A little over a year ago, the sky fell. And now for the silver lining.
When advertisers began trimming their ad budgets back in late 2008 and early 2009, an interesting thing happened — especially for those advertisers who had investments in several different media. The long and short of it is this: Many advertisers made the wrong cut.
Inefficient media won. Here’s how …
The timing of the advertiser’s decision to cut didn’t quite coincide with their yellow pages renewal. And since they couldn’t just cancel their current YP advertising, they had to look elsewhere. Not as if you can rip all those pages out of all those yellow books, many of which were already littering our landfills. They had to wait that one out.
The newspaper didn’t offer them any consolation either — in most markets, the daily paper comes with an annual contract and those trademark steep cancellation policies. So they had to find other areas to cut, and waited that one out too.
As for their direct mail campaigns, they may have already printed out those next 2-3 (or more) pieces, paid for and/or managed the “list”, and decided “We may as well do the next few mail drops since we’ve already paid for the printing and the list.”
Electronic media, like television and local internet, were disproportionately cut out of many budgets because of their “flexibility.” Flexibility in terms of media placement, timing, and perceived contractual obligations. Most advertisers wanted to keep more of this in their mix, but weren’t afforded the luxury of doing the right thing.
It’s too bad, because that’s exactly what could’ve helped stop the bleeding. We have plenty of evidence of that over the past three decades, not to mention the past 12-18 months.
So, heading into 2010, there was a disproportionate glut of dying media at the local level. The local media portfolio was weighted down very heavily with the likes of newspaper, yellow pages, and direct mail. Talk about a recipe for disaster. The mass exodus from these media was delayed by — of all things — the worst recession this country has seen during our lifetimes.
Don’t get me wrong. Many advertisers still exited from these media. But given the relative strength of these print media (as compared to today’s electronic and digital media, which are far superior in reaching and converting customers on any budget), it became a cruel double-edged sword. Not only were there fewer customers in the market to be found, the inefficiencies of the overall media mix did nothing of note to even find those customers.
That didn’t help the downward spiral one bit, did it?
Fast forward to today. Local businesses have long since realized their media mix is out of whack, and many have started to correct this. Some may call it “reallocation”, but that’s too gentle a word. It’s more like cleaning house of dying media. And in 2010, we will see an acceleration of the exodus from print media like newspaper, direct mail and yellow pages.
So, where is the money going?
Here’s where there is some urgency in your next move. The growth of online media (e.g. paid search, behavior targeting) is being fueled by the failure of print media. About 2/3 of paid search budgets came directly from the three dying media described in this article. And more will continue.
Advertisers see something like Google Adwords as “cheap and easy.” Their actual experience, however is much different. Something as innocuous and “cheap” as a $2 CPC (cost-per-click) on Google looks like a bargain, right? WRONG!
As “cheap and easy” as a pay-per-click (PPC) campaign may appear on the surface, the reality is that paid search fails on many levels for the local advertiser. Unfortunately, they’re not being informed of this until it’s too late.
Here’s the most important part: Anybody selling electronic or digital media is no longer selling against the inefficiencies of print. That horse has left the barn. These budgets are already leaning heavily toward digital — specifically search marketing.
We have a job to do. Those who are well-versed in some straight forward logic will be able to help those exiting print media to make the right moves. And by “right”, we mean an advertising plan that actually delivers more new customers for less money.
Don’t hesitate. Those renewals are always right around the corner.
Dave Eckstein is a partner in the firm ESA & Company, based in Red Bank, New Jersey. Dave specializes in highly profitable market share growth for local business and gets a kick out of demonstrating a declining cost of customer acquisition for his clients.