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Saturday, December 20, 2014

It's All So Fragile

In recent weeks, I have had conversations and exchanged a ton of e-mails with two agency owners. One runs a small shop while the other’s agency straddles the space between small and mid-sized. Both gentlemen have been around for a long time and have thrived through several economic downturns. All I will say to identify them is that they operate businesses far from New York City.

The fellow with the smaller shop is gregarious and openly describes himself as a “shameless self promoter.” He loves to sell and has a wonderful enthusiasm for all that he does. So, I was surprised, when hearing from him after Thanksgiving, how discouraged that he seemed to be. Here are some verbatim comments or quotes from e-mails over the last few weeks:

--When I met you at a 4A’s Media Conference a dozen years ago, you really annoyed me. I told you that my two anchor accounts were local banks that covered all of our rent, utilities and even employee health insurance. You looked at me with an almost Mona Lisa smile and suggested that I diversify more. Then you muttered something about a bank getting swallowed up every day in the United States due to mergers or buyouts. I was annoyed but when I got home I checked it out and you were right. And, of course, we lost both banks to buyouts within a few years. It took me five years of great effort to crawl out of that hole.

--I had a few car dealers that have been great for years. We had a rough time in 2009 as they did but we all survived. Lately, even that is slipping away. The son of our biggest dealer decided to join the family business after a few years in the financial world. I warned our staff to be polite as he would eventually take over the dealership. Each month we placed a fairly strong radio schedule locally for them. One day, our account executive came back and reported that “Junior” had told him they were trying something new and their would be no paid media next month. I got Dad on the line but he backed his son up 100%.  What Junior did was simple--he sent an e-mail or direct mail piece if he had no e-mail to every customer who had bought a car from the dealership in the last  three to six years. The offer was very,very good--no dealer hype. My account guy told Junior that it could not work without the lift that it would get from conventional media.

It worked great! According to the old man, SUV’s just flew off the lot. Two of my team bought cars from him! Dad was excited and wanted to do it again. Junior said no and suggested doing it two to three times per year at most with a fresh offer each time. Sales were not great when our radio buy went on the next month. They are now doing all kinds of e-mail blasts and even using Twitter successfully. We look like cave men compared to this kid who is simply doing basic 21st century blocking and tackling. Also, Junior has a buddy who designed the mailer for a few hundred bucks. So, we will not get any work there anymore. Even the crumbs are disappearing.

--We are at a point where we cannot pitch business where the key client decision-makers are young. I know that I have to turn over my team over the next 18 months. We are dinosaurs and if we do not reinvent ourselves, we will become extinct!

The second player has a bigger team and is in a larger metro area and has a staff that has embraced digital options fairly well. He was a copywriter in his early days and still sees himself as a creative type rather than an executive. Some of this comments were:

--We work our team hard but we just cannot keep up with the industry changes. Last week, we were at a pitch and asked about mobile advertising. We said we did quite a bit of it and had more on board for 2015. A young prospect started firing questions at our media and creative guys. He used terms that none of us had heard of before. We looked like country bumpkins. I really embarrassed a friend at the prospect company who fought to get us into the consideration list for the business.

--The opposite happened at a session the month before the mobile debacle. Our creative head began to present a storyboard to the prospects. Three of the people around the table started laughing. He stopped dead in his tracks and one of the guys said, “You really think TV makes sense for us. Really?”  We crawled out of the meeting.

--The media talks about the mega-shops and how well they are doing with their online trading desks. I just do not see how we fit in to the new world much longer. Radio just does not work anymore and TV pays out very poorly if at all. The only people who say they see our TV work are over 60. We do some local cable and they provide some attractive promotions but that is not enough to carry the day for us. We do not have a clue about the needed media mix between conventional and digital.

--I just do not know how I can keep the game going. Everything is so fragile.

These are good people who have given their lives to the advertising industry. They cannot be alone in their struggles.

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

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