Posts about Ad

Wanna buy an ad on my nose?

Hearst’s Shop Etc. magazine is turning its cover into an ad. That’s a line crossed, but many others have been tickling that line for sometime now. The New York Times is putting ads on the front of its business section and not ruling out ads on its cover. Sometime ago, I noted that AM New York was turning its front page into an ad, using the distribution power they’d built to make more money — which it could do because it is free and didn’t need to use the front page to sell copies. Hearst is likewise sending its adcover to subscribers who’ve already bought the thing. These are desperate moves by publishers dying to eke out more bucks and they are victories for advertisers who always want to get closer to the publishers’ brands. But, of course, the more that advertisers take over those brands, the less those brands stand for.

: Oh, and when you see hand-wringing about foolish marketers trying to buy posts on blogs, come back to this: They’re buying the most precious editorial and brand space from the big guys.

Click this

Outsell says click fraud accounts for 14 percent of per-per-click ads — others say more — costing marketers $800 million a year. The FT story is here; the CNET story is here.

One thing Google could do to at least stem the tide would be to wipe out spam blogs. It’s cynical of them to say they’re concerned about click fraud when splog fraud is operating right in their own backyard.

And I’ll say that this is one more reason why we need to get our act together in the networked/distributed/citizens media world and create higher value ad networks built on trust. See my Ad Age call for an open-source ad network here.

Open-source open-source

Ad Age critic and On the Media cohost Bob Garfield is writing a book about how the open-source world changes marketing and, so, he’s writing it openly on a new blog.

The idea is to put it together, chapter by chapter, with ideas, criticism and corrections coming from all of you out in the Bobosphere. It’s no wiki; I’m the sole author. And it will be owned lock, stock and hypertext by my employer, Crain Communications. But who cares? It’s being produced in full public view for public view.

Go see his chapter outline and get to work.

Advertisers: You’re next

I’m seeing a lot of avoidance of the elephant that isn’t quite in the room yet but is banging at the door:

Advertising is the next big industry to suffer huge upheaval thanks to the internet. They may think they’re already there, but they’re not, not by a long shot. In fact, it is the ad industry that is holding up the progress of other industries — newspapers, TV, radio, cable — that are already getting tromped on by that elephant. Advertisers can get away with moving slowly — for now — because they are the ones with the money. Funny how that works. But this won’t last for long, as one client and then one agency discovers that the lazy, traditional, one-stop-shopping of TV upfront and the big-media lunch circuit is inefficient, wasteful, untargeted, irrelevant, and ultimately damned irritating to your customers. Once that tipping point comes, dollars will start flowing to the upstarts online — not as many dollars concentrated in a few places as before, but spread out far and wide. As Bob Garfield pointed out in Ad Age and on On the Media, the upstarts aren’t quite ready for it, but once they see money sitting on the table, they’ll get ready fast (see my Ad Age piece on an open-source ad infrastructure for the distributed world). The day of reckoning nears.

There happen to be lots of links to stories that are avoiding that elephant from the last few days. Start with Richard Sikos’ New York Times piece about waiting for money to come online:

But one could make a case that the amount of focus on — and hype about — Internet activities at media companies has some kind of inverse relationship to the amount of near-term revenue they represent for these companies.

We’re still in the early innings, but given how much the Internet has already transformed the media and society, it’s surprising how little money traditional media companies make directly from it.

Don’t take my word for it. Flip through the financial statements of some of the biggest names to see what they say about their Web sales and profits. . . .

The less-cheerful view of the traditional media companies is that all their online efforts will not translate directly into more revenue or fatter profits. Thanks to aggregators, file sharers, pirates and other disruptors, more value will leak away or be stolen than will be gained by these companies.

This is not to say that online will never be an important — if not central — financial contributor to media businesses of all kinds. For some companies, though, it could serve increasingly as a promotional or marketing outlet, or as a cut-rate but widely distributed version of what consumers can buy in conventional formats.

It’s a good piece, but I’ll nudge on a few points.

First: Of course, there’s no saying that these new activities will lead to “more revenue or fatter profits.” They won’t. Period. That’s because there is now no scarcity of competitors for those dollars and ways to spend them more efficiently in more places. The amount spent on advertising likely won’t change, but the revenue will be spread thin.

Now this usually makes the proprietors and executives at those legacy recipients of ad dollars moan and gnash their dentures about where they are going to get the money to support what they do now. As Jimmy Wales once famously said to a famous news executive: That’s not my problem. The auto industry didn’t start worrying about how to make as much money as horse breeders and hay farms made; they started something new and the new industry grew to what the market will bear. That will be the same in media. There’s no saying that the old players will be as big as they were; the biggest growth in media, I’ll content, will come in the line called “others.”

That inevitability is being delayed, again, because the ad agencies and advertisers continue to play safe — or at least they think it’s safe — by giving more money to the old players, even if they are shrinking, and relying on the old means of measurement, even though there are now new and better things to measure.

So I’d ask friend Siklos to do the exact same story from the other end of the pipe. Follow the money. Look at why the ad agencies and clients are slow to change. Investigate their growing inefficiency. Expose their chickenheartenedness and make them scared (eventually, you did get fired for buying IBM and you will get fired for buying upfront TV). Look into how the media buying structure of most agencies is not built for this new world. Compare the cost of buying targeted attention in big, old media vs. in new media. Calculate the cost of irrelevance in advertising. Predict what the flow of money will look like in one, five, and 10 years. Somebody is losing $40,000-a-week marketshare to Rocketboom today; where did that money come from and where will the next $40k go next? I can’t wait.

: Next see Rob Hof covering SuperNova for his Business Week blog, noting how two giants of mass-market advertising — GM and P&G — are starting to sing in a different key:

Two of the biggest marketers in the world showed up at the Supernova conference in San Francisco today and sounded more like Web 2.0 zealots than brand giants. Michael Wiley, director of new media, GM Communications, at General Motors, who’s responsible for GM blogs, sounded the most radical: “The existing advertising paradigm sucks,” he said. “It’s woefully inefficient. We give consumers virtually no information.”

He and colleague Curt Hecht, executive VP and chief digital officer at GM, have been meeting with social networking and media companies in the area the last couple of days, and Wiley sounds like a fan: “We see the new social media space as a place we can become engaged,” he said.

Likewise, Stan Joosten, Procter & Gamble’s innovation manager for holistic customer communication (how’s that for a title?), said P&G needs to experiment more with social media–carefully. “We have to stay out of some places” where people don’t want to see ads, he noted. But he says P&G wants to engage with customers wherever they are online.

I’ll be eager to see them put their money — big money — where their mouths are. And remember: It’s not just about finding new big media to take your big bucks: MySpace v. NBC. It’s about entirely new ways to place advertising and entirely new ways to think of what advertising should do.

The greatest challenge for advertising today is relevance.

: Now see Peter Preston in Sunday’s Observer with more reaction to Sir Martin Ice Age Sorrell’s blowing against the wind of the future.

Here’s the imminent end of everything, a mist of yellow doomfulness that suddenly affects the conventional media world, and newspaper journalism in particular. But keeping your balance also means keeping calm – for the wisdom of Sorrell wanders around many mansions. Five years ago he told a Yale audience that ‘the world is being Americanised’. But that was before he saw India. And, three weeks ago, he said that new media would ‘almost certainly’ not supplant existing ones.

Now, of course, gurus are allowed to change their minds or adjust their perceptions. And Sorrell, CEO of an umbrella holding company with 70 separate operators, 65,000 people and 950 offices in 92 companies, is allowed to correct course whenever he likes. Nevertheless, there’s an important countervailing thought here.

For aren’t J Walter Thompson and Ogilvy and Mather, historic names from the WPP collection, legacy businesses, too? And what precisely are advertising agencies and their great media-buying adjuncts for any longer? The legacy newspaper distribution business, under OFT pressure, is currently being asked whether driving diesel-fuming lorries along motorways in the middle of the night is the best way of getting millions of surplus copies to recycling dumps 24 hours later. You could ask much the same question about advertising agencies.

: Now see Liz Hoggard, also in the Observer, reporting from the adfest at Cannes, where the star of the West Wing, the creator of Sex and the City, and the queen of HuffingtonPost came to talk about what’s compelling in media today.

What both shows also had in spades was authenticity. . .

And JWT want to learn from that. Because the days of the 30-second TV spot are numbered. . . .

This means a new bar has been set for advertising, says Davis. Not only must their output be fresher, cleverer, edgier, but ads must become an art form in their own right, or at least move closer to the entertainment space. ‘The challenge to us is to stop interrupting what people are interested in and be what people are interested in,’ he says – or ‘make coitus interruptus the real intercourse,’ as Huffington puts it bluntly. That means goodbye to internet pop-ups, which drive the consumer mad, and more investment in ‘360-degree’ communication strategies – emails, text messages, flyers, chatrooms and podcasts which the consumer chooses to view. Customers are now co-authors of a brand’s ‘story’. . . .

Consumers will happily spend time with branded communications but only on their own terms – and only if the content is engaging. It’s a brutal, Darwinian market out there, as veteran ad man Maurice Saatchi observed in his keynote speech, ‘The Strange Death of Modern Advertising’, given at Cannes last week. Only strong brands will survive, he insists. ‘The intellectual rigour of advertising – paring and editing down to a brutally simple thought – has never been more in demand.’

‘It used to be the company that owned the brand; now the consumer owns the brand,’ adds [Guardian Unlimited head of commercial development, Adam] Freeman. ‘They can either kill it or love it. Word of mouth is the most powerful marketing channel.’ . . .

The big message from Cannes is that advertising must respect the intelligence of its audience – if it does not prompt consumers to think smart, it will be instantly dismissed. Advertisers want your brain as well as your wallet.

And there’s the other great for advertising today: respect. That means you can’t talk to us like dummies anymore. you have to talk to us human-to-human.

: Now hear lines from Saatchi at Cannes on the state of the ad industry:

“At the tender age of 50 it was struck down in its prime,” he says. “Mourners at its grave side are now embarrassed to admit they knew the deceased.” . . .

He quotes from the Gospel of St John – “In the beginning was the word and the word was God.”

“No copywriter could put it better. The word is the brands’ protector, guide and saviour. The word comes first, for a brand, before all actions in all media at all times. The word is the saviour because in each category in global business it is only possible for one brand to own one word. Take great care before you pick your word because it will be the god of your brand.”

He cites an Interbrand study that strong brands need few words. And that top brands need just one word. The question is how do you find that word, afterall there are 750,000 words in English.

Research by M&C Saatchi showed that 80% of marketing directors agree strongest brands can be described in one word. But only 10% of the marketing directors could describe their brands in one word.

Nowadays only brutally simply ideas get through. Reducing the complex to the simple requires the painful necessity of thought. The ruthless paring down of paragraph to sentence and sentence to word.

“It is said that Charles Dickens was paid by the word. Times change. Now marketing directors’ pay should be inversely proportional to the number of words in their strategy statemment.”

Less is more. . . .

The same applies to the world’s great revolutions. Marxist socialism.

In a paragraph read the communist manifesto. In a sentence read the lines on Karl Marx’s tomb. In a word – “justice”. . . .

: LATER: I just watched Sorrell’s speech at Cannes. It’s positively wacky. The man has nothing to say of the slightest relevance or value. A classic case of fiddling-while-the-biz-burns.

: THIS JUST IN: The real tipping point will be the decline of TV’s upfront. Ad Age says tomorrow:

For a decade the marketing world has been wondering when the digital revolution would finally cut into networks’ upfront payday. The smart money says this is shaping up to be the year, and TV’s take could be down as much as $600 million.

Although sales chiefs are still dickering, agency executives and analysts forecast the market to wind up anywhere between $8.5 billion and $9 billion. Either way, that represents a correction from last year’s $9.1 billion haul, itself down from the $9.3 billion raked in for the 2004-2005 season.

Paper-thin thinking

Stuart Elliott, the Times ad columnist, jumps into the rhetorical trap of the newspaper writer stretching for a lead. He takes one event — one press release, in this case — and tries to make a trend out of it or argue that another trend is disproved so as to justify writing a whole column about it. Elliott takes the launch of a USA Weekend spinoff on health and says that print is not dead. Well, no one — not even this online triumphalist — has said that print is dead. Print is changing and in many cases, its audience, advertising, and margins are shrinking. Elliott does not even bother to note that plenty of other new Sunday newspaper supplements have been announced to great fanfare, only to fizzle: Parade’s teen magazine died and Time Inc.’s Life looks like it gets about $2 in ad revenue. If this health supplement succeeds, it will be because of regulatory requirements to print pages of side effects about advertised prescription medicines. So it may well succeed. And, as always, other magazines will be born and die every year. But Elliott stretches one dot on a graph into a trendline, ignoring all those other pesky dots there. Take it from an old columnist: It’s an old columnist’s trick.

The adman and the ice age

I was amazed at the retrograde thinking from WPP chief Martin Sorrell in a speech reported by the FT. But Richard Edelman, head of Edelman PR, was even more gobsmacked. He blogged:

Now Sir Martin Sorrell is seeking to turn back time to a fairyland that he and other advertising executives knew so well, when media was only old media, when top down marketing prospered, and when control of the message was paramount. Sorrell’s speech… is absolutely stunning in its recidivism.

Among Sorrell’s gems as reported by the FT:

“How do you deal with socialistic anarchists?” he asked, referring to Craigslist, the popular, free classified advertising site that has been threatening revenues at US city newspapers.

“The internet is the most socialistic force you’ve ever seen,” he added….

Well, actually, I think the internet is potentially the most capitalistic force yet invented, empowering the individual and the small business to control their fates and their value.

It seems that Sorrell is defining capitalism as buying up ever more companies, since that’s what he does. But that, I say, is not the essence of the free economy. The individualistic anarchy — the free marketplace — of the internet is much purer.

The internet is not a socialist collective. That’s not to say that we do not end up acting in collective ways. The internet enables societies to form as well, even when they don’t know it — that is, when the data about our activities shows, after the fact, that great minds think alike. Still, the wired are not pinkos.

Sorrell next whines about media giving away content for free:

“They have decided – ‘if I don’t eat my children, somebody else will’,” … adding that he disapproved of giving away content for free. “You should charge for it if the consumer values the content,” he said.

Well, ain’t that ironic? Here’s an ad guy staring incredible new advertising opportunities and availabilities in the face and he can’t see that this is the greatest gift his industry could ever have imagined: the end of scarcity, the introduction of endless competition for ad dollars, lower prices meeting greater effectiveness. Wake up, mate!

Next, Sorrell complains that companies are losing talent because young people don’t want to devote themselves to slow-moving heirarchies. How shall I put this, Sir: Well, duh?

And then, as Edelman says, Sorrell gets to his real bottom line. Says the FT:

Sir Martin said that while his agencies and Google were co-existing, the search giant could make life difficult for the advertising industry. “We are Google’s third-largest customer, but on the other hand they are talking about an electronic media buying and planning exchange,” he said referring to a service where advertisers can buy and plan their own media campaigns without going through agencies.

Says Edelman:

The dirty little secret for ad agencies (and hence their holding company owners) is that the real money these days is made in media planning and buying, a model jeopardized by Google and by the dispersion of media which disrupts advertising price points.

Here is the reality. The peer-to-peer revolution has happened. The genie is not going back into the bottle. Paul Saffo, technology futurist,who addressed Edelman’s management meeting on Tuesday morning in Washington, said,

“We are shifting from information to media. Media is information when it is embedded into our lives. The mass media order that came in the 50s with the advent of television is shifting to personal media. Mass media brought the world to us on a one way street. Now in the era of personal media, you must answer back, you must be engaged. There can be no bystanders in this revolution….” . . . .

So there you have it, Sir Martin’s fervent wish that the world returns to a walled garden of proprietary content, a well manicured lawn and beautifully tended flowers where marketers reach consumers through saturation advertising or direct mail or other one way push tactics versus the Saffo/Jarvis/Gillmor view of a chaotic world of continuous discussion, learning from the crowd and remixed media where companies must cede control to gain credibility. To me the choice is as clear as Berlin before the fall of the wall and the Berlin of today.

[Full disclosure: I was brought in to run a panel at the Edelman management meeting in Washington yesterday.]

: FRIDAY UPDATE: The FT sums up the reaction to old Sir Martin’s daydreaming.

Classified

Topix adds local classifieds. Although free, that requires much local traffic to work. Since the company is controlled by newspaper investors, it’ll be interesting to watch the strategy. But I think the lashup of classified aggregator Oodle with the Sun is more intriguing. The cycle of distribution and aggregation will make this world go ’round.

One for the good guys

Hugh MacLeod wins an award for his wine selling.