Featured Post

Side-Giggers And The Future

In the advertising world, moonlighting while holding down a full time job has been around for decades. Millennials have taken it to a new he...

Thursday, February 26, 2015

Cord-Cutting Exaggeration


There is much chatter these days about “cord-cutting.” This is simply eliminating one’s TV cable or satellite service. Over the last two years, I have tried to track it very closely. The many people whom I have spoken with or exchanged e-mails with tend to place cord-cutting at about 75,000-80,000 households in the U.S each month. Losing 900,000 subscribers a year to pulling the plug is not a death knell to the industry as many new households come on board each year. It certainly does impact Pay TV growth, however.

In recent weeks, I have received significant mail from ad agency media people or principals discussing cord-cutting. Candidly, I find it a bit disturbing. Here are some of the comments that I have received:

--“Something is happening out there. Cord-cutting is really building up momentum. Cable and satellite are toast.”

--“I just have a feeling talking to people that cord-cutting is really taking off.  My shop needs to cut back on using TV.”

--“It seems everyone that I talk to is cutting the cable cord.”

Okay, people often make statements based on anecdotal evidence. I am sure that I am guilty as well. But, these characters should know better. The first rule of a marketer is to step outside of yourself and look at facts. The comments made above are made by people who are masquerading as marketers. If that sounds harsh, so be it. In a society with 319 million people, 80,000 households per month is not “everyone.”

The cable industry itself does not dodge the issue. I have read interviews where cable executives basically said cord-cutting is done by those who cannot afford the service plus those who do not see enough value in a subscription. It is hard to argue with that.

My experience with cord-cutters is as follows: the cord-cutters that I have met have tended to be very well educated millennials who, in most cases, could afford cable or satelllite. They lead busy personal and professional lives and many live in places where there is a lot to do outside of business hours such as New York, Boston, Washington, DC or San Francisco. TV is simply not that important to them. At the same time, I have not met or spoken with a rural person of any age who has cut the cord. TV is likely a serious part of their entertainment so they would loathe to give it up.

So, the mistake the ad professionals make is by listening to young people in the somewhat rarified air of their social network or even well paid staff. Recently, I asked a classroom full of students, many from rural areas, if they had cut the cord. I was met with stares and a bit of laughter. Two young men approached me after the lecture and asked how could anyone give up ESPN? I smiled and told them about the ESPN proposal to charge $30 per month for a streaming service. They both perked up and then sheepishly admitted that their parents picked up the tab for cable in their off-campus apartments.

In recent months, as a test, my wife and I cut the cord for the second time in six years. By using Netflix, Hulu, YouTube and many other on line options, we are doing fine without a subscription. Didn’t we miss the Super Bowl? Nope. We watched it streaming and it was fine. The Oscars? I went to You Tube and caught acceptance speeches 15-20 minutes after the announcement. We are looking in to Apple TV and may try that for a few months to see what it does for us. If we do that we would be “cord-shaving” meaning we downsize our Pay TV commitment to a one time only fee with Apple. Generally, cord-shaving means going from a premium service to a basic cable approach. The $20 per month Sling TV streaming service may be a better example yet of cord-shaving.

Despite efforts, I can find no evidence of many people coming back to Pay TV after they cut the cord. One person wrote to me and said his neighborhood resembles his childhood hometown in the 1960’s as TV antennas are now sprouting up all over the block. This may be true in his case but there is little evidence that this is sweeping the nation.

So, people need to be cautious about the impact of cord-cutting. We all know that TV goes not work as well as it did years ago. Commercial avoidance is soaring but largely due to DVR penetration growth and the strong emergence of the two-fisted viewer who is looking at another device or two especially when a commercial break is running. Those issues are affecting the effectiveness of TV advertising far more than cord-cutting.

Were I a cable or satellite executive, I would be nervous about cord-cutting and try to come up with some pre-emptive strike to slow it down.  Right now, I would say that the problem will only pick up real momentum if the economy tanks badly again (let us hope not) and many people see that eliminating paying for TV is a way to cut expenses. A second factor is that the millennials, saddled with a $1.3 trillion student debt, realize while they are out on their own for the first time, cutting the cord could instantly put $100-150 each month in their pockets for fun or maybe speed up payments on the millstone of student debt that is weighing them down.

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

Tuesday, February 17, 2015

Is Media Planning Obsolete?

Things are changing and faster than many would like. In the media world, much of this is caused by data driven marketing. Programmatic buying allows one to execute media buys via several digital technology platforms including ad exchanges and agency trading desks among others. The new world of media placement is increasingly quant based and is largely “cookie reliant” where we can track where prospects have been and are likely to go in the future. Programmatic delivers efficient planning at scale. Increasingly sophisticated algorithms can process a staggering volume of data that is  granular on steroids.

Clearly, the old days of understanding media properties, trying to zero in on a target and negotiating hard on a client’s behalf are disappearing and rapidly. On the plus side, what we used to call “scattergun reach” is also going away. We would reach our target but often with huge waste in conventional media.

With change a reality, agencies are learning to adapt. Yet the change is raising a difficult  issue that many whisper about, a few talk about and very few brave souls write about in public. The question I now hear frequently--”Is Media Planning Obsolete?”

My knee jerk reaction is definitely not but it will change and change big time over the next few years. No matter how smart the algorithms predictive skills get, I am convinced that they can only be as effective as the human direction that they have received. Someone has to make the decision of where to go and what mix of media to use. At the same time, it is obvious that, over time, fewer people will be needed in media strategy.

To those who say it can all be done by machine, I always conjure back to the optimization systems used for magazine selection as far back as the 1970’s. I remember a supervisor who would always want to take the “optimal” buy right off the computer printout and buy it. Even as a kid in the business, this really bothered me. I remember vividly asking, “What about editorial content? Doesn’t that count for something? If we buy this we are choosing one book (publication) over another because of a half a percentage point advantage in total reach or a 10 cent C.P.M. edge.” He did not like my comment and considered me somewhat insolent. As I matured, I realized he just did not want to think and could hide behind the optimization run. For evaluating editorial content, a key component in media selection, I became largely self taught.

So, today, if you lean too heavily on programmatic buying, you may not be doing your best. It can help to assist you in reaching the right people in the right place, but is it the right time? Again, analyses are getting more sophisticated but it seems that you need a master puppeteer, a.k.a media strategist or planner, to oversee things.

Proponents, and it is hard to be totally against it, say programmatic can or will give you several things including price transparency, granularity, control, and, in some cases, insight.

I threw the question out to a number of people and here are some of the more interesting responses:

30 year media planning veteran--“No one likes change. Actually, most of us hate it. I have tried really hard to keep up and peers tell me that I am doing well. Then I read where Pete Cory of Google said, ‘The pace of change will never be as slow as it is today.’  We are a solid mid-sized shop. Can we compete in a world of agency trading desks? Hell, I cannot even hire a junior planner. We will have to fake it for a while. As the pace of change accelerates, what do we do?”

Agency CEO (mid-sized)--“We have a wealthy and very well educated young client. Behind his back, we call him ‘Harvard Boy’ even though he did not go there. He has friends and contacts in mega shops and all over Wall Street. Anyway, Harvard boy arranged for me and my media chief to visit an agency trading desk in New York. It was fascinating and very intimidating to us. We went for a drink afterwards. I was laughing at the absurdity of things and my media director looked absolutely frightened. We used to position her as a guru. She asked me never to use that term again.”

Chief Marketing Officer, Publicly Traded Company--“Can’t we just go to Google or someone else directly who is a player in Big Data? Why do we need an agency for this part of our work? The agency has a sharp young woman who plans on our business. I might ask her to come client side and work with us as a contact with Google or whomever. She would make more money and have a future.”

Senior Creative Officer, Major Agency--“Behind the scenes, we are pleased with programmatic buying. Finance keeps saying how many people we can eliminate in media in a few years. Our executives are mixed--some see how important the good ones have been as we have moved to digital. Others just see it as a way to improve the bottom-line. One said if we blow away X many people, it would be likely adding a new account with a huge profit margin. I was hoping that there would be a big renaissance in the importance of media people. Every day one of them teaches one of my staff new ways to use mobile or online. As trading desks get stronger, too much of that may go away.”

Management Rep, Mid Sized Shop--“Of course, we will still need planners! The lead people will need superior analytic skills to guide us through this new maize. We will need fewer people but they will need to be better students of consumer behavior than what I see now. A few may adapt but not many will be able to do it fast enough.”

To close, I will quote at length someone whom I admire greatly. In the media planning world, he could best be described as an elder statesman. Here is his passionate response to the question “Is Media Planning Obsolete?”--

“Oh my god, I can't believe we have reached this fork in the road. I have always thought that as the media world becomes more complex and diverse the need for a strong media planner is more essential.  You need someone overseeing the entire operation and pulling all the moving parts together.  I have always said that media planning is like putting together a patchwork quilt. If you have only one color for all your patches, anyone can put that together. But when you have 15 color and size options, you need to have a strategist to oversee the entire operation and pull everything together.  The more complex, the more you need a media planner. The media buyer who negotiates the best buy is not there to really make the best decisions for each client.  They are there to bring in the best prices. It's a one-size-fits-all approach. There is a huge difference in a media buy for Tide detergent versus Mercedes Benz and that is what the media strategist must figure out.  What selection of media do I need to move MY INDIVIDUAL product.  It's not all about media tonnage. It's about the right message in the right medium at the right time that really moves product. This is THE most important job for media people.  It frightens me to think that planning is getting disrespected like this.  It's like getting in a car and having no idea how you are getting to your destination.  At that time the navigator (the guy with the road map) is a lot more important than the car driver. The navigator knows the goal and has figured out how to get there.  The driver can only guide the car but needs someone (or some machine) to determine the path to success.  And without the smart strategist, we would not really be where we are right now in media.  It was the media strategists who first bought ads on the Internet or on cable or on social media who changed the world of media.  If not for them we would still be buying print and network TV. Eliminating media planners/strategists assumes we have reached the apex in media.  I think not. There is something beyond the media we have available today.  Every day this world is changing.  We have reached Future Shock.  The changes are coming at alarming speed.  The winner in this race is going to be the media person who knows where media is going not where it has been.  Where it has been is the world of the media buyer. Where it is going is the world of the media planner/strategist.  I could not disagree with this thought process more.  Now, more than ever, we need smart media thinkers, not simple media executors".

On that eloquent note, let me say that if you want to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a comment on the blog.




Tuesday, February 10, 2015

Media Mix In A Digital World


In recent weeks, I have been receiving a number of questions and comments about the determination of media mix in a media plan. If one is honest and careful about putting a plan together, this is always a major issue but generally only to the person drafting the plan and his or her immediate superior.

For years, I struggled with this issue and spent countless Sunday afternoons at the office trying to sort the issue out properly in every plan. I used one law of economics to guide much of my decision-making--the law of diminishing returns.

In essence, let us say that TV was the lead medium at the time. I, or a team member, would look at various combinations of day-part mixes and settle on one that delivered a strong portion of our target and was in a configuration that could actually be bought in the marketplace (30% Late Fringe might look good on a computer printout but sometimes there were not that many rating points to be found in a market). When we arrived at a point where it took 20% more dollars to add 5% more in potential reach, sharply diminishing returns had set in and we moved on to another medium.

The process worked well but I and others were never satisfied. When we blended the next medium (assume radio), we took a careful look at the frequency distribution of the messages. Did we reach a large number of people 3-10 times during the advertising flight? We generally dubbed that effective frequency even then we knew that the combined reach was a formula laden with sophomoric sophistry. Still, we tweaked hard and tried to get it right.

Once, and only once, in my long career did someone ask.  My colleagues never wanted to hear the explanation but to their horror they had to sit in a conference room with clients as I took them through an early power-point. The co-workers of mine sat in back. They did not heckle me openly but one started a conversation with a client and I often had to stop my presentation until they quieted down. When it was over, there were a few questions, and then, amazingly, applause. A client came up and said, “I cannot tell you how much I appreciate what you try to do. You are taking good care of the money that my husband and I spend with you.” It remains to me the most profound compliment that I ever received in my career.

Okay, years ago some of us did media mix carefully and we did it with an elan and dedication that few appreciated. What about in 2015? This is what I hear from friends and readers:

--Soon to retire media strategist--“Media mix was always a pain in the ass to get right. But, now! Who knows? Most of my business is getting increasingly digitally oriented but where do I blend in conventional advertising? I am nearly 60 years old and I cannot tell team members with a straight face what we should do. As we cut back on conventional every six months or so (annual plans never seem to last), I rarely get to diminishing returns so sometimes I just do TV and digital. It gnaws at me. How do mobile and online interact? How do you give a reach number for the whole campaign?"

--30 something Media Supervisor--“My boss tells me that an impression is an impression so if you buy TV it does not matter if you watch on a big screen, you laptop, your tablet or your phone. The networks may say that but I do not. Everything is measured differently. And, if someone is watching on their phone are they as attentive as someone watching TV in their family room? Also, with two fisted viewers maybe people watching on their phone are MORE attentive than those who have a laptop or phone at the ready as they view. Commercial ratings by device are badly needed but in the meantime, we are guessing."

--Late 20’s Media Planner--“Your question is stupid, old man. The solution is to only buy digital.” Okay, young man. How do you determine your mix of digital options?

--40 something Associate Media Director--“My fight tends to be with creative. The young ones are itching to do new digital executions and love it when I find a way to make it happen. Often, now they say they cannot do radio. My response is “You are creative. Do it. You sound like a method actor who says I can’t read that line. If you are an actor you do it. So, if you are creative, you should be able to develop some radio.” Management has silenced me so we are delivering plans that I do not consider to be optimal. I am looking for work elsewhere.”

--A Voice of Reason--“A lot depends on who the target  audience is and what are the goals of the advertising. To get to what we feel is the optimal media mix we first do our due diligence by running current media usage reports via Experian Simmons, we'll then overlay the advertising/marketing goals (is this campaign to raise awareness, generate leads, generate direct sales, etc.). We then apply the assigned budget to see what we can afford within the different channels.  What level of spend to each is optimal. We would rather own a channel or two  versus being in too many channels at low levels to make any impact.”


So, in a digital age, this issue is more important than ever. It gets little press and little attention by agency management.  Clearly, untold millions are being wasted every year.

If you would like to contact Don Cole directly, you may leave a response on the blog or reach him at doncolemedia@gmail.com

Monday, February 2, 2015

Crabby Clients?

A long time ago, I heard a colleague voice a theme for the first time that I still hear frequently today. Essentially it was along these lines--“I just love this business. It is my clients that I cannot stand.” We all get older and I hope a bit more mature. When clients were impossible I always reminded myself that they indirectly paid for tuition bills, vacations, and 401k contributions. Yet, in recent years, the complaining seems a bit louder and more strident. Are the criticisms valid? I asked several people at some small and mid-sized shops as well as a few alumni of mega-shops. The answers below were really interesting:

1) Medium sized agency president--“The clients are just plain scared. I remember you e-mailing to me that the average lifespan of a marketing director in a U.S. company was about 24 months. That struck me as crazy until I did some digging. I have seen various reports and asked around a lot. The range seems to be 18-30 months in my unscientific sample. To me, that explains a lot. These men and women come off as tough. Bull@#$%! They are simply afraid. Their superiors, of all types of firms, want tangible results and they want them now. If you are not successful on a project, they put you on notice as they are in trouble as well. It is our short term oriented American business culture that is wrong--not these clients. They come off as hard as nails but they are as scared as our junior account team.”

2) Small agency operations chief--”when we started years ago we were both “gung-ho” about the industry. Where are those kids today? I cannot find them although I must admit they probably do not want to live in our small city. The current team’s total lack of zeal is obvious to our client base. An 80 year old business owner, long since retired, sat in on a client presentation recently. He looked me in the eye and said you need to hire kids who were like you 30 years ago. I would if I could; where are they?”

3) A retiree of a publicly traded mega-shop--“Years ago, advertising was where smart and ambitious people wanted to work. Now, Silicon Valley and investment banking scarf the sharpies up. Our pay cannot compete and the best of breed do not want to wait years to be rewarded financially.”

4) A senior marketing executive at a major agency--“If you are honest, you know that the best ideas, the innovation, bubbles up from smart people client-side. A superstar will recognize this and leave the agency business and go where the real thinking is taking place.  Am I harsh? Maybe a bit. But the questions that I get from 30 year old clients are deeper than any I get within our shop."

5) Media Director at a very successful agency--“Digital media increasingly is giving you measurable results. Conventional media is still pretty murky. The young clients want accountability. We seem evasive after unsuccessful campaigns. There is often no 2nd chance with them."

6)) Account Director at Mid-Sized--“The problem is simple. With cut fees, we have to do more with less. Our young people have a job but are not in love with the game. They get beat up at meetings and are defensive. There is no time to train them properly and I cannot be at every meeting.”

7) Mid-Sized #2--“The kids we hire do not live and breathe the business. I send them articles to read about their client’s category and they ask me if they can read it on company time. One told me that he will never take work home. And, sadly, he is our 2nd best person!  Another one said, “I don’t read.” There is not enough interest in the business. Your contact who said we no longer attract the best really nailed it. I am exhausted and getting old. It should not be like this.”

So, are the crabby clients monsters? It seems a bit more so than in the past. Yet, the landscape has totally changed. Ratings continue to get smaller in TV and cable so forecasting is difficult. The clients are uneasy.  On paper, the economy seems to be crawling upward but few feel content, secure or optimistic. It is hard to establish relationships when client turnover is high as well as on your own staff. And, the people who leave are often the best.

We all have learned how to deal with difficult people. With the digital age upon us and conventional media in retreat, we need to relearn and rethink how and with whom we operate and rework the client-agency relationship.

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