At a recent iMedia Summit, iMedia interviewed Taddy Hall, chief strategy officer of ARF, about interactive marketing being the proxy for the future.
The following edited conversation took place at the iMedia Summit at Amelia Island, Florida on May 23. The format was that of the "Tonight Show," with iMedia President Rick Parkhill taking on the role of interviewer. Doug Weaver, president, Upstream Group, Inc., was "on the couch," having just been interviewed by Parkhill himself. Weaver introduced the theme for the discussion, which is the idea that interactive is the tail wagging the dog -- "the things we are figuring out in our little interactive world are really going to be the lessons that are going to drive the whole business of media and advertising in the future."
Rick Parkhill: Ladies and gentlemen, our second guest. Taddy Hall is the chief strategy officer of the Advertising Research Foundation (ARF). He is a bona fide intellectual. Yale graduate. Holds a Harvard MBA. He collaborated on the publication of the Innovators Solution. Taddy is a big thinker. He’s a great guy. Some of you heard him yesterday at the agency meeting. We are really proud and pleased to have him here today. Ladies and gentlemen, please welcome Taddy Hall. Come on out, Taddy. Come on out, Taddy.
You know Doug Weaver, right?
Taddy Hall: Good morning, Doug.
Doug Weaver: Good morning.
Parkhill: All right. We need to explain, very briefly, if you would -- not everyone knows what the Advertising Research Foundation is.
Hall: The A.R.F. exists to help marketers execute their marketing programs with greater accountability and greater effectiveness through the intelligent use of research.
Parkhill: And, what -- as the chief strategy officer for the A. R. -- can I call it “ARF?” Is that okay?
Hall: Whatever works for you is fine.
Parkhill: Okay, so as the chief strategy officer of ARF, what is your role?
Hall: That’s a trick question. Ahh. You know what? I spend most of my time with marketers. And, I try to figure out by spending time with marketers what it is that would alleviate their frustration in growing their businesses with greater consistency and greater profitability. And, the neat thing about being where I am is, it’s kind of like being the fool in Shakespeare, right? Nobody is … everybody lets you into their tent. And, so, you get to be with the advertiser, and with the agency, and with the research person, and with the media company. And, everybody just thinks you are a nice fellow.
Parkhill: And, you get to absorb all of this stuff.
Hall: Yeah. And, you take a lot of notes.
Parkhill: So, let me ask you: Do you feel that the C level folks, that these advertising organizations (and that being, you know, the CEO and CFO types, you know that really have to have responsibility for how the money is spent and how the money is earned), are they putting more and more pressure on the marketing for measurability?
Hall: It’s a very interesting question. One of the things that I have been confused by and trying to understand is marketers who come in to me and consistently express great frustration with their agencies and the disconnect they feel between what they think they want and what the agency is delivering. And, as I have been thinking about this, one of the things, (and there are a lot of agency folks out there, I think), one of the biggest problems I think that agencies have is who they are connected to at the marketer firms. Right?
So, I think the big disconnect isn’t necessarily between the marketing department and the agency, it’s between the marketing department and the rest of their corporation. And, the problem is, is what that leads to -- and, I’ll just mention two quick specifics -- it leads to agencies getting the wrong idea of what they ought to be focused on. So, they get focused on things like ROI, which frankly isn’t something really that many CEOs truly expect of their marketing departments. Or, they get focused on Big Ideas, which is like the last thing the CEO wants. Like, in the CEO’s mind, who is responsible for Big Ideas? He is, right? He doesn’t want those from the agency.
But, at any rate. That is one of the things I would encourage agencies to think about: Making sure that when they are connecting with their clients that they are really hearing the client at the CEO, CFO and COO level, not just the CMO level, because the CMO is only going to be around for about another two months.
Parkhill: Short lived these days, aren’t they?
Hall: That’s right.
Parkhill: Did you read Stuart Elliott’s piece this morning: “No More Same Old. Tune In, Log On”?
Hall: I had a chance to glance at it … just back there, yes.
Parkhill: Yeah. I mean, it started off with how GM had been beating up on BBDO for a good idea. And, they hadn’t been listening. They were complaining to them, our agency is not listening to us. You know, we need bigger ideas. We need to do things differently. They didn’t want to do things different. They are used to the way they make money today, I guess, huh?
Hall: One of the interesting things -- there are a number of media agencies. And, this is the thing that is important: It is not a Big Idea -- Big Ideas are a dime a dozen -- it is a delivered execution that grows the business. That’s what they want. And, people are confusing Big Idea for just an idea. People actually need an idea that has the business idea, the creative component, the media component and appropriate metrics to actually put it in the marketplace and grow the business. And, if you look at what some of the great media agencies are doing right now, Starcom and others, they are actually -- and, we will get into this a bit more when we talk about who is wagging which dog with which part of the anatomy -- they are, actually delivering what the CEOs really want … did I say something bad?
Parkhill: No, no, not at all.
Weaver: No, you’re doing fine.
Hall: Am I doing okay? They are actually delivering the types of solutions that the CEOs actually want, which are business ideas that include the business idea, the creative idea, the media and the measurement in an integrated fashion. And, those guys are actually doing the leading.
Parkhill: You and I talked about this last night, about this whole Wag the Dog concept, and you disagreed with it. We thought, you know, online seems to be wagging the dog, that other medium can take some lessons from the things we are learning here. And, what do you think of that assertion? Does that hold water for you?
Hall: It doesn’t. And, I know that Doug and I disagree.
Parkhill: Yeah. So, what about this -- you know the TV upfront just happened this week. I guess they did okay, huh?
Hall: I guess they did okay.
Parkhill: Yeah. And, why is that? I mean, advertisers continue to put up with the model and the money keeps pouring in.
Hall: I will give you a … this is a borderline sort of philosophical answer to that, because it is one of my great frustrations. You mentioned some of the work and the writing I have been doing and speaking and whatever … which is about how the availability or knowledge or better ways of doing things doesn’t actually drive change. Right? What actually leads people to do something different is a change in their belief. If they don’t believe that a better outcome is going to occur by doing something different, they are not going to do it. Even if they know that they ought to be doing it, right?
The classic example, and we talked about this yesterday, is “Geez, you know, I really ought to sit down and plan for my retirement. But, you know what, Doug, he’s not doing it, and he’s going to be okay, so screw it.” You know? And, gosh, “I know I should be taking my cholesterol-reducing drugs because otherwise I’m going to frigging die, right? But, you know what? Nah, I don’t think many other people are doing it. I’m just not going to do it,” right? So, that’s like my retirement future, and it’s like, my health, and I don’t do what I know I ought to do, because I sort of believe things are going to be okay. And, the problem with TV, and the problem with the upfront, is you just … like everybody else is doing, you just kind of believe that there is safety and continue to do what you have done in the past.
Weaver: You know, Taddy, I agree with you, to an extent. But, at the same time, I think that you are almost putting too much rational thought into the process. When you look at the TV upfront, you have a whole lot of people on both sides of the business. You know, clients, agencies, and of course, TV executives, who have spent their whole lives building their credibility within this niche. And, now that the watering hole has gotten smaller, there is almost a sense of desperation, like, “I have got to get my ratings somehow.”
I mean, how many people ditched the party last night and went to watch "Desperate Housewives," last night. Anybody? Come on, I know some of you did -- I saw the exodus. "Desperate Housewives" -- the phenomenon -- is the number two show on TV right now. But just 15 years ago, with its ratings, right now, it would have been the number 19 show on network television. So, there is this sense of desperation, as the watering hole is getting smaller and smaller, you know, for any kind of an “all at once” audience on TV. You end up, you know, there becomes this desperation. And, that drives the price up, and that drives the upfront.
But, back to the concept of Wagging the Dog for just a minute, I’m not talking about the fact that online is driving the business, right now. That would be a fallacy. There is clearly a lot more money being spent in TV and other media today. What I am talking about is the idea that, how long can TV exist in its current model? And, how long before they are going to be looking at addressable advertising? When are they going to be looking at different creative approaches? If indeed Joe Jaffe is right in that the 30-second spot is, you know, has its days numbered, what are they going to do? My point is that they are going to do a lot of things like we are doing in online, right now. Right? The creative techniques. The user-initiated advertising. And, the kind of measurement that goes with it. So, that’s the whole premise that I’m resting on here.
Hall: Yeah. The quick rebuttal to that -- and I agree with most of what you said -- I just think that the online guys got burned by trying to be revolutionaries. So for the last two or three years, they have really been trying hard to behave themselves, so they can like, get invited to the party. And, they got invited to the party. And, I frankly think that today the online publishers and those in the online agencies, and those folks that really have a stake in the future of digital advertising, now need to kind of step up and not be afraid to lead.
And, I think that the rationale for the behavior of the last three years makes every sense in the world, but it is not going to be the posture that is going to drive … it is not going to be the posture of the tail wagging the dog. It is not going to fulfill the great promise of the internet as a medium. And, I really think it is time for those who want the internet to be the driver of the advertising medium world for the future to lead. Lead means, delivering integrated solutions across media, to provide accountable returns to marketers that grow their business by creating customers. That’s what the CEO cares about, and that’s what leadership is about.
Weaver: I never heard a rebuttal that sounded so much like agreement before.
Hall: That’s why I sort of said I like was agreeing …
Weaver: I think we are in violent agreement up here, Taddy.
Parkhill: Yeah we’re all friends.
Hall: Can we hug?
Weaver: I would love that.
Parkhill: You guys can sit on the couch together in just a moment.
Hall: Oh, good.
Parkhill: We will be right back with out next guest, huh? Thank you.
Stay tuned tomorrow for discussion with Alan Shulman, chief creative officer for Brand New World.