In My View by Eric Musgrave: Analysing data is about maths, not marketing
Older readers may recall the amiable American entrepreneur Victor Kiam, who famously acquired the Remington electrical goods business because he enjoyed using its products.
"I liked the shaver so much, I bought the company" was his cheerful catchphrase on TV ads during the 1980s.
Around seven years ago, Marcel Bordon, CEO of the Sole Trader footwear business, was faced with the opposite problem. He could not find a company he liked so he established one himself.
The activity in question was digital marketing, or paid search, and the company he created, a London-based agency called Hypus, is an interesting example of a retailer’s need driving innovation. High-level mathematical analysis of data – everyone’s favourite buzzword at present – was the solution to his dissatisfaction with others’ efforts.
Bordon has run his family-owned business for 35 years. Sole Trader is part of a group founded in 1946 by Marcel’s father Salo. A talented entrepreneur, he famously gave Dr Martens its first 144-pair order in 1960 and held exclusive wholesale distribution rights for Dr Martens in the South of England for a decade.
Bordon Senior, who died from Covid in April 2020, also developed and popularised Spanish desert boots in the UK, as well as driving innovation in EPOS and merchandising systems in the late 70s, long before tech became the thing.
I have known Marcel as an able footwear retailer for many years but until recently I had no idea about his keen and practical interest in technology.
Continuing his father’s penchant for innovation, Bordon embraced e-commerce with enthusiasm and Sole Trader’s first transactional website went live as long ago as 2005. Being an analytical businessman, he tried to achieve best practice in the range of necessary new behaviours, including paying Google and other smaller search engines for their search capabilities online.
Better searches lead to more online customers is the basic formula, but he soon found that digital marketing is a world of smoke-and-mirrors, dark arts and what might politely be described as obfuscation. Other terms can be applied…
“Locked into fixed contracts with even supposedly top digital marketing agencies, I was soon wondering why they never hit the targets they had promised for increased revenue on our site, why they were unable to explain simply what I was getting for my money, and why their solution to my every question was to suggest I spent more,” Bordon recalls.
As befits a man who has a degree in Philosophy and Law from Cambridge University, Bordon was convinced there was a better, more considered way to tackle the issue. His response was to team up with his son-in-law Eli Cohen, who has a First-Class Honours degree in Mathematics and Economics from the University of London.
They founded Hypus with the firm belief that utilising a business' vast data is at the core of effective performance marketing. Cohen's passionate view is that everyone has access to data, but it is about what you do with it that is crucial to high performance.
More than simple commercial awareness is needed. What is required – consistently – is a rigorous scientific approach to measurement, to properly ascertain who is worth what, where to find them, and what to pay.
The challenges and requirements of the Sole Trader site was the test bed for Hypus' singular approach, which is driven by an almost fanatical obsession with providing an accurately measured ROAS (return on ad spend).
In short, every penny has to pay its way – with the value it brought correctly attributed and clearly demonstrable.
"What is important to us is that we display competence and integrity in equal measure," says Bordon. "Both elements were sadly lacking in my dealings with other agencies. With Hypus, we do not ask clients to sign up for a year's or 18 months' contract. We simply have a rolling 30-day notice period on either side. We get paid for hitting agreed targets. We have not lost a client since we started in 2014."
Impressed by this transparent approach to the increasingly important and increasingly costly discipline of paid search, for the past couple of years I have been introducing Hypus to some of my network.
One person I knew would analyse the offer very thoroughly and honestly was Sally Minto, global digital director for fast-growing British beauty company Revolution Beauty.
When we first met many years ago, as Sally Heath she was a womenswear buyer for House of Fraser. She subsequently worked for All Saints and New Look, and at the latter developed her skills to become a highly effective ecommerce director. She married Adam Minto, co-founder of Revolution Beauty, in 2011 and joined the business in 2019.
Once when we were discussing the increasingly turgid jargon being used to describe ecommerce practices, she commented: “All these complications drive me mad. Trading online is just about selling stuff in your biggest and best shop.”
As someone who has long considered e-commerce to be traditional mail order with algorithms thrown in, I could not have put it better myself.
With her retailer’s eye, Minto observes: “I like Hypus because they created a business to solve a problem that all online traders face. The digital marketing space, to put it politely, is a bit of a black hole and some agencies make it even more complex than it needs to be. The Hypus solution was to build a model totally driven by statistical analysis. They were able to test it on Sole Trader before they started offering it to other clients.
“They work very hard and very closely with us at Revolution. I totally trust what they do and I am happy to be guided by Eli on what our digital marketing strategy should be.
“One of the essential things that marks them out is their obsession with getting us the best ROAS for every single ad, even generic ads that usually do not make anyone money. Their reporting is very detailed, yet very transparent, and they always deliver what they said they’d deliver. And most remarkably of all, they usually underspend the budget.”
Hypus is in growth mode, looking to work with clients with a performance marketing budget in excess of £1m annually. While acknowledging that practices have improved in some areas in recent years, Cohen stresses that many marketers fail to grasp the core principles upon which a performance marketing operation should be built: “I find it intriguing that so much of digital marketing is still driven by legacy marketing principles rather than pure data analysis. Often our first comment to a prospective client is not that we would do what they are doing better, but that we would take a completely different approach. Their initial set-up is inappropriate and outdated.”
Hypus’ client list includes companies as diverse as the Japanese athletics brand ASICS and Scottish luxury goods business Johnstons of Elgin, and of course Sole Trader. When he established the agency in 2014, Bordon was running 45 footwear shops and online accounted for 18% of group turnover.
The impact of COVID-19 prompted a restructure in 2020 that has left the company with 28 shops, while online now is responsible for 56% of sales. The growth of online sales is only one part of Bordon’s plans for the business:
“Moving forward Sole Trader will have a more diverse and clearly delineated retail strategy, focusing on development for new products, such as the vegan V.gan brand founded by Derrick Hoyle, our long-serving buying and creative director, together with me.
“Additionally, we will be helping credible and genuine performance brands to get oxygen and grow in a market obsessed by the Big Two athletic brands. We want to help brands by onboarding them to online platforms and leverage the premium tech and logistics capabilities of the business to help ambitious brands to grow fast and sustainably.”
Given Bordon’s penchant for keeping a low profile, however, there is no chance we will see him fronting a marketing campaign like Victor Kiam did. He would be good at it.