Nothing to Snore at: Pete Blackshaw Urges we “Get Back to Boring”

March 11, 2010 § Leave a comment

Good column in Ad Age from Pete Blackshaw, EVP of Online Digital Strategic Services at Neilsen, which echoes what Rupert Murdoch had to say about the blinding effects of all the technology razzle-dazzle in new media today. Says Pete: “We’ve got too much sizzle in the system right now.”

Pete has been looking back at “timeless truths” in advertising in connection with his efforts to help found a Museum of Advertising in Cincinnati. Cincinnati, of course, is home to Proctor & Gamble which has been the source of many advertising truths. He is reminded that the very first Ivory Soap ad invited participation from consumers and that Bill Cosby refused a script for his first commercial in order to be more authentic. It leads him to suggest that “Maybe things haven’t changed that much at all,” and, further, to propose that:

“Social media and digital marketing will only succeed — and sell through the organizational layers — if we ground it in deeper, more established marketing truths, not ephemeral campaigns, one-trick pony moments, or hypocritical oaths or proclamations.”

Commentors to the post heartily agree:

“Couldn’t agree more Mr. Blackshaw. If I hear one more brand person say that their brand needs to start having a “dialogue” with its consumers, I am going to lose it!!”

And,

“I’m sick to death of the marketing media’s obsession with the latest shiny new object, Social Media, and grateful that someone with your impressive and relevant credentials has had the guts to point out that there’s a certain element of “Emperor’s New Clothes.”

Pete Blackshaw and the supporting crowd are predominantly about social media and marketing. His comments and the others resonate across the new media landscape, however, as Murdoch’s comments earlier in the week from Abu Dhabi confirm.

Advertising is sold, not bought

March 3, 2010 § Leave a comment

The article in Advertising Age this week reliving some of the points that were made at the IAB Leadership conference in Carlsbad, CA, about erosion in the middle of the online advertising value chain ushers to mind the old maxim, “Advertising is sold, not bought.” We’ll get to that in a minute.

For now, if you believe in the virtues of audience-based media over the virtues of place-based media, then you believe that publishers probably don’t matter anymore – or matter less – to the outcome of media planning decisions because media value today, to you, is in the data, not the position. You are among many, therefore, that may have read the Ad Age piece and thought, “So what” when it came to publishers.

If that sounds like you, and if you belong to the value chain at all, you probably belong to one of the provider-types in the crowded middle of the value chain (ad networks, ad exchanges, data providers and ad servers, etc) where the expectation is certainly that the online market will continue to grow, maybe even to $80 – $100 billion worldwide or more by 2015, but that value considerations will evolve along their present lines: that is, from advertiser – to second party – to third party – to fourth party – and, finally, publisher. Or, from high – to lower – to lower – to lower – and, finally, to bottom; Or, in the event of consolidation, from high – to lower – to lowest.

In this value environment, it matters a great deal that prices stay low because so much of what gets exchanged is dependent on cheap access to premium web inventory. Providers in the middle of the chain have proved ruthlessly efficient in this regard, going so far as to position audience-based targeting as a “new science” and an improvement on old-fashioned media planning (which would be according to place and time in addition to who). So far, however, the “improvement” has failed to extract a better price for itself or others downstream, and it is hard to see how it will given the stress it would put on provider-types in the middle.

But, again, if you believe publishers don’t matter any more – or matter less – to the outcome of media planning, so what? It is certainly worth thinking about the fact that place-based media has simply become too expensive to plan for in a fragmented media world.  

Fine. What happens if the market grows to $80 – $100 billion as some predict? How will the current value chain absorb the increase if not through price? Here are all the options:

Option 1 – Volume, which means more advertising pours into the Long Tail of the Internet unless comScore’s list of the top 100 web sites that account for 84% of ad network purchases (per research from Adify) grow in audience size dramatically;

Option 2 – There is no option 2, except price.

Now, the fact that (according to Adify’s research) 84% of ad network impressions currently run across the top web sites means that the likelihood of every incremental dollar between here and $80 – $100 billion going to the Long Tail is very slim. Media buyers have a built-in bias for branded media. It’s easier to sell to clients; it aligns with their client’s own brand sensibilities.

Pretend, though, that every incremental dollar from here to $80 billion, or so, does, in fact, flow to all new media inventory besides what is represented in comScore’s top site index. Prices can stay low under the circumstances. But, there will be many, many more publishers with significantly higher earnings that suddenly have the means and inclination to compete for a bigger share. Think of it as the G.I. Bill that introduced the possibility of higher education to a generation of Americans that never thought of it before. It will be game-changing, ushering in a potent “middle class” with decisive powers.

Or not. Maybe only half the next $40 – $50 billion seeks out new inventory and the other half must find a home within the premium inventory sector at the top. It becomes a closer race for space and opportunity, prices go up and the rich get richer.

Either way, more influence over the outcome of media planning and buying accrues to publishers, which is why the maxim “advertising is sold, not bought” elbows its way to the front. Even now, despite arguments about infinite supplies of inventory, there’s an argument afoot about supplier value. Publishers are whining because they feel pain. They will want advocates going forward.

This is an ominous thing facing provider-types in the middle of the chain for when the day comes to atone for value. The difference to them between now and $40 billion from now will be the difference that results from selling versus buying advertising. It will be about advocacy.

It is a sad fact that advocates for the poor have always had very little leverage in the world except moral leverage. Advocates for the rich, on the other hand, have always had commercial leverage, and a $80 billion market will undoubtedly create more leverage for the citizenry of the new media economy – the ones accountable for its upkeep and maintainance – which are its publishers.

Or not. The market could fail to grow. We could be done and dusted at $50 – $60 billion worldwide some day, in which case advertising explorers, acting on behalf of their brand customers, with nothing to report from the new media frontier but ad model chaos, may sail on to potentially more favorable places, such as easy-to-recognize interactive TV.

That’s a disappointing prospect given all the potential online, and it says that one way or another, advocacy matters. Value must get sold, advertising value included. And, ultimately, the value of the supply matters most  – if not to everyone, at least to the suppliers.

Digital Media: so simple a caveman could do it

January 5, 2010 § Leave a comment

The Ad Age staff compiled a list of challenges and pitfalls awaiting the advertising industry as it turns the corner into 2010 and the start of a new decade. Editors gave the issue of agency compensation and the role of client procurement officers prominence as the first entry on the list. Quoting Mediabrands CFO, Tara Comonte, from her remarks at the American Advertising Federation’s Hall of Achievement Awards, Ad Age summarized the issue: “Procurement wants to pay less than enough. And it will be self-destruction.”

It is an issue that deserves to be at the top of the list. The issue of agency compensation must be addressed if the industry is going to be able to afford to keep pace with the rapid advances in new media in a way that provides maximum benefit to marketers.

In that regard, further down the Ad Age list was what to look for in Digital Marketing. “In short”, says Ad Age,

“marketing on the web has not been about creating demand so much as reacting to it by delivering the right ad to the right person when they indicate they want it. This has been a boon for Google (and has given birth to 400 ad networks), and represents the best thinking of largely West Coast technologists. But it is increasingly disastrous to content industries that are watching offline revenue erode and finding no equivalent revenue stream online.”

It remains a mystery (sort of) why the media value of the Internet can be so obvious and so invisible at the same time. Ad Age reports that delivering the right ad to people when they indicate they want it has been a “boon for Google.” Yes, but this is not the invention of West Coast technologists, nor the impetus of 400 ad networks. Google’s success is tied to rules cavemen (whose primitive work got us on the right track with media as much as with the uses of fire and raw materials, we might say) understood: the right message in the right place reaches people predisposed to what you are trying to sell them. Ug.

Most ad networks evolved differently. Most pay very little regard to placement if they are paying regard to anything more than price. Those that invoke any targeting do so almost exclusively on the basis of person, not place; and not time, either, though some would argue that “in-market” means “right time” as much as “right person.” That may be the best thinking of West Coast technologists. Hunters and gatherers, however, think differently. They fish where the fish are.

Ug. 

Google has successfully leveraged all of  the Internet’s power beginning with place, which has been the thing most responsible for the boon. One person has learned that lesson well-enough: Tim Armstrong. Hence the new and improved, comes-in-a-resealable-package, add-water-and-stir,  instant content formula of Aol. Will it work? Not like Google. It’s instant after the fact, which is an instant too late. But, the heart is in the right place: content. Place. Audience pre-disposition here (an operative word) and now (another operative word). They are both on sale, online  (you’re probably already buying them, thanks to Google) and available – as Ad Age says – in “millions of tight niches.”

The millions of niches part, of course, has been the distraction. New media is a vast place and the buying industry has been ill-equipped to navigate it.  The digital market, therefore, has a very clear stake in the future of ad agency compensation (see above). If the industry wants the Internet to emerge as a boon for itself and not just Google it must figure out how to reward planners and buyers for the work that goes into harvesting the power that Google has harvested – deliberately and transparently, not passively or non-transparently through third-parties, or by trying to find escape routes around the media nexus of person, place and time.

Maybe it’s not so simple that even a caveman could do it today. But it’s still pretty simple.

CBS Interactive steps out of the ad network buffet line

December 14, 2009 § Leave a comment

CBS Interactive will reportedly announce that it is dispensing with most ad networks today according to a report in Ad Age. Excellent. If they stick with it, it means another blow struck in favor of selling value online.

The formula used with such success by many ad networks over the last few years has been selling discounted space on the top 100 – 200 web sites, like those owned by CBS Interactive. The sales pretense has been rescuing excess inventory and leveraging data, which is balderdash. For buyers, it’s been about price. The importance of where the advertising runs has existed alongside the importance of who the audience reaches, unabated, and networks have provided plentiful access to those preferred places. If it were otherwise, the tension between networks and large publishers would not exist as, indeed, it does not exist in the mid- and long-tail of the market where ad networks and representative firms succeed in creating value, not discounting it.

For help understanding the not-so-hidden forces at work it will be interesting to see what happens with CBS Interactive’s replacement strategy, which is its internal ad platform, Madison (a very cool name). If the same discounted opportunities continue to exist through Madison then CBS Interactive will start fighting with itself instead of third-party networks. In the final analysis it doesn’t matter who sells it; it matters only what it sells for. So they should proceed carefully, because internal fights are far more destructive to a host than fights with third-parties.

We should expect a surging fourth quarter to embolden others besides CBS Interactive to see the glass half full again. Then what? Whither all the business plans that have been counting on ad network models to pig out at the buffet?

Advertising Needs a Back-bone

February 18, 2009 § Leave a comment

Companies that accepted TARP bail-out money need to get a back-bone, says the editorial in Advertising Age this week, and dig-in against pressure from government minders who question the value of using those funds to pay for advertising and other marketing practices. Those companies also have to get their priorities right and stop flying around on fancy corporate jets, taking fancy retreats and paying excessive incentive bonuses, say the editors. Advertising is a necessary and important component of growing businesses and creating shareholder value and must continue.

How do we turn this editorial into a clarion call to the marketing industry as a whole? Get a back-bone. I’ve heard the John Wanamaker expression — you know, the one about which half of his advertising budget is getting wasted — so many times since the Internet appeared on the marketing scene to “solve” that problem that I’m convinced it’s become destructive. In the same issue of Ad Age this week, on the front page, is the report that Anheuser-Busch InBev is looking to trim $1.5 billion in agencies fees – roughly 25% – 30%. I referenced this issue in my blog post yesterday (“What would J. Walter Thompson do?”): we’re eating our young. Over the years, through quiet acquiescence as an industry we have enabled those who would destroy us.

In the final paragraph of its editorial Ad Age exhorts businesses to take the fight to Washington. “Even if it means marching up to Capital Hill, you must make the case for good businesses practices. And if you need some help doing so, know we’ll be right there with you.”

Ad Age is right. Unfortunately, it’s hard to think how the value of our business – that is, advertising – can prevail in Washington if it has failed to prevail in the corner offices of our own companies. I have this awful image of a Congressional hearing on the matter:

Congressman: “Well, what about that so-called Internet advertising? Is it true that you can count the number of times a person points at – or, what is it? – clicks on an advertisement?”

CEO: “Yes, Congressman.”

Congressman: “There you go then. Problem solved. All this other advertising voodoo we can take out back and –  you know – shoot it. Who’s for lunch?”

FTC Urges Marketers to Self-regulate Consumer Privacy – or Else.

February 13, 2009 § Leave a comment

I still wake-up nights haunted by a telephone call we got at home sometime early last year. It was evening, around 7:00 p.m., and my wife and I were cooking dinner and having a glass of wine. The telephone rings. I answer. “Hello, George,” the caller said boldly (my first name is George, but I never use it; so when someone addresses me as George, I know we’re not on a first name basis), “This is Mitt Romney and I am calling to ask for your support next week in the primary election. This year, the stakes have…” Who knows what came later. I hung-up. I turned to my wife and explained. “How did he do that?” she asked. “Your name and everything?” Good question, especially since we had long since registered on the “Do Not Call” list with the Commonwealth of Massachusetts.

So, interesting that the FTC released guidelines yesterday that gave marketers room to self-regulate around the issue of consumer privacy, dangling the “R” word in plain sight to make it clear that if the industry can’t do something to stop all the calls and letters Government keeps getting from angry consumer advocates, then they will. I would like to register my desire to see the calls stop from Government (and candidates).

Most of the brouhaha about privacy points to online behavioral targeting. But honestly, I have never been bothered by an online marketer at home during dinner using my first name.  Most of us recognize that the grocery store down the street has more information about us, personally, than virtually any online behavior marketer, so – with apologies to Butch Cassidy –  what’s the matter with those guys? It is impossible for me to wrest control of my wife’s merchant cards from her hands. I would appreciate some help at the point-of-purchase heading-off future mailings and offers. It would save a ton in the “George” household.

One of the FTC commissioners, Pamela Jones Harbour, gets it, and according to the report on the subject in Ad Age this morning, she acknowledged and expressed concern that the FTC’s report was too narrowly focused on online advertising.

Burst offers behavior targeting as a standard component of its advertising sales product lines and is rigorous about policing the privacy policies governing it and any other remarketing features we use relying on cookie data, all of which is non-personally identifiable. Behavior targeting is a great tool for extending the reach of relevant campaigns against a target audience. Our business relies as much on contextual advertising (e.g. Travel advertising on Travel web sites), which the FTC said does not pose a problem and is not covered by the principals in their report. Good to know in case they invoke the “R “word down the road, but as a consumer I would be more interested to know what the FTC can do about keeping Mitt Romney from calling me at home.

I Love You, Man.

February 11, 2009 § Leave a comment

As reported by both Advertising Age and The Wall Street Journal today, Bob Lachky, Chief Creative Officer of Anheuser-Busch is leaving the company after 20 years. Mr. Lachky was the person behind many celebrated Anheuser-Busch campaigns, including “Wassup?!“, the Budweiser Frogs and the “I love you, Man” commercials.


Mr. Lachky’s commercials, created in partnership with long-time agency DDB, won numerous awards and wove themselves into our culture. Before the term “social network” was popularized by the Internet, his commercials were creating social networks around water coolers – social networks that then got together after work for a beer.

Watching these commercials again on You Tube this afternoon all my thoughts were about the risks that Bob Lachky took with the Anheuser-Busch brand messages. I watched “Wassup?!” and thought, “How did he get to ‘yes’ with that?” The frog’s? I can clearly remember my reaction the first time I saw the frogs commercial; it was, “Huh?” They grew on me. Looking at them today, I love them. But, it is interesting to note that both Ad Age and The Journal essentially summarized the career and success Mr. Lachky had at Anheuser-Busch with a quote from him at the end, as follows: “I was fired more times than Billy Martin.”

You see, in the creative business risk is everything. Great creative does not emerge risk free. That is why Ad Age and The Wall Street Journal summarized Bob Lachky’s career as they did, in my estimation, because intuitively it is known that what made Mr. Lachky great were the risks he took, risks that nearly cost him his job as many times as Billy Martin (who was fired five times).

Now, let’s talk about media as the “new creative,” a popular term today. How much media risk takes place in the world today? Executional risk such as video and widgets and layer ads doesn’t count. That’s creative. Not media. I’m talking about planning risk: TV v. Internet. Satellite Radio v. Broadcast. Branded Content v. the Long tail. Actions attributable to less than 1% of an audience v. Impressions attributable to 99% of an audience. What’s our gut about media value? What bets have we made on it? Who’s bet their job on a media instinct?

Advertising.com, before it disappeared inside Platform A, used to talk about “risk free” advertising. No surprise – and very much to the point being made here – they got big. But what has it done for us online all this talk about risk free and results? Reading Randall Rothenberg’s exceptional piece on Interactive Creativity (featured on this blog yesterday), the answer is not much. As the new creative, media is simply failing  to inspire those who would take their cue from it in order to develop messages that move people and brands online.

We have to kiss some frogs here. We have to take some chances and say “I love you, Man.”

Really. I love you, Man.

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