Sharpe Partners: Interactive Agency NY

The late Newsday columnist Murray Kempton once described editorial writers as partisan fighters who come down from the hills after the battle and shoot the wounded.

And so it seems we are seeing a veritable slaughter of various AOL Time Warner programs now as the smoke clears from the company’s most recent conflict.

The victim now staring up the barrel?

Multi-media packages.

From Stuart Elliott, The New York Times’ prescient and knowledgeable analyst of the advertising industry, to Advertising Age’s Jon Fine, the guns are cocked and ready to put AOL TW cross-media deals out of their misery by pronouncing them failures.

Here in July 2002, it’s easy to pick on AOL Time Warner, as well as Discovery Communications, Disney and Viacom and all the other big media companies. It may actually be a little too easy.

A cynic might look at Elliott’s July 20 piece (”Madison Ave. Reconsidering Package Deals in Buying Ads”) and think that this a great way for the ad agencies to distance themselves from deals and even media partners that have fallen on hard times.

Never mind that in many cases the agencies recommended these deals and took them to their clients. Now it’s all the media companies’ mistake.

What exactly was their mistake?

It was in promising the turnkey solution, more specifically taking on the task of making sense of an increasingly complex media environment. They would for all intents and purposes do the agencies’ media plans for them.

The appeal was enormous. The agencies didn’t have to do the work. The media companies would do it all–everything from determining the differences and values of all this diverging and emerging media to understanding what it takes to track online advertising versus TV.

They would cover all the cable options and continue to support the myth of the value of outdoor. No need to spend an agency’s billable man-hours to get to a recommendation. Here came the cure to those shrinking media commissions. Here was the answer to the problem of efficiently planning media at a time in history where it may actually be the most complex task an agency was facing.

The agencies could use their promise of clout to get the media companies to deliver big plans.  And that’s exactly what the media companies delivered.

Were the plans self-serving? Yes. Did they lack the critical analysis that only a third party can give? Of course. A media company’s job is to sell as much as possible, not to sell what’s right for a particular client.

Was it difficult if not near impossible to break out the components of any given plan to see the “real” value?

Yes, they were selling a package and they were going to make it difficult to break it apart.

Were the budgets high? Well, yeah, that was what got the companies’ attention in the first place. Were they turnkey? As media plans, absolutely, though production was of course a different matter.

More importantly, were they good plans: high-value, efficient and effective? For the most part, no. But in all fairness that really wasn’t what was promised.

The media companies did deliver on their promises. It was just on deals the agencies never should have made. To turn around now and blame the AOL Time Warner’s and Viacom’s, while viscerally satisfying, is to miss the point and certainly to miss the opportunity to learn from our mistakes.

If the media companies can no longer claim their ability to sell cross-media packages as a benefit–and according to Elliott every right-thinking media expert agrees they are of no value–then it only follows that the agencies’ ability to buy cross-media packages is also valueless. It is without value to agencies and most critically to their clients.

Clout was just a club that was used when much more subtle, complex and more costly instruments were required. Oops!

Underlying these mistakes is a myth, the Myth of Clout.

This myth grew out of real world experiences, going back to the days when whichever media-buying conglomerate took the most money into the upfront TV market or the Super Bowl bidding war stood the best chance of getting their clients the best deals.

This happened for several years in the 90s, and it led many to believe that more money equaled greater value for clients and incidentally for agencies as well.

Under those relatively straightforward market conditions, the thinking made sense. It wasn’t how smart you planned, it was how much money you had. It wasn’t an ability to negotiate, it was having the most money to negotiate with. It was easy, never mind that it negated the age-old claim of media departments offering smart, incisive thinkers who knew what to buy and how to buy it. It worked, at least then and under those conditions.

The mistake was extending this model beyond these very particular market conditions. Relying on clout to carry you beyond deals with four or just one TV network couldn’t work. Attempting to leverage clout in negotiations with multi-media companies selling multi-media packages left the key value of the media department, knowing what and how to buy, out of the mix.

And then along came the internet, that shape-shifting media monster where ad units and metrics change almost daily.

The value of the internet is best found in the surgical strike-in covering the specific target and measuring awareness through sales. It’s a place that brings into question the values of the almost ancient metrics of reach and frequency. CPM or CPC or CPD. It’s not a new world, it’s an evolving solar system.

In the internet space, clout will get you impressions, but a well-thought-out plan can buy one tenth of those impressions, at one twelfth the cost and get 10 times the leads. Nor is the brand left behind.

The internet shows exactly how mythic the Myth of Clout is. No mistake, most of the complaints cited in various stories were about the internet component of those massive deals.

The good news from all these reassessments and recriminations is that the Myth of Clout has finally been vanquished. Now every smart media planner once again has a job.

The bad news: It won’t be easy. But then it never was, was it?

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