A History of Marketing / Episode 32
This week we’re diving into early internet history and the digital transformation of Hollywood with the one and only, Shelley Zalis.
Zalis is the founder and CEO of The Female Quotient, an organization dedicated to elevating women in the workplace and closing the gender gap for good. With millions of social media followers and tens of thousands of global event attendees, The FQ is the largest global community of women in business.
But before she became a leading voice for workplace equality, Zalis was a tech pioneer who transformed the market research industry.
In our interview, she tells the story of taking research from the analog world of mall intercepts and random-digit dialing into the digital age. She personally pioneered the modern, internet-based methods that are standard practice today.
And she led this transformation by tackling one of the toughest industries to break into: Hollywood. You’ll hear how she used the early internet to reinvent movie trailer testing, breaking a decades-long monopoly in the process.
I’m a huge fan of both early internet history and the inner workings of the entertainment industry, so this was an absolute blast.
As you’ll hear, Zalis is a charismatic leader and a great storyteller. She shares amazing stories from her career, and the “heartbeat moments” she faced as an entrepreneur. After meeting her, it’s clear why Zalis is such an inspiration to so many millions of people worldwide.
Listen to the podcast: Spotify / Apple Podcasts / YouTube Podcasts
More from Shelley Zalis:
Special Thanks:
Thank you to Xiaoying Feng, a Marketing Ph.D. Candidate at Syracuse, who volunteers to review and edit transcripts for accuracy and clarity.
And thank you to Bill Moult, whom you may remember from episode 23 of this podcast, for introducing me to Shelley Spector.
“How did a nice girl like me get stuck in market research?”
Andrew Mitrak: Shelley Zalis, welcome to A History of Marketing.
Shelley Zalis: Just calling it history and marketing is interesting in and of itself. So you had me at hello.
Andrew Mitrak: Awesome. All right, well you've been a driving force in marketing and market research, so I'm looking forward to a conversation about your historic career and how you've seen the industry evolve. But I want to start right at the beginning. How did you get started in market research?
Shelley Zalis: How did a nice girl like me get stuck in market research? That's a really good question. It actually started by—I didn't think I was going into market research. It was by accident. I was at Columbia, and I was a senior. Senior year, I went to the job bulletin board, and I saw this—I was studying psychology—and I saw this great ad up that I thought was a job at an ad agency. And I love commercials, and I watched them all the time. So creating them and working was like, wow! And I love examining people and their minds and messaging and comms.
So I go to this interview, and I walk in, and there were four women sitting in the entry of the office, all eating ice cream and gossiping from People magazine about, you know, celebrities and trends. And I'm like, "Oh my God, I love this job." Only to find out it was a market research company. I got a D in statistics, so I would never be in a market research company or apply. If I thought it was market research, I would never have applied for the job. It was called Video Storyboards. So I thought you made these great boards and whatever.
And then the owner comes out, and he's wearing Wallabees, red socks, and brown corduroy pants. And his shirt was kind of messy, and his name was Dave Vadehra. And lo and behold, I ended up accepting the job, and I worked there for probably six or seven years, and I loved it. But I did not apply for a market research company. I thought it was an ad agency.
Pre-Internet Market Research: Mall Intercepts and Paper Surveys
Andrew Mitrak: And so this was in the offline, pre-internet era. Can you just paint a picture of what market research actually was and what it looked like at the time?
Shelley Zalis: Market research for me, at the time, was mall intercepts. So we did mall intercepts. And we stopped people and showed them an animatic. We produced these storyboard animatics on three-quarter-inch cassettes. You remember those thick things? And people would be in the malls, and they'd pop in the video. You'd sit in a little kind of place and watch it, and then it was a paper-pencil survey where they would answer the questions on a survey. And even on rainy weekends, somehow we managed to get these surveys done.
It was an amazing experience for me. I did not know what qualitative was. I did not know what quantitative was. I only knew what Video Storyboards was. And I had a typewriter, and I did everything. I'd sit and type code, and I would tick, tick, tick, tick, tick to make the five-slash was across the board. That's how we coded and tabbed. We did coding and tabbing. And I knew nothing more than that's what I did. And we would sit around with the clients, and I'll never forget Bausch & Lomb was a really big client of ours, and we would show them the results and then I would just tell them what I thought. We'd watch the ads, we'd look at the results. And that's how we did market research.
Andrew Mitrak: You said you did everything. Were you more client-facing, or were you the person at the malls kind of getting people in? What was your role at the company?
Shelley Zalis: I did everything, which is probably why I'm a really good researcher because I understand the mindset of people. I understand what answers mean. I understand open-ended responses, close-ended responses. But more importantly, what I really understood was taking data and telling stories from it. And that was always really my sweet spot, especially with clients. I loved that meeting when the client would come and say, "So, which commercial is better than the other one, and why?" That "why" was so defining for me. Data is the "what," and that story, that heart of how people really feel, and that it is a love relationship with a brand and the authenticity of the story and the consistency, that to me was so remarkable.
The Jump to Quantitative: Trading a Typewriter for a Computer
Shelley Zalis: And then I got a phone call one day after six, seven years, whatever. Um, from a company called ASI that was later acquired by Ipsos, which is full circle because I was acquired by Ipsos too. And the job was coming to work at a quantitative market research company. Quantitative? What is that? And so I went into Dave's office, I said, "Dave,"—and I was like a daughter to him. 212-689-0207. I still remember the phone number, and this is 40 years ago. And I said to him, "What is quantitative research?" And he says, "It's basically what we do, but it's bigger sample sizes."
And I said, "Well, I just got recruited by this company to come for an interview. I think it's time for me to fly. I think you need to let me go. It's time for me to go." And he says, "You're right. I don't want you to go, but go."
And so I walk into this big office. I mean, we were in a little tiny brownstone, Video Storyboard tests. And now I go into this office with like 50 people or something, and they're not sitting around eating ice cream and talking about celebrities and people and gossip. It's like everyone is at their desk and punching away on their computers and all this kind of stuff. And the CEO comes out to greet me. And he is this tall, handsome man with a navy blue cashmere cape, an Armani cape. He says, "Shelley?" I said, "Yes." He says, "Come in." And he takes me into his office, and he has a big desk and a standing desk, and then sofas and chairs and tables. And he says, "Okay, here's your interview. I'm going to show you three commercials." I think it was for either Pizza Hut or Domino's. My gut tells me it was Domino's Pizza. He says, "And you tell me which one is going to do better and why."
And I'm like, "Oh, this is easy. I am so well-trained for this."
And he shows me the commercials, and I said, "This one did better. Here's why. Here's how they have to fix this..."
He goes, "You're hired."
I said, "Great."
He says, "And I'm going to pay you this kind of money. And what do you need in your office?"
I said, "Well, I need a typewriter and a TV."
He said, "Well, why do you need a TV?"
I said, "I watch TV commercials all day long. I love ads."
And he says, "Okay." Then he says, "And a typewriter, that's not going to happen. You're going to learn how to use a computer."
And I said, "Uh-uh. Not me. I think on a typewriter." And that was how I got my job at ASI.
Andrew Mitrak: That's really funny that you were resistant to the computer because later on, you'd lead the transition to online and everything. So it seems like a pretty big difference there.
Shelley Zalis: Well, the interesting thing about Video Storyboards to ASI: Video Storyboards was mall intercept, and ASI was telephone. And we would buy, to run the ads, we would buy time on unused cable channels. So those 105, 120, you know, this is before the world was as it is today. To the point where I was having my first child—you're a new parent—my first child, he's now 33, 34 years old. And at night, when I was feeding him, I would watch infomercials. And they were on all those underutilized channels because that's how they bought time to run programming on those channels. So it's just so full circle.
In-Person vs. Over-the-Phone: The Early Days of Data Collection
Andrew Mitrak: So if ASI was doing things over the phone and previously you were doing mall intercepts, was there any trade-off in the quality of the data when you're doing something over the phone versus in person? What is—because obviously, you can do a lot more scale over the phone than at a mall, presumably. So what was the main difference?
Shelley Zalis: Well, I think also random representative sample. I mean, if you think about going into the white pages, which is RDD, random digit dialing, back to those days of thinking of RDD, you would randomly pick that name out of a phone book. And so it's more representative. And also, you don't just recruit or stop people in the mall that look like you or sound like you or talk like you. I also never really understood how we would fill surveys in a mall on rainy weekends. Yet, we managed to fill them. And if you actually looked at the surveys back in those days, there were a lot of erase marks. Oh, was it really a man at this age, or was it a woman, but you made it a man because you had to fill your quota.
Now, I had the same issues with telephone, by the way, but it's a much bigger, more random population, I think, than just geographically this is the mall in Beverly Hills and this is the mall in Chicago, you know, whatever.
Andrew Mitrak: And when you're running this over the phone, what are your main clients? What problems are you trying to solve for them? Like what is the primary type of thing that you're doing for them at that point?
Shelley Zalis: Well, we would recruit them. This is a really long time ago, so I might not remember this perfectly. But you would recruit them, and this is why we did the testing on unused channels, to watch—and this is how we added recall testing, 24-hour recall to see if you can remember not only the ad but who the brand sponsor was. Right? And so it was more pre-post recall testing and then asking them the questions about it. So that's how we did it at the time. When we were doing mall testing, you could do a 30-second, a 15, 30, 60-second ad, but you also, because you had that attention sitting down, they would also be able to see it in real-time and just give you their answers. Do you like it? Do you not? When we were doing recall testing, we embedded the advertisements into shows. And that's how we got recall measures. You're bringing me back to the nineties.
The First Online Ad Standards
Andrew Mitrak: Yeah. So the reason I want to dwell on some of these offline things, over the phone, mall intercepts, is that you were also really early when it came to online market research.
Shelley Zalis: First.
Andrew Mitrak: Yeah, you were the first. Sorry, I didn't mean to say “very early.” The first, literally the first!
And I'm wondering how you knew that the internet would be a big thing and not just a flash in the pan. And how you saw that this would be able to solve problems that in-person mall intercepts or kind of manual phone-type market research couldn't do. Why did you know that the internet would be a big thing?
Shelley Zalis: I had no idea. So I did not know. But at the time, when I was at ASI, you know, we were doing telephone research. But I also was working on infomercials because it was a big aha moment for me, these infomercials: direct response, call to action. And so I created a dual-dial technique. No one did research with infomercials because your call to action was your numbers and your metrics for success. How many people bought from the show they watched? But I always thought to myself, an infomercial is a 30-minute show, and they would always put the call to action at the end. But what if I didn't wait until the end and I wanted to buy it? I didn't see the number. So I did a dual dial. One dial—and I did this in a central location—one dial that you could move to gauge your interest across the board. And the other dial, at what moment would you want to buy?
And that is how we ended up creating a call to action in a 30-minute, every eight minutes. It was just mind-blowing for me, but using technology, and we did them in theater settings, and I had these dials and it was really quite remarkable.
And the other thing that I was doing at the time, the internet online was starting to happen, but brands were creating 200-page websites for brands. Like for Tide laundry detergent, they would have 200 pages with the ingredients and how to do this and how to do that. And I thought to myself, gosh, no one wants to read 200 pages of a website about Tide laundry detergent. And by the way, Tide doesn't create a program to advertise in; they put their advertising in other people's programs.
And there were also no standards online with banner ads and split screens and skyscrapers. I mean, do you remember—how old are you?
Andrew Mitrak: I'm 35.
Shelley Zalis: Okay. You won't remember this then because it was just beginning, but there were no standards. A banner ad could be this big or this big or this big, a square, that. And so how could Procter... if Tide wanted to buy ads across content sites, they would have to make them all different sizes. And so I built a consortium. It was called IIX, Interactive Idea Exchange, and CIA, Consortium for Interactive Advertisers, to bring 10 non-competitive advertisers together to create online advertising standards. The government called it collusionary, so we brought in the IAB, and then that's how the IAB started.
But that's when I started understanding—oh, by the way, what we realized about the 200-page websites, most consumers would only go to a couple of the pages. And that's when I started creating microsites for brands, where instead of creating their own website to advertise in, we took the three pages and moved it to other people's content sites that had an audience. And so like for Tide, we called it Stain Detective. You could go to the page, and anything, any stain you had, it would teach you how to remove it. And it wasn't... Tide wasn't always the solution. And it was amazing.
Pitching Online Research to an Offline World
Andrew Mitrak: And so you're doing this—just place me in your career. Is this after you've left ASI and you started OTX that you're doing this, or are you still at ASI and doing this?
Shelley Zalis: This is pre-OTX, where I had the idea. But by testing websites, I had the idea, "Well, why don't we migrate research from offline to online by creating a research website?"
Andrew Mitrak: Right.
Shelley Zalis: And that was how I got the idea to test shows, commercials, all of that inside a website by recruiting people to that website to test. And that was the whole epiphany around it, which is why I told you about infomercials and website testing, because it was how I ended up coming up with the idea of online research.
Andrew Mitrak: So when you came up with this idea for online research and you pitched it to your bosses at ASI, I'm sure they were like, "Yes, let's do this! Let's all change!" Is that what happened?
Shelley Zalis: No. Not at all. I went to my bosses and I said, "I have this really big idea. Let's migrate research from offline to online." ASI had just gotten acquired by Ipsos. And my bosses and bosses' bosses and bosses' bosses all said to me, "Well, it's not the right time." I said, "Not the right time? Why?" They said, "Well, first of all, Ipsos just acquired us and they want us to go global. So we have to invest all of our resources in global expansion because we were very US-centric. And second of all, no one is online except wealthy old men with broadband connections." And to test video, you needed high speed, but there was no high speed. The majority of people that were even online were on 14.4k modems. Clunky. And definitely not consistent if you're going to show video to show consistency, and you need that for research. And because no one's online, you can't get a representative population.
So everything that they were telling me was "why not" versus "why yes." And so a week later, I'm on a panel with Larry Mock, who was the Chief Research Officer of Procter & Gamble, the largest consumer packaged goods company in the world. And my bosses were all in the front row, and I'm whispering to Larry. And Larry was very famous, very well-known as a market researcher. You should interview him. He'll tell you. And I said to him, "Larry, when is the right time to come and talk to you about migrating research from offline to online?" He said, "Next week." I said, "Great."
So I come off the stage and my bosses said, "What'd he say? What'd he say?" I said, "I just asked him when is the right time because you told me there needs to be a right time. I want to know when that right time is to come and talk to Procter & Gamble." And they said, "Well, what'd he say?" I said, "He said, 'Come next week.'" They said, "Great. John will go, Paul will go, we're going to go, and Star will go." I'm like, "What about Shelley?" It's my idea, I got the yes, and if I'm not going, I'm going to cancel the meeting and wait for the right time.
And that was my moment of truth. It was my heartbeat moment that I'd rather be in charge. Why am I always being told I'm not the right one, it's not the right time, it's not going to work, it's not possible, I'm going to fail? And that's when I left and started OTX. Had to.
Hollywood Goes Online: Measuring Movie Trailers on the Internet
Andrew Mitrak: So literally, that was the moment that you decided, "I've got to start my own company. These folks are going to miss out. They don't know what they're doing and I need to be in control of my own destiny." When you founded OTX, this type of company just didn't exist before, right? It was the first of its kind. So how did you know what you needed to do to build OTX? It's like, okay, I'm going to found it. What then? What are the first decisions you make to build this new type of market research company?
Shelley Zalis: Well, what's crazy about that story is when I was doing website testing, I had hired this young guy, his name was Trevor Kaufman, to help. I didn't know anything about online or whatever. So he helped a lot. And I said to him, "Will you help me build a website for online research? And if anyone buys it, I will give you a million dollars." He was 20, 21 years old. And so we built it in my basement. And I brought the idea to Nielsen. And I said to Nielsen, "I have this crazy idea to migrate research to online." And they said, "We love it. What do you need?" I said, "I need a million dollars to give to this young kid."
And we ended up giving Trevor the money. But it was over a year helping do the research and test and whatever. But I say we made him a millionaire at a very young age. And I pioneered at Nielsen, and I called it Reel Research, R-E-E-L Research. And I decided I was going to start in movie research, movie testing. Why? I knew nothing about the movie business. Zippo, zero, nada. But I knew that if I could test movies and trailers—which were two and a half minutes long versus 30 seconds for CPG clients where nothing changes—I could do anything. So if I go for the hardest category and build around that, then the rest is easy.
And there was only one person in the entire world doing movie research, and his name was Joe Farrell. And this story is so crazy, you can't make this up. Joe Farrell had a monopoly. Nobody could break the monopoly of NRG (National Research Group), Joe Farrell. He was the godfather; they called him the godfather of movies and movie research. And crazy enough, let's go back to Video Storyboard days. He tested trailers in the malls. So now I'm back to my Video Storyboard days. And successfully, and he was the CEO whisperer. He was the whisperer to everyone. He would tell someone, "This movie's going to be big, move the date." And no one could break his monopoly. So I thought, you know what? I'm going to try. And I'm going to go in with online research.
Breaking through Hollywood's Research Monopoly
Shelley Zalis: And I realized there's always a yes, you just have to find it. But no one was able to find it until I came along. And so I went to Warner Brothers. And there was a guy named Dan Rosen and Richard Del Belso. I am so grateful for them. And I said to them, "Are you perfectly satisfied with how you do research in the movie business today?" And they said, "Well, of course not. Who's ever perfectly satisfied?" That was my crack.
I said, "Great. I have this crazy idea to pioneer online research, migrating it from the mall to this. I don't know how to do it, I don't know what I'm doing, and I don't know anything about the movie business. But will you take a chance on me?" And Dan will tell you it's because I actually told him the truth. "I know nothing about this, but we're going to hold hands and go together." And I said, "And all I want from you is to give me every ad you've tested in the mall and let me test it online so I can calibrate the norms. And it won't cost you a nickel." He said, "Great, I'm in." He said, "The only problem is we have exclusive contracts with Joe Farrell, and we'll get sued." I said, "Let me see the contract." I look at the contract, and it was exclusive, but it was exclusive for mall testing. There was no online. I said, "Dan, loophole. I'm online. He's mall intercept. So you're not breaking the exclusivity with another mall intercept testing company, I'm online."
And so that was that. Partners, hand in hand. And we held hands and I tested everything in parallel. Now, the interesting part was they called me Jane Doe because if Joe Farrell would have found out, it wouldn't have been a good thing. Not that they were breaking a contract, but he might have withheld information from them. Joe Farrell used to call me "her." "If you're going to work with her..." He called me her, and I like that. That was really good.
But we also had the producers and the directors that were all comfortable with offline data. So I said to Dan and to Richard, "Don't go in with online data because a) it's not reliable yet, b) I don't know what it means, c) we haven't calibrated the norms. I'm not comfortable. But what I do want you to go in with is the verbatim testimony." Because in the malls, they would scribble the answers of what you liked about it. There were two things. What did you like or what didn't you like about the commercial, the trailer or whatever? But online? But online, the verbatim testimonies were wow! They were the wow factor because people gave robust answers in bold type, in capitals, when they want to say, "I love Brad Pitt!"
I said, "So you go in with the quantitative results from Joe Farrell and then just supplement. And don't say it's another company, just go in with these verbatims. Add the verbatims."
And they go in with the verbatims and the producers are all, "What the... where did you get these amazing verbatims all of a sudden?"
And he said, "Oh, online. We're doing it online."
And everyone starts saying, "I want the online. I want the online version."
And lo and behold, we started calibrating the norms. And not only did I do Warner Brothers, but I went to Sony.
And I said to Sony, "Warner Brothers is using it."
And as soon as you say that, Sony is like, "Oh, me too." And then Disney, "Oh, me too. Me too, me too."
Power of the pack. And next thing you knew, we were in. Am I telling you too many pieces of the story?
Andrew Mitrak: No, this is great!
Shelley Zalis: Then all these CEOs, the studio chiefs... by the way, Joe Farrell was the godfather to their children. So this was not an easy thing to break. And all of them had these decks—paper stacks, paper stacks, paper stacks. And I said, "I'm not going to deliver paper. We're going to deliver the reports online." And they're like, "No one's going to read them. No one is online." And I said, "Okay. I am going to deliver a teaser in paper with chocolate chip cookies and milk. And it'll have a code to go online." And sooner than later, everyone was doing online. And then Joe Farrell, who would always say, "Everyone lies online. It's terrible methodology,"... but we also did movie research online, predicting... and we were nailing it. And he kept saying, "No, it's not this, it's not that. And telephone and mall is the way to go." And I said, "How do you know that people in the mall and people on the telephone don't lie? Why are you just attributing this to a new methodology and look at what it's not versus what it is? What percentage of people lie online, too? What percentage have you looked at those paper trails?" I only knew this because I've been there, done that. I did telephone and I did mall. So you can't mess with me. I've been there, done that, right? Anyways, those were all the little loopholes of how we actually created online. And then next thing you knew, Joe Farrell started going online trying to build an online business, but we were already in online.
Andrew Mitrak: Right. Yeah. So National Research Group, NRG, was founded in like the 70s or something like that, right? So it'd been around for a long time. Wrote all his contracts for malls, which is the only way to do it back then. Along comes a new paradigm, online, and you find this wedge because the new paradigm, new market opportunity. And also your position, it's OTX... online is the "O." So you're branded as the online expert. So I imagine if a 1970s-founded, Joe Farrell, old-school way of doing things, repositions to be online, it just doesn't quite have the credibility that you have. And it seems like you also found product-market fit because a movie trailer is, one, it's probably one of the few types of ads that people actually want to go out and see. Usually, people have ad blockers, but some of the most popular videos online are new movie trailers. So you can actually watch this. And they're probably short enough where the buffering and the bandwidth probably somewhat works if it was much longer than that.
“Wrap, wrap, wrap!” Securing Movie Trailers with DRM
Shelley Zalis: It works because it was two and a half minutes, and so we had it download in the background as it was loading. So it was not easy, especially on 14.4 modems and maybe the fast ones were 28.8. And people with T1 lines were not representative; they were mainstream. And I had to ensure that everyone saw the same quality. And so what we did was we built this buffering mechanism that allowed the video to download as you were answering questions in the survey so that by the time it opened, it would be already downloaded and you would have smooth sailing. I used an analogy: it was sort of like if you're on a freeway that is jammed, you go really slow. If there's no one on the freeway, you go really fast. But you have to be able to build it so that everyone has the same experience.
And then protecting the video, because in the movie business, a movie could close before it opens. It was all about opening weekend. And the reason I built it for the hardest common denominator was because the studio would send you 20 ads on a Friday night that had to be encrypted and encoded. If you're just sending it to a mall, boom. If you need to encode, encrypt, and then get big enough sample sizes—I think we were doing 300 because I had to match what Joe Farrell was doing, it was 200 or 300 per trailer or commercial—that had to be given back to the studio by Monday morning. And I remember in those days when I built the system, we had a refresh button. Refresh, refresh, refresh, refresh, because I had to make sure that there were 300 people filling out the survey by the four quads, too. A movie is stereotyped by male, female, under, over 25—four quads. It's a four-quad methodology. And if I could build a system that could encrypt, encode, get the surveys up, get the samples in, and deliver results online by Monday morning, I could do anything.
And we had to build a DRM solution, which didn't exist. You know DRM?
Andrew Mitrak: Digital Rights Management, right?
Shelley Zalis: That didn't exist. I had to build an encryption system because I'll never forget this moment on a Friday night. I'm having dinner with my family. And online, you're always on. There is no off button. You're always on. And I get a phone call from a lawyer at one of our studios that said—and it was for one of the biggest films of all time—someone lifted the trailer. Now these trailers are not aired, and they lifted the trailer and broadcasted it out.
Now, thank God the trailer did really well, and the movie was going to be a blockbuster. But that was scary as hell. And I remember saying to the lawyers, "First of all, trailers have been lifted in the mall. So let's not... Second of all, you know that is the risk with online. It ended up doing well, and I said maybe this is a new way of going viral, you know, the talk." And I said, "And third of all, it took... I can't remember the number, but a group of hackers. It wasn't just a single individual. It was a group of sophisticated hackers—because it was a superhero thing—it took a group of them over 24 hours of nonstop working to break my code. 24 hours with over 25 people." I said, "So my system is pretty secure." Like, I said, "You go see how easy it is to lift one of those tapes that you have lying around between intercepting UPS and FedEx packages to somebody not paying attention to someone pulling that. You tell me that's never happened to you before." But that was a moment. And so we built a DRM solution to wrap, wrap, wrap, wrap, wrap around the videos.
Andrew Mitrak: What was your relationship like with filmmakers themselves? I imagine a superhero movie, they want to test, test, test and get all four quadrants and that. But there's probably certain auteur-type filmmakers who see their film as their baby. Did you ever have relationships with them where they saw, "Oh, testing, that's... they're the bad guys who just want to change my artwork"? What was the relationship like? And do you have any examples of changes that were made to movies or movie trailers as a result of the tests?
Shelley Zalis: So, we tested so many trailers. And for them, there was no... they created them, and all we were doing was showing them which one was going to do the best. And of course, it wasn't just four quads. They would say, "This is our target," and we had to reach the target. And after a while, I had an enormous community. I called it the blender. Now people call it a router or whatever. And the way I built the sample, because that didn't exist either, I had to build a sample ecosystem. I had to build an RDD online. So think about RDD offline is the telephone book concept. I was actually teaching a class as a guest lecturer at Wharton in the business school, and I remember telling the students how I came up with the sample methodology for online. I said, "I closed my eyes one day and tried to imagine RDD on steroids, but online." And so I mixed all of these samples from Greenfield to Harris Interactive to AOL... and I put them all into this blender. So it was a blend. And I said, "It's sort of like One Fish, Two Fish, Red Fish, Blue Fish."
And I took the entire class downstairs to the library to read One Fish, Two Fish, Red Fish, Blue Fish. And I said, "You need all kinds of fish in the ocean. Different fish in the lake. Different... if you want an ecosystem of representation." And that was the idea of... and then eventually, I ended up having 20 sample companies, 50 sample companies, whatever, all... and it would go like this, and the router was the hardest thing to build, that the first male 25 would go into that survey. I was doing a hundred surveys at a time. Go to that one, the next one into that one, that one. So it was representation on steroids. And it was magical.
The movies we tested in real life, that was not online because they were two and a half minutes, and so we did that the old-school way. But we didn't start with movie testing; we started with trailer testing online. And then the movies just came our way. And what was amazing about the realness of it, because you... testing a movie, you want to smell people, you want to see people, you want to hear people. A movie director or producer would hear when someone would laugh or when someone would cry or... so that we did offline.
The Three Sales of OTX: A Journey from Nielsen to Ipsos
Andrew Mitrak: Yeah, that makes sense, yeah. So I could spend hours just talking about movies and this early internet era because I'm fascinated. I love movies, and I'm always fascinated by early internet history as well. But I know we have limited time, and I want to just jump ahead in your career to The Female Quotient. You wind up selling OTX to Ipsos.
Shelley Zalis: I sold it three times.
Andrew Mitrak: You sold it three times? What were the stories of selling it?
Shelley Zalis: Well, I first went and pioneered at Nielsen, and I had to build from scratch. And then I left Nielsen because they wanted to walk, and I had to run. And then it's now called Nielsen Online, but it started from REEL Research, R-E-E-L Reel Research.
Andrew Mitrak: Okay, I misunderstood. I thought you had sold the product, like they were buying your license to the product, but you sold the company itself to Nielsen?
Shelley Zalis: No, I did not get anything from Nielsen. I was an employee. I brought the idea to Nielsen and pioneered at Nielsen.
Andrew Mitrak: Oh, okay.
Shelley Zalis: And I got this young kid money, but I was a salaried employee with a big idea that needed to see it come to life. I then left Nielsen because people were starting to compete with who would run my business that was incredibly successful. So I left it behind and I joined iFilm.
At iFilm, I was an owner. And iFilm, do you remember iFilm?
Andrew Mitrak: I know I've seen the logo "iFilm" a number of times.
Shelley Zalis: But you would have seen it because iFilm was the first YouTube. It was so ahead of itself, but it was YouTube. Let's just... and so I went to iFilm.
It was run by Kevin Wendle, who was the founder of CNET, and Skip Paul. And they were a dot-com company so ahead of itself. But the reason I joined them was they understood video on the internet, and they understood the internet. And they wanted to run. And they were obsessed with REEL Research that then became Nielsen Online. And that's when I called it OTX. And I built, in a warehouse—it was like really a dot-com, and I was surrounded by young, techy, entrepreneurial people. I was like in heaven, as a traditional researcher, to now be in this spirited place. And my business ended up growing exponentially. And I used off-the-shelf technology that I modified using iFilm's help. It was called iFilm OTX. It was booming. I loved it.
And I sold from iFilm... well, iFilm was doing video. And one day, I heard that they wanted to go into porn. By the way, don't forget, this is online, and they should. Like, they had all the channels. That should be a channel.
Andrew Mitrak: Yeah, it makes sense... It's just, do you want to work there? Do you want to work at a company doing that?
Shelley Zalis: Well, iFilm OTX because they wanted the iFilm brand on top. I came with the name OTX; they said we're going to call it iFilm OTX. Anyways, I walked into a board meeting one day and I said, "Here's the deal. You should go all in in porn, but go triple X because that's where the money's going to be, and I'm out." And so I sold from iFilm to Tom Freston and Bob Pittman. And Bob had just started a company called Pilot. He had left AOL Time Warner. Tom Freston was a VC. And I sold to them. So that was the second because I'll call going to iFilm then going to... and at iFilm, my ownership was in terms of revenue because zero on zero is zero. No one thought I would be successful. And I ended up selling... I was doing 30 million in revenue at the time. And I sold to Bob Pittman and Tom Freston and stayed with them for a few years, and then we sold to Ipsos.
Andrew Mitrak: I wish I could spend more time going on this because I need to ask about The Female Quotient...
Shelley Zalis: I like you. I've never told it this way.
Andrew Mitrak: No, I love hearing it this way. I love all these details, and I want to spend proper time on all of that. But also, I can't talk to you without also, of course, talking about The Female Quotient. And so you transition from innovating in research to innovating in culture with The Female Quotient, where you're founder, CEO, and chief troublemaker. When did this start? It sounds like the values of equality have been with you for forever, but was there a moment when you knew this needed to be its own company?
Founding The Female Quotient
Shelley Zalis: Yeah. So I'm at Ipsos now. When I went to Ipsos, I had 250 employees. When they acquired me, I was doing 60 million in revenue, and I was operating in six cities. I now sell to a company doing 2.6 billion in revenue, 16,000 employees, operating in 83 countries. Now, my dream was I wanted to sell to a VC, not to a traditional research company because I was going back to the Nielsen days then. And I had 10 out of 10 offers from different VCs. I accepted one, and they were going to buy us for $100 million. And my only wish and my only ask wasn't about salary. It was that you can buy me for $100 million, but I want a $100 million shopping budget. I want to go buy all these small, new, up-and-coming technology companies that's going to make the online research business go to a whole other level. And I got a yes, and the deal was done, signed, sealed, and delivered. And then the market fell, the dot-com market boom fell.
The head partner of the deal calls me up. I'm in Hawaii celebrating with my family. She calls me up. And she, Vivian, and she says, "I have good news and bad news. What do you want to hear first?" I said, "The good news." She says, "We're still going to go through with the deal. $100 million, no problem." I said, "Bad news?" She goes, "I can't guarantee you the $100 million shopping budget." And I said to her, "I am so grateful, but I can't do it." I said, "Because especially with the world collapsing, the traditional market research companies are going to win, and my little cute company will disappear because it's the alternative, it's the 'and,' it's not the 'either/or' yet." And I had to walk away. And Bob and Tom were really pissed at me, but I quashed the deal; they would have cashed out. I cared about my employees and my team and growth and innovation and all of that, and I needed that innovation budget, of which I didn't have with Tom and Bob.
And so I waited longer, and then Ipsos came and acquired us. And so while I was at Ipsos, I was the only female CEO, top 25 in market research, you know, when I had OTX. Didn't stop me, but I knew I thought differently, I acted differently, I led differently. I knew all those things, but it didn't matter. It was my company. I gave myself permission, and I was doing just fine. And now I'm at Ipsos. I'm sitting at a board, a publicly traded company, two women on a board of 26. And they were moving my employees around like chess pieces. And tears came down my eyes. And I was pulled aside after, and I was told by the HR person, "There's no room for emotion in the boardroom." My head said, "Just agree because they just bought my company for a lot of money." And my heart said, "No way."
And so I went and gave a speech to thousands—I was a global speaker at this point. And my speech was called "Bring Emotion to the Boardroom," exclamation point, heart, heart, heart. And that was that. And it was clear to me that with the power that I had, with the position that I had, with the purpose that I had, with the passion that I had, that I needed to give back with generosity what I wished I had my entire career, which was girlfriends in business. And so while I was at Ipsos, I started the Ipsos Girls' Lounge because I wanted to go to CES, 150,000 people, less than 3% were women. I did just fine in the predominantly male-dominated conferences, but it was boring and it wasn't fun, and I wasn't surrounded by people just like me. So I invited five girlfriends, and I said, "Walk the floor with me at CES. And if you have other girlfriends, invite them." 24 hours later, 50 women showed up. And two remarkable things happened at the time. One, every single guy's head turned. "Where the hell did all you women come from?" And that's when I coined the phrase "power of the pack." A woman alone has power; collectively, we have an impact. And the second was I was surrounded by women just like me: imposter syndrome, work-life balance, how do you do it all? How do you stand out as a woman in business thinking differently, acting differently, behaving differently, and not wearing those ugly suits and the ugly shoes and trying to fit in? How do we stand out the way we want to? And that was when the Girls' Lounge was born. And we were all doing deals in my bedroom. It was a king-sized bedroom. And by day two, 100 women; by day three, 350 women. We took over the penthouse suite. Boom. Girls' Lounge was born.
And I called it the Ipsos Girls' Lounge. Then my five-year contract ended, and I had no earn-out, but I'm very loyal. And they wanted to renew my contract. And I said to them, "I will, as long as you commit in writing to keep funding the Ipsos Girls' Lounge because it's really important to me." My contract came back, and my package was in there, but there was no Girls' Lounge. And I said, "Well, where's the Girls' Lounge?" They said, "We want to do it, but we can't guarantee it." I said, "No guarantee means it's not going to happen." And I said, "I'm not resigning, I'm just not renewing, and I'm going to take the Girls' Lounge with me because it's not important to you. So I'm going to take it, and you could become the first partner in the Girls' Lounge."
That was over 10 years ago. And today, the Girls' Lounge has evolved to the FQ Lounge. It's brought to you by, you know, collectively by amazing Fortune 500 companies, men and women. We have over 7 million-plus women in business across 30 industries, 100 countries that are part of the pack. So from the OG of five to now over 7 million. We host pop-ups all over the world at industry conferences, but we also do pop-ups and summits across different categories. We also are now in the media business, waking up one day to a very unique community of over 7 million B2B women in business is one of a kind. And then, you know, we have an advisory practice advising Fortune 500 CEOs on how to close the gender gap across the board, but more importantly, how to make everyone feel seen, heard, and belong.
Andrew Mitrak: Seeing your content online, the community you've built, people's reaction to this, the amazing storytelling your team does across all social channels, it's just so inspiring and it's so amazing to see what you've built. I wish we had more time together so I could just ask you more and more about this. But I really appreciate your time, your stories from your career, from market research, from all those really cool inside Hollywood stories of film trailer testing online. Shelley Zalis, just thanks so much for your time. I really appreciate it.
Shelley Zalis: Well, first of all, I want to thank you, Andrew, because you've asked the questions that haven't been asked, and putting it in a timeline, but the linearity of where we were to where we are, but also to where we're going is so incredibly important. And I call people like you conscious leaders because you're just conscious, and it's not whether you're a man or a woman, it's about the intentionality. And so thank you for your intentionality and your passion for all of this, and for being a new dad!
Andrew Mitrak: Thanks so much. Well, I know your career inspires so many people, including myself, and just hearing from where you've come from and all of the gritty details along the way and everything you did, it's just so inspiring to hear. So Shelley Zalis, thanks so much for joining me.
