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Wednesday, April 27, 2011

Social Media and John Wanamaker

Back in October, I posted an extensive series on mid-sized ad agencies under the heading “Mid-Sized Malaise.” Dozens of people help me put the report together by giving me valuable interviews and insights into what was happening in their troubled space.

In recent weeks, I have gone back to a few of the agency CEO’s who participated in the reports and asked for an update on Social Media, a hot topic today.

Two people’s comments stand out and I post these comments with their permission. One agency chief said the following, “last fall as we were preparing plans for 2011, I was in a client meeting and they kept pressing me to do more than the modest tests that we had done up to then with social media. My young staffers wanted to cut back conventional media (Spot TV and radio) sharply and go with a big Facebook presence and other Social Media approaches. I felt railroaded by the client and my team. Actually, to be honest, I felt like the king in the Hans Christian Andersen tale of “The Emperor’s New Clothes.” (To those of you whose memories are fading or had peculiarly warped childhoods, the story goes like this—Some swindlers posing as weavers got in front of an insecure emperor who cared mostly about his personal appearance. They promised a magnificent set of clothes for him but cautioned him that to a fool or one unfit for his office, the clothes would be invisible. The king’s lackeys not wanting to appear to be fools either said nothing as the swindlers pretended to weave the garments. On the day of an important procession, the “weavers” mimed putting the garments on the emperor and then left town. The king marched out in the procession and people marveled at the new clothes until a four-year-old boy shouted, “look, the emperor is not wearing clothes.”)

My friend did not want to appear foolish or not up to the job so he caved in on the Social Media demands of his client and his staff. A few months’ later sales had dipped and now the client does not want to hear the term Social Media.

Another agency head wrote that he had some modest success with early work in the Social Media arena. Then, one of his staffers had a cousin visit his Middle American town and introduced him to the CEO. The cousin was a digital media expert at a large media service. He agreed to spend a few hours the next day reviewing what the agency was doing.

The digital maven made some suggestions as to new platforms to try, gave some direction on rates without being indiscreet, and suggested that certain areas be killed. My friend's digital media planner was very defensive but had no choice but to go along with it. Now, several months later, response is up 30% according to their admittedly subjective yardsticks and costs are down 20%. The client is delighted and they will continue to ratchet up Internet advertising with a growing dollop of Social Media each year. The young agency planner is now sent to every industry conference on emerging media and speaks with the big city expert each month.

All this leads me back to the great John Wanamaker. He was an early retailing giant with a department store carrying his name in Philadelphia. A brilliant merchant he is said to have invented the price tag and was the first to use full page newspapers ads effectively. He also had a full time copywriter on staff in the 1870’s. Somewhere in that decade, he made the now famous statement—“Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.”

Many of us, if we are honest, know that his 135 year old statement still has some truth in it. Even if you simply use conventional media, what is the interaction of TV and magazine or radio and outdoor? They may work together well but how much of each contributes to results and in what proportion? I wrestle with that issue almost daily and have for the last 37 years.

The same has to be true of Internet advertising and Social Media at the moment. Things are happening quickly and new options pop up weekly. Yes, the measurement metrics today are better than in Wanamaker’s day or even 25 years ago. But there is still a lot of wasted energy and client money.

My one friend made a mistake by diving in to Social Media and savaging his conventional budget in the process. Social Media does not always work overnight. As everyone involved with it will tell you, you are not talking to or at your customers anymore. If done right, you are having a dialogue with them and creating a relationship. We all know that relationships take time and effort.

The agency chief who shifted gears with help from the digital media director took the right tact. He knows that even with the improvements, his execution is not without wasted message units. But, with a disciplined approach he can keep one foot in conventional and the other in some combination of Internet marketing/Social Media. Over time, he and his team will get better at it and measurement of Internet and Social Media results will get sharper.

An old friend and keen observer of the marketplace sees the coming transition this way: “We need to revise the old TV and Direct Mail (DM) formula to one of TV and Social Media that morphs into Digital DM.” Well put.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

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