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Why your campaign is cheapening digital

Why your campaign is cheapening digital Jim Meskauskas

The stock market seems to be improving these days. It's up 33.5 percent from six months ago, and up 47.8 percent since its lowest point in 2009.


But the tough times continue overall for the economy. And even if they are improving, the tough times will continue for the advertising industry for a while. 
Marketing spending is much like the inverse of the Marines when it comes to the economy: When things are rough, marketing spending is the first out; when times improve, it is the last thing to come back in.


What this means is that the downward cost pressures on media vendors and others providing marketing services continue unabated. With clients' downward cost pressures, media is being commoditized, commoditizing the rest of the business with it.


This is nothing new. It's been happening for a couple of decades now. But while the squeeze has always been on agencies and other service providers, the squeeze on media inventory -- and the success clients are having in getting those rates lower -- is a newer development.


Print, Spot TV, digital, and even national broadcast have seen price decreases.


It is natural for a marketplace to seek lower costs if lower costs can be had. But there are unintended consequences to the kind of rabid quest for paying less for media and the subsequent slashing and burning of rates that has resulted.


One of those is the distraction of the media planning process away from developing strategy and towards cost-only considerations (see ""). The other is even more insidious; namely, that when treating media like a commodity, the rest of the business goes with it.


Agencies are, by and large, compensated for the transactions they perform, not the ideas they generate. What the agency provides ends up being a commodity because what it is trading in is being commoditized. And so long as the focus remains on the cost at which agencies can acquire media, any service they provide ancillary to that will come across the same way.


Media shops, in order to overcome the commoditization of their transactional services (running comScore reports, issuing RFPs based on those reports, buying media based on the rates submitted with those RFPs), now seek to become analytics and insights providers. This is fine, and something they should look towards, but by doing so, they are just seeking to build a better mousetrap, an endeavor that is only undertaken when there is no longer an abundance of mice. Adam Gopnik puts it well when he writes in the May 11, 2009 issue of The New Yorker, "When mice are on the run, we have time to think of how to kill them better; when we are overrun by mice, we turn to cats, prayers, and hope." There actually aren't better mousetraps to be built; only a need to figure out how to get to the mice first.


The media business as a whole continues to operate with the understanding that its role will remain transactional, and it is in the transactional elements that efficiencies must be gained and, therefore, margin is to be made.


These are all aimed at increasing efficiency from within the performance of the transactional elements of the media trade. It stands to reason that the more a marketing services provider can be freed up from the tedium of the transactional elements of the media trade, the resources of that services provider could be allocated to coming up with those big, creative ideas. So far, that isn't happening with the big media shops.


I'm not saying media is a commodity. But when the majority of a client's focus and energies are applied to concerns with media's cost, media is becoming commoditized. Most of media buying continues to be the practice of buying demographics, at best a surrogate for what an advertiser is really looking for. While this remains the case, one media location can be just as good as another, meaning that only cost and service are the differentiators and so, hence, the media is a commodity.


What is all of this to say? That focusing on costs renders what is being purchased and the process of purchasing a commodity. Bringing analytics and insight into the mix might serve as a temporary palliative but will mostly end up just differentiating the color of the mouse trap; agencies will still only be pitching mouse traps. Agencies are going to really need to find a way to offer their clients not just direction on bait, but the thoughts of the mouse. And it's unclear whether the current process of drawing information from data and getting into the analytics business is going to be offering that. 


So long as agencies focus on the machines they use rather than the people thinking and imagining about what comes out of them, it's hard to tell one piece of cheese and a spring-loaded snap trap from the other.


Media strategies editor Jim Meskauskas, is vice president and director of online media for Icon International Inc., an Omnicom company.


On Twitter? Follow iMedia Connection at @iMediaTweet

Jim Meskauskas is a Partner and Co-Founder of Media Darwin, Inc., providing comprehensive media strategy and planning.  Prior to that, Jim was the SVP of Online Media at ICON International, an Omnicom Company, where he spent nearly five years.

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Comments

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Commenter: Matthew Greene

2009, November 30

Jim -

Love the sentiment here, and wholeheartedly agree.

To quote Larry David from the finale of Curb, "that being said", would you characterize Icon International as being in the business of "big ideas", or commoditized "barter transactions"?

This is not a knock on Icon, at all, however, I long-ago gave up on the idea that clients truly value big ideas.

After many years in the trenches in big advertising, all of them instructive, what I learned most of all was that if I sought the satisfaction of leveraging big ideas, it wasn't going to happen on Unilever, American Express and other brands too big to go for the big idea.

This fact was what drove me into the waiting arms of digital, in the '90's, where "big ideas" are on the horizon!

Matt