impressed.

After explaining how we planned to bill the newspapers, I asked Mary Ann Brown how difficult she thought that it would be to get the newspapers to cooperate. She said, “They’ll do whatever we tell them to do.”

I had appointments the next day with Pittsburgh’s two newspapers, the Post-Gazette and the Tribune Review. At the Trib I met with an IT guy. He found what we were doing very interesting. He verified that all the reps had access to the Internet, and he was quite pleased that our approach did not require him to purchase equipment or reconfigure what he had. The lady who was Kaufmann’s rep at the Post was more stand-offish, but she verified Mary Ann Brown’s assessment of their willingness to cooperate.

My third appointment was at the Cleveland Plain Dealer. I rented a car and drove to Cleveland for an afternoon meeting with Kaufmann’s rep. I soon discovered that we had a common acquaintance. He had just returned from a trip to Albany. He had met there with Fran Lipari, the owner of Communication & Design10, the agency that handled the Key Bank account. The rep was polite, but he was not a bit enthusiastic about the prospect of paying TSI for handling insertion orders.

I rated my success level at the three newspapers as a win, a loss, and a tie. That was not a great result, but we were still in the ball game. We were just at the stage in which we were ready to roll the product out to the first advertiser when something remarkable happened.

In 2001 TSI received a telephone call from someone at Belk11, a department store chain that was (and still is) based in Charlotte, NC. In the next few months I made many trips to Charlotte to discuss with them the use of the AdDept system. Since Belk already owned several AS/400s, the time between their approval of the AdDept contract with the accompanying design document for proposed enhancements and the beginning of the installation period was much shorter than usual. I remember that at one of those early meetings I was explaining how the AS/400 could automatically fax the insertion orders to the newspapers. Someone asked if it was possible to use the Internet to send the orders.

Guinea pigs love to whistle. Be careful; if you pick one up by its tail, its eyes will fall out.

I swear that I did not plant this question, but if I had thought of it ahead of time, I probably would have. I informed them that TSI had indeed developed just such a product, and we were about to roll it out to our existing customers. After I explained how it worked, Belk eagerly agreed to act as TSI’s guinea pig (sorry; I meant to type “Beta Site”) for AxN. This was such an ideal situation that I could scarcely believe it.

How TSI persuaded nearly all of the users of AdDept and hundreds of newspapers to sign up for AxN is explained in Part 2, which is posted here.

1. The name of the paper was changed to Springfield Republican in 2001.

2. Filene’s used AdDept for accounting functions, but only because the May Company insisted. I was never able to persuade the newspaper manager to abandon the elaborate set of spreadsheets that he had developed even though it did not produce insertion orders. The painful story of my attempts to get them to use more of the system have been chronicled here.

3. Most department stores negotiated much lower rates than the published ones. They often had complicated agreements about volume discounts.

4. The “standard rate” was the “open” rate for a black & white ROP ad in a daily edition. It did not include any discounts or premiums. I located a web page that actually included a page in one of the 2005 editions of Standard Rates and Data. It showed the complete rate card for the St. Petersburg Times, which happened to subscribe to AxN. It is on p.3 of the pdf posted here. SRDS, the company that published the physical book, now allows subscribing advertisers and agencies to view the rates on the Internet.

Becky Newman’s LinkedIn photo.

5. TSI’s long relationship with Stage Stores is recounted here. I do not have vivid memories of Becky Newman. Her LinkedIn page is here.

6. Foley’s was one of the earliest users of AdDept. The details have been posted here.

7. I have only a vague recollection of AdDirect. Apparently it was a way of entering ads for insertion orders online one at a time. The orders could be sent to the newspapers. This might be a reasonable approach for an ad agency, but retailers ran the same ad in many markets. Entering these one at a time would be unduly burdensome. If the $10,000 figure is correct, then the AdDept-AxN combination saved Stage a heck of a lot of money over the years.

8. M&F is Meier & Frank, the smallest department store division of the May Company. It was based in Portland, OR. Details of the AdDept installation at M&F have been posted here.

9. L&T refers to Lord & Taylor, the May Company division based in New York. The relationship between L&T and TSI is described here.

10. Much more has been posted about the AdDept installation at Kaufmann’s here.

11. Communication & Design (always “&”, never “and”) was one of the first ad agencies to purchase the GrandAd system. My adventures in installing and supporting that system are described here.

12. The details of TSI’s long and productive relationship with Belk are posted here.

1999 TSI: Mike Gets Certified

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The AS/400 hardware, the OS/400 operating system, and the and DB2 database were introduced in 1988. The AdDept system that TSI developed for the administration of the advertising departments of large retailers was one of the very first systems developed … Continue reading →

The AS/400 hardware, the OS/400 operating system, and the and DB2 database were introduced in 1988. The AdDept system that TSI developed for the administration of the advertising departments of large retailers was one of the very first systems developed on and for the AS/400. At the time TSI was an IBM Business Partner for its GrandAd system on the System/36. Earlier TSI had been one of the first software companies to be recognized as an IBM Business Partner for the Datamaster.

Prior to the late nineties the only requirement for a company to become a Business Partner was to have some successful accounts that were using its software or services. At times it was a huge advantage to be an IBM Business Partner. At other times IBM employees treated the partners as competition.

At some point the concept of Value-Added Retailer (VAR) was introduced. VARs were at first allowed to order and sell systems for which their software or services had qualified as adding value to the sale of IBM equipment. Too many bad sales by VARs prompted IBM to take away the ability to take orders from smaller companies such as TSI. Instead they were assigned to a “Super-VAR” who vetted and placed the orders for them. In 1999 TSI was assigned to a company called BPS, which shortly thereafter renamed itself Savoir.

The next, but by no means last, set of restrictions imposed by IBM was to require any company involved in sales of IBM equipment to have at least one employee who had passed proficiency tests for the the equipment. At the outset there were two levels with separate tests, one for sales personnel and one for technical.

My partner Denise Bessette and I judged at the time that it was critical to the future marketing of AdDept and any other future product that we continue to participate in IBM’s partnership program. I knew more about the hardware offerings than she did, and so I was chosen to study up and take the technical test. It made little sense for a different person to study for the sales one, which was reportedly much easier.

I think that I must have taken the exams in the first half of 1999 or late 1998. I have a lot of notes from the second half of 1999, and there is no mention of them.

IBM still publishes Redbooks. I think that WAS was in version 1 in 1999.

IBM published study guides for both exams. One or two Redbooks may have also been on the syllabus. I remember that there was a considerable amount of technical material about several things with which I was not at all familiar. One was the cabling required to connect two AS/400s. The other was setting up partitions on a single AS/400 so that each partition had a separate file system. It was more complicated than it sounds because each device needed to be defined in each partition that used it. I remember practically nothing about either of these topics, but we did encounter partitioning at Dick’s Sporting Goods (introduced here).

I spent as much time as I could bear going over the course material. Hardware and operating systems have never really been my thing. It took a lot of discipline to force myself to understand the details of things that we would never use.

The day arrived on which I was scheduled to take the tests. I drove to an office in Farmington that specialized in administering exams for corporations. I had already consumed one 20-ounce bottle of Diet Coke before I arrived, and I brought another with me.

I gave my registration document to the receptionist. She asked me which test I wanted to take first. I selected the sales test. I seem to recall that each test lasted for about ninety minutes. All questions were multiple choice. I was required to enter my answers on a PC.

The sales test was not too difficult; I reported back to the receptionist ten or fifteen minutes before the deadline. She told me that I had passed.

I told her that I wanted to take a break before taking the technical test. I went to the men’s room and sat in the lobby. I drank my second Diet and tried to clear my mind. Then I took the second test.

It was much more difficult than the first. A few questions were beyond my ken. I skipped them. I read all of the others carefully and only answered after I was fairly certain. I used up nearly all of the allotted time. I was pretty relieved when the receptionist assured me that I had passed both tests.

It doesn’t look familiar.

So, I was certified by IBM as knowledgeable about both the sales and technical aspects of the AS/400. If I ever had physical certificates, I certainly have not seen them for a decade. TSI’s Sales Manager Doug Pease told me that his contact at Savoir had told him that almost nobody ever passed the technical exam on the first try.

I am not sure how much good my success did us. I am not sure that TSI sold any new hardware at all in the rest of the time that we were in business. We might have ordered an upgrade or two through our Super-Var.

On the other hand, we did get to go to the PartnerWorld convention in San Diego. That adventure has been described here.