The Changing Face of Digital Media & Marketing : Ad Age

“Metrics Madness” – You’re Nuts!

Scott Berg — Wed, 27 May 2009 18:18:00 GMT

I was catching up on my reading last night and happened to read Al Ries’s Column “Metric Madness: Running biz by the numbers is just not logical” in the May 4, 2009 issue of AdAge.

With all due respect, Mr. Ries makes an argument that marketing is to focused on math, ROI, etc. I’ll let you review the column yourself, but Mr. Ries ends his article with the following… “Mathematics is logical. Marketing is not. That’s why marketing is so difficult to learn.”

Well Mr. Ries… I’ve got a different take on the situation and frankly don’t agree with a number of points. Let me explain.

The Language of Business of Numbers: Guess what, I didn’t make up this rule, but any good manager, CEO or marketing person should understand this.

The purpose of companies is to make money. Yep, it’s as simple as that. That point is especially important when you have investors or shareholders….for some reason they actually want a company to be profitable – hey I know its “crazy talk” but they want to make money off of their investment.

Authenticity and Character: You reference in your article about having the accountants come in and “shift some of the numbers around” to meet your purposes and that “one of our biggest complaints about management is its tendency to run things by the numbers.

I grant you that the recent financial crisis doesn’t show the best side of the financial sector. But that is an issue of Authenticity and Character. The people who made those decisions were absolutely wrong… but it’s more than “shifting numbers” it’s a question of character.

Also, perhaps one of the reasons the media and advertising business has been dealing with the “rise of procurement” inside of companies is because of the very situation you mentioned agencies are doing – “shifting the numbers.”

Your point that “Mathematics is logical. Marketing is not.”

I could not disagree with you more. The greatest connection engine on the planet “the internet” allows marketers to understand not only what’s working, but what’s not. It helps us determine whether creative is performing… what creative we should run. Marketing is logical and disagree that it’s tough to learn. It’s not. But we make it difficult as marketers and agencies because we don’t take the extra step to understand what the numbers are telling us. Numbers aren’t like some bad voodoo spell. They are a guidebook into the thoughts, hearts and passions of our customers. Metrics are a good thing… it’s allowed us to stop wasteful marketing investments and increase our market share by focusing our efforts.

I was Media Director at HP for 5 years – managing a huge amount of media spend across the world. Every single media rep, agency, etc. told me the same story. Our media (or agency) can deliver sales – my questions back was prove it? Put your money wear your mouth is… if your agency or media property can deliver sales then guess what?... go on 100% commission of each product your campaign or media vehicle sells.

Walk in the Clients Shoes:

You think you’ve got a tough job. Try sitting in the client chair for a week. Where we have to show results, where you’re held to sales, profit and market share numbers, where we have to stand in front of management and explain why something didn’t work. Thus, we need math and metrics to help us make informed decisions on the allocation of our financial and labor resources. If one agency is performing better… guess what? they’ll probably get more business. If a campaign is performing better than another one….we’ll probably make a tough decision to shut it down.

Scott

A Solution for Magazine and Newspaper Companies

Scott Berg — Mon, 23 Mar 2009 14:39:00 GMT

MagCloud is HP’s newest solution for the print world… essentially as Michael Mendenhall our CMO as said it is the “democratization of print.” I’ve attached the video from Michael’s recent speech at the IAB convention.

If any print publishers are interested in this very unique way of printing… just let me know and I’ll make sure to get you some additional info on MagCloud. If you want to look at something immediately just check out our website.

2009 Digital Media Trends – Update & Scorecard

Scott Berg — Mon, 02 Mar 2009 17:28:00 GMT

Late last year I posted my 2009 Digital Media Trends. I thought it would be a good idea to see where they stand as well as add in a few other trends I’m starting to see emerge.

It’s the Economy Stupid...

More newspapers and print publications will go out of business -- I hate to actually say this one is dead on. All you have to read are the following articles on the demise of newspapers across the US.

San Francisco Chronicle Might Shut Down

Denver Rocky Mountain News Shuts Down

Derby Daily Reporter Shutting Down

Taconic Group Newspapers Shut Down

Accuracy: Dead On

Weaker online sites will see advertising revenue sales fall – the economy is not only pushing pure “print” revenue down, but newspapers online revenue as well as “pure play” digital advertising is taking a hit as budgets get tight.

Search Revenue Falling

Online Video Ad Revenue Decreasing

Digital Shops Begin to Feel Effects of the Economy

Accuracy: Dead On

Sponsorships will take a beating….

RBS Sports Sponsorships

Sports Sponsorships Take a Beating

Accuracy: Dead On

Social Websites will see a decrease in ad revenue –

Accuracy: Too early to tell

Community development will be a priority – marketers will engage differently with the end customer by developing stronger communities and/or engaging with current standing communities.

Accuracy: Too early to tell

Rise of the “Un-Badged Employee” – most people use reviews before making a product or service purchase… but in an economic downturn, that input revs up to make sure the purchase is what the consumer wants. Check out this article.

Accuracy: Dead on

SEO will become more important – with decreased budgets, SEM will also feel the budget pinch, so advertisers will focus more attention on SEO to decrease costs and increase search page placement.

US Search Spending Falters

Accuracy: Too early to tell

Again, mobile will struggle – tough to tell right now… but keep your eyes/ears tuned in the coming months.

Mobile Marketing Watch Newsletter

Accuracy: Too early to tell

Google will continue to gain share – ok this is a “duh” prediction, I admit it. But with Yahoo in turmoil, the recent layoffs, Microsoft not making headway on revenue in the online space… Google will extend it’s lead – either by sure will might and force or through acquisition.

Google’s Share Extends

Accuracy: Dead On

Online Upfronts get more momentum –

Accuracy: Too early to tell (but if I was a betting man) – I’d say I’m way off on this one. Prices are falling as demand craters… who wants to get locked in on long term inventory when the short term rates continue to fall.

Digital television platform (aka Canoe Ventures) will get serious attention – Certainly the new administration pushing back the digital transition date didn’t help, but frankly with the advertising world in a tail spin right now, Canoe still holds promise of better targeting….although I think most advertisers wished it were live and ready to go today.

Accuracy: Too early to tell

CRM and database marketing will make a comeback – well I’m not seeing it yet… although my email box is deluged daily with a great deal more email than ever, but I can’t attribute that to better CRM or just desperation on behalf of marketers. Plus, with the economy in the dumper, big tech projects are harder to sell unless they can guarantee a result.

Accuracy: Seems I was a bit too optimistic

Media inventory costs will decline – regardless of whether you’re buying upfront or not. This one is definitely on track… with the networks taking a bath on inventory, newspapers having difficulty selling pages prices are falling. What’s concerning is we’re only in March…what will this look like in July?

Accuracy: Dead On

Scott

Omnicom Media Group -- HP's New Media Agency

Scott Berg — Mon, 23 Feb 2009 14:55:00 GMT

After an exhaustive review and detailed analysis by many within HP, we announced Friday, that we awarded our media strategy, planning and buying business to Omnicom Media Group.

A large group of individuals inside HP, representing the business groups, procurement and corporate marketing all worked together during this process. A couple of notes:

First, thank you to all of the media agencies which participated in the review. All of them were truly impressive which made the task of choosing one very challenging.

Second, congratulations to Omnicom who showed all of us the strength of their network, the depth of their capabilities and their hunger to win and service the business.

And finally, a sincere thanks to the entire team and management at Zenith Optimedia who have been HP’s media agency for well over 12 years. Zenith has been a fantastic partner and much of our media success and awards are due to ZO’s ability to drive HP into new media territory.

Scott

Michael Mendenhall, CMO – Hewlett Packard and his Masters of Marketing Discussion

Scott Berg — Wed, 22 Oct 2008 21:34:00 GMT

Our CMO, Michael Mendenhall made a presentation at last weeks ANA’s Masters of Marketing Conference. And as I listened to the video and read the article on AdAge, what struck me was everything he’s talking about is related directly to change and innovation. Not just a one time fix or shift, but the ongoing transformation of business models, agencies, skill sets, etc. and how that impacts our brand and the way we interact and work with our customers.

They say the only constant in the world is change… Michael’s insights certainly bring that into focus.

Scott

CMO’s Annoyed by Agencies and Networks

Scott Berg — Wed, 22 Oct 2008 17:09:00 GMT

Over the past couple of days I’ve received a number of phone calls and emails regarding presentations made by Gary Elliott, VP-Corporate Marketing and Michael Mendenhall, our CMO.

I’d like to add a few thoughts in 2 separate posts… first let’s talk about the article in AdAge regarding the ANA panel that Gary Elliott sat on.

Gary Elliott was quoted in the article in a couple of areas:

“The overall message, I would have to say, with HP, is that I don't think any of these [agency] relationships are satisfactory enough that we would continue them without having some degree of experimentation," said Gary Elliott, VP-corporate marketing at Hewlett-Packard. "We've been experimenting with different agency relationships where we're looking at agency partners and vendors in ways that connect them loosely with each other. We're looking at models where we have everything with one of our key partners." What's lacking in agency relationships now is speed to market, Mr. Elliott said. "I don't think with our current system we're achieving that. ... We're going to pilot a number of different relationships where we go direct with media companies." My thoughts: 1. Business Model – as I’ve blogged about before the media, marketing & advertising business model is changing. It’s not all about advertising and media anymore. It’s about developing projects that have mutual benefit between two companies. I point to the deal HP just did with MySpace as a great example of this. Agencies are still focused on creating ads and placing the media. And for some companies, that’s what they want them to do. But for larger advertisers we must have more. Every single agency presentation I’ve sat through always shows how the “campaigns” they’ve worked on generated revenue. And all of us in marketing say we generate revenue for the bottom line through branding and direct…the problem is there is more to branding and direct than ads and media. A company the size of HP with distinct businesses and different needs for each business requires us to think creatively and continue to explore the best way to structure our agencies to meet the needs of each unique business. 2. Technology -- And what about the way we transact business… we still use an antiquated system to do the upfronts each year…but search terms are being purchased via an auction model every single day through Google and Yahoo! We must learn how to utilize new forms of technology to drive and increase our speed to market. We no longer market 8 hours a day… our customers are doing business/choosing brands/making purchasing decision 24 hours a day. And they’re utilizing all different forms of technology to do it – from mobile, interactive TV, the internet, search, etc. And believe me, I’ve experienced the pain when a media network incorrectly distributes online creative or radio/tv spots in the wrong place or within inappropriate content. These “mistakes” impact our brand in the consumer’s eye which ultimately makes our job of selling product harder.

Relationships – the world is built on relationships. Look no further than linkedin.com, Facebook.com, or MySpace.com to understand how important relationships are to folks. It’s my job to ensure that HP is given an opportunity to look at unique ideas from media partners before any other competitor and/or advertiser in the marketplace gets a chance. And that’s done by having strong, solid relationships with the major media players in the marketplace.

Hey, you might not have liked what the Advertisers said on the panel… but remember this…it’s them and other CMO and marketing professionals inside companies who have to justify budgets and drive revenue to executive management and ultimately the company shareholder. Try sitting in that chair for while and I guarantee you’re view of the world will change. Scott

“TV Networks Should Replace Agencies” – Are You Nuts!

Scott Berg — Tue, 09 Sep 2008 17:20:00 GMT

Sorry it’s been a few weeks since my last post… my family and I took some time to visit the great state of Maine…. specifically Bar Harbor, what a great place I highly recommend it for a relaxing and fun filled time.

That being said, I just viewed the latest 3-Minute Ad Age post from Brian Reich the author of “Media Rules” who believes the future of advertising is the elimination of ad agencies between clients and television stations. He claims ad agencies get in the way and between the client and the television stations and somehow muddy the water in the messaging.

Now in all fairness, I haven’t had the opportunity to read Mr. Reich’s book so he might have some additional points which I’m not privy to, however, I do have some initial thoughts.

What Business Are TV Stations In? Easy answer for me – to sell time to advertisers in order to cover costs of programming, salaries, utility, rent, etc. etc. What’s left over is called profit and that usually goes to shareholders. Yes, TV stations do unique programming things to keep the users engaged with the content or the commercials, so they do have a creative element.

What Business Are Ad Agencies In? This ones a bit more complicated but I’ll list the biggies…

Branding
Communications
Strategy
Program Development
Audience and Research Management
Media Buying/Planning and Idea Creation
Integration
Traffic Cop
Logistics
Events/Tradeshows
Forward Thinking
Oh, and that little thing called Creative

Who Should Do What? I have news for Mr. Reich…. I meet with media folks all the time… guess what every single presentation says “we’re #1” – we beat our competition across the board and we know our audience. And guess what…. each one of them is right, but it depends on the lens you look through.

Agencies are a critical part of the entire marketing eco-system… I dare say that no TV network could produce the level of creative spots that Goodby Silverstein & Partners has for HP.

I do agree with Mr. Reich that the customer is the most important part of the equation, but it’s the client who needs to manage the component parts to meet the goals of the company/campaign/initiative/communication. Do we do it perfectly, heck no…but we’re trying like you wouldn’t believe.

To get another view of the topic, I’d suggest picking up a copy of “Kellogg on Advertising & Media” from Bobby Calder….I’ve spoken about it before, it’s a compilation of a number of business and academics who describe thoughts about the future.

I’ll leave you with this thought…. My Mom’s a pure Saint (I know everyone says it, but she really is) and I love her more than she’ll ever know. She gave birth to 2 sons some 40 odd years ago, but that doesn’t make her qualified to take the place of a doctor and start delivering baby’s on the side. I think we still need the ad agencies to help “birth” our strategy and marketing communications.

Love your thoughts on this….

Scott