Tag Archives: marketing

A Boon For Hulugans, Streamers and Cord Cutters

Today’s content is written by Alexa Paradis

Hulu has always been a leading force in the streaming age, differentiating itself from Netflix by offering current seasons of network shows in addition to their vast library of shows and movies. This made them the perfect match for cord-cutters who wanted immediate access to new episodes of their favorite shows. On May 3 during their 2017 Upfront, Hulu announced that they were now offering a live TV subscription that includes over 50 channels to start that will grow over the current year. The current channel offerings include all 4 Broadcast networks, all major sports networks, 5 children’s networks along with the Scripps channels just to name a few. This package will not replace their normal streaming subscriptions but instead be an add-on for customers that will cost $40 per month and also come with the ability to stream on multiple screens at once, quite less then the average cable bill. “Hulu can now be a viewer’s primary source of television,” said Hulu CEO Mike Hopkins. “It’s a natural extension of our business, and an exciting new chapter for Hulu.” As a millennial that cut the cord once I moved out of my parents’ house, I would definitely consider adding this onto my normal Hulu subscription especially if it means I can be watching the new episode of Scandal while my boyfriend watches the Yankee game in the other room.

For advertisers this means even more inventory on Hulu, in addition to their 32 million viewers who opt for ad-supported content advertisers now have access to the standard 2 minutes of local breaks per hour on cable networks. Also announced was a new deal with Nielsen, Hulu said advertisers will have access to Nielsen’s Digital Ad Ratings (DAR) across connected-TV devices starting in the fall of 2017, to provide a validated measurement solution across screens. Another amazing new feature for advertisers is the launch of T-commerce interactive ads in partnership with BrightLine that will let subscribers purchase movie tickets through their connected TVs. The on-screen purchasing capabilities will expand to other categories like retail and quick-serve restaurants in 2018.

Aside from the exciting announcement of the live TV subscription Hulu touted their extensive release schedule of original programing for this year with all of their biggest stars stepping on stage to share their excitement. Stars of the instant hit “The Handmaid’s Tail” announced that not only did they have the most streamed series premiere on the platform out of original and acquired series but they have already been green lit for a second season. Other exciting original series announced were Marvels “Runaway Teens”, Mars mission drama “The First” from House of Cards creator Beau Willimon, Seth Rogen’s project “Future Man”, Sarah Silverman’s political comedy series “America, I love You”, “The Looming Tower” which will star Alec Baldwin along with the series finale of “The Mindy Project”.

A powerful moment took place when Mindy Kaling took the stage for her last upfront and thanked Hulu for being a place that all types of women can be showcased and celebrated, which is not something you can find in many types of entertainment today. This certainly sets Hulu apart from their traditional network counterparts as a way to connect with Millennials who place a high value on inclusivity of all types of characters, especially female ones.

This year’s upfront showed that Hulu is remaining vigilant in their quest to be streamers go-to service and advertisers go-to platform to reach a diverse and highly engaged audience. The company shows no signs of slowing down their innovation either.

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The Dark Side of Programmatic Buying

Programmatic digital can be dicey when it comes to getting what you paid for and you should be concerned about fraud, bots, safety, and viewability issues that result in bad outcomes.

A few months ago a prospective client asked me to evaluate a small programmatic buy her agency had executed for her with one DSP. The agency thought the buy was great, given that they drove a CTR of .48%, higher than most campaigns with a CPM of $1.40. On the surface I would agree.

That is, until I looked at the source of clicks report. This was a small enough campaign, just under 10,000 clicks, that a simple scan of the source of the clicks made me question the real value of the campaign. Many of the URL’s were from out of the US (Belgium, Brazil, Malaysia to name a few) but his was supposed to be a US campaign. Many were from sites that I could not load if I tried. Many seemed to be legitimate sites, but the visits were very low quality and very brief. The average session time for clicks from this DSP was 1/3rd to 1/4th the next lowest referrer. Average page views were even lower.

I sent the source of clicks list to a third party fraud and safety expert for their opinion. About 50% of the clicks were “High Risk” for fraud and another 5% were “Suspect”.

So if this is true, the client’s CPC for real clicks just doubled, at a minimum. Since I knew which DSP was used I asked them for their opinion on the third party auditor’s findings. I was shocked at the response from the DSP salesperson; we take brand safety very seriously and we’re more than happy to deliver on any parameters mandated.  Normally, during campaign negotiations we need to know in advance if a campaign is being measured by a third party and we’ll set up with daily reporting so that we can optimize out of those placements, sites, creative, and or content driving fraud.” 

Let me translate this for you. He said that if they knew we were going to look at a third party safety audit that they would not have delivered those impressions. Want to know what was worse? The CEO of the DSP echoed the same sentiments when I raised the issue up the line.

Fraud and bot clicks are going to happen. Clients and their partners who focus exclusively on getting the lowest CPM or CPC will find that they are actually paying more than they think for real inventory. Use a third party verification service for your campaigns, even if it is just to keep the people you’re giving money to honest.

For more info go to http://www.ocdmedia.com

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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.

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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.

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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?

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Repercussions

The fallout from Jon Mandel’s statement at the ANA about Agency kickbacks has led to a number of anonymous executives admitting it has happened under their watch and some even confessed to participating themselves. Now, this doesn’t mean that these individuals received kickbacks, but that they allowed their agency/media company to take or give money for a media buy. Initially I thought Jon Mandel was overstating a problem, but apparently it is more prevalent than we could imagine. This is certainly more significant than an agency taking the 2% cash/pre-payment discount–which is still sometimes offered–and not offering the money back to the client.

In my last blog I focused on the kickbacks that were occurring out in the open via mega holding company specialty shops. Read that blog for background. So to go into more detail, here’s how the mechanics would work in two scenarios:

  • Moving buys through a barter division. To simplify things, media companies sometimes want to take clients on a trip or schedule a sales meeting in a nice venue away from the office. Rather than pay cash for these trips the media company will offer future access to media inventory at a reduced price or for free to a barter agency. This is easier than going to management and asking them to pay out-of-pocket, but the media company offers value of inventory that is higher than the cost of the trip. The media company can be more lavish and less cost-conscious, especially when it comes to taking clients on a trip. The barter agency sells the inventory either internally or externally at closer to market pricing and makes a significant profit. The barter division of the mega agency holding company tries to move this inventory internally first, where they can ask for equivalent market pricing. If they sell it externally it needs to be sold at below market pricing. Suddenly a 2% commission on national Cable TV becomes 25% or more–I’m being kind. Remember, some of this inventory can be accessed for free. Barter division provides kickback to media agency to ensure the deal goes through.
  • Non-disclosed media buying. Marketers less familiar with the agency process or infrastructure might be led to believe that their media buying is falling under the master contract with a creative agency when, in fact, it does not. The media agency adds their commissions into the media prices they quote, taking a high commission rate. The creative agency keeps all of their fees, not having to pay for media service while completely offloading the labor. Sometimes they even get a kickback above and beyond their fee.

Both of these scenarios would pass muster on an audit because the audit only goes one transaction deep. The auditors are not examining every transaction nor do they know there are secondary transactions. The kickback would always be treated as a separate transaction, not discounts on invoices.

The more you know, the more you don’t want to know.

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Buyer’s Remorse

A new CEO comes in, ousts the CMO and VP of Marketing and tells his smaller media agency that he won’t renew their contract because he has a larger media shop he’s worked with and believes their BS about bigger agencies always buying better than small ones.

This happened to us recently. When the CEO’s preferred media agency submitted a ridiculously high compensation proposal suddenly we’re back in the mix. Our fee proposal was very fair. We even offered the client a better deal. We get an opportunity to pitch ourselves to the new CEO who, for the previous two months, wouldn’t even acknowledge our existence.

We have a great meeting. We explain the fallacy in believing that larger agencies “always” get better pricing. We tell him you get best pricing (and overall work) from people who care about their work and have time to do a great job for you. They take the time to negotiate for value and continue to drive down costs if they can rather than stop when they reach the benchmark. Sometimes those people work at bigger agencies, but more often they work at smaller ones. He mutters on his way out “that was a great meeting”.

We have the support of the marketing team, the research team and the field marketing personnel who all lobby for us to be retained. The CEO asks us to submit pricing on a prototypical buy in 50 markets. We bought those markets the prior year so we used our actual achieved costs. The CEO hires his preferred media agency. We’re disappointed, as we should be. We felt we had a chance. We believed we won the CEO over. Then we felt used simply so he could get a better compensation deal from the agency he hired.

A month later one of the marketing managers calls us to ask how we got our media pricing because the new agency can’t meet those costs. Why weren’t they asked to submit pricing on the same prototypical media buy that we were asked to? The CEO could have hired the better agency if he held them to the same standard throughout the process.

We get more calls asking us to meet with the new agency to tell them how we achieved the costs we got. We outright refuse and offer to handle the business instead. “Hire us and you’ll get those costs”.

Now the CEO has a recruiter calling one of our senior people to ask him to interview for the head of media position. Our guy says to the recruiter “If he respected me so much and wanted me working on his business why didn’t he hire my agency?”

He wanted a larger media agency. He got one. Be careful what you ask for. You just might get it.

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Don’t Outsmart Yourself

Summer is over. My golf game is not much better. My beloved Yankees were unceremoniously dispatched by the Tigers in four. My blog is back.  Thanks for waiting.

 We work primarily for smaller budgeted brands, those with unique challenges and lofty goals operating on tight budgets.  We love the unique challenge of helping these brands and are always up for it.

 No doubt, you’ve often heard the expression “when you can’t outspend your competition, outsmart them”. While this makes sense what exactly does outsmart mean? Does it mean come up with clever tactics that allow you to stand out for a short time? Does it mean to carve out a subsegment of the population that you can win and focus with laser-like precision on them? Yes. It does. It means all of these things. But what I think is even more important than outsmarting your competition is outpredicting them.

 You can outpredict your competitor by choosing between multiple options based on the best net business outcome. What does that mean? It means develop a series of alternative scenarios and select the one with the best return on investment.  What it doesn’t mean is making marketing decisions solely based on achieving more efficient media impressions. Having worked with many companies up against deeper-pocketed competitors I have seen many opt for driving efficiencies on audience metrics rather than productivity on business metrics. Sometimes being less efficient in media is better for your business.  We’ve seen it first hand.

We outpredict our client’s competitors by using historical data on sales, awareness, penetration, buying rate, etc. to determine the potential outcomes. While we discuss communication and delivery metrics we consider them leading indicators, not the goal we want to achieve. A little statistical analysis is better than the ordinary demo targeting and reach goals your agency might use. If they’re not asking for more data you’re being hurt. If you have the data, give it to them.

If they don’t know what to do with it, call me.

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Can I Be Upfront With You?

This week is the annual parade of network TV presentations and parties where the networks pre-screen their September TV schedules for the marketing and advertising community. As important as what their upcoming content may be it also signifies the beginning of one of the oddest behaviors from otherwise intelligent people; investing billions of dollars in schedules before marketing plans are developed.

Whose idea was this anyway? It’s no secret that this process favors the sellers more than the buyers for a number of reasons.

1)   Let’s start with the macro-economic look; creating demand for a diminishing supply of “goods” only leads to pricing increases. Think about this, who else can take a diminishing commodity—in this case TV GRP’s—and actually drive up the pricing? If TV rating points are decreasing why are CPM’s increasing? Because marketers are addicted to TV. Because many brand managers are evaluated on how well the brand does under their tenure vs. the prior period year ago. If a brand purchased 75 TV GRP’s same week last year they better have a good reason to not buy 75 GRP’s this year. So assuming they needed 25 units last year to achieve 75 GRP’s they need to buy more units this year. Even one more unit creates more demand because everyone needs to buy more units—and there is no incentive for the networks to add more commercial units. More demand for a diminishing supply means unit price increases.

2)   Agencies don’t negotiate pricing of units, they negotiate price increases. Ask any TV buyer what their thoughts are for the upcoming market and they will talk about how much of an increase there will be. What kind of market is framed from the beginning this way? One that is designed to favor the seller.

3)   Sellers walk away from this process with a certain amount of guaranteed sold inventory, even if every marketer exercises their options more than half their inventory for the year is committed to. Why does this hurt marketers? Because they cannot allocate resources to other marketing channels. Should a brand’s budget be cut how committed is the budget to radio? To digital? To print? To OOH? These media are the ones to get cut when budgets are reduced because the sellers don’t have a marketplace working to their advantage.

4)   It breeds mediocrity in programming and risk taking by marketers. Aside from a few great shows what incentive does a TV network have to create 100% truly groundbreaking programming? They are better off feeding the status quo. Marketers are forced to decide between promising mediocre, estimable results than pushing for innovation.

Why am I bothering. Nothing will change. Marketers will get caught up in the frenzy and this year’s upfront will take in over $9 billion dollars.

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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.

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