Managing Marketing: Media value, transparency and relationships today

Managing Marketing is a podcast hosted by TrinityP3 Founder and Global CEO, Darren Woolley. Each podcast is a conversation with a thought-leader, professional or practitioner of marketing and communications on the issues, insights and opportunities in the marketing management category. Ideal for marketers, advertisers, media and commercial communications professionals.

Steve Allen, Chief Executive of Fusion Media has seen significant changes in the media landscape in his career. In this podcast he shares with Darren his views on media value, the problem with lack of media transparency today and the continued importance of having trusted and respected relationships with media owners, media and agencies and the advertisers.

Steve Allen

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Transcription:

Darren:

Welcome to Managing Marketing, and today I have the great pleasure to introduce someone who knows the media industry in Australia and probably globally better than anyone else and I’m talking about Steve Allen, Chief Executive of Fusion Strategy. Welcome Steve.

Steve:

Thanks very much, Darren.

What is media value?

Darren:

This is, I have to say, a great honour because I remember even when I started out in advertising, which is a number of years ago, you were certainly one of, if not the most, high profile person talking about media, and media value, and media strategies at that time compared to the industry. You were the voice. So, this is a great opportunity to sit down, especially at a time when media is going through so much turmoil and upheaval.

But I want to start off talking about media value because I think it’s a really interesting term at a time when everyone seems to be focused on cost, for us to really reflect on what is the cost of media?

So, from your perspective, Steve, what’s value for you when you’re talking about media to clients and advertisers?

Steve:

Look it does vary and by media type. As much as we can crunch it all down to putting all media types on one spreadsheet to show their performance and their cost efficiency and all the rest. They’ve all got different ways of qualitative communication and you’ve got to weigh that up but unless you get it all down to a spreadsheet, figures thing, many clients don’t believe.

At least if you get it down to that, you can say, ‘guys, look at this, look at the most cost-efficient, look at the least cost-efficient then make your value judgements’. You’re in a much better place when you’ve got that to look at, to range,… well is that worth twice what another medium’s worth to our product or our service?

Darren:

And what’s it bringing to the interaction or engagement that you’re not getting somewhere else?

Steve:

But one of the big things, Darren that clients are losing sight of in this digital age is critical mass. They’ve completely lost their way. They’re buying in spaces that we can easily prove to them are not cost efficient. They sound like big numbers but when you put it in that universe or the public’s universe they’re not that big and they therefore can’t even necessarily support the brand share that the client is presently on or chasing.

So when we talk about value we talk about a number of dimensions at once. One of them is, ‘what is your position in the marketplace?’ ‘What market share have you?’ ‘What is your market definition?’ We’ve got to build strategies that at least reach your market share but they should always exceed it and whatever ambition you have over the next number of years.

Clients aren’t doing much of that anymore. Whether they ever did it I don’t know but certainly clients that we came to influence knew about it and we were singing a hymn if you like.

Darren:

Well, Steve, I actually see a dichotomy happening in the market place and that is that clients almost seem to think, ‘it’s digital or it’s traditional’, and that they have to somehow make a decision of one or the other.

And yet to me it seems really obvious that there’s a role for both. I mean if you want mass then the traditional media is still delivering that massive audience and if you want to get down to targeting and engagement in particular environments then digital.

Why is it that the industry has this conversation? I mean even Mark Ritson who’s going, ‘forget digital, go traditional’. He’s saying one or the other but it’s both.

Steve:

Yeah, but in a sober moment Ritson would admit that it isn’t that extreme, it’s just that he sees the trend so heavily away from fundamentals that he’s railing against it for the good of the industry in many respects.

Darren:

He’s trying to shock us into rethinking the black or white.

Steve:

Absolutely. Because look the digital thing is two-fold. From the media agency’s point of view, it’s a way they can earn an extra dollar. They get twice, ten times the income.

Darren:

90% according to the ANA.

Steve:

They get a massive mark-up when purchasing officers have put them into these contracts they can make no money out of. They’re forced to sign those contracts and digital was their way out and now that’s going to be closed off pretty soon.

But from the marketer’s point of view, remember marketers compared to 20 or 30 years ago have such a short tenure of employment in an organisation and so all they’re looking for (this doesn’t serve all professional marketing people well what I’m about to say) is the next big hit to get them the next job.

It doesn’t matter if they’re harming the brand longer term. It doesn’t matter if at a later date their strategy will prove (if they have a strategy) to be not very good and not great value as long as it creates headlines and admiration from the industry they will be promoted.

They will be promoted within their organisation or out of their organisation by being headhunted. So that’s one half, and of course the media agency mark-ups is the other half.

Digital age and measurability

Darren:

So what you mentioned there is the brand ‘I’, which is all about what it’s going to do for me and my professional career rather than building the brands around me. But isn’t part of it this allure that people sell around digital media, which is, ‘oh it’s so much more measurable’?

Steve:

And it engages more. It’s a lean in not a lean out back. I hate the mumbo jumbo that goes on because everything is very basic in my view. Some of the ways you measure things aren’t basic and some of the measurements are quite complex but nevertheless.

You know in the digital age there are a lot of measurements that come instantly. It doesn’t mean they’re good measurements and it doesn’t mean that they’re telling you the right story. You still have to, particularly if you’re a strategist and you’re channel planning you have to know what all those numbers mean and you have to be able to get them to do the job that you’re looking for.

So, when we talk to clients and say, look, one of the tricks we use on spreadsheets, to get 50% reach of your specific target audience, having defined a really refined target audience for them, whatever that happens to be, it doesn’t matter how big or how small, how niche or how mass let’s look at what it costs to get 50% reach in a single week. Now that’s critical mass. Remember 20 or 30 years ago if you told a client 50% was critical mass they’d say you’re barmy, I want 90%.

Darren:

65%, 3 plus frequency was the standard I remember for retailers and then you had a different formula for consumer goods and all that kind of thing but that was critical mass.

Steve:

When they suddenly see to get 50% reach from some of these new digital areas is quite expensive they go, ‘no, I don’t believe that’ and you say, ‘ok here’s your target audience, here’s what they’re doing in a week of digital so look at the number 1 site. The number 1 site gets to about 20% of your target so if you’re able to buy all that 20% (by the way you can’t) but if you were able to buy all that 20% that’s one. So the next one…’

What you explain to them is because the media landscape particularly in the digital age is so fragmented, you need lots of little pieces and a bit like some of the traditional media industries when you’re adding up lots of little pieces there is an incremental cost the further you go up the reach scale. It doesn’t become more efficient, it becomes less efficient, more costly, bigger outlays.

When you explain that to them their minds start to churn, start to ask some intelligent questions, ‘oh right, so how many digital sites, internet sites will we have to go to get 50% more reach?’ And you go, ‘oh it depends on how niche we want to be or how broad we want to be but 20 or so’ and they go, ‘really?’ And I said well that’s doing an efficient buy for your target audience it might be 20 sites that we’ve got to go to.

Then the penny starts to drop. Unfortunately, I think that what then happens is they go, ‘this is way too complex. I mean I came in with a simple idea and now it’s got very muddy and it scares me’.

Darren:

We haven’t even touched on view-ability, ad fraud, bot fraud and all that sort of thing, which could be completely wiping out another 50 % of that delivery.

Steve:

What upsets clients, they’re not visible in being upset but you know it’s happening. You can tell from the way their body stiffens, and the way they don’t talk as much, the tension that it might be easy to identify listener-ship, viewership in the traditional media, readership in the digital media. There might be long-held ad norms, noted norms in lots of those media.

Similar things can be applied to the new media. And when you start to apply those things, some of which you’ve just brought up they see it’s just as complex, probably more complex in the new media than it was in the old media.

Darren:

It makes sense because it is infinitely more fragmented as a medium. The long tail that was written about more than ten years ago is the truth of the digital market.

So many marketers get bedazzled by Google and Facebook and yes, they’re very dominant in the digital domain but perhaps not as dominant when you look at the numbers as some other media options, like the TV stations that are available to them and can actually reach into an audience.

Now, you then get into questions about engagement and things like that but they’re different roles to me. Different roles for different jobs, it’s a tool shed that you pick the right tools for the job.

Steve:

Yeah, and even before we get to that we say to clients to this day, ‘no matter what channel, your creative is your most important weapon’. Having a persuasive argument, having it beautifully and engagingly presented is easily your most valuable weapon.

We can do all the rest. We did some stuff but you’ve got to have a really good clear communication strategy executed brilliantly, and of course in the digital age it’s more like cut and paste.

Darren:

Or it’s all over the place.

Steve:

Yeah, nothing consistent. You do see some fabulous campaigns usually from some of the bigger advertisers where they’ve got a central message and they’re executing it across a lot of channels.

They’re doing it, they’re building big reach and impact at the front with traditional media like television, like newspapers, like radio, like magazines, like outdoor but it’s coming straight through into the digital age. They might be just picking off niche audiences there but to my mind they’re probably doing it intelligently. Who knows whether they are but they probably are.

The media transparency crisis – how did we get here?

Darren:

So we’ve alluded to and touched upon some of the issues with the media industry and I think the ANA K2 report really consolidated for a lot of people the ills that the industry is suffering these days. I don’t necessarily want to just drag through what the report said but I am really interested because I have a clear point of view on why we are where we are today.

I started in advertising just before the end of accreditation so I saw accreditation; I saw the dismantling of it, and I’ve been witnessing what’s happened since then but I’d be really interested from your perspective, Steve, as why are in this situation now where media agencies are sometimes acting as agencies of the media owners and sometimes acting as agents of the advertiser but it’s not clear which, and I think that’s the best way of putting it isn’t it?

Steve:

Look, it’s never been clear and what clients have been concerned about even in the formal accreditation where you had to go through a media agency or put cash with copy through the front door unless you were a big advertiser – really, those dynamics haven’t changed. It doesn’t matter what it’s called they’re still the same.

The principle reason that advertisers have distrusted the relationship between media agencies or adverting agencies when they used to be full service and the owners is that they’re not party to the conversation of ‘group buys’, so they don’t actually know what’s going on inside and what’s been promised. And they’re not even told by many of the big groups what the arrangements really are.

I think they’ve got every right to know and I think it’s crazy for the big media agencies not to be transparent about exactly what the negotiation was. They can still talk about the principles of the negotiation, what we did to get this, what the obligation is for you, and so forth. If they’d done that 5 or 10 years ago, we wouldn’t be at the point we are now.

Intercepting with this, as the media industry and the media agency industry rolled along, and as purchasing departments, procurement departments got more and more involved particularly with the global advertisers – there were good reasons why they should because they didn’t know what value was in any given region, they didn’t know why they were employing this agency compared to that agency be they media or creative.

There was a role for them to start counting the numbers, putting them on a spreadsheet.

Darren:

Eliminating waste and increasing productivity and things like that to a point.

Steve:

To a point. Trouble is they became zealous and for many chief executives there was a difference. Look at today, I don’t know of a marketing background person who’s a chief executive. 30 years ago there were tons. That was one of your ways to the top.

Darren:

You were a growth driver.

Steve:

Either sales or marketing. Not today. So the more common thing is you come from a finance background – so a lot of the procurement people and so forth, because they’re numerate, they were thought to be the new saints.

The trouble is our industry is very competitive and pliable and when you bring people in that really are there to drive costs and margins down they’ll do it very effectively but it gets to the point where people are entering into contracts they can never make any money out of because their path…

Darren:

They can’t make honest money out of.

Steve:

Honest money. Because the person who wins that business gets lauded around the world. It’s their way to the top. The fact that no one knows whether they can make money out of this that’s measured much later. They’ve been promoted.

Darren:

Yeah, we’ve see that happen, haven’t we?

Steve:

We have.

Darren:

Without naming names.

Steve:

So when they got to this nasty point (you probably know more about this than me). I would say we started to get to this point 10 years ago, this crunch where business was being won and traded at paper-thin loss margins.

When the digital age started to come in with any force ten or less years ago, suddenly the light went on to some creative people here and overseas. And a lot of the early work was done here where they suddenly said –advertorial they call it native now don’t they?

Darren:

Native advertising, yeah I love that.

Steve:

Well, if our clients are looking for things like that why don’t we do it ourselves? Why don’t we employ some people to do that, and why don’t we get a big fat margin for doing it, probably more competitive than the market margin, but nevertheless quite different and outside the contract we’re stuck with.

Darren:

I think RECMA called it non-media income as it’s declared by their rankings of media agencies.

Steve:

I’ve seen chief executives that are pals in the industry at functions and presentations say we get more than 60% of our income now from…

Darren:

Non media services.

Steve:

For me that practically turns me the white of your shirt because I know there are things in there that they don’t want disclosed.

Darren:

Exactly.

Steve:

Because if their clients find out about them they won’t be happy.

Darren:

Well let me share my view because I’m really interested in your thoughts, having your experience of the industry. We saw procurement rise in 2005. 2007/ 8 we had what in Australia is called the global financial crisis and in most of the rest of the world called the global recession.

But we also had something else happen that is digital media impacted television stations and suddenly television stations had three and four times the amount of inventory they used to have so that was a lot of inventory.

Now, any commercial person would say the laws of supply and demand say if you’ve got four times as much inventory the price should come down but we saw for quite a while the price was maintained because these digital stations were not necessarily getting a new audience they were just sharing the existing audience.

At the same time procurement comes along and goes, ‘well we’ve got to get prices down’. They saw that trend so they started saying ‘we want our media cheaper’ but this is the bit I don’t get and they turned around and said, ‘and we’re going to pay you less to do it’.

Now to me a media agency is the person you pay to invest a larger sum of money, 10 or 20 times more to get a return on your investment.

I wouldn’t be pushing the price of the media down and what I’m paying the person that’s given the task of investing that for me because that seems counter-intuitive.

Steve:

It is absolutely. But it’s what happened and it’s why we’re in the position we’re in now and why the ANA in America has released the report. Blimey, any fool could’ve told them this is what they were going to find. I suspect it’s slightly worse here because we’ve been slightly more entrepreneurial and we got on the front foot a bit quicker. You’d see more of this than I would.

Value banks

Darren:

Absolutely. Value banks can only exist, and for those that don’t know value banks – it is almost a promissory note of inventory that doesn’t appear anywhere on the balance sheet. So that’s why I laugh when auditors say, ‘oh we’ll just audit the books’.

Do you think you’d ever see a value bank on a media agency balance sheet?

Steve:

No.

Darren:

No. It doesn’t exist. It’s a handshake isn’t it?

Steve:

There might be something in writing but you can bet that USB stick is in a vault.

Darren:

Yeah, absolutely.

Steve:

The sales director’s the only who can look at it. From the media owner’s point of view these weren’t bad things. If to get an extra point or two share, to get an extra couple of points margin selling price they had to give away a bit of inventory so what do they care if it’s charged for. It’s more money to them.

Darren:

Especially if they’re having trouble selling that inventory at full tote odds. Why not give it as a bonus?

Steve:

The fact that they could frown upon the media agencies when they heard or found out or when a client asked them, ‘I’ve been charged for the following — oh you know it’s part of the trading platform’. But because clients didn’t know about it it’s not a fair part of the trading platform.

Darren:

I had a discussion about this on LinkedIn so it’s actually in writing with a very high profile Australian marketer where I’d published a post saying this whole issue of the lack of media transparency has been driven by the greed and stupidity of clients wanting to pay less for their media.

He said, ‘it’s not our fault the agencies have accepted it so it’s their fault’.

My point of view was (and I believe, Steve, in the golden rule: the man with the gold makes the rules), that ultimately to say just because the supplier will do it means that they will take the responsibility negates that huge responsibility that you as the buyer have in actually setting the rules of the game.

Steve:

Absolutely. I mean clients should spend more time discussing the philosophy of how they’re going to have a relationship with the media agency, the philosophy of their buying and trading.

They should spend more time on that so they understand what’s going on. They should always know if there’s an investment officer or buyer on their business. They should have direct conversations with them. They should know exactly what is going on with their money.

It is their money and they should take a vital interest in how it’s being traded. They shouldn’t be so concerned about the price they’re paying or the unit cost. That’s all in the very first question you asked in this conversation. That’s value. If you get into these philosophic areas, then …

Darren:

The value will reveal itself.

Steve:

Yeah, it will reveal itself and you’ll understand what’s going on. For instance, you bring up the point of the 2008/2009 GFC and the digital and the multiplying of the free-to-air stations and the tripling of inventory because of it.

Clients should have understood that to trade as effectively across all those platforms would triple the workload of any media agency. Now it didn’t quite.

Darren:

It certainly increased it.

Steve:

But in principle they should’ve accepted and the problem with smaller ratings everywhere is that every transaction’s smaller so there’s a greater work intensity no matter what.

Darren:

Absolutely.

Steve:

Even if they don’t go to the digital channels.

Darren:

Yeah, digital channels, digital media, the fragmentation of media, the ability to target very small groups of people or at mass means that it’s more labour intensive. And they go, ‘yeah but technology allows us to do it’. But someone still has to go through the strategic thinking to set the paradigm, the strategy that’s going to be delivered.

Steve:

Darren, then we get to programmatic a few years ago and clients are now railing about that and that was the answer from the media agency’s point of view. It was ‘get hold of the inventory of a particular medium and make it computer tradable’.

Good computer programmes with good vendors and suppliers, media owners give you good targeting skills. You can set a lot of parameters that don’t make it all footloose and fancy free, so you’re not just splattering money all over the place.

But so often when you talk to clients or so often when you talk to colleagues, people are just feeding you money and its CPM and off it goes and you go ‘pardon, what target audience is that?’

Darren:

Don’t start me on CPMs.

Steve:

Media agencies have sometimes led the push for some of this behaviour that clients are now questioning and the ANA report covers and sometimes clients have been the catalyst for the latest round of what’s gone on, so they can’t say, they shouldn’t say that, ‘we have no part or that it’s not up to us, they’re our agent’.

Well you’ve got to have a great relationship if they’re truly your agent and it’s got to be an open relationship and you’ve got to make sure they can make money. By all means make sure they’re as efficient as they can be but then you’ve got to make sure they can make money.

Then you’ll get stable staff. That’s another huge problem with clients. I get a visit a month from a client and you know when you dig on what their problem is there’s no intellectual property on the service team because they are getting…

Darren:

Churned.

Steve:

A complete churn of all their people in a year. And so there’s nothing left.

Darren:

So rather than talk about profit one of the things that I find really interesting is in the U.S they talk about compensation and I have this great joke that I say, ‘compensation means to make good for damage done whereas to remunerate actually means to reward for output or success’.

I think marketers need to start thinking about their media investment as an investment, and therefore think about ways of rewarding the agency for maximising that investment either in value, the value delivered or the performance of it because both of them are infinitely measurable.

The trouble is the auditors to date have all been about cost because CPM is cost isn’t it? It’s actually not value.

Steve:

Nope. And it might have a lot of other attendant harmful effects on what they’re doing.

Darren:

Tell me about it.

Auditing and rate cards

Steve:

You might remember in my previous life at AIS Media, one of the first things that we did was we became an auditor but we became an auditor in part because at the time Channel 9 had launched their rate per programme rate card, which we’d actually designed for them (I can say that now).

Quickly Channel 7 and Channel 10 followed and we did one of those other two’s cards for them, and so we understood the construction of the card and what it was driving to. So, we understood the dynamics that were behind the card, what the television owner was looking for, which was better yield.

But as a consequence what was the way through these new cards for the really canny advertiser?

Darren:

Where could they pick the best value to deliver to their strategy?

Steve:

Of course when you’re an auditor you have to be squeaky clean. So I can’t have a mate called Darren over there who’s heading a media agency and I tip him off about how he’ll work his way through this. But as an auditor you can write reports that guide that are transparent because they’re in a report that’s shared by everyone.

Darren:

Well, that’s a good auditor, Steve. What I’ve seen is most of the auditing that goes on is pretty much setting up a set of rules that distort the agency’s strategic ability to meet a buying metric.

Steve:

And worse than that. The cards that we did way back then, I’m not saying they were the best or that we were fantastic. I’m saying they were designed with a particular philosophy and that philosophy was not anti-advertiser.

It was pro owner but it wasn’t anti advertiser. Unfortunately, none of those cards exist. They don’t construct their cards. Very simple principle when they were launched; the highest rating programme you paid a premium for, the lowest rating programmes you got the discount. It was a terribly simple philosophy.

Today, that’s no longer the case. Some of the highest rating programmes, some of the king-hit shows are actually very economical to buy. You could get out performance easily 20, 30 years ago just by paying a bit of a premium. Today you can get out performance sometimes by buying really good programmes but mostly by buying crap because it’s cheap.

Darren:

And going for accumulated reach and bugger frequency.

Steve:

The tail of the reach frequency graphs. You know I had a client, I’m sure he won’t identify with this, anyway I had a client who was mad about pay TV, absolutely mad about pay TV (and pay TV’s got its uses) but one day he asked, and we’d battled and kind of tried to minimise the proportional budget.

He was one of those people that before the digital age, wanted a substantial amount of the budget to go into pay TV because they had dedicated channels and specialised audiences and all that stuff.

It was very good sales, we claimed that MCM and Foxtel should’ve got marketer of the year a number of years over because they were so clever about what they presented.

Darren:

The way that they presented it.

Steve:

Yeah. Full marks to them.

Darren:

Salesmanship.

Steve:

Anyway to cut a long story short, eventually for some peculiar reason, something that he’d forced us to do he said, ‘oh, could I have the reach and frequency on that?’ Somebody came to me and said, ‘he’s asked for the reach and frequency’, I said, ‘do it, do it’, ‘but when he sees this he’s going to be horrified.’

I said, ‘do it, he’s asked for it’. Sure enough within minutes of it being emailed, “Steve…

Darren:

Low reach, high frequency.

Steve:

‘Steve, what is this? I must have got this wrong.’ ‘No, it’s come off the back of the computer. No one’s touched it. We can do it 100 times over.’

Darren:

It’ll be the same result.

Steve:

‘It’s all frequency and no reach with the way you’re using this medium. We’ve been telling you that for years’

Darren:

He’s probably been picking the same environment and just investing in those and just getting the same audience over and over again.

Steve:

All of these things go into your very first question. All of what we’re talking about comes to value.

Value is in the eye of the beholder

Darren:

Steve, in my early days as a copywriter I had to write radio ads so that the particular client could buy a package on a radio station that got him and his family a trip to Disneyland every year.

So, when it comes down to value, for him value was running a run of station package that included a trip for four to Disneyland. It all comes down to how you define value.

Steve:

When the media run those things for clients or media buyers, this started a long time ago. We had a staff handbook in AIS Media where we were very firm about inducements. Inducements of any kind had to be declared to the client in writing and if the client wished to take that inducement it was theirs. It was their money it was running off the back of and so we insisted on being transparent of course.

There was a lot of colourful language used at the time by both staff and senior management and I said, ‘no, we are investing client’s money. Clients cannot think that we are bending the truth or being compromised with their dollars in any way so we must have this kind of transparency.

Most clients when you are that open with them say, ‘well, would you like the trip to Bali? You have it. If you get the trip to Bali, you go right ahead.’ Quite happy with that as long as the client knows and of course many clients have rules in their marketing departments about what they can and cannot accept and many of them say, ’we can’t be part of this’. We can’t tell you what to do with it.

Darren:

So, it’s not value for them.

Steve:

No, it’s the reverse, it worries them that these things go on and I think we should get rid of it.

Darren:

How many times does a network value in their…

Steve:

Hospitality package.

Darren:

Hospitality package for the Olympics for instance. Every time someone gets the Olympics’ deal there’s a huge hospitality package built into it. But that’s another thing I think is changing, that’s the relationship between the advertiser, agency, and media owner and I’ve seen a change with the rise of Facebook and Google because in both cases like there’s always been relationships.

7 and 9 have used sports events to invite clients along to hospitality but what I’m seeing with the Facebooks and the Googles of the world is that they’re using data or user insights as a way of almost leaping over the media agencies and building those relationships.

I have a number of marketers that say that they value the relationships with those media owners for those insights.

I’m wondering from your perspective because I think we always forget the role the media owners have in the whole media ecosystem.

Steve:

Look, media owners when they’ve got a sizeable proportion of their sales going to one advertiser; they have a relationship. It might not have been the case in your days when you first came into the industry. Advertisers used to rail against the television networks, they said,’ we never meet them, we never see them’.

It’s not the case today. There’s very senior people based inside every network and basically they’re key account people and it is their job to have a relationship and to be as transparent as they can be with the advertiser and to look for adding value and maybe opening up margins by doing something extra for them.

We’ve all seen, every network’s got a couple of value added companies now that do things, they do advertorials they do whatever and this has always been currency.

You know some media companies like Murdoch Magazines they use research, consumer insights, every couple of months they’d do some ground breaking study that explained to the advertiser in that category what the consumer was thinking and the way to tap into that.

People have always used good data and research to explain to clients, to get clients a better return on investment or show them the way they can. I think that’s quite valuable.

Where some of these new media owners, perhaps smartly, have cut completely across the media industry, media agencies industry is there’s no commission. For any small clients it’s all self-serve.

We have to deal with this, every day of our life. We self-serve everywhere. Trouble is, like Monday and Tuesday of this week, a couple of those places (I won’t mention them) their self-serve did not work. We couldn’t get a campaign up.

Relationships in the digital era

Darren:

Technology’s brilliant until it doesn’t work.

Steve:

Yeah, until it doesn’t work. You know in all these modern new organisations, two of which you’ve mentioned, if you don’t have the direct line of the person there’s no way of getting through.

Darren:

It’s interesting, you go to their website– there’s just nothing on there.

Steve:

There’s nothing.

Darren:

It’s been a great conversation but we’re running out of time, if you could give marketers, advertisers three things that they should be looking at and it’s probably the same three things it’s always been.

It’s always worthwhile stating the bleeding obvious but what are the three things if they’re responsible or committed to a media investment what should they be doing?

Steve:

Well the very first thing they should be doing is asking what are we trying to do and how are we trying to do it? Yeah, what’s out strategy and how do we think we’ll execute that strategy and why?

You know the most powerful word I think I’ve learnt in life is ‘why?’ If you keep asking why even against the best salesperson, you’ll eventually get the answer because eventually they’ll get so frustrated that they’ll boil over and then you’ll get the answer. It maybe with a lot of invective but you’ll get the answer. So that’s the very first thing they should ask.

Then they should ask what sort of a relationship do I want to have? If I’m going to have a media relationship, what sort of relationship am I going to have (or creative agency)? And what sort of relationship am I going to have with the media? Do I want to have a relationship with the media or do I want to sub-contract that?

It’s best to be clear about that because it empowers your media agency if you say I don’t want to have a relationship. By the by, a good media agency should always tell the client to have a relationship with key media, maybe not all of them but with whatever those keys are.

So that when extra opportunities come up, when favours can be granted they’re in the frame. If you’re faceless and nameless you’ll never be in the frame.

Darren:

You’ll never get it.

Steve:

The last thing in all of this is really going to the same thing we started with, that’s value.

How am I going to define value? What’s the KPI here? We learnt from doing a lot of direct marketing and some very wise souls said; ‘Don’t do it if you can’t measure it’. ‘Don’t do it if you can’t measure it accurately’. ‘Don’t do it if you can’t measure it accurately and are not going to do anything about the measurement.’

It can apply to fast moving consumer goods; it can apply to all kinds of things. When we were in fast food at one point – they’re some of the canniest people they’re still around some of them. They understand value. Intrinsically they understand value because they’re a high turnover, quick transaction business.

Media business isn’t that different from that. It’s different but the principles are somewhat similar and so they’ve got a cannier appreciation of these three things that we’ve just spoken about and they can tell you exactly what they’re looking for on nearly every occasion and exactly how they’re going to do it.

That’s because what they start with; ‘how are we going to increase our sales?’ or ‘how are we going to hold our sales in winter?’ or we’ve got this promotional deal that’s going on, you know comments with newspapers. What are we looking for here?

So often clients are shy about saying what they are ultimately trying to achieve. Well are you looking for a sales increase? What’s the quantum of the sales increase? Show us where we’ve been.

You know all of the clients are shy about showing the intimacy of their sales data. The best clients give it to you and say here’s where we did a price promotion and that’s what happened at Coles and that’s what happened with Woolworths, and that’s what happened at Aldi.

Darren:

So you can get under the skin.

Steve:

So we want to do this here when we’re not on special and actually get a return at full price and then we’re going to do something over here where we are on promotion but not on full promotion.

You brought into their confidence; you understand the dynamics at play in their business, in their category and you can actually start to give some grey matter and not just be a transactional person.

Darren:

Exactly.

Steve:

Those three things off the top of my head that I answered you are the ones that get you out of pure transactions and into adding value to the client.

Darren:

Yeah, I think it’s Einstein’s quote that ‘genius is taking complexity and making it simple’. I think today too many people are focused on taking the simple and making it incredibly complex so I’m glad that we could have a conversation that perhaps has helped people get back to finding simple solutions to their complex media problems.

Steve:

Let’s hope it stimulates. Thanks, Darren.

Darren:

My pleasure. Thank you, Steve.

TrinityP3’s Media Transparency, Performance and Value Assessment takes a holistic look at the operation of your media agency, assessing against best practice at every stage of the journey. It aims to give you the tools to improve the output of your media agency.

Why do you need this service? Learn more here

About Darren Woolley

Darren is considered a thought leader on all aspects of marketing management. A Problem Solver, Negotiator, Founder & Global CEO of TrinityP3 - Marketing Management Consultants, founding member of the Marketing FIRST Forum and Author. He is also a Past-Chair of the Australian Marketing Institute, Ex-Medical Scientist and Ex-Creative Director. And in his spare time he sleeps. Darren's Bio Here Email: darren@trinityp3.com

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