Tag Archives: integrated marketing

Is Your Marketing An Investment Or A Cost?

Never underestimate the importance of goal setting and strategy in media. While smart media buying will save you money, smart media strategy will make you money. Without a well thought out media plan you are not getting the most from your budget because you have not determined what you should buy and what you should not. While what you buy may be priced well relative to other options, buying the wrong media is wasteful no matter what the price is. And all too often advertisers and their agencies let buying lead the media process or are missing the connection between the plan strategy and the buy.

Would you use an investment strategy of buying only stocks that are less than $10 per share? And would you use the broker who charges the least per transaction because all he has to do is tell you how much of a given stock is available when you are ready to buy? Or does this sound crazy to you? It is crazy. But what’s crazier is that some companies handle their largest investment, advertising media, in this manner.

This approach is designed to limit your costs, but what you may not know is it also limits your return. Successful media buying, much like having success in the stock market, depends on good research and good timing because the basis of both is supply and demand. The biggest difference is that media buying is more negotiable than the stock market, an extra level of complexity that ultimately determines how much you will pay for your ad time/space.

And negotiating is something large media buying agencies on the whole don’t do as well as their smaller sized competitors. “How can this be?” you ask. “My agency buys gazillions of dollars of ad time, they have to get better prices than the agencies who buy less. It’s simple math. You buy more you get a better price.” Remember Lucy and Ethel in the chocolate factory in that classic “I Love Lucy” episode? That is what being a media buyer in a mega-media agency is like. You don’t have time to “wrap” the schedule properly because you have three more buys to get on the air that day.

Negotiating is about give and take, a certain back and forth. If you’re using one of these big guys chances are you’re not getting the best price because the buyer cares more about getting four buys on the air, and less about buying the right inventory. It’s easier for them to only buy the lowest priced stuff because they don’t have to worry about value. But you should because your media buy is your investment in your brand like your stock portfolio is your investment in your retirement, not an expense on your P&L.

Smart media planning let’s you know which media does and does not make sense for your efforts. It helps tell you which media to stay away from. Buying the wrong media because it’s cheap is as wasteful as buying premium priced media that isn’t right for you. Neither one will produce results.

An approach that recognizes the importance of strategy means targeting the right people at the right time, yielding a smarter use of your marketing resources. Make it easier for a buyer to buy effectively because they know the difference between price and value.

Advertisements
Tagged , , , , , , , , , , , , , , , , , ,

The Model Isn’t Broken. It’s Fixed.

Sony, VW, P&G, J&J, Bacardi, SC Johnson, Visa, 21st Century Fox, L’Oreal, Coca Cola, BMW, BASF. What do all these companies have in common? They all have placed their media business in review, or recently completed a review. Their incumbent media agencies; the usual suspects—OMD, Zenith, UM, Mediacom, Vizeum, Carat, Starcom/MediaVest. The agencies involved in the review; the usual suspects.

Insanity is doing the same thing over and over again and expecting a different result.

I’ve heard and read that some people believe that industry change (content, integration, analytics) is driving this rash of reviews. If so, why are the same agencies that some clients are dissatisfied with all of a sudden appealing to others? Why would OMD be a good repository for Bacardi, which they recently won, when current clients J&J and Visa have put their accounts in review? Is it because what is shown in new business pitches is not what is used on a daily basis? I witnessed much of this when I was at Initiative, albeit a dozen years ago. The people who work on client business think many of the tools and sexy stuff shown in new business pitches is just that, only shown in new business pitches. It’s not practical for everyday use because the planners have too many boxes of GRP’s to fill in. They do not have the time to solve real business problems.

So what is the value proposition of these mega-media agencies? It certainly isn’t buying leverage because smaller agencies can match the big guys on media pricing—and often beat them. The big guys speak of relationships with the media companies, but the media companies are putting more and more inventory up for sale in the open market, using exchanges to eliminate the human aspect of transactions that is rife with inefficiencies.

Others suggest that the reviews are procurement driven, which explains why only the usual list of invitees are participating. These big agencies hate losing business and they’ll promise everything to win. They have a beast to feed to perpetuate their own myth and they believe their own BS.

You don’t have to. If you want the same-old solutions join in the Mad Hatter’s Tea Party. If you want real change you really have to want to change.

Tagged , , , , , , , , , , , , , , , , , , , , , , , , ,

Ad Sales Rep Consolidation

An interesting trend is happening in traditional media and it has interesting consequences for marketers.

Meredith Publishing is now managing all the business operations, including ad sales, for Martha Stewart’s print properties. Hearst recently launched a division that provides scalable solutions for smaller and medium sized publishers, including ad sales consultation. Today a number of spot radio rep firms announced they were partnering to form an umbrella radio and digital media sales rep firm.

While these decisions make sense for these media companies’ needs it will have impact on marketers in ways that might not be good, most notably upward pressure on ad inventory pricing.

Marketers get the best price when they pit multiple sales organizations against one another for share of a media budget. Now that Meredith represents an even larger share of the viable print inventory what is their incentive for negotiating price down? The power they have to creep pricing up will have dramatic impact on the market. And not just for the companies participating in the sales co-ops or outsourcing. Their competitors now know that fewer players are negotiating so it would not surprise me if CPM’s begin to inch up. I recall having this conversation over breakfast with Tom Harty, The President of Meredith’s Magazine Group, a few years ago when Hearst acquired Woman’s Day from Hachette. I thought, in the long term, that it was good for both Meredith and Hearst to not have a wildcard single book that could only be a spoiler on price.

On the radio side, this impact will be felt most by agencies that buy through the rep firms. As far as I can tell it is mostly large media agencies who buy their inventory this way because the buyers simply do not have time to negotiate with every station in every market. Again, where in the past two or three rep firms were negotiating against one another for radio buys now they will not because there is no incentive at the company level to do so. This is one of the reasons why the FCC has ownership limits on radio and television stations in any given market.

Does your radio buyer buy through rep firms? If so, what does that mean for you?

Tagged , , , , , , , , , , , , , , , , , ,

A Matter of Efficiency

If you ask any media planner or buyer what the term efficiency means they will tell you that it is the way to determine relative value of different media and is usually defined as the cost per thousand impressions, CPM, of the media vehicle or buy. This results in their decisions on which media to buy being made strictly on costs.

That definition is dead wrong and leads to overemphasis on a surrogate measurement that may not correlate with sales results. Something is efficient if it is capable of producing the desired results without wasting materials, time, or energy. Can the vehicle deliver sales at a lower cost than other options? There is a cost/benefit perspective inherent in that definition. Nowhere in this description is there any indication that trying to get as many people as possible to see your efforts compared to other choices is the goal.

Making decisions based exclusively on audience cost of a media vehicle can waste tremendous resources. One of the sayings I’m known for is that the cheapest media is the most expensive media you might buy if it does not work.

Today we have so many tools at our disposal to apply metrics other than CPM to define efficiency. We also have ways to insert intermediate steps in the purchase consideration path to measure whether we are on the right track.

Are your media buyers looking at data other than audience delivery to track your progress? Are they looking at your Google Analytics data? Are they making adjustments based on how well their buy is driving traffic? Even if your ultimate goal is sales at retail there are intermediate steps that can be taken to identify what is working and what is not.

The secret is predicting in the planning stage what the potential return on each vehicle will be based on syndicated data, prior transactional data, behavioral modeling, etc. During the execution stage, make sure you align an inbound intermediate mechanism for tracking. You can use unique landing pages or promo codes, statistical modeling on web traffic, coupon downloads, social media actions or good old fashioned phone calls. A holistic look at this activity can prove helpful in making the proper optimizations to your campaign. Now that’s efficiency.

Tagged , , , , , , , , , , , , ,

Relics Part 2–BLUR

In a meeting earlier this week a client was discussing what classes of trade they have distribution in and I mentioned that there’s no longer such a thing as a class of trade. For those of you under the age of thirty, product distribution used to be contained to what we called grocery stores, drug stores or mass merchandisers. Today, these types of stores are one and the same. Food products were sold primarily in grocery, health products were sold primarily in drug and household staples, mostly dry goods, were sold in discount stores. Today, Wal-Mart makes up about 40% of all product sales in almost every product category. Drug stores sell milk and grocery stores sell prescription drugs. The concept of selling through a single class of trade no longer exists. Why? Because consumers want convenience. Whether it’s a quick stop into a convenience store for coffee and breakfast while they’re gassing up or to have one destination for their once-a-week major shopping trip (if that even exists anymore). They don’t want to go to a drug store for their prescriptions, a food store for their groceries and a discount store for paper goods.

I call this blur. Blur refers to the blurring of the lines of delineation that historically existed to differentiate different “channels”. Blur is not only a retail channel phenomenon; it is a reality in the marketing world as well. Today, everything is everything. In my Integrated Marketing class I refer to video and audio as communication techniques, I hate to call them TV and radio. Why? Because TV and Radio are terms that reflect an archaic distribution AND consumption system that no longer dominates. Most of the students in my class don’t listen to traditional radio, but they are exposed to a lot of audio content. The same is true in video.

Even within traditional media concepts like dayparts in TV are blurred. Many cable networks air the same programs in daytime that they do in Prime. Many people DVR whatever they want and time-shift the viewing to their convenience, yet we still plan TV based on old reach curves and buy daypart ratings numbers.

Last year I recall speaking with a client who considered Social Media PR and not advertising. We said it’s neither and it’s both. The line between PR and advertising has blurred dramatically. Is Content Marketing advertising or PR? Is Native advertising or PR? The answer lies in redefining what we do not as advertising or PR but as marketing. And if it’s smart to do PR and advertising for your brand it doesn’t really matter if there’s a line. It only matters that it gets done right. But doing it together, in an integrated manner, where paid promotion of Tweets/Posts and DJ endorsements and product integrations and content all magnify the messaging to a brand’s business advantage.

Tagged , , , , , , , , , , , , , , , , ,

Is Your Marketing Integrated Or Quarantined?

Isaac Asimov once said “The true genius of any plan lies as much in the execution as it does in the concept. “ The same can be said of Integrated Marketing. An Integrated Marketing program built solely on execution—meaning, simplistically, a multi-platform media buy for cost efficiencies sake—will save you money, but won’t accomplish much in business growth. Nor will a great idea not executed properly, not achieving significant scale and not motivating people to a specific action.

So, if Integrated Marketing is so important why don’t we see it every day? It seems that somewhere somehow we lost our way as an industry. Let’s take a step back in time to see when that happened and how we got to the state we are currently in. Marketing in the days before mass media was simple. Most businesses were local and there were few national brands. So a product got a strong following and word-of-mouth with an occasional newspaper ad worked. But after World War II mass media took over—first driven by magazines and radio. But barely a decade later, TV became affordable to a large segment of the population–and mass brands grew simultaneously in a symbiotic way. One could not have happened without the other. TV and Magazines helped introduce brands to new consumers and the advertising revenue generated by these brands funded the content that increased the appeal of mass media. And because there were fewer options the mass media flourished.

Advertising became the focus of most brand’s marketing budgets and TV became the favored medium. The advertising industry came up with a model of how to evaluate advertising—the famous six stage ARF Model—Vehicle Distribution, Vehicle Exposure, Advertising Exposure, Advertising Perception, Advertising Communication and Sales Response. We developed an advertising impression metric to plan, buy and track how we were doing. Advertising agencies restructured around this principle and created media planning and media buying disciplines whose goal was to aggregate audiences.

Since the 1980’s a lot has changed in media availability. Most homes have multiple TV’s, and access to more than 100 channels and the share of viewing has fragmented greatly. That’s just TV. Magazines, radio, newspapers had the same fragmentation and increased availability of options. Today, with internet/mobile access rivaling TV ownership, the world is different. The age-old ARF model doesn’t apply anymore because with digital media we can do so much more than we ever could before. We can customize messaging and create individualized communication pathways to drive purchases. Digital is not an advertising medium, per se. It is a marketing channel.

The sad truth is that today that ARF model still drives the advertising industry. Media is still planned and purchased at most agencies on an impression/GRP basis. We value ourselves as buyers on how well we do on a cost per thousand impressions basis. Media Researchers at most agencies are more concerned about methodology of tracking audiences than on developing tools and techniques to measure what really is important—product sales. We used to play a joke on new employees. On their first day we would show them a media plan and tell them it didn’t have enough W18-49 GRP’s. We’d then send them down to the supply room with a requisition form for a box of GRP’s. Well, the joke, it turns out, is on us for focusing for too long on a surrogate metric for evaluating ourselves. We are still trying to aggregate audiences. But it’s not just an agency problem. The entire marketing process is over-siloed. When marketers have a creative agency, a media agency, a PR firm, a promotional agency and a digital marketing partner engaged on the brand, often times from multiple holding companies, the challenge becomes one of bringing disparate voices into harmony. Getting everyone singing the same tune, and not seeking a solo performance that highlights their voice, their contribution in absence of everyone else. This is a base instinct we have in these situations, proving our worth and our value in a team environment.

Besides the inherent human desire to prove our individual worth is how we as agencies and media salespeople divide functional disciplines—TV sellers call on TV buyers who are responsible for delivering TV value, print sellers call on print buyers who are charged with delivering print value and the digital sellers call on digital buyers who have to deliver digital media value.

So in a world of silo-ed, or worse—quarantined, marketing partners how can one deliver both an idea and an execution? By chance? I doubt it. Sheer magnitude of media buying clout? Probably not. A great idea without the scale to impact the bottom line? Highly unlikely. Someone develops an idea and champions it, with contagious excitement and relentless single-minded focus on executing that idea with the potential consumer at the center of everything.

We are at a critical point in the media landscape. Old line media companies are struggling. Magazines titles are getting shut down. Newspapers are merging or getting shut down. Consolidation is happening all around us. But the news is not all bad. Magazine companies are becoming media companies and media companies are becoming marketing companies. The threat for agencies is the biggest one. If ad agencies do not reinvent themselves as marketing agencies then they will be disintermediated, dismissed from the process entirely. Historically the ad agency has been the lead partner to a marketer. In a world of long-tail marketing there is no “One” message for the masses. There are millions of messages each one speaking to an individual’s motivations.

So, here’s my clarion call to us as an industry. Here’s the three things we each need to do to re-focus our efforts on Integrated Marketing.

Marketers:
1. Stop thinking of marketing as a cost proposition and approach it as an investment. Stop the constant priority of evaluating your marketing efforts on cost alone. Sometimes good ideas cost more than bad ones. You should think about results and a return on investment. You should want talented and creative people working to build your business.
2. Engage all your marketing partners together frequently. Let them get to know each other. Make them work together. Encourage them to dialog and debate ideas without you as an intermediary. Make them collaborate and let them know that it’s “all for one and one for all”.
3. Make us accountable. Hold our feet to the fire. Make sure we deliver on our combined promise.

Media Companies:
1. Stop thinking of yourself as a media vendor and an advertising placement property. So many of you have such rich content and strong relationships with consumers. Use it to your advantage. You are a marketing communications company.
2. Engage your marketing people in bigger ways than ‘added value’ programs that don’t add up to much. Put your marketing people, who know your customers better than you think, in front of the marketers and agencies. Number
3. Partner with like-minded properties inside your own company and outside as well. Find a partner that can enhance your offering and make you both a larger scale player than you can be alone. If you’re a special interest magazine company with marginal web assets find a cable TV network that you can partner with whether it’s an ad-hoc relationship or a longer-term strategic alliance. What do you have to lose? What do you have to gain?

Media Agencies:
1. Think like marketing agencies, not media buyers. We are uniquely situated to help collaborate, build and evaluate, but only if we allow ourselves. We need to re-insert ourselves at the highest levels and not be a vendor.
2. Don’t just keep buying more boxes of GRP’s. If we want to be treated as a marketing partner we need to behave like one. We need new metrics to prove what works. Get your research department to stop focusing on audience metrics and have them develop marketing metrics.
3. Treat the media companies as partners, they are not your enemy. If you want them to bring good ideas to you then treat them fairly and with respect. Listen to them and let them bring you ideas. Don’t make them fill out 100 page RFP’s asking them to answer questions that you won’t even evaluate.

Our collective business, the business of marketing brands, is built on our people, because that’s all we have. Our people and their ideas. If our people are willing to contribute to the greater good, then we all win. If someone champions an idea, is relentless in their pursuit of engaging their partners, and accepts nothing less than a team approach then there is nothing we can’t accomplish.

Tagged , , , , , ,

Hello world!

Welcome to WordPress.com. After you read this, you should delete and write your own post, with a new title above. Or hit Add New on the left (of the admin dashboard) to start a fresh post.

Here are some suggestions for your first post.

  1. You can find new ideas for what to blog about by reading the Daily Post.
  2. Add PressThis to your browser. It creates a new blog post for you about any interesting  page you read on the web.
  3. Make some changes to this page, and then hit preview on the right. You can always preview any post or edit it before you share it to the world.
Tagged , , , , , , , , , , , , ,
%d bloggers like this: