Hess Bring Numbers to Bear at Carat

Feb 25, 2009  •  Post A Comment

Mike Hess thinks of himself as a well-rounded guy who just happens to have a passion for data analytics.
This month, Mr. Hess joined Carat from OMD, where he was global research director for five years.
As executive VP for research, marketing science and consumer insights at Carat, he expects to focus on the consumer while getting more involved in the digital side of the business.
“All the data that’s available on the digital side kind of reminds me of 20 years ago, when scanner data first became available by Nielsen and by IRI. With all that data out there, it kind of led to a new era in our understanding,” he says. “I kind of hope to bring that background in analytics and stats to the digital area as well.”
Mr. Hess says he specializes in applying advanced multivariate statistics, regression analysis and cluster analyses to problems.
He discovered his facility with statistics with a Jesuit professor at Loyola University in Chicago, where he majored in psychology.
Mr. Hess also wrote for the college paper, and thus gained experience finding the words he needed to describe what his numbers told him.
Colleagues at marketing companies credited his approach to helping find “bulletproof” ways of quantifying the value of the ideas they came up with for skeptical clients.
“I like to consider myself holistic in that the statistical work is definitely left-brain stuff, but being a marketing person, I really have the respect for right-brain stuff. What I try to do is to kind of quantify what good right-brain thinkers come up with,” he says.
He went to graduate school at Columbia University in New York, where he discovered a love for the advertising business.
“I was able to find a job through the New York Times working as a brand assistant for a brand called Propa PH lotion, which was an acne lotion that kind of competed against Clearasil and Stridex,” he says.
He decided to go to the University of Pennsylvania’s Wharton School for an MBA rather than pursuing a Ph.D. at Columbia. He took a summer job working for Pfizer, tracking a statistical project for one of his professors.
While in grad school, he also tried applying his knowledge of statistics to horseracing, spending days at Philadelphia’s Liberty Bell Park race track. He used 300 race variables and found he was picking winners 7% more often than the straight pari-mutuel odds would suggest. Unfortunately, with the state taking 17% of his winnings off the top, he still wasn’t able to make money.
He thinks he could have refined his system to improve his winning percentage to 10% or 12%, “but I’m not convinced over the long run people do make a living” picking horses.
That meant he needed a day job, so after completing his degree he went into brand management, working on Windex glass cleaner for Drackett. After two and a half years there, he decided to get back into research.
His first stop was Burke Marketing Research, where he became part of its Basis new-product forecasting division. During his run at Burke he returned home to Chicago to help open an office there for Basis.
He was recruited by venture capital startup View Facts, which used set-top boxes, to do single-source research. The boxes also could be used to survey participating homes. One such survey correctly indicated that Richard J. Daley would be elected mayor of Chicago.
Mr. Hess moved on to IRI and headed its testing business for six years before joining Clorox in the San Francisco area, where he started the company on marketing mix modeling. He returned to the Midwest with Knowledge Network’s PDI unit, where he continued to work in the area of marketing mix modeling. There his team figured out a way to compute the long-term effect of advertising, which became the basis of a book, “Short- and Long-Term Effects of Advertising and Promotion.”
After three years with IRI, Mr. Hess moved to Elrick & Lavidge in Chicago, which later was acquired by TNS.
Five years ago he was recruited to move to New York by OMD. He’s found he enjoys life at a media agency.
“There’s almost a different set of challenges every day,” he says. “Your main task is to take the great creative that your creative partners have come up with and try to put it in the right channel at the right time when people are most likely to actually consume that media, so it’s definitely been fun.”
Mr. Hess moved to the United States from Austria with his family when he was 5 years old. He spoke only German when he started kindergarten in Chicago.
He grew up within walking distance of Wrigley Field and remains a Chicago Cubs fan. His parents still live near the ballpark, and he says he timed a drive during a recent visit so that he could see fans gathering for the Winter Classic hockey game at Wrigley on New Year’s Day.
At home, Mr. Hess is kept busy by three teenagers, two boys and a girl. The family last week vacationed in Captiva Island in Florida.
After learning German in college, Mr. Hess has picked up a number of other languages, including Spanish. He also reads French.
“I like anything that has a structure to it,” he says. “Statistics does, and psychology and language obviously have a structure.”
Mr. Hess is also a bridge player, but since moving to New York, he does most of his playing online. A Silver Life Master, Mr. Hess has been asked by Warren Buffett and Bill Gates to join their game on occasion.
He says the billionaires are looking for players who are both competent and polite.
“If Bill Gates were to make a mistake, you’re not supposed to say, ‘You could have made the hand by doing it this way,’” Mr. Hess says.
Who knew? The highlight of Mr. Hess’ athletic career came in college while playing with the ROTC flag football team at Loyola. They traveled out to South Bend, Ind., visited Touchdown Jesus and managed to beat Notre Dame at home. “That made the bus ride home great, and I was able to write about it for the Loyola Phoenix the next day,” he says.


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