Hitting the marketing reset button

It’s a very good sign to see more chatter about the need for senior marketers to re-assert the strategic value of marketing inside organizations, which is the point of Scott Davis’s piece in Ad Age.

It boils down to trust.

Reports of the death of advertising are exaggerated

Over at Buzzmachine.com Jeff Jarvis has been speculating on the decline of advertising in a one-to-one world linking consumers with marketers. Google presumably makes this possible. Social networking presumably makes this possible. They are the high-tech conduits of word-of-mouth, which has always had the underlying responsibility for building brands. Give consumers the power on their own through these and other tools to talk about brand experiences and marketers can cut out the middleman: advertising.

Rumors of the death of advertising are driven as well by the fact that advertising grew so pervasive and intrusive off-line that skipping commercials became a business, starting with the remote control, then the VCR, then TiVo, Napster,  the iPod, etc. James Fallows gave time in his Atlantic Monthly blog last month to the idea that newspapers aren’t dying; instead, advertising is dying and dragging newspapers and other media down with it.

Here’s my take: nothing is dying. Newspapers aren’t dying, TV isn’t dying and advertising isn’t dying. To be sure, there may be a few deaths in the family, but the distinguished line of TV, print and advertising  inheritors can look forward to a continued life of citizenship.

As an industry we have discussed that changes may have to be made by some of those inheritors in order to carry on their legacy. For the most part this means specialization, or enhanced relevancy. Newspapers don’t have to disappear, but they may have to stop trying to be all things to all people. Ditto most every media business. But, fortunately, most media types have shown themselves willing and capable of successful adaptation over the years, enough to ward off extinction.

Now it is important, however, to come to terms with the significant role that advertising has played in the survival skills of media through the years. Today, most media are utterly dependent on it, new and old. That dependency is making it hard for advertising to change in the ways it needs to in order to catch-up with others in a consumer-driven world. As the thing so totally and utterly responsible for powering the New Media Age advertising has been feeling recently that the world needs it more than it needs the world. Some have even said so.

Well, Jeff Jarvis and others are speculating this may not be true. I don’t agree; but their conjecture is not uninformed. The world dislikes advertising - the Internet world, I think, most especially – and the reason why is simple: advertising insists it has the right to be rewarded, which is fundamentally out of step with what every sensible marketer knows is true about the world in which it does business today – rewards are given at the discretion of consumers. The rather astonishing trail over the years of advertising innovations designed to reward advertisers online such as adware, pops-ups (then pop-unders), flashing banners, interstitial, home page take-overs, and even pre-roll have done nothing except leave room for the doomsayers to howl at the moon.

Can it be advertising by this or any other name if it is not so insistent and demanding? Can advertising let go and give itself over to the care and judgement of the users groups and web pages and the mobile telephones of consumer generations today and tomorrow? Can it be successful at cultivating consumer trial and loyalty? Yes, it can, if it agrees to second place behind the consumer.

Consumers have rewarded advertisers many times over the years that agree to see it their way. Research has regularly documented that subscribers especially value the shopping circulars in their Sunday newspapers, which despite the onslaught of new media still splash out of the paper onto the kitchen counter every weekend. What is a fashion magazine to readers without the fashion advertising? There is as much anticipation today over Super Bowl commercials as there is the game, a reward to advertisers for their bold creative efforts. The brilliant Herb Schmertz forever changed corporate image advertising and showed how to constructively engage audiences by underwriting Masterpiece Theatre on PBS in the 1980s for Mobil Oil.

Put the consumer first and great things can happen for business, including the business of advertising. Unfortunately, not enough of that takes place online where, instead, it was suppose to be pay-back time for advertisers: one-to-one advertising, nothing lost or wasted. A little “me time” for beleaguered ad executives desperate to show that, “Yes, we can.”

Bad idea. Wrong for the times. Especially wrong for the medium and its value proposition to users. Of all places, the Internet, a consumer-driven, owned and operated, ours not yours, media tapestry with genetic hyper-sensitivity to third-party encroachment and control was the wrong place for advertising to insist on the spot at the front of the line. After much banging around, we are now in serious trouble of regulation that is thoroughly disconnected from practical reality and – worse - out of proportion to the more significant encroachments that exist offline. And, unfortunately, the facts really don’t enter into it. As of now, it’s perception not reality. How ironic.

As a consumer I have no satisfactory response for advertisers that have been denied for so long the answer to Mr Wanamaker’s question. When I’m not busy selling the virtues of vertical niche content online, I am a media consumer and as a consumer I have no reliable guidance for advertisers that wish to engage me.

“When would be a good time to talk?” I don’t know. I suppose when I’m in the mood. I suppose when I’m thinking about whatever it is that I’m thinking (note veiled, commerical reference to vertical niche content above).  I suppose if you have something clever to say. But I need my space. Please don’t hover. If I have questions, I’ll ask. That’s my attitude and, I suspect, the attitude of many consumers.

I don’t know how Mr. Schmertz measured the effectiveness of his corporate underwriting experience back in the 80s. It was a sensation and gave him a certain celebrity along with his pioneering use of op-ed advertising positions. He wrote a book. I suppose he did some research to measure favorability of Mobil among the opinion-leader demo that was his target. Still, today, however, I expect to see Mobil (now Exxon Mobil) as the underwriter of Masterpiece Theatre and I will forever associate the company with citizenship, whether I agree with them or not. And while it may or may not be connected, I really have always favored their brand when buying gasoline, which leads me to report, sadly, that Exxon Mobil is pulling out of Eastern Massachusetts. The stations will be replaced with Gulf. Ifeel like I’ve lost a life-long community connection that I had learned to trust – a connection that had its roots in advertising and gave me something interesting along the way.

Advertising is about consumers and no one talks about the death of consumers as a marketplace constituency. Make advertising the servant of consumers, in the way advertisers do their products, and its future is assured.

More metric madness.

On the heels of Al Ries’s ”Metric Madness” commentary in Ad Age yesterday (see previous post), comes this from Zephrin Lasker in the online trade, Adotas: “Online branding in the age of performance.” Performance today, says Zephrin, is a cultural imperative, woven into every day life. Accordingly, he asks:

“Why should it be different in the world of online advertising? Why can’t our executive teams and clients expect better performance from our branding campaigns? Why should branding campaigns be insulated from the demand for better performance and higher ROI?”

This is where we get distracted and off-track with the whole advertising accountability question, particularly as it regards brands.

For starters, who says that branding campaigns are insulated from performance and ROI?  Brand campaigns are not launched into the advertising ether without goals and objectives, and there are plenty of tools with which to measure performance against those objectives.

But consider also:

Brands are a collection of promises: quality promises, service promises and price promises. If a brand promises one thing and delivers another, the brand suffers and the customer suffers. This is the primary performance burden of brands. And, to Zephrin’s point, they carry that burden with them to work every day.

The burden of brand advertising is to remind customers of brand promises. To do this, most brands – especially big brands – have to reach many people, perhaps millions. Take Tide detergent, for instance: I heard once that Tide sells about 500,000,000 units of its product(s) each year in order to fulfill it’s promises.  At an average action rate of, say, .006 if Tide’s sales depended exclusively on the sort of direct action implied by performance advertising advocates the online world would have to come up with slightly over 8 trillion ad impressions. Maybe less, considering that 12% – 15% of Tide’s customers account for most of their sales. Regardless, long before we reached those levels of exposure customers would be dumping Tide out the windows. More advertising is not the answer for brands.

I own an Acura TL. Before I owned an Acrua TL I was mostly unconscious of other TLs on the highway. Driving the TL home from the dealer the first day, and as I have driven every day since, I am amazed at how many people drive TLs. This is something brand marketers understand. It is the same thing with brand advertising. Before the TL, I saw no TL advertising. Since the TL, I see it all. This is branding. I have 56,000 miles on my car and I plan to make it last another 100,000, or three to five years. All the car buyer opportunities in the world don’t add up to all the car owner opportunities in the world, but there will be very little performance in the advertising that washes over me from Acura until, maybe, 2012.  Is their money insulated from the demand for performance?

No. Measured in units of one-thousand (CPMs), brand advertising is wonderfully efficient way to reach customers, over time, with a reminder of brand promises and smart choices. Nothing is best left to the last minute, as my father used to try and teach me. We’re not going back to the store to get Tide for weeks. We’re not buying another car for years. If marketers save advertising for those last possible - in-market - moments so as to try and connect the financial dots more securely they are only insulating themselves from reality.

Stop the madness! Al Ries writes about our over dependance on the numbers.

I was interested to learn today in his Commentary piece for AdAge (“Metric Madness”) that Al Ries, brand positioning strategist, was a math major in college. He uses that as a bit of leverage to support his argument that the issues of metrics and numbers and ROI have run amuck with business, generally, and with advertising in particular. Says Mr. Ries:

“Almost everything about marketing is the opposite of the typical manager’s approach to running a business. Marketing is illogical and definitely not analytical. Marketing is intuitive and holistic.

We’re concerned, however, that this message is being ignored by the marketing community, who seem to be drifting from the right to the left — from a right-brain approach to a left-brain approach.”

Quite.

No where is this drift more pernicious than online, which claimed ROI as its value proposition and has struggled ever since to prove its case in a way that is truly differentiated and successful at attracting a competitive share of ad spending. On balance, the only unique ROI selling point online has been price and, specifically, pay-for-performance – which we’ve heard many times through this recession.

Not that Internet doesn’t offer a more accountable media experience: Let’s just start with measuring the size of an audience, which, offline, is surmised by sample and audit reports and online can be counted impression by impression. But as a value proposition ROI fails online because it is not a sufficient explanation – it is no explanation at all - for why people use the Internet. Value propositions are customer centric and customer driven. Advertising ROI is not customer driven. Thus it cannot be the reason to advertise online.

Connecting with customers has to be the reason to advertise online, as it has to be the reason to advertise anywhere. As a customer, however, I can report that establishing those connections is hard. For one thing, if you asked me today, I’d never buy another Wolf stove (owned by SubZero) for my house. But tomorrow someone could stop by and say, “I hear those are the best stoves on the market,” to which I might just then agree.

It’s complicated and sometimes, as Ries says, not very logical. That’s why it’s hard.

Ad Networks Need to Grow Up

As we near quarter 4 of 2008, the frothy ad network business is undergoing a significant shift. In the minds of the publishers they support, there is a feeling that ad networks are either undercutting them in front of the same advertiser or not giving them the best ads possible. In the minds of the advertisers, the demand for cheap reach is being offset by the growing insistence that quality controls be in place to make ad networks, as currently defined, a safe place to do business.

The ad network landscape began to bifurcate in late 2007. The very large performance ad networks consolidated through acquisitions by Google, Microsoft, Yahoo!, and AOL. In 2008, they continue to dominate the revenue landscape by delivering tons of impressions (if you could weigh them) and performance-based results. When you mix portal, comScore 300, and exchange inventory, the chances are pretty good that you can find inventory to match the tight CPA goals desired by direct marketers.

On the flip side, the brand advertisers are gravitating towards transparency, trackability, and accountability.  This flight to quality is delivered by two types of firms — vertical ad networks and ad representation firms. The latter represents sites completely, helping them get in front of advertisers and fill the sales role for the publisher on an outsourced basis. Rep firms do well because they have a number of products in their portfolio that could be of interest to the advertisers they call on. The direct relationship they enjoy with these publishers requires that they can make and keep promises, report on where the ads show, and respond to issues an advertiser may have regarding a placement or a content concern.

The vertical ad networks and transparent ad networks, which include Burst and a handful of other companies including Tribal Fusion, provide a middle ground for both advertisers and publishers. The advertisers get a brand-safe solution for reaching ten, hundreds, or even thousands of high quality web sites, but don’t have to contact and negotiate with each property. The publishers get representation in front of the largest spenders on on-line media, but do not have to build a sales force to gain that visibility.

This “flight to quality” is emerging in a number of ways:

1. Better data reporting. comScore is revising the way it accounts for ad-focused traffic to separate media buying networks who report “potential reach” from ad networks running real traffic or “actual reach” numbers. Brand advertisers who want to know precisely what they are buying will gravitate toward the latter – and direct response marketers to the former.
2. Documentable distribution. Ad networks were recently called out by a major brand on the issue of transparency. Brands rightfully demand to know where their brand impressions are showing up online. Expect sensitive advertisers – those with reputation to uphold and shareholders to please – to continue to press these issues going forward.
3. Privacy concerns, part 2. Remember when DoubleClick tried to buy Abacus and everyone got nervous about the connection between online and offline data? The whipping boy for the latest round of privacy issues has been NebuAd. The truth is, every company has to consider their privacy policies in the face of ads that follow consumers around the internet. Whether or not they have your phone number in the real world, it feels like they do online.

This shift in values will lead to more distinction between what I call “traditional ad networks” – those that serve the needs of advertisers looking for broad, affordable reach – and “web site networks” – where representation of high quality, brand safe sites in a reportable, measurable way provide advertisers a well lit way across the Internet.