IntelliComs

5 THINGS YOU NEED TO KNOW ABOUT MEDIA IN 2013

 

Media communications is getting more complex and changing faster than ever. Each month there seems to be a new channel and a new solution that competes for the marketer’s time and budget.

As you start to think about planning your marketing media activities for 2013, here are five essential points to keep in mind before those media salespeople start calling.


1. Everything changes but everything stays the same
If there’s no targets, no strategy, no big idea, then no new thing will fix it

The media world continues to evolve at an ever faster pace. We need look no further than that media darling/devil Facebook for a practical example of this rate of change; every week the platform makes incremental changes and evolves a major step change approximately every three months.

Facebook is itself transient and is a work in progress; there will continue to be new channels and new opportunities to communicate with consumers every year.

But the fundamentals of media communications don’t change with new channels, because good planning is based on consumer and human behavioural psychology and that the fundamentals of human behaviour are fairly timeless.

Marketing & media targets, objectives and media strategies still need to be defined, created and executed, and the craft skills for these tasks, well, haven’t changed either.

2. TV is alive and well – and living in your house
TV has been predicted to die as a consumer mass marketing channel for the last 15 years. Unfortunately for the naysayers the TV corpse is actually very much alive, and in robust health.

Viewing figures in the US are up in 2012 – for the 7th year in a row; more people are watching more TV than ever before.

Viewing behaviour may be changing; we consumer TV simultaneously with digital devices while interacting with social media. But so far no medium or channel can replace TV for impact, delivery and emotional involvement; and the viewing data proves this.

3. The next big thing; is not the next big thing
Continuing from the longevity of TV, Marketers always overestimate the attraction of new things and underestimate the power of traditional consumer behavior.

Don’t panic; 2013 will not be the year of mobile, or the year of Internet video, or the year of mobile internet video. These new channels will continue to be marginal marketing media for midterm, until they establish themselves

New media channels will continue to evolve, but building significant consumer numbers and simultaneously creating a viable marketing platform for a new channel is extremely difficult and takes time. So no new channel is going to make a significant impact in 2013, or will significantly affect your channel mix.

4. Five small ideas don’t equal one big idea
Creativity is not maths; a lot of low impact messages spread across different media and channels will not equal one big idea executed with focus.

Lots of little tactics don’t equal a big strategy

With multiple executions of different ideas you instead create noise, confusion and irrelevance. There will be little word of mouth and no viral effect

A big idea can be extended across media and platforms. It will engage people. It can be developed and extended both creativity and in tactical execution. It will have ‘legs’

Finding a big idea is not easy. It takes time and hard work. So be patient and sweat it.


5. Fashion is a dangerous thing
''Nobody ever got famous predicting that things would stay pretty much the same''.

‘’Fashion is always changing, slightly elusive, extremely seductive.
It has the power to transform an image and make a social statement’’

www.fashion.About.com

But ‘fashion’ has no place in marketing. There is no new solution this year or next year that will transform your product, market or communication.

Be wary of anyone selling the ‘solution’. There isn’t one, there are just new executions.

The Real Importance of Cannes Lions

You can’t have missed the fact that it's Cannes Lions week. People have been blogging and tweeting nonstop about how great the talks and presentations have been this year, and also how it’s great to meet new people and make contacts. Cannes is all this and more; and especially some fantastic parties and the subsequent serious hangovers.

But at the centre of Cannes Lions is the advertising competition and at the heart of that event is creativity. And creativity matters; not just for the festival itself, or for the agencies or even the advertising industry but for the clients – the advertisers.

Creative advertising engages consumers and changes their viewpoint about a brand, a company or a cause. But creative advertising also works; and it works better than non creative advertising at building brands and changing viewpoints over the long term.

Following on from Peter Field’s study  'The Link Between Creativity and Effectiveness' (IPA, 2011, Peter Field). Dominic Twose and Polly Wyn Jones of Millward Brown conducted their own survey, publishing their findings in Admap November 2011. They used a base of 251ads from 91 brands.

From the report summary - ‘’While creativity cannot be defined or prescribed, its effects can be measured, and creative ads tend to be enjoyable and involving, and different to other advertising. They tend to stimulate an emotional response. Effective ads also tend to generate these responses – and they are also likely to be well branded.’’

The full article from Admap can be found here. It makes enlightening and interesting reading.

So when you see photos and hear reports of Cannes Lions delegates in compromising situations (usually from the infamous gutter bar) in the early hours of the morning, don’t be too hard on them. They’ve probably been working hard for the past year back in their home cities. And some of them have also managed to produce great work that’s moved hearts and minds, been effective and by the way; made money for their clients.

LinkedIn Usage Infographic

It's all very well social web sites publishing gross numbers - membership - but what is critical is knowing the site's usage; how often people use the sites and with what frequency. In media speak these are the penetration numbers, and are actually the only really useful and practical metrics for assessing advertising value.

Below is a useful infographic showing the usage of LinkedIn on a daly and weekly basis

 

 

 

 

 

 

The Future of Sharing * Infographic

The End of Counter-Culture

Originally posted by Charles Vallance in Brand Republic

 

Capitalism itself is under question. The euro is looking as ill-conceived as its opponents predicted from the start. Democratic European countries are now essentially protectorates, with unelected technocrats put in charge to impose the kind of austerity that no-one would otherwise vote for. The Middle East is in a state of upheaval not seen for decades. And, on a more parochial note, the UK may soon be history.

Given all this, you would have thought that we would be a nation galvanised by big, clashing ideas - that there would be a vibrant, even combative, debate between conflicting ideals and visions. When you look back at the way that the upheavals of Thatcherism caused politics to be such a visceral business in the 80s, you would expect that the conditions swirling around us now would provide equally strong cause for political or cultural radicalism.

But they don't appear to. Yes, we've had the riots; but that was more about opportunist theft than political conviction. Yes, we have the Occupy movement; but a bunch of trustafarians and full-time layabouts who don't even occupy their pitch at night fail lamentably to convince.

 

So, I go back to my original question. Where is the counterculture? What is the punk of today or, even, the Thatcherism? Where are the Marmite and the polarity? I think there's a simple reason that they're not about any longer. They're no longer here because the most recent counter movement has made polarity close to unachievable. The counter movement in question has been bigger and more pervasive than any that has gone before. In many ways, it has also been the most insidious.

The counter movement I'm talking about is the one that has been led by the geeks. While the internet has had a revolutionary impact on autocratic regimes (because, for the first time, it has allowed a flow of information), in the free world it seems to have had an opposite, almost sedative, effect. The incessant sharing and airing of ideas over Twitter, Facebook and blogs tends to dilute or mitigate against unorthodox viewpoints. Meanwhile, our ability to censure any vaguely off-centre message has grown exponentially. You sometimes feel there's a whole industry devoted to policing people's language, that censureship has become the new censorship.

 

The result is that there is little incentive for radical expression or thinking, with the commentariat of the interweb having a strangely normative effect. Sometimes it feels that the whole news agenda is written to a giant algorithm, where people's energies are spent disparaging each other rather than saying anything constructive or meaningful. The geeks have inherited the earth and, to date at least, no-one seems to have found what will replace this new opiate of the masses.

Why does Product Placement on TV means Higher Spot Prices?

The main TV channels in Turkey are making a good case for increasing prices substantially in April, May and June this year. Of course this always the same situation at this time of the year, as this is the advertiser’s key advertising period and the TV channels attempt to maximise income. The channels always have a story to tell, which they hope the agencies will pass on to their clients in their attempt to justify providing the same product for more money.

This year the Channels seem to have a reasonable excuse; RTUK has again changed the advertising rules on TV, cutting some types of advertising, but also allowing some flexibility on how ads are broadcast. It’s the cuts of advertising types – so called generics, ad break sponsor spots etc – that has the channels trying to justify price increases. They argue that that the total seconds lost, means they have less product to sell, therefore they must increase prices. That is not the advertisers concern – that’s the TV Channels problem.

However, to give the Channels argument a little more sophistication; there is increasing demand for less product so prices will increase.

Now this sounds all very logical on the surface; the seconds have been lost. But advertisers do not buy seconds in 2011, they buy ratings. And a good argument can be put that the available ratings have not decreased. They have in fact increased, and therefore prices should not increase; they should - logically - fall.

First; the total adverting time per hour for normal ads has not changed. When ads were blocked together in slots lasting up to eight minutes (including all messages between the programmes) there was a massive loss of ratings through the break. Up to seventy percent of the available programme ratings were lost during the break. Now that the channels can transmit single ad spots, there is almost a zero ratings loss between the programme and the ad. Conversely, the same ad minutes now probably enjoy 50% higher ratings for the exactly the same transmission time.

Second; product placement has now been made legal, and there is an explosion of products appearing in programmes. The channels charge a premium rate for these placements, and the ratings are high – they are the programme ratings. These ratings will therefore be higher than the generics etc that they replace.

The result is a net increase in available ratings that the channels can sell.

What is required is for the agencies – the advertiser’s representative – to do the correct analysis and publish it, and not buy the channels simplified arguments verbatim. In other words; agencies should do their job

The Media Account Pitch - Let's Try Something New

Pitching (the tendering for the media account of an advertiser) is a microcosm of the whole media agency/advertiser/media owner world and involves all the players and all aspects of the business in a competitive situation, and therefor creates winners and losers.

Like all competitions, it makes apparent the strengths and weaknesses of the players and through the way the competition is conducted, the strengths and weaknesses of the sector itself; including ethics and transparency.

When the process, and results, of pitches are analysed in some detail there is compelling evidence that says the current methods and process of pitching a media agency is failing advertisers, media agencies and media owners.

As a consequence of the current process advertisers don’t get lower prices or better strategy; and the agencies are constantly fighting to retain business at lower margins, while diluting their added value offering.

What is needed is an honest examination - by all the players - of what’s really happening and going wrong, and also to look at radical new solutions about how to change the current system and create something that will better serve the sector.

 

 

TV Media Metrics - Time to Move Forward

Despite tools and systems being available for linking advertising media performance to marketing results, in most emerging markets the main measurement for evaluating TV campaign performance is the unit cost of airtime.

Using cost per rating point (CPP) as a metric for measuring TV campaign performance is a bit like using the price of concrete as a metric when employing an architectural firm to construct a new hotel.

It may be the main basic material, but it has little bearing on the success of the final product, or even its final cost.

It has absolutely no bearing on whether the project is successful or profitable long term.

What does determines the final cost is the utilisation of the basic materials; how they are used; what is created, and is it fit for purpose.

The same is true of using Cost Per Point as TV metric. 

 

The Results of Using CPP

Using only CPP creates a false commodity and marketplace which doesn’t exist in reality. Grouping all ratings together, and even subdividing them into sectors (channel, day part, position in break) is to treat them as if they were the same. They are not; each spot is completely different in composition.

But further; when adding spots together and constructing a campaign, the reach they generate is unique, and cannot be replicated or commoditised.

Aggregating campaign spots is meaningless, because when the spots are constructed into a campaign there is diminishing return in effect (the number of contacts possible). Therefore the spot utility value changes depending on how and when each spot is used.

Advertisers and auditors are not measuring the agency contribution when analysing campaigns using CPP on TV; they are auditing the fulfilment of the TV channel contracts, as most contracts are CPP based.

CPP negotiations can be manipulated by the channel and by the agency in their favour. As research information and analysis is centred with the agency and channel, the advertiser becomes the weak player in the game.

CPP is simply a TV price negotiation metric: It should be used as such.  

A TV Metric that measures Contact

We should measure the cost of reaching the right number of people the right number of times. The correct metric to use when measuring media campaigns is the cost per reach point.

That is; the total TV campaign budget divided by the percentage reach, (in marketing; ‘penetration’). The total reach is the total percentage of the population who saw the ad one or more times, (known as 1+ Reach).

To develop the concept further; the effective reach number should correctly be used. Effective reach is the percentage who saw the ad at the frequency determined to produce a consumer response (change of awareness, change of attitude to the brand, a call to action etc), known as 3+, 5+ Reach etc.

The Cost per Effective Reach Point (CPERP) is the total budget divided by the Effective reach percentage of the campaign.

 

Using CPERP

CPERP is a metric that has meaning and real utility for the marketer.

·         It takes account of the diminishing return on the ratings

·         It measures the actual campaign results

·         It starts to include campaign effect and consumer response into the measurement

·         It measures the agency’s contribution and it’s scheduling ability

·         It is difficult to manipulate results

·         Individual channel contribution to the total campaign effect can be separated and measured

·         It shows the value of airtime - not simply its cost

·         Accountability becomes part of the process.

When adding the CPERP of each channel back into Media negotiations, only the advertiser knows exactly the contribution of each channel to the total campaign result, and the cost of that contribution. Therefore the basis of media contract negotiation has changed and the power shifts back to the advertiser.

Cost per contact is not a measurement of media effect; but it is the only pure and correct media metric. To see brand and business effect more upstream metrics are required (shifts in awareness, top of mind, brand KPIs, saliency, purchase intent and sales).

That is the subject of a future blog.

Media Negotiations - Double Dipping fails the Client

 

Media price negotiation is not exactly the Oslo peace accord or the EU accession talks. So, why do so many large media agencies find negotiation with media owners so difficult; and as a consequence loose the confidence of their clients?

The client position is clear, especially in these difficult times; they need continually better value from all their suppliers, as their sales, prices and margins are under constant attack in their marketplace. They need the best possible media price, and the media agency is employed to negotiate on their behalf and deliver it for them.

Even though they pay the agency to represent them, in many cases advertisers do not trust the agency to deliver the best price. Instead clients choose to either negotiate themselves with the media owners, or when they do allow agencies to front the negotiations, the agencies don’t lead; it is often the clients who are pushing the price downwards, and the agency is simply the messenger between the parties.

How can this be so? The agency is supposed to be the sector expert; they should know exactly what is the minimum price possible, and they should know exactly how to achieve it. They have all the resources; they have the data, they have the tools and they have the manpower.

The ultimate sanction of any price negotiation is to simply walk away and refuse to spend the money. But the agency is paid commission on the client media budget. So the agency is reluctant to use this final weapon. 

More importantly, the majority of the agency income comes from those same media supplies who they are supposed to be beating up in the negotiations, in the form of Agency Volume Rebates (known as ‘ristern’ in Turkey). So they must be careful not to bite the hand that feeds them. If they push too hard, maybe the media owner will cut their ristern percentage back to maintain their own profits.

And if they use the walk away/no spend weapon, then the agencies own volume commitment to the media owner will not be achieved, and their percentage ristern will be downgraded or not paid at all.

As a consequence the agency doesn’t always push too hard, and instead they have evolved into diplomats, running with messages between the real players (the client and the media owner), trying to keep both sides happy so they can continue to take their percentage from both sides. And like a diplomats they feel the pressure from both sides.

In the meantime another added value service of the agencies has been downgraded, and they are left with the back office function of number crunching and process; the real decision making has been removed, and they move further down the food chain.

Media Communications Vs the Hospitality Industry

Working in media communications, we tend to see our business as unique and esoteric; but it’s just a service business, and sometimes it's useful and enlightening to look outside our own small world and compare what goes on in our industry with other sectors and other industries.  But let’s do something more enlightening; let’s apply our own working processes to another business……

Imagine; you work in the tourist industry managing hotels. Your hotels are unique and clients choose them because of that something special; and they pay a little higher price for that extra something.

At the start of the year you make a business plan and decide that to increase sales and profitability, rather than increasing prices, you will open a new hotel.

You decide to employ one company to create a new concept, and another company to do the architectural designs, buy all the materials, construct the hotel and project manage the process.

Your internal construction manager knows that 65% of the capital cost of new hotels is the raw materials, such as concrete, metal, wood etc; and he says he knows the cost of concrete from previous jobs when he built shopping malls, and what his friends in other companies talk about.

So you decide to make the process transparent, and you hold a pitch, and invite construction companies. The construction companies tell you they can provide design architectural plans and project management, and they will charge you only on the cost of buying concrete. This looks like a good deal, almost too good.

Despite all the wonderful design and concepts, there seems no way to evaluate one design from another, and the construction companies offer no design metrics either, and as all the construction companies seem pretty much alike you award the contract to the construction company who promises the cheapest concrete and lowest fees.

They only troubling thing is; all the fees of all competitors are based on commission on the concrete bought. But as the commission is almost nothing and you end up paying them 1.0% commission on the cost of the concrete. Whatever hopefully the Finance Director will be happy.

The construction company tell you that you similar hotels cost $20m: so you allocate them $20m and tell them to build a hotel and report back at the end of the year. In the meantime there will regular status meetings.

At the end of the year, the hotel gets built, the construction company gets paid,  but for some reason, sales are flat, profits are down ($20m is a lot of money to take out of the bottom line after all), share is static, and your Financial Director is starting to ask tricky questions. What’s more, when you talk to your friends who have had work done in the construction sector, they all claim that their cost of concrete is less than yours. And that strange payment practises are rife within the industry.

So, you employ an independent construction sector specialist. The specialist claim they can help you deliver results, add value, and save money (and keep the FD happy) by telling you the real cost of concrete. 

And they do; not only concrete but wood, metal and plastics. The cost of interior concrete vs outdoor concrete; floor concrete vs ceiling concrete; the list goes on and on.  You become a concrete expert.

The consultant does this by comparing prices his clients have paid for dams, roads, and power stations. He doesn’t have any other clients who build added value hotels, but this doesn’t matter as all these differences can be standardised and consolidated. He also can’t seem to create an direct correlation between concrete costs and hotel success and profitability; but whatever.

The consultant tells you that the problem with the hotel is that; yes indeed, you are paying too much for concrete, and the solution is to hold another construction pitch, which he will manage, and the prices will definitely come down, and your next hotel will be more profitable. Your Financial Director is happy.

 

Of course, all the above is completely ridiculous isn’t it?

Let’s compare the above with what really happens in construction and other large capital projects:

The design and feasibility stage is crucial and no project gets the go ahead until these stages are thoroughly researched, modelled, evaluated, and costed from every possible angle and using every possible criteria.

Third party contracts are awarded dependent on a number of factors including design quality; track record, resource, project suitability and lowest cost. Cost in itself could not be the single factor in decision making.

The design and execution are separated, and a third party project management role is created to mange construction, timing and costs. Key is that; cost decision making and cost execution are separated and made accountable wherever and whenever possible.

Key milestones are created through the project; actions; timing and budget. The project is reviewed regularly and measured and evaluated against these interim milestones. Stop/ go decisions can be made against these milestones.

Separate areas are fully accountable and managed by identified and responsible individuals within the overall project management.

The contractors are paid fixed fees, and penalised for under delivery against milestones (late delivery or over cost), and rewarded for over delivery (early delivery and under cost).

Outside auditors are employed to validate invoices and audit the entire project.

Now, let’s flip it around: how much of the above happens in Media communications? And why doesn’t it happen? After all; $20m is a lot of money. Ask your Finance Director