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.
Read a great article in the latest MarketingProfs "Get To The Point" newsletter on Marketing Analytics. They recap a post from the Email Experience Blog on measuring the success of email marketing campaigns. This specifically addresses email, but the principle applies to ALL marketing efforts and the importance of pre-establishing metrics for success.
The blog post says data gathered on email marketing campaigns might not be as useful as you think. "Real danger lurks in not measuring the right factors or not measuring accurately. You could suffer lost revenue. You might not know which messages are working. And your sales team won't know what to focus on."
There are just SO many different things you can measure in marketing (especially online marketing), that it's extremely difficult to agree upon industry benchmarks in order to make effective comparisons. People are focusing on impressions or clicks or only those clicks that lead to a single sale.
The purpose of any marketing is to trigger an ACTION. Actions could include:
Forward to a friend
Signing up for a mailing list or additional informaiton
Visit to a physical store location
Attend an event
Buy a product
It's vital to have a clear view of your client's specific goal for the campaign's marketing message and for the results on which the campaign will be judged. In order to meet those goals, tools must be in effect to capture the correct data by which effectiveness can be judged. As they say in the article... "If you can't measure it, you can't improve it."
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?
Meet Shawn Morton. He's the Senior Consultant for Social Media at Nationwide Insurance.
Nationwide Insurance hired a full-time guy to oversee their social media. That's huuuuge. Shawn's job (according to his linkedin.com profile) is "establishing the enterprise social media strategy and advocating social media within the organization." (Watch your back Shawn. I want that job.)
Shawn recently held a Twitter 101 seminar for his Nationwide associates and was kind enough to post his slides on a (what else?) social website dedicated to sharing presentations.
Slide 12 should be of special interest to any of you with 'boring old insurance accounts who cut all their advertising budgets this year...' It's a screen filled with some logos of corporate entities who are using Twitter. Among them: State Farm Insurance, Allstate, and of course Nationwide.
For any of you who've wondered why I send links to companies and articles and examples of businesses who are embracing new media as an option to traditional advertising -- THIS is the reason. Because, although they've reduced their spending on traditional media advertising, they are embracing and investing time AND MONEY into developing their social media efforts.
Become an expert in social media and apply the concepts of effective marketing principles to this new way of communicating to your audience and YOU will be the expert to whom they turn when they decide to reallocate advertising dollars to social media dollars. YOU can be the social media expert who gets rewarded for helping these companies strike up a dialogue with the audience that already loves YOUR brand and communicates through YOUR traditional media and social media tools.
Good article from AdWeek covering some of the reasons why Zappo's didn't need traditional advertising to create a company with $1 Billion (with a "B") dollars a year in sales.
Some insight from Zappos CEO Tony Hsieh... "One of our core values is being open and honest. It ends up creating more trust with our customers... It's the opposite of what most businesses do." "One disgruntled or happy employee can write something on a blog and have that read by millions. It's the same thing with a customer. Our belief is a company's culture and brand are two sides of the same coin. You can't control every touch point like you could 50 years ago." "About 75 percent of our orders are from repeat customers. We've grown from zero to $1 billion in gross sales in 9.5 years. The No. 1 driver has been from repeat customers and word of mouth. It lets us to spend less on customer acquisition." "There will be less reliance on advertising for a long-term, enduring brand. Word of mouth is so effective right now." "If you go to twitter.zappos.com, you'll see all the employee Tweets. We have lots of stories of employees meeting up with each other outside of work because of Twitter. With customers we find it's good for building a more personal, emotional connection with them."
"With most Web sites, it's hard to find any contact information. We put our 1-800 number at the top of every Web page because we want to talk to our customers. It's our best branding opportunity. We have 5-10 minutes of our customer's attention where we can let our true personality shine and develop that personal connection."
The scary part? Zappos just started a consulting group specifically created to teach other companies their method of growing business using their (proven!) non-traditional means.
The takeaway? It's more important than ever to be perceived as a marketing and promotions expert/consultant/resource rather than a plain old media salesperson.
Facebook is free. Twitter is free. Domain names are less than $10 each. Site hosting can be had for $5/month. YouTube hosts videos for free and a myriad of sites offer podcasting and blogging options at no cost. (And we all know traditional media costs are falling like a rock.)
Your value comes from having a sound strategy to grow profits and build business for your client.
Everyone has access to the same tools. It's what you do with them that counts.
Nice coverage in WSJ about challenges facing "The Dead Tree Society" as they seek to increase their share of local Web dollars.
Though the article focuses on Newspapers, one need only review the Borrell Associates chart to the left in order to realize Radio has the great potential for growth in Online Advertising.
Some of the article highlights...
Scrambling Cannibals
In an effort to make up for their plunging print-ad revenues, newspaper companies have been scrambling to train their sales teams in the intricacies of selling online ads to local marketers. But in many cases they aren't selling a lot of ads and at least some of the new ads they are managing to sell are cannibalizing their print-ad revenues, industry analysts say. A common scenario is that a trusty local print advertiser -- a car dealership, say -- that used to spend $20,000 a year on advertising might now spend a quarter of that with the newspaper online and nothing in the print product. Thus, the newspaper company is now selling more digital ads, but the new sale is taking away from its bottom line.
Losing Their Edge
Whatever edge Newspaper may have had in capturing web revenue appears to have evaporated. Newspapers now control only 27.4% of the local online ad market, down from a 35.9% share in 2006, according to Borrell.
Cracks and Gaps
There are several reasons why newspapers so far have failed to crack this market.
Online ads are far less expensive than print ads and thus offer lower commissions, making it difficult to get salespeople to focus on selling the digital products
Newspaper is typically selling banner ads which don't meet the needs of local businesses
Most local online revenue growth comes from small and medium-size local businesses -- a market segment that Newspapers have typically ignored
