Seems like a situation with easy logic: advertisers should spend their marketing dollars with the medium that offers the most audience engagement, right? Well, then someone tell me why Newspapers get 20% of the marketing dollars when they only deliver 8% of time spent between the media and their audience?
BusinessInsider.com shared 2008 research from JP Morgan via their Chart of the Day post:
The Internet tops the chart in disparity of attention vs. advertising investment by delivering 38% of time spent with the medium but receiving a mere 8% of total advertising dollars.
The other big missed opportunity is Radio, only receiving 9% share of advertising budgets, but delivering 19% of audience engagement -- a virtual mirror image of Newspaper!
Certainly something to talk to your clients and prospects about as you help them plan their strategies for 2010.
BusinessInsider.com notes the numbers are from 2008, so the ad spend on newspapers is lower today-- but go on to say "it's not low enough, considering how little we spend with them."
Marketers Seek Accountability Do more with less isn’t just radio’s operating standard. A new survey shows two-thirds of marketers are being told by their companies to drive more sales with the same or lower budget -- and three-quarters say their marketing budget has shrunk this year. Facing that challenge, accountability has taken on a much greater significance.
Anheuser-Bush has changed it's "free-wheeling, let’s-give-it-a-try attitude" for a more "scrutinized and calculated" results-based approach.
From the article... "A-B has always been good at listening to agencies with good ideas. But now you’ve got to do more back-end research,” Litwicki said. “The way they make decisions is a lot more mathematical. It used to be enough to do brand building and create an image that would ultimately drive sales. Now they also want to see the component that will actually incentivize the consumer to pick up the product. When you come in with those solutions, they are very receptive."
Measurable results are beginning to matter more and more to advertisers, and they are cutting spending with their agencies to find marketing resources elsewhere who can provide those results. As the article above states, when you have an idea that is based on delivering actual results (rather than just another branding campaign) companies are ready to listen.
The expectation of SOME advertising clients is that they are entitled to free radio spots, van stops, on-location broadcasts, web banners, email blasts, etc. that all seem to fall under the mysterious category of "Value Add" -- simply because they bought an advertising schedule. This expectation is utterly ridiculous. I don't know how media companies (especially Radio) ever let themselves get roped into this one-sided deal. What happened to the "win-win" deal?
Clients like this are either asking the media outlet to outright LIE to them about their "real" price (by hiding the costs of all the freebies deep within the traditional spot costs), or they really believe that media companies can afford this sort of "buy and bribe" practice.
My opinion has always been that this sort of "value add" would NEVER be permitted in any other business. Can you imagine walking into McDonald's and ordering a "Value-Add Meal?" That's where you buy the fries and drink and they give you the burger (and some McDonaldland Cookies) for free.
What about going to the movie theater and buying two tickets to see a show, and then expecting to receive free popcorn and Snowcaps from the refreshment stand?
Buying a new car and getting a boat for free?
Why are media companies (hello, Radio!) the only ones expected to do these sorts of things? The next time you have a client hitting you up for a bribe... er... I mean "value add" send them a link to the video below. Perhaps they gain a little insight into just how outlandish these expectations really are.
You want to offer your clients some REAL value-add? The added value I bring to MY clients is that of creativity, experience, marketing savvy, and personal dedication to help them grow their business. If they're really interested in elevating the success of their company -- I want truly to help them solve their toughest marketing challenges. If, on the other hand, they just want the cheapest rates and to have the station van out on a Saturday handing out balloons and hotdogs (or worse yet -- will only buy into an advertising campaign to get seats at the next game or concert) they really aren't seriously interested in their marketing success so much as getting all the "free stuff" they can from the media company. If their business can be earned by those sorts of bribes, they really aren't a client that I'd be interested in working with. Let them pick someone else's pocket.
I'm a creative marketing professional that works tirelessly for my clients, and I expect a fair rate for my services. How about you?
Great, great, GREAT article about ESPN's view of the value of their web content versus the commoditization of internet advertising.
ESPN Turns Off Ad Nets Excerpts from the article: Top Web publishers are planning a revolt. Even as more prominent sites experiment with selling remnant inventory through online ad networks, and in some cases ad exchanges, ESPN.com is saying thanks, but no thanks.
ESPN's decision crystallizes a philosophical debate in the online ad sales industry that has intensified since the Interactive Advertising Bureau's annual meeting last month when during a keynote address, Martha Stewart Living Omnimedia media president Wenda Harris Millard gave her now famous warning against selling Web inventory like "pork bellies."
Two sides have formed—those who want to protect traditional, direct selling of premium content brands and the math-loving crowd that favors automation and data. The math lovers make the traditional sellers nervous."There is a genuine concern about commoditization of brand inventory by some of the networks," said Millard in an interview.
...ESPN, see networks as profiting on their brand investments and their user data, while also threatening their own marketer relationships. Many just think using networks devalues the power of content.
Worldwide internet ad spending will jump to $44.6 billion in 2008, from about $36 billion, increasing its share of the market to 9.4% from 8.1%, according to ZenithOptimedia.
“We predict internet advertising to pass three milestones over the next three years,” according to ZenithOptimedia’s forecast, released December 3rd. “We expect it to overtake radio advertising in 2008; to attain a double-digit share of global advertising in 2009; and to overtake magazine advertising in 2010, with 11.5% of total ad spend.”
Advertising Now International In addition to noting the growing importance of new media, ZenithOptimedia also notes a trends toward international ad spends.
“North America used to be half of advertising expenditures,” said Tim Jones, CEO of ZenithOptimedia Americas. “We’re seeing its share drop a full point every year at this point. That’s being made up for everywhere east of Eastern Europe. Look at the multinationals and where their investments are focused: the Russias, Chinas and Indias of the world. That’s true of our business and media vendor companies as well.”
Between now and 2010, according to the forecast, the 10 fastest-growing ad markets will be Kazakhstan in the pole position followed by Belarus, Serbia, Egypt, Russia, Moldova, Indonesia, the United Arab Emirates, Ukraine and what the agency refers to as “Pan Arab.”
Pearlfinders.com's recent survey of ad agency clients provides some not-so surprising (at least to anyone who is not an ad agency) results about what clients want from their agencies...
85% of clients don't feel agencies prepare enough. Clients want agencies to be far more proactive in providing research on their product or category.
75% of clients said they might or would definitely "follow-up" were an agency to pitch a solution relating to one of their current business challenges.
And perhaps most importantly, 92% said that they might respond favorably to switching to a new agency if an agency had produced some research or insights into their category.
These results have the need for implementing CSS strategies written all over them. "Providing proactive research" sounds like a VBR to me. "Pitching solutions relating to current business challenges" is the focused presentation that results from a solid CNA. And "switching to a new agency" -- that's earning new business from being a Customer Focused Sales Pro.
