Chasing the Almighty Ad Dollar

NATPE REPORT, 2001  By Elaine Morris Palmer

In 38 years since its modest beginnings, NATPE 2001 was said to be the largest, most diverse conference in the association’s history.  Showcasing new media’s significant inroads, NATPE provided a digital organizer on the conference website downloadable to your Palm and WAP devices, sessions were streamed on the NATPE website and there was breaking new s on TVinsite.com, from Cahners TV Group, the show’s official Internet newscaster.

 

And for the better part of those 38 years there were only 2 or 3 media outlets to worry about.  There were a lot of dollars chasing a few channels. Today, we can look forward to consumers pulling media messages anywhere, anytime.  Millions of homes will enjoy interactive television powered by companies like OpenTV sending weather updates for any city, providing e-mail, banking and shopping services-on demand, just by using a remote control. Wireless devices will abound with standard telephone features plus potential for always-on capabilities, an Internet gateway, a personal information manager and e-identification tools.  Multimedia functionalities will continue to proliferate along side traditional media outlets.  In a conference session moderated by MediaCom’s co-managing director/chief negotiating officer,  Jon Mandel, “Chasing the Almighty Ad Dollar”, panelists representing sellers, programmers and advertisers pushed and pulled at who should get the greater share of the advertiser’s dollar in a rough, multi-channel universe.

 

Does any one medium deserve the lion’s share of the ad dollar? Today, each must prove why its services match a client’s particular marketing strategy and, to a greater  or lesser degree, earn placement in a media mix.  Hopefully The 4 A’s (American Association of Advertising Agencies) is premature in re-issuing a book on “Advertising in a Recession”, but as challenging a task as it may be, the book points out that a slowed economy may just be the best time for a client to steal market share from a competitor. The downturn can not only be a time to advertise with better ideas and better offers, but to demonstrate with a potentially smaller budget the efficacy of integration across media properties.

 

Consider the Internet.  In spite of Disney pulling its dollars out of Go.com and other traditional media companies struggling to make businesses viable on the Internet, IAB’s (Internet Advertising Bureau) Chairman, Rich Le Furgy, projects an increased share of total ad revenue for 2000 at a healthy $8 billion.  More traditional media planners and buyers entering the Internet space, he assures us, will help to realistically meet clients’ previously overblown expectations. Furthermore, he claims, traditional advertisers are coming onto the net and veteran clients have come to understand albeit, the hard way, that the Internet isn’t a panacea, but a long-term partnering proposition. In favor of the web, cable companies are finding that with the growing interest in targeting geographically as much as demographically, great leverage can be created in the packaging of cable websites with cable properties. The interest in programming for cable websites,  says Joe Ostrow, president & CEO of the Cabletelevision Advertising Bureau, is as great and growing as is programming for original cable.

 

 

Research posed the greatest challenge across the board as reliance on it  increases proportionately to the number of available media channels. “Strategy used to be a stomach business,”  reminisces Mary Sue Robinson, independent marketing consultant and former VP, Management Supervisor at such agencies as Ogilvy & Mather and Griffin Bacal. “You’d just know a certain publication was right, and go with it.”  Today, research has emerged as the most frustrating and opportune issue the advertiser and his agency face. “It’s a big science,” cautions Robinson, “and it takes a lot of money to get it right. Right now, Nielsen is the day-to-day benchmark. When someone does it better, I’ll look at it.”  Mandel predicts that we’ll all be “dead and gone from the business” by the time anyone really learns to target.

 

One solution, the panel advised, could be pay-for-performance or the kind of step sales performance Group W instigated 7 years ago based on payment for intervals of a car sales cycle: calls to the 800#, request for brochure and test drive. The Internet, for a time, was thought of as the leading edge for that kind of accountability.  Though companies like Procter & Gamble have worked base level of compensation plus pay-for-performance into their agency contracts,  strict application portends not to be the win we’re all looking for. Isolating the real influence of an individual medium seems like an impossible task with variables in distribution, product design and pricing not to mention the quality of the product and whether people like it.  Rather, a hybrid formula of front-end CPM and back-end revenue share based on performance may be the best solution. In other words, lower price for the advertiser and upside for the media provider.

 

Does the game then change from who gets the dollars up front to who is the most effective in the end?

 

Without doubt, the tables have turned. The new reality is that broadcasters need to chase more dollars these days.  Most television stations have beefed up their sales staffs and seek to get directly to the decision makers of who allocates the dollars even at the risk of bypassing the agencies altogether.  And media entities like Newscorp, with multiple media properties, see cross-platform (as in multi-media) selling as the opportunity of the future. Fox Sports,  Cable, Network and Internet, for example, has the cross -platform advantage and ability to reach audiences and different media types under the umbrella of a coordinated marketing plan. Though most internal divisions don’t like to share, Newscorp, for example has coupled upper management support and relentless communication among departments with incentives (not penalties) to cross pollinate when opportunities across divisions present themselves.

 

Diversified plans need to be conceived and introduced at the outset to smooth the way for a synergistic marriage of elements that go into a cross-platform sale. But, while it solves more of the media planners concerns and needs and more of the clients goals and objectives, adding more outlets looks to most marketers like a greater outlay of media dollars. Clients can’t expect to save their way to higher sales but agencies and their planners must be prepared to make not only compelling creative, but a fiscally sound, cogent case for diversifying, laying out a clear path to consequential savings or increased ROI.

 

In Summary:

The consensus, tough times or not, is that advertising drives demand in the economy. No matter where the dollars wind up, starting with the client’s objectives and demonstrating value to the advertiser are the foundation for putting a plan together.

In a tougher environment, advertisers will focus on proven performers, vehicles that get the message out. One suggestion:  follow the direct marketers. They’ll go anywhere once, but when they revisit a vehicle, it’s usually a winner for responsiveness and accountability.

Cross-media performance reporting, or tying together a retail sale, a wireless ad message, an interactive television commercial is going to emerge as investor-friendly. Five years out, marketers will track and reward their most profitable customers.

Hyper-targeting and customer relationship management can be a double-edge sword. While clients won’t keep buying another new medium, tracking every tube of toothpaste back to an individual sale can result in pay-per-performance as the standard.

Understand that where the nature of partnerships between the ad agency and the media outlets begins and end. In simple terms, they both supply solutions for a client’s needs.

Learn from the Internet experience not to let promise exceed delivery. Listen to the consumer about interactive television applications. What kind of interactivity he wants,  will pay for and cares about.

Media sellers: subscribe to the trades!  Know what you’re selling.

Let The Buyer Beware:

Reported in the IAB Informer of Jan, ’01,  two Unsolicited Commercial E-Mail bills addressing unsolicited commercial e-mail (UCE), introduced late in the 106th Congress, have been picked up.  The “Unsolicited Commercial Electronic Mail Act of 2001 criminalizes the sending of UCE without valid return e-mail addresses. It requires opt-out features of future e-mails, and prohibits sending UCE to anyone who has opted-out.

The “Wireless Telephone Spam Protection Act,” would ban UCE on wireless devices making it a crime to send commercial e-mail to a wireless device without the user’s express permission.

While technology develops more sophisticated ways to sniff out a consumer’s connectivity, keep an eye on the FCC, hard at work on the digital must-carry rulings. This will impact how cable carriage works with multiplexing or multicasting.  That is streaming I Love Lucy, news, sports, financial, enhanced sales messages and program-related material in one broadcast signal.

 

 

 

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