David L. Smith, president and media director of Mediasmith, Inc. in San Francisco, is a thirty-seven year veteran in the advertising media management arena. Smith has contributed his knowledge through articles and interviews in an extensive range of media over the past two decades. He also has a major involvement in national committee work to establish and refine standards in metrics, business practices and financial issues for Interactive advertising with organizations such as the AAAA's, IAB, OPA and the ARF. He currently chairs the Online Reach & Frequency Committee for the ARF. Smith talked to iMedia Connection recently to give his views on the direction of the interactive marketing industry and suggestions for its improvement.
Meet Smith at the iMedia Summit in New Mexico, May 13th through 16th. Click here to request an invitation.
iMedia Connection: What's one of the most successful campaigns you've executed recently, and what made it successful?
Smith: An online lottery site hired us in fall of 2000. They needed us to lower the CPA where a tough competitor had already gotten the CPA down as far a possible. The client needed it to be half of what the previous agency could achieve. We took it on and set some goals. One was that we WOULD pay lower prices than the previous agency for successful sites. Second, we optimized early and often and found a way to walk away from sites where it was not working. After all, if it is not working for a site on a CPA basis, they are burning impressions with little return. Result: We beat the goal significantly. What happened? The client lowered the goal. We kept meeting the lowered goals, and even survived a period in which the client went in-house only to come back to us. We recently resigned the business when they lowered the goal to 1/8 of what it was when we started. It had become too much after a number of management and rule changes.
iMedia Connection: What measurements did you use to deem it a success?
Smith: Cost-per-registration.
iMedia Connection: What sort of new models can we expect in the future?
Smith: Branding, of course. Right now, branding is measured through AA+U research such as supplied by Dynamic Logic or Millward Brown/Intelliquest but in the end, the consumer goods folks are looking for payout marketing and they too will look for ways to track their media this way -- the Web and other media too.
iMedia Connection: Why is it better for a traditional marketer to go with an interactive agency than to advertise-direct with publishers OR take the entire workload in-house?
Smith: In-house has no cross training. Our buyers and planners are constantly learning from one piece of business and applying it to another. With in-house, once you drink the Kool-Aid, change is hard as there are few new inputs.
iMedia Connection: What remains the industry's biggest stumbling block?
Smith: Acceptance that the branding research is real and getting Interactive budgets out of the hands of the DR people.
iMedia Connection: Is there a same way to do CPA so everyone wins?
Smith:. Sure: fair metrics. Credit for post-impression. Credit for branding. Anything else is predatory (only paying for those who click).
iMedia Connection: Is there enough branding research to satisfy clients? If not, what needs to be done?
Smith: NO. There can never be enough branding research. Even the companies that have proved their case need to keep measuring branding vs. various mix options to optimize their branding initiatives.
iMedia Connection: What are your clients reservations about spending more money for interactive media?
Smith:. 1) Payout. 2) Being satisfied that they can effectively take money out of other media efficiently. 3) Limits vs. the past year or two.
iMedia Connection: How can agencies encourage their clients to keep up with the reported increase in consumer media consumption?
Smith: What says they need to?
iMedia Connection: What's the benefit of Interactive media buying consolidation at one place?
Smith: Over the last twenty years, various clients have consolidated media efforts at a single shop. It started with buying. First network TV (to make sure they weren't competing with themselves for the same inventory), then spot TV (to bring down costs), and eventually print and outdoor (to save money). Eventually, it happened with media planning AOR assignments (biggest example is the GM award to BCom3's Starcom to creative GM Planworks). Unbundling of media helps to coordinate overall efforts into a single corporate schema and can save money that more than pays for itself. It is time that Interactive media follow the same path. Some major clients have well in excess of ten Interactive agencies. Many of these are design in orientation and do media for the cash flow, not because they are a leader. If a client chooses carefully, it can find a media agency capable of consolidating all Interactive efforts. Caution: Not all media agencies get online at this point, so some due diligence is needed at this phase.
