Tyee Group’s Brown Sees Growth In Serving Corporate Brands

While many people in the DRTV industry say Fortune 1000 corporations have lost interest in DRTV the last couple of years, Spencer Brown boasts of high growth in corporate clientele.

Brown is the newly appointed CEO of The Tyee Group, a DRTV agency and production house in Portland, OR, that prides itself on its corporate roster, which included Philips Consumer Electronics, Hewlett-Packard, Hanes and Mirro/WearEver last year. He said the company’s reliance on so-called “infomercial entrepreneurs” who hawk the latest in exercise and household gadgetry has diminished in the last few years as its corporate clientele has grown.

“It used to be that 80 percent of our business was non-Fortune 1000 clients,” Brown says. “Now, about 80 percent of our business comes from corporations.”

As he steers the company into the next millennium, he sees opportunities to expand beyond direct response TV into interactive media, especially as television becomes more of a high-bandwidth direct marketing tool. It’s expected that DRTV expertise will be in greater demand as corporate brand managers develop ways to direct market through electronic media.

“When I first joined Tyee about a year and a half ago, the attraction for me with this company was the potential to marry new technology with the ability to market and sell products to consumers,” he says. “It seemed a natural that television and technology were rapidly colliding.”

Brown boasts a strong track record in technology, having worked for several hi-tech firms that went public under his stewardship.

He served in the Air Force from 1969 to 1973, when the United States was embroiled in the Vietnam conflict. He didn’t see action in Southeast Asia, since he was stationed in Indiana and Iceland, where the U.S. military monitored airspace for Soviet intrusion. While the Air Force exposed him to technology, he has always considered himself more of a businessman than a techno-geek.

After leaving the Air Force, he studied at the University of California at Los Angeles for three years and earned a bachelor’s degree in political science. His first job out of college was with Peat Marwick Mitchell, at that time a Big Eight accounting firm. He earned a CPA certificate and audited entertainment clients, including 20th Century Fox.

From there, he worked for Compact Video Inc., a video and film production and post-production firm in Burbank, CA. The company experienced rapid growth during the four and a half years he was a senior financial manager there. Its sales rose about 528 percent from $7 million in 1978 to $37 million in 1983. While there, he managed a secondary public offering of the company, which was eventually taken private by corporate raider Ron Perelman.

Hi-Tech Experience

Brown entered the hi-tech arena, which was experiencing rapid growth during the 1980s. He became president/CEO of GigaBit Logic, a maker of gallium arsenide computer chips in Thousand Oaks, CA. The company’s clients included Digital Equipment Corp. and Cray Research Corp., both of which are now owned by other computer firms.

He moved to Portland, OR, in 1990, leading a merger with Tektronix Corp., another maker of gallium arsenide chips, which are used in communications equipment. Another firm joined the merger, with the result being TriQuint Semiconductor Co., which eventually went public.

Brown left the firm for another venture. He bought an electronics distribution company called Sundance Electronics Inc. in 1993 and sold it three years later.

He remained in the hi-tech field as a consultant for Now Software Inc., a troubled firm that produced calendar and personal information manager software for Macintosh computers. He helped turn the company around in preparation for its sale to Qualcomm Inc., the communication systems giant in San Diego with revenues of about $3.3 billion last year.

As the deal closed, a headhunter recruited him to consult for Tyee, leading to his selection as president in September 1997.

Brown was attracted to Tyee because of its innovations in infomercial production for corporations, particularly in the hi-tech field.

“I think manufacturers are realizing they need more than a traditional short form spot to educate consumers,” he says. “They want to make complex products appear simple and it’s increasingly difficult to get a message out about new products.”

He sees continued growth in Tyee’s agency business, which was launched four years ago and is now headed by Rick Petry.

“Rick has done a really fabulous job at growing that end of our business,” Brown says. “It doubled last year and we expect to just about double it this year. We expect to see more growth from our core Fortune 1000 clients, providing them with services in multimedia, Web site development and DVD programs.” The company wants to grow business in Web-based media placement as more advertising dollars divert to interactive media.

Tyee also owns a minority interest in 800.COM, a Web marketing company it helped launch before selling it to a software company.

Although Brown has led public offerings, he does not foresee an initial public offering for Tyee in the near future.

“As a service company, we would need much bigger revenues before considering a public offering,” he says. “Most of our assets go up and down the elevator every day.” He started a stock plan for employees last year, enabling them to share in company profits.n

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