Heart of The Matter
In debate over creative, capabilities and standards, do we forget that we’re here to sell and brand?
In one corner there’s a heated conversation about the impact of subservientchicken.com on the future of online advertising. Across the room you can hear the “It’s a branding medium,” “No, it’s a direct medium” debate that has played like a five-year-long tennis match.
Somewhere, somehow, a new set of publisher standards have been issued, this time for pop-up ads. And in one of the upper suites, the leaders of the 4As have found their focus announcing that, “among top priorities for the Internet market is getting into rich media ads”.
The noise is deafening.
As fascinating — even in a misguided way — as all of this industry discourse can be, it has very little to do with the question that has plagued the integration of online adverting into the mainstream marketing mixes for the last decade. How are advertising agencies going to successfully sell products to consumers who are increasingly in control of the media they use — and make money at it? It is those last four words that lie quite squarely at the heart of the matter.
Interactive media (on any screen) can build brands, can drive sales and can deepen any brand’s understanding of its consumers and customers. It can do all of that, and do it in real time. But it is highly unlikely it will get the attention from traditional agency executives that it gets from consumers, until those executives find a way to rework decades-old revenue models.
No not even subservientchicken.com can provide as marvelously efficient a means of making significant income for ad agencies/holding companies as the traditional agency revenue models. Loosely described those models are variations on the media commission + production theme. Percentages vary, as do the implementations of fee structures and pay for performance. But across the board the basic lifeblood of the industry is a flow of media commissions that require relatively little investment in hours to attain.
In other words, the margin on a $50 million TV buy — even with 9 percent commission — is like crack, almost impossible to walk away from, despite being obviously lethal.
The desperation of the situation can be seen in continuing efforts to push TV advertising onto the Internet. The growing penetration of broadband has made the use of full-motion video — of a quality comparable to TV — very viable. Now TV spots or even mini films can just be broadcast online. With this transition, online media buying snaps back into the old model, a pure reach/frequency game, with some modeling for clickthrough.
Left behind, of course, are the majority of capabilities that make the Internet such a powerful marketing tool, including but not limited to: real time optimization, metrics that can measure from a click to a sale, and a host of consumer data gathering tools. A small price to pay to retain such a lucrative revenue model — besides, can’t marketers take care of all that with email marketing?
Left out of the equation entirely are all the human beings a brand is trying to reach by putting a commercial online in the first place. Interrupting your customers as they search for news, book their vacation plans, check their portfolio status or just look for a joke transforms your brand into a barrier. And while the barrier-selling business has been on a roll since 9/11, it’s not a viable alternative revenue stream for advertising agencies or their holding companies.
It’s time to just get off that pipe. Skip the arguments about fixing the upfront. Restrain yourself from trying to attain the perfect online reach and frequency model. Just focus on doing what so many of our clients have done. Look at the bottom line and what has to change to deliver what our clients will need in the future.
It’s a re-organization. It involves re-thinking departments, people’s jobs and what talents you need and don’t need. It cannot be based in the visions of glory past, but of something yet to be imagined. What will remain true is the need for very smart people, who are fascinated with solving marketing problems and with the tools that solve those problems best. We were always right about one thing — talent wins the game. People are the only asset that matters. But now it’s different.
We will also require the help of our clients, and not only to insist that we stay clean and on the right path. Let’s face it — many of them have basically told us that we are in deep trouble. If you didn’t hear Jim Stengel at the 4As meeting, you can read his speech online. We will need to work together to craft new billing models, and — most critically — shift value propositions for our work. Only this last move will enable us to continue to deliver what we want most to deliver: marketing that sells their products.
That’s really what’s at the heart of the matter. Maybe we’ve gotten so caught up in what we do that we’ve forgotten why we do it. We are here to sell products and build brands. The tools we have used to do that are undergoing a radical change — and so must we. Change the revenue models that have supported this industry for decades.
Change now or die. That is the heart of the matter.
