Focusing Your Ad Business

Doug Weaver's Agency Summit keynote made sense to me, right up until the point where he said that business organizations in our industry will need to concentrate on one of two focus areas in order to profit and survive.

Doug's presentation was centered on an Oreo cookie metaphor. Two disciplines in our industry represented the opposing sides of the sandwich cookie, and, as Doug said, when the two sides are pulled apart, one side usually gets the cream in the center. He described the two ends of the Oreo as representing transactional players -- folks who make their money buying and selling standard ad units -- and what he called "marketecture" firms: people who make their money solving marketing puzzles.

He warned the audience of interactive buyers and sellers that trying to play both sides of the cookie was dangerous, and that profitability and survival in the new world order was predicated on choosing a side.

I agree that firms in our industry should concentrate their efforts on what they're best at. I also believe that companies can take the expedited path toward profitability by concentrating on their core business and performing well in that area, rather than becoming a jack of all trades that does many things in a mediocre fashion. 

However, I tend to think of these axioms as business guidelines rather than hard and fast rules.

Where the Oreo metaphor began to fall apart for me was at the point where I tried to make it fit with some real-life business scenarios. Suppose you're operating in the marketecture sphere and you identify that the challenge for your client is buying leads at a low cost, or selling ad inventory at a high cost.  We all have clients like this: direct response media buying clients or publishing clients looking to increase the value of their ad inventory. In either case, if you actually want to be able to act on your recommendations, you need to play both sides of the Oreo.

If marketecture involves complex marketing problem-solving, what DR advertiser in their right mind is going to hire a firm that can't execute on what it recommends? While I agree with Doug that buying and selling ad inventory is becoming an increasingly automated process, I also believe that successful DR campaigns rely not just on signal intelligence (such as the data coming back from ad management systems and auto-optimizers) but on human intelligence as well. It's rare that a DR client is happy simply meeting his lead quota at an acceptable Cost Per Lead. The client also wants to know why certain media types work and others bomb atrociously. Otherwise, media selection becomes a wasteful and tedious cycle of test-and-refine, without any direction as to what drives success, or any way to narrow down a rapidly growing menu of media choices.

If it were my keynote, I might have chosen a different dividing line between my two halves of the Oreo. Perhaps one side of the cookie might have been firms that embrace automation and the other those that resist in order to preserve outdated business models. To me, that would have made a lot more sense.

It's a given for many forward-thinking firms that much of the "busy work," such as RFPs, booking inventory, optimization and reporting are all increasingly relying on automation. That's just the market at work: increasing efficiency out of necessity. But automation often falls short when we're talking about the application of human intelligence to everything that's going on during those processes. If you play in that arena, are you a marketecture firm or a transactional player? I'd argue you're both.

Does playing this role doom you to failure? I doubt it.

To me, Doug's keynote was great at detailing the two areas in which today's interactive players are making their investments and developing their companies. I got a good deal of value out of that part of it. But it didn't appear to make too much sense that profitable firms absolutely need to pick one side of the cookie or the other and stick to it.

Tom Hespos is the president of Underscore Marketing and blogs at Hespos.com. Read full bio.

 

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