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Friday, February 22, 2013

The Robots are Coming to Media Planning!

Technology has always frightened people but long term it makes for a better life. Most economists would argue that every invention has caused some people to lose their jobs. While each generation benefits from mechanization, the displaced workers due to technological advances are often permanently out of luck. This phenomenon is likely to hit agency media departments in the next few years.

About a dozen years ago as the Internet took hold as an advertising medium and we began to slip the term digital into our workday vocabulary, many of us media types would talk about the exciting future before us. Without exception, we all discussed how, with so many new platforms to evaluate, we would need far more people working in media planning if we were to do an adequate job for our clients. As a result, we all jawboned with our CEO’s about how plans would need to be made to accommodate the new employees both in terms of agency payroll and increased client fees. Except for a few idiots who thought that the Internet was a fad (I never worked with one!), management bought in to the idea but never figured out how to pay for it in many cases. So, they faked it at many mid-sized and smaller shops and trotted out a smart young planner and positioned him or her as their digital guru. They were smart kids who dropped the right buzzwords (think Facebook four years ago) and things progressed fairly well in many cases.

In the last 18 months, the pendulum has swung the other way. Many agency chiefs and honest media executives are now saying that rapid improvements in technology have taken much of the guesswork out of digital placement. While few are saying that “robots”, algorithms, and artificial intelligence can totally replace humans, some are wondering if they should simply “let Google do it.” Here is a quick story from a marketer who has never worked at an agency and has no axe to grind either way--“Some years back, we were using ad networks. I seemed pleased with the results. After a year, we changed agencies and a bright young lady told me that she could hand pick sites that would do better for us. I let her test and results were twice that of the ad network. Two years later, our company was sold and I had to adjust to a new corporate culture. My new boss said the agency had to go and his guys would take over. I told him of the wondrous work our agency media planner had done for us. He smiled and said that Google would do it all. I was really annoyed but wanted to save my job and fit in to the new environment. A few months later, I was stunned. Google outperformed my hot-shot planner by a multiple of 3-5 times and we saved money, too. That was a few years back and I know that ad network buys are safer and more effective than they used to be and that planners have gotten better. Yet, the spread was so huge in performance that I became a believer in letting the robot handle it.”

No one knows where TV is going but it is obvious that the existing model is heading for extinction. Do you need a team of men and women whom you proudly refer to in private as your “bust your chops negotiators.” Looking at possibilities, it would seem highly unlikely. Personally, and I definitely do not know when, we will move to some type of paid format for content beyond the current cable and satellite. Content providers be they networks, stations, cable companies, Netflix, and likely many new entries will give you a mutually agreeable number of impressions against your target demo in a specific timeframe and geography. You will never overachieve nor will you underachieve. No estimates and no post buy analyses and no make goods or under-delivery weight. You will always get what you originally contracted. So, you will not need a huge “broadcast” staff. Who knows how things will develop in what we now call TV but it is clear the personnel required to monitor the new reality has to be lessened substantially.

Bouncing these ideas against many old pros and selected members of the Media Realism national panel, I received some great responses. The first came from a man whom I have known longer than anyone else in the media world. He is still active in the business and is one of the smartest people I know--

  “I don't know about Google and its site selection.  We spend a lot of time 'optimizing' our online buys, which means that the kids constantly look at the previous week's or even day's results and switch websites based on the results.  I've always felt that an advertiser can get a better rate on any media if he negotiates and buys it himself (the advertiser can say 'no advertising' if his price isn't met, whereas the agency needs the client to advertise to survive).  I don't think most advertisers want to spend the time and energy in building an in-house staff to even use Google”.

Reading this, it reminds me a bit of when computers began to take on humans playing chess in the late 1960’s. Initially, the grandmasters could always beat the computer. All of us laughed and said that humans have more imagination than a computer program and could see many moves ahead while the computer was limited to looking at the dozens of iterations right in front of them. Then, over time and with new software, the upgraded programs would hold the world’s best players to standstill draws. Finally, the computers broke through and started to win games. Is the same thing happening in online media? A new and improved algorithm can now match our best media planners and someday, perhaps soon, they will best them consistently.

When I posed the whole robot issue to an agency media chief whom I have known for a dozen years, he gave this thoughtful response:

“Well, this certainly is a topic that is on each agency partner's mind.  The media department as we know it is certainly in for a lot of change. And, yes there will be fewer people, with different acquired talents in them. Technology and easier access to data will help streamline the buying process. The big online giants like Google, Adobe and Facebook are developing ad buying and selling platforms that are going to have a huge impact on the way media is planned, bought and placed.”

“While we do use Google platforms, usually in combination with selected publishers for online, we still do have some buyer/negotiators on staff. However, we know that the makeup of the group is going to change. Agencies and media department heads have to be planning for the future. And the future is evolving very rapidly. The media department that you and I cut our teeth on is really a thing of the past. It will be hard for a lot of agencies to make the shifts that are needed to keep up with the modern day consumer, but they will have to make a concerted effort or else it will be time to open that beach bar in the tropics sooner versus later”.

An agency CEO whom I have never met in person but sends me lively comments on many posts weighed in as follows: “I totally agree that we won’t need broadcast buyers much longer but I can’t put a timeframe on it. Lately, we hire people over 50. I suppose it is illegal but few people know of reverse age discrimination. :)  I like old pros who can really do the job and I don’t have to lie to them about a 20 year career here. The smart ones know that the broadcast media game is just about over.”

A multi-faceted sales executive who is an astute observer of ad agencies says, “The cycle of agency evolution used to change modestly from one period to the next, but agree we're fast careening toward the end of the Great American Ad Agency as we knew it.  Or maybe it's just returning full circle”.

“Agree that as methods of measuring engagement against desired audience become universal and automatable, we may eventually eliminate the need for a traditional queen-bee buyer.  But it's not that shops will be savaged, so much as forced to adapt to this change.  The silver lining is that "creative" will always be the most important part of advertising because you can't automate creativity.  Creativity in message, promotion and content will return to center stage, though the traditional buyer may indeed be relegated to data entry.  Which kind of turns the clock back 50 years to the age of Mad Men”.

“Too many agencies are preservationists instead of visionaries, (Kinda like how legislators too often focus on creating more $5/hour jobs, instead of creating house-buying careers.), and it's time for all focus to be on the coming noise.  So with apologies to Curtiss Mayfield... "People get ready, there's a train a comin'.  You don't need no baggage, just get on board".”

A shrewd consultant who has dealt with every sized agency and every department within gave a passioned response concluding with the line I used above-- “let Google do it.”

What can media people do to remain relevant? I have two main ideas:

1) Relationships--if you know me well, this one will surprise you. Over the years, I did not like nor hire those who were technically incompetent or lazy but always finished interviews with “I have relationships.” Having a BFF as the person that you were negotiating with never struck me as the best way to get the most for your clients. In our brave new world, relationships may be truly important. If you work closely with providers you can hear about opportunities that most have not. Your robot is not going to tell you. You, the media planner, can give creative some ideas about what can and cannot be done. Sponsorships and promotions can be customized and sometimes be breakthrough if you know where the bodies are buried. Relationships will no longer mean getting last minute tickets for management or clients; it will be helping to create something meaningful for brands using new technology.
2) Become a data junkie. Warren Buffett became one of the wealthiest men in world by reading and absorbing a few annual reports each day for the last 60 years. He breaks them down without calculator and associates are stunned at the facts and figures he has on command about many companies going back years. His partner in crime, Charlie Munger, says, “you would be amazed at how much Warren reads.” Well, the media planner of the future needs to be as geeky about the media environment as Buffett has been about financial analysis. They need to interpret raw data, separate the wheat from the chaff, and then move quickly. Art and science need to meet.  Robots are only as good as the codes that they follow. The human element has a place here but the media person has to be a real pro who can sift through piles of data and find the gems.

To stress one more time, I do not want to wrap a definite timeframe around all of this. And while many are thinking about this issue, few agency executives are discussing it in public. Finally, a special thank you to the 15 professionals who spoke to me about this issue. Some were so candid that I could not quote them directly.

As a final note, one younger panel member wrote to me and said that if his media job was eliminated he could always get a job flipping burgers. I e-mailed him back the bad news. A robot has been developed that can made hundreds of perfectly cooked burgers in a fairly short timeframe. And, as my young friend noted, “robots don’t want raises, need health insurance or take breaks.” The times certainly are changing.

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

Friday, February 15, 2013

Is Netflix the New HBO?

If you have scanned media columns the last few weeks, you probably have noticed titles to articles similar or perhaps identical to the headline of this post. Netflix premiered a series entitled “House of Cards” on February 1st. The 13 episodes of the political drama starring Kevin Spacey and Robin Wright were released all at once. Several columnists described how they holed up for the weekend and watch all the episodes in one long gulp.  I was not that enthralled but I really did enjoy it. “House of Cards” altered my viewing habits and, it turns out, will continue to do so for a few more weeks.

Each morning, I make a cup of coffee and then turn on the TV and watch the business news. I toggle back and forth between CNBC and Bloomberg News and sometimes squeeze in some time on “Morning Joe” On MSNBC. Over the last few weeks, that has been it for TV viewing. I have been going to my laptop and watching “House of Cards.” When I finished all the episodes,I recalled, that back in 1990 I had seen portions of a show of the same name on the BBC via Masterpiece Theatre. So I went on Netflix, found it, and now I am working my way through that multi-part series and comparing it to the made for Netflix entry.

My point here is that except for some financial advertising when I am not channel hopping, I am virtually cut off from traditional TV messaging for the next few weeks (of course, I watched the Super Bowl and my adopted hometown Ravens along with the entire commercial load that night). But, in essence, I will be without almost all advertiser supported TV for at least a month. My youngest panel member e-mailed me and said “Really, who cares that an old guy like you is not seeing commercials”.  I laughed when I read it but I think that there are any number of advertisers who would like to reach an active and reasonably liquid prospect such as I.

And, more importantly, there may be several hundred thousand others like me! All of this ties in to a theme that I have been pushing the last few years in Media Realism. Every time something new comes along such as Hulu or Netflix originals or growing DVR penetration, it all impacts the power of advertiser supported TV and cable. If properties like Hulu and Netflix start producing more quality content and Amazon keeps buying up rights to other video, it has to make reaching light and affluent viewers even more difficult than it is today.

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

Friday, February 8, 2013

Is Media Planning Getting Too Superficial?

If you have worked in any aspect of the advertising business for a while, you are almost always subjected to self appointed critics who say how superficial advertising is as well as the people who work in it--namely you. Some of the comments can be true but generally they are not.

Lately, however, I see a lot more superficiality in an area that I hold dear. That area is media planning. There is no question that the media puzzle is getting more complicated each year. Yet, certain simple disciplines seem to be falling by the wayside.

A good example is explaining to a neophyte the difference between media buying and media planning. For years, if giving a half day or full day “media boot camp” seminar to new clients, I would always tie in both disciplines to the laws of economics. Media buying was part art but was also a captive of the economic law of supply and demand. So pricing of TV, radio, magazines and other traditional media were largely subject to an auction market. When the economy was strong or certain programming or radio stations were highly desirable to advertisers, the price of the inventory would rise. In a recession where pressure for inventory fell or sometimes collapsed, the prices would fall and often quite quickly.

When it came to media planning, the economic law of diminishing returns took center stage. For example, if your projection said that TV had reached 85% of the target prospects (likely overstated as I have often written) you would have found that adding 20% more dollars might yield a projection of only a few more incremental percentage points in potential delivery. So, when the diminishing returns on that incremental 20% expenditure became extreme, you knew that it was time to move remaining dollars to other media options.

Recently, I have written to young planners about this issue. Their response has not  been that I am a harmless old fossil but rather that either my time honored approach was too sophisticated for their clients or why should one bother to do so much work? One told me that he just guesses at it. “What if a client asks you how the mix was determined,” I asked. He responded, “No one has so far and, if one does, I can always make something up.”

Clearly, something is wrong, very wrong. How do they integrate social media, mobile or any number of digital platforms in to the mix? Here they talk about the accountability of new media which is very good and then say that they can actually “steal” money from clients promotional dollars and re-invest it in to a variety of paid media platforms. My question remains how do they determine how much to put in each area? You get some windy answers but, boiling it down, the bottom line seems to be to try a bunch of things and see what sticks.

Things are changing fast and people at small and mid-sized shops are at a huge disadvantage to those working at the giants as they cannot tap into the enormous resource and experience pools that the mega-agencies have. Yet, media staffers at smaller shops still have a big responsibility. They are spending other people’s money and need to spend it well if their agencies campaigns and clients are to succeed. There seems to be too much sloppy work out there when a bit more effort could pay their clients rich dividends.

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