Here we are, in the first quarter of 2007, at a point in time when virtually anybody — and I do mean anybody — can buy and sell advertising. This isn’t a new phenomenon. If you don’t believe that’s true, just check your email right now. Or visit Google. Log into Twitter. Or read a blog. And look at who is buying and selling advertising.
This notion — the decentralization of the advertising and media sales functions — scares the daylights out of many people in media. It makes them fear for their clients, for their share of the market, and for their jobs. It makes them wonder about the evolution and extinction of media in general. It may even predicate a quick glance to the future and possible escape routes.
I think I speak for many of my colleagues, and many of the readers of this commentary, when I say this energizes us.
I can’t imagine a better time to be here, doing what we do. This is not a motivational speech. It’s a reality check.
Media sales is akin to a big rollicking party. It’s easy to see the similarities between media sales and a big party. No, not the wild and crazy atmosphere, although, truth be told, those who really enjoy selling media (as they would a party) are usually the ones who outperform their peers.
Think of the last time you were at a big party. Strip out all the formalities. Imagine the big party, in a dark room, with dim lighting, smoke fills the air, there’s lots of noise. You can hear multiple conversations, see lots of silhouettes, and you know there’s plenty going on. But you can’t make out much.
This is advertising. At least, this is the advertiser’s perspective. They have been at the party long enough and aren’t really having much fun. Their senses are bombarded. They can hear and see as much as they’d like, but nothing with any clarity. In a word, it’s chaos. This is why today’s adveriser is frustrated. They have more options than ever, with less performance to show for it.
Every time a new form of adveritising media evolves, the experts from the ivory tower (as well as the number-crunchers in the back office) hail this as the “dawn of a new age in advertising”, with new efficiencies for advertisers to reap. These same experts then begin digging a grave for “traditional media” right then and there.
Actually, they couldn’t be more wrong. With more selection has come more inefficiency. This is a statement of fact, founded in the numbers.
Just check out the average cost-per-lead for some of advertising’s largest categories. Over the past five years alone, most major retail categories at the local level (think durable goods and services like automotive, furniture, home contracting, carpet, financial, elective healthcare, and so on) have experienced dramatic increases in their advertising inefficiencies. Cost-per-lead, cost-per-up, cost-per-new-customer … whatever measure you use, all of them are up over the past five years. Some as much as 50% or more.
Home contractors, who once enjoyed cost-per-leads in the sub-$200 range, are now forking out an average of $241 per lead. Auto dealers once paid $200 per unit sold in their tier-3 (auto dealership) spending. That figure is now well in the rear-view mirror, especially on domestic lots.
Hey, now that media is so much more measurable, shouldn’t we be measuring the things that really matter? That’s like being a consumer in the market for a new car and forgetting to “measure” price and MPG.
Back to the party. Now imagine for a moment, a newcomer to the party walks over to the giant switch on the wall and pushes it to the “ON” position. The switch controls the floodlights in the room. Light pours into every dark corner and under every chair and table at the party.
We have this thing called the internet, the new kid on the block (thank you, Al Gore), and it is the self-proclaimed most measurable medium of all time. Don’t get me wrong. The internet is great for business and advertising. Those that embrace it correctly have seen the results. It has a place in the media mix which grows stronger every year. Most importantly, for those of us in media sales, the internet spotlight has cast a beam of accountability and measurability upon the media landscape that is inescapable.
Thank goodness for that. I’ll ask again … Is there any better time to be selling what we sell?
In other words, the party is over. The chapperones have arrived. And many are running for cover. When accountability and measurability are paramount, when numbers mean more than promise, when the true measure of advertising is front-and-center … that is, advertising as a profit center … does it not make our job clearer? Does it not energize us all? Does it not make a clear statement about the selection of media for destination businesses in our markets?
It’s really the best thing that could’ve happened. Whatever measures are trumpeted from ivory towers or server-dominated back-offices — ROI, Cost-Per-Click, Cost-per-action, etc — the primary criteria for media planning will always be a declining cost of customer acquisition coupled with real market share growth. Period. Good advertising is a profit center, not an expense line, not an experiment, nor is it an exercise of measuring the minutiae.
If I own a destination business in any market, and I want to buy more share for less, the decision has never been clearer. This is not a generality or a statement of hyperbole, it is the numerical reality of comparitive media today. Run the numbers, see who wins. And please, encourage your clients and prospects to do the same. Actually, be so bold as to challenge them.
Simplicity has triumphed over chaos. Can we bring this simplicity to our clients and prospects? If so, they win, and so do we.
They are ready to leave the party and would like to hear from us soon.
Dave Eckstein does not play shortstop and was never the MVP of the World Series. He is a partner in the firm ESA & Company, based in Red Bank, New Jersey.