Stop selling scarcity. Start selling relationships.

 

I posted a reply in Jeff Jarvis’ discussion over at BuzzMachine about “Selling Scarcity.” Uncharacteristically, I’ve disagreed with him. 

The link to Jeff’s thread is above. My reply is there and here, but there is a difference in the last sentance where, as an after-thought, I have chosen to be more emphatic here about the question of results vs. relationships. (I could not go back and edit my reply to Jeff.) Fundamentally, it has not been shown that results are more abundant online than off, though they can be, perhaps, measured with greater ease. Relationships, however, are far more abundant online. Therein lies the differentiator. We should be selling relationships.

Dear Jeff:

If I have followed your reasoning properly, then I have to say I disagree with it, certainly as far as the media and advertising portions of the argument go (which are the only portions I’m semi-qualified to address). I’m a fan and advocate along with you (and of you) in regards to the consumer driven information economy, but I believe strongly in the value it has created. My reading of this post is that the new media economy has, instead, wrecked value. Rupert Murdoch would agree; perhaps also Mel Karmazin. Not I.

Start with advertising. “Sell the outcome” is a pretty good summary statement of the points you make, for which we/you thank Max Kalehoff. From it, you admonish those in the media business to align with marketers if they are to have any hope of surviving the chaos of the new world. This is a bad idea, I believe, and poor recipe for survival. Why?

Relationships. You say that media “must become” about relationships. I say media has always been about relationships, and I’d say further that the exciting part about new media is how especially good at relationships it is relative to old media. It is substantially more personal and timely. It is more one-to-one.

The principal stakeholder in a media relationship, however, is the consumer, not the advertiser and the media must stay firmly aligned with consumers or perish. Google’s remarkable success with results was/is driven by value it creates for consumers, not advertisers. Google is in the results business, which is the same for all search engines – as it has been the same for the Yellow Pages and the same for classified section of newspapers (May they rest in peace). BuzzMachine is not in the results business except so far as when I show-up it better be interesting – as, indeed, it always is. Google doesn’t have to be interesting. Google has to be reliable results-wise. You, have to be reliable interesting-wise. You have the harder job. You should make more than Google on a pound-for-pound basis. But, that’s for another day.

I am clear about the primacy of the consumer as principal relationship holder with media in the way that I think you are a bit unclear about it. You say that Rupert Murdoch and others are playing a dangerous game when they propose to charge their “best customers – cutting off their richest relationships with a toll booth.” If you are right in this case (I think you are) it follows that you are wrong that media should align with marketers.

Unless I’m missing the point, which may be that media should be equally devoted to consumers and marketers serving as some sort of Den Mother between the two, as community builders, or Tupperware party organizers inviting advertisers to share coffee and donuts with the neighbors. I’d argue the idea lacks passion, which suits Demand Media and other content mills paying $20 an article just fine. They are not in the passion business. They are not in the relationship business. Coffee? Donuts? Warm bodies? Save a seat for them on the sectional.

…Which is where I get stuck again when you argue, “advertising is failure – it’s what you do when you don’t have a valued relationship.” Right, but then, ipso facto, advertising is not failure in the presence of valued relationships, the “richest” source of which is the media – the richest source of which today is the Internet, where I think we have always agreed consumers find more of what they care about.

Interestingly, this outcome still supports your overall premise to stop selling scarcity. Instead, sell abundance – of relationships. That’s what the old media world was missing: the fact that they could not produce and distribute content abundantly enough to satisfy the needs of all their consumers. The Los Angeles Times tried to serve an area the size of Ohio and failed. It could not afford so many relationships. Ditto the rest. If they are smart they will retreat to their interest-based borders and thrive on the meaningful relationships that result, way into the future. Profitable, only smaller, just as you say.

The Internet can afford countless relationships. It remains to be seen if marketers will harvest them. If we want to help the marketers, however, stop selling results and start selling relationships.

Tit for tat: TBWA appoints a Chief Compensation Officer

Ad agency TBWA is clearly serious about instigating a new level of conversation over ad agency compensation. As discussed in this space a few weeks ago, TBWA Chairman, Jean Marie Dru, had opined that the current compensation formula is broken. This week, Ad Age reports that the agency has appointed a Chief Compensation Officer to lead negotiations with procurement people on the client side.

Why didn’t anyone think of that before? Good idea. Tilting the balance back in favor of ad agency revenues is an urgent need of the 21st Century Information Era, notable for its global, super-abundance of creative media opportunities. Having parties on both sides that speak the same language when it comes to money and compensation is good way to start the balancing act.

Google stops by the old neighborhood on Super Bowl Sunday

According to MediaPost’s Online Media Daily report this morning, John Battelle, at least, knew Google would run a commercial during the Super Bowl yesterday. It was a surprise to most of the rest of us. But it was a welcome surprise. All was right with the world for 30 seconds when Google showed-up still looking and acting like its old self – a search engine – back in the Internet neighborhood, in touch with its roots.

“Hey, look who’s here!”

“Hey, Ma, Google’s outside.”

(“Hey, don’t he look swell.”)

“Hey, don’t you look swell, Google! Where you been!? Come over here.”

“Hey, you look tan. Nice suit…where’d you get it? Paris? Hey, Ma, check this out…Look who’s wearing a suit from Paris!”

“Wait…who’s the girl? This girl with you?! You with him?!“

“HA HA HA!”

“Bonjour.”

(“Bonjour? Is she French?”)

“A girl from France, Ma!”

“Geez, it’s nice to see you, kid. All we know is what we see in the papers, you know? Oh boy, the papers say some things, don’t they? We all know better, of course. We tell ‘em, too. We tell everybody. Google never hurt nobody.”

“But, hey, look at you! A tan. And a girl from France! Geez. I never been to New York, let alone France.”

“HA HA HA. Laugh with me, you old dope! You lost your sense of humor?”

“HA HA HA!”

“It’s good to see you, Google. It’s good that you stopped by. Really good. Really good.”

(“Give me a hug.”)

“You stay in touch.”

“Do you hear me?! I’m watching you! You stay in t-o-u-c-h!“

Happy Commercial Day

Commercial Day is this weekend, the centerpiece of which is the Super Bowl game between the Indianapolis Colts and the New Orleans Saints. America will load-up on snack foods and ground beef, beer and soft drinks and watch the game on wide-screen television sets with remote control. Every iGadget in iVill, both big and small, will join in celebrating the hard-hitting, high-scoring, fist-pumping thrill of consumerism. At half time, The Who will perform (merchandise available here).

Monday, the armchair quarterbacks will pick apart the commercials. Some schools around the country will be closed in observance, just as many office workers around the country will be absent because of observance, and the hum of extravagance will linger in the air.

It is fundamentally untrue that America doesn’t like commercials. America loves commercials and each year the country takes time out to honor this secular art form that tries to tap our aspirations and desires in ways that motivate us to think happy thoughts about ourselves and others that we might buy, perchance to give.

But, sadly, as with so many other observances that are now buried under an avalanche of irreverence and irrelevance, it is hard to remember the true meaning of Commercial Day.

Well here it is:

The High Costs of Saving

 

“We need to get past this idea of saving,” entreats Seth Godin in his blog today, which amounts to a prescriptive for many of the business world’s institutional problems, including banks and brokerages, probably also automotive, and – to Seth’s point – traditional media and publishing companies.

Years ago I heard someone recast the old saying that the problem with railroad companies was they failed to recognize they were in the transportation business. In fact, this speaker observed, the problem with railroad companies was that the people in them loved the railroad business. Under the circumstances, therefore, saving the railroad business became paramount.

I think about that railroad analogy almost every day, which is how often I read something new regarding attempts and desires to “save” newspapers, or magazines, or television.

Seth Godin is right, of course: as with the matter of transportation before it, when the world learned to fly, today information is more plentiful, more timely, more first-hand and, thanks to new devices, more transportable. It is boom times if you are in the information business - but not, unfortunately, if you are in the newspaper business.

In Memory of J.D. Salinger and Brand Mystique.

I wanted to be in book publishing, not advertising, when I grew-up. So, during winter vacation of senior year at college, many, many years ago, I went to New York to interview with a pack of publishing companies (plus one ad agency).

Interviewing at one of the big publishing houses I remember asking the Editor about one of their best-selling authors and was surprised when she said, “Oh, yes, very popular. But, of course, we write most of the books today. He’s just a brand name, now, really.” (It’s interesting that you see the author’s titles in movie theatres or on TV, but not so much in book stores, these days.)

The summer before college I painted a barn with a friend of mine. One very hot afternoon his older cousin came to a screeching stop in front of the barn where we were working high up on ladders, jumped out of the car and yelled, “I’ve got Coors beer!” Down the ladders we went and thus I had my first taste of the Rockies, available only to anyone who had been there and brought it back with them.

More recently, I was in the Palm Restaurant on Second Avenue in New York pointing out to a person who was with me, “This is the original Palm.”

“Really,” he said. “Man, they’re just everywhere today, aren’t they?”

Yes. They are.

J.D. Salinger would have none of what it all might have meant to him and he died yesterday not only as one of America’s most treasured writers, but, perhaps, as the last of its mystical brands. Detractors dismiss his reclusiveness like they dismiss all oddballs. But brands depend on more than scarcity for mystique to follow. They depend on quality and – to be truly great – an attachment to quality that prevails over ambition and profit.

This is hard to do, which is what I like about the Internet: that it is held together by thousands of independent authors and publishers which in the vastness of the space are too small, or too remote, or too busy with other parts of their lives to be tempted by great expansion, so that they can satisfy themselves with patient attention to quality enterprise and stand against selling-out. Thereby they are enriched and so are we, and the Internet is sustained.

How many brands may secretly, desperately wish to retire to a village in New Hampshire to live out their days on the strength of their legacy, unyielding to the temptation to pump it up amidst the bright lights and big cities? It’s a different sort of brand luxury I suppose. But, there’s an opening now for anyone that thinks they can take it.

The Apple iPad: offering a way forward to many beleaguered publishers and content producers

The most inspired thing to emerge from the iPad launch is the notion that book publishers will be given firmer control over their pricing (“Apple Tablet Portends Rewrite for Publishers,” Wall Street Journal). For this reason, perhaps, iPad launched this week with the support of Penguin, HarperCollins, Simon & Schuster, Hachette Book Group and Macmillan Publishers (“iPad Launch; Apple Unveils iBooks”; PaidContent).

Perhaps Apple sensed the scorn of so many publishers and content producers over their treatment by third-party distributers and tech enablers – angry publishers like Rupert Murdoch that have decided to erect pay walls, and ones like CBS Interactive that have decided to dump ad networks. Perhaps in the midst of that scorn Apple sensed an opportunity. It has the brand, the device, the distribution and the objectivity to be the partner of choice for content producers. It has no portal, no ad network, no search engine, no ad exchange. It has no dog in the fight for ad dollars. It has only a gleaming, portable device and millions of loyal users.

Microsoft has wound-up in the content business. Not Apple. Google has wound-up in the network business. Not Apple. Each of them is in the media business, but only Apple doesn’t have to sell advertising – so far -which means content producers may be breathless to work with them. Indeed, Martin Nisenholtz of The New York Times was sounding pretty excited in the report in Paid Content:

“Martin Nisenholtz said that since The New York Times website is beautiful on the iPad, why bother with an application? “Well, our app for the iPhone has been downloaded three million times, and we wanted to create something that combines the best of print and digital all in one. It captures the essence of reading the paper. Articles can be saved, and read later on the iPhone.”

If you step back and squint, in order to have a dimmer view, it’s possible when looking at the whole of the media landscape to see nothing but the hunched over frames of depleted, disaffected content owners and producers worn ragged by the ungratefulness of new technology. Enter Apple with a potentially credible solution to finally help many publishers get upright again, and in the process catapult itself into the hands of millions more users eager for content relationships that you can still practically touch.

TBWA Chairman, Jean Marie Dru, joins the conversation about fixing agency compensation

In Ad Age today, TBWA Chairman, Jean Marie Dru, adds his voice to the growing chorus of people that are eager to have a conversation about the future of ad agency compensation. It must change. Ad agencies have paid the price for years of ”apparent frivolity,” but the model today, in the grip of a procurement process that has one ambition, lowering cost, leads to a dead-end. Notes Jean Marie Dru:

“It has become fashionable for everyone to blame “procurement” for their problems. It’s an easy way for others to off-load responsibility. The real decision-making, however, lies with CEOs and marketing directors. They’re merely leaving the dirty work to procurement. Procurement execs are often given no other option than to squeeze for more so-called efficiencies, year after year. In doing so, they have created a death spiral, making it impossible to attract and compensate the talents we need to deliver the value-creating ideas our clients demand.”

The danger, of course, is that if clients don’t become part of the compensation solution ad agencies will proceed with fashioning their own out of the resources available to them. One resource stands-out: media. The money is in the media; but to benefit from that fact agencies will need to be on the receiving, not just the giving, end of media dollars. They will need to be both buyer and seller, which will surely lead to a crisis of objectivity in a business whose purpose, the late Clifford Fitzgerald of Dancer Fitzgerald Sample reportedly use to say, is “to recommend.”

In this regard, Mr. Dru makes this observation:

 ”Back when advertising agencies still bought media space, I used to remind our clients of a forgotten truth. If the agency commission paid was 10% of the total advertising costs, the work produced by this 10% is what gave the value to the 100% invested. It was a good argument to fight against too-heavy revenue reductions. Today agency-fee negotiations and media-rate discussions are separated. By considering these two activities separately, our clients have lost sight of the fact that one actually multiplies the value of the other.”

It is a very good place to start the conversation: bring back agency commission.

Before the business disappears behind a smoke screen.

“Something is rotten in Denmark.” Tom Hespos challenges the ethics of agency-side audience networks

Rather sooner than we might have expected the question of agency side audience-networks, or demand-side networks, is raising concerns about ethics. Tom Hespos, Chairman and President of Underscore Marketing, who has been a leading conversationalist about online advertising since he helped found the Old-Timers list back in 1999, confronts the dilemma of buyers acting as sellers in a column for iMedia. Speaking for the concerns of many independent ad sellers Tom writes, “Something is rotten in Denmark.”

Tom asks three questions at the center of the agency-as-ad-network question:

1. Who owns the user data? Tom is ambivalent; perhaps no one.

2. Is it morally correct for agencies to be opaque with publishers and/or clients as to how they’re leveraging data? Opaque means impenetrable, not transparent. According to Answers.com, it means “to be so obscure as to be unintelligible.” Tom puts it to us as a moral question. If we are made uncomfortable by that characterization, what are our professional instincts? Is the media model of the future destined to be “so obscure as to be unintelligible?”

3. Is it okay for agencies to both buy and sell inventory to the same advertiser? Simply, can agencies serve two masters? Can anyone?

Whether you judge, or judge not, the answers to these questions are foregone conclusions. The ad network model that the new in-house agency networks seek to replace has already crashed on the rocks of the ethical and commercial anxieties it creates. Ask the publishers. Ask the agencies. Ask the privacy lobbyists. They have  given the answers: one cannot serve two masters, the future of media is not to be obscure and unintelligible and, finally, the data belongs to the user.

Perhaps the message will finally make it to the advertising clients when all this is over: HELP, we’re drowning down here, and there are no good answers for saving brand relationships in a world fragmented by technology that we can offer relying on the resources at hand.   

Agencies must be paid to create and buy advertising, not to sell it. Something must be done to fix agency compensation lest media vanish forever behind a smoke screen – and with it, intelligible contact between consumers and their brands.

Mark Cuban defends Jeff Zucker’s experiment at NBC Universal. But, has Zucker given-up on the experiment too soon?

Mark Cuban goes on a tear over at Paid Content about the flip-flop on Jay Leno’s primetime show at NBC. His contention is that NBC Universal CEO, Jeff Zucker, was bold and absolutely right to experiment moving Leno to the 10:00 p.m. slot and the world would be a better place if more people – notably corporate executive types of people – were like Mr. Zucker.

That’s worth agreeing with, although Mark Cuban seems fine with the fact that Jeff Zucker has quickly bailed on the experiment and will return everything to before, minus Conan O’Brien, who, it seems, will be a casualty. Cuban’s got some colorful gambling metaphors in his Paid Content piece (which won’t get repeated here as this is a family friendly blog) implying he applauds Zucker for also knowing when to fold ‘em. The smoke is clearly rising at NBC, however, and the cost of ushering Mr. O’Brien off the set and out the door is going to be $40 million according to the Wall Street Journal today. That’s a lot to pay to step away from the table.

I don’t know anything about TV programming and so the signs that Jay Leno’s primetime effort was doomed to fail may have been obvious to everyone inside the organization. Maybe. But, what’s been nagging at me over the course of this real life TV reality show are memories that Leno took a long time to get traction when he took over “The Tonight Show” from Johnny Carson. Back in 1992 nerves were just as raw, to the extent that David Letterman stormed off to CBS where he thumped Jay Leno in the late-night ratings for two or three years. Leno recovered and held the lead until his “retirement.”

Hence a nagging feeling that Jeff Zucker’s bold moves have not been given enough time. There is not a single, common prescriptive for developing a media audience on TV, or anywhere, except patience. Content has to be good, but one person’s good will be another person’s bad as loyal viewers of ”Late Night with David Letterman” or “The Tonight Show” will tell you. Audiences are not quick to embrace change and loyalties run deep.

In the same report, The Journal quotes Jeff Zucker from earlier in the year cautioning observers that Leno’s switch to primetime would be a “marathon, not a sprint.” It may be that the world – specifically the media world – needs more of that kind of Jeff Zucker.