The Changing Face of Digital Media & Marketing : efficiency, media, agency

What To Do About the Meltdown in Media

Scott Berg — Mon, 12 Jan 2009 01:44:00 GMT

Apocalypse is one of those words that I remember from bible study as a kid. The word itself just sounds scary – even if I didn’t know what it meant it would freak me out. But it seems everyday we’re hearing about media companies making massive layoffs, shutting down publications, cutting costs and the like. Even the agencies are cutting staff because of client budget cuts and the need for leaner expenses on the income statement.

So as a client what should you do? Here are a couple of thoughts:

Lock in Low Prices. Just like the stock market – you buy low and sell high. So why not negotiate hard with media suppliers for lower CPM’s and lock those prices in for 2-4 years and with the ability to further reduce if thing get worse. When the economy does turn-around, you’ll get a higher ROI aka make more money.
Renegotiate. Why not renegotiate your contracts with agencies and suppliers? Think about it… if your media/marketing spend has gone you’re paying more fixed and variable costs as a % of media/marketing spend. So renegotiate the costs and contracts in order to keep those “non working dollars” as low as possible (or at least even). While you’re at it, why don’t you put in some clauses that put some of the supplier/agencies income at risk? If your company or campaigns do well… the agency does well.
Step up the SEO. Get your webmaster to increase the SEO terms on your web site so you’re not paying for terms that your own website should drive.
Fish Where the Fish Are. Dig deeper into your database and determine who those best customers are and start using a Recency, Frequency, Monetary Value model to determine who is likely to response. To learn more about RFM I recommend you read the book “Libey and Pickering on RFM and Beyond” by Don Libey and Christopher Pickering.
Get Closer to Your Customer. If you haven’t been talking to your customers – get to it and start. If you’re not talking to them, odds are your competitor is.
Listen, Listen, Listen. Do I need to say more? If your customers are telling you they want x from your product… give them x. Stop listening to 30 person focus groups and start listening to the entire web, including blogs, social media, etc. There’s a number of software available… many free some that you have to invest in. Check out a product from a company called Aubice.
Look Deep into Your Organization for Recommendations. I’ve often found the best ideas from the deepest parts of the company. So start having lunch and coffee with a new group of folks and start asking them for their ideas.
Get Even Leaner! You’ve probably had to cut budgets, perhaps even some headcount… but start eliminating or reducing costs. Couple of areas to think about: Ad Serving Costs, Agency/Supplier Costs (see points 1 & 2), get rid employees who are deadwood and replace them with many of the outstanding professionals looking for employment, conferences (do you really need to go?), stop traveling all over kingdom come and use technology and the good old phone.
Shift Channels. If your customers costs are getting out of hand – for instance they’re calling your call center a ton…. Perhaps you should start to direct them to the web where they can self serve themselves.
Lead. If you’re not stepping up to make the tough decisions… start. If you’re planning on “keeping under the radar” until the current economic environment turns, then I’d recommend you refresh your resume.

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