Transforming Advertising Production for the 21st Century

This is the fourth post in the series of TrinityP3 Webinars.

Good afternoon everyone.  I’m going to have a chat to you about transforming production for the 21st century.  So I’ll give you a little bit of background about myself.

I’ve been doing production related things for many, many years, going way back to the 70s unfortunately. So I’ve seen a lot of transformation throughout that time, that was the pre digital age and I’ve done that in Europe, all through Asia and in Australia all down the eastern seaboard.

So this is a subject I’ve worked with for a long time, most of my career, and it’s transformed many times but hopefully today I can give you some pointers that will help you transform as well.

So what we’re going to discuss today is a few things.  So what is the definition of production and transformation of production in the 21st century; what does it look like?

I’ll give you a brief history of previous transitions that have happened over time. We’ll look at some of the current challenges that marketers have, then we’ll do an overview, a bit more of a deep dive into the various media channels; so TV use to web broadcast media which also includes video and radio, print which is what we would define as magazine, newspapers and outdoors, then we have printing which is what we are looking at now which is commercial printing and digital printing.

Then we get to the main topic which is digital and we all know that this is where things are moving to.  Then we’ll go through a few traps and then I’ll give you some tools for future proofing the way you approach production today.

What is production in the 21st century?

So firstly, what is production in the 21st century? It’s a digital world, therefore, the most important thing we have to do is to understand that these assets are very valuable and they will be re-purposed so therefore the actual storage of them is the most important thing you’ll do.

You need to store them in an organised fashion so they can be reused throughout. So that’s a keystone for production today. What it isn’t based on is the way advertising agencies and other suppliers have been charging you.  There is a lot of legacy terms that are used that come from the old days of advertising that we still see constantly when we do assessments around production costs and these are particular agency revenue centres.

But it’s not what moving forward is; we need to get rid of these, we need to understand them better and use terms that are relevant to today.

We also have to be careful as we move into the digital world, because there’s a lot of acronyms floating around, I think a lot of it is used to confuse us all and it’s about the complexity of actually doing anything.

At the end of the day, someone’s actually helping you publish, it just happens to be in the new channel called digital.  So it’s about these partners you engage with helping you define your strategy, not making it very complex by talking a strange language that we don’t like to admit we don’t always understand.

The 21st century is also about the opportunity to reach and actively engage with customers that we’ve only dreamt of in the past.  If you go back to the way that things used to be channelled before, with the old mediums we couldn’t engage with certain customers.

But with this opportunity comes the challenges of how we get relevant content in a cost effective manner and how we produce that content to actually get out to all those customers.

We’ve seen a seismic shift away from TV production as a one-off.  Obviously there’s still a need for it in brand, but it’s also around testing and modifying when we’re actually using the digital channel so that we can actually have lots of testing going on, in the static forms of banners or being in the video forms.

How do we actually do that in the 21st century? Well unfortunately what we’re seeing and what I’m seeing is maybe three printing companies in Australia a week going under. Commercial printing is dying. We want to try and hang onto it but it is unfortunately changing, we’ll touch on that point and help you transition away from that if you need to as well.

My view is that there’s a rebirth of the publishing model, not publishing as traditionally known as pushing out magazines, but the skills around publishing, where they help to actually generate the content edge. They got writers involved and photographers and they were pulling together articles that we were then pushing out through the old channels. We’re doing exactly the same thing.  We need to organise content and then move it out through our modern channels, those being the digital channels.

So let’s have a look at some traditionals that we have known, these are the ones that I have known, some of you aren’t old enough but I’ve seen most of these, I even saw one before this time when I first started in advertising production, they were still using letterpress.

It’s not that long ago.  We had, and I was one of the first people to transition away from letterpress into what was litho but a lot of those people were very, very scared of what this was going to do because we all get stuck in our ways and we have comfort but to move away from that was a big move in the good old days.

The ones that you’re probably most familiar with and even understand would be when TV came out, I’m sure none of you are old enough to remember when TV was first started, but there was talk about how it was going to be the death of radio because radio was where everyone got their news and entertainment.

Well that was the mainstream of mass marketing before TV.  So the presumption of what was going to happen was, that people would leave radio, therefore, as a channel, we wouldn’t have to produce things for it anymore, and use this modern equivalent which was TV.

But radio has actually reinvented itself and digital has actually allowed the podcasts, specialised radio and content is being pushed out by that channel and it’s helped marketers now target the message through that channel.

From a production point of view, nothing really has changed there.  You’re still producing good audio, a lot better production values around it now but, the same thing’s occurring.

And TV, TV itself as it was going to replace radio, is the one that’s under threat from things like Stan and Netflix as well as the digital channels and obviously anything that’s happening on the computers themselves. So it’s more under pressure than radio is.

The other one that we’ve seen is radio magazines replaced by digital. Obviously newspapers, magazines, specialist magazines where everyone got their gossip and they got their news and the massive amount of money being generated through classified advertising in the newspapers allowed them to subsidise and everything else around quality journalism which was a rare form of content.

People were hoping the transition would be at an organised pace over time but the mobile phone has changed that so that’s actually speeding up very, very quickly.  So newspapers and specialist magazines are going under all the time because people can look for the content they want as opposed to it being served up in a not very timely manner with both of those streams.

Then internet advertising which is a very interesting side. This is not necessarily relevant to production, but we have to think about what we’re going to have to deliver into these channels.

So paid, targeted, media advertising based on consumer search behaviour is what was actually happening with programmatic bookings, therefore there’s always going to be continuous growth and an increased level of targeting that will get more sophisticated with things being pushed out through Facebook, LinkedIn and all the other channels. So content was required to fill those spaces.

An interesting release of Apple’s latest phone with the ad blocker software in there is causing a few scares for the likes of Google.  I’m sure Google will come back strongly but that does change the dynamic if paid advertising can be blocked. What does that actually mean for the internet advertising?

And it’s good, lots and lots of bookings can be made , but with too much space, we don’t necessarily have the right content to actually fill it so that’s a big challenge.  So what challenges do marketers have today? I mentioned briefly about test and learn deployment when we’re going out, the opportunity to create content that is highly targeted as a one on one piece of communication.

The first thing we actually wanted to talk about was how to generate content for the test and learn deployment. With more places to put things, how can we actually keep those costs under control?

So that’s a big challenge there.  As the content gets more complex and files get larger, you have the problem of where to actually store those and how to actually receive those in an orderly fashion.  When I talk about receive, that is you’ve got multiple people assisting you with creating this content and you need to keep it in a central place so how are they actually going to upload those assets for you?

The third area where I think there’s a challenge is, we talk about building content in the digital world, who’s actually going to build that for you?  Obviously all your partners will be putting their hands up to do that but should that sit with them, because you’re actually talking about the brand or you’re talking about offers, traditionally PR companies might be helping you with that; should they create a lot of that content?

I’m sure they are volunteering to do that but should you bring that in-house? It depends on the channel you’re going down and where you’re communicating that, can you actually put a team together inside and actually do all your social so actually push that out yourself?

Do you have to go to a third party? Or do you go to an external service? Again, is this publishing? Is it the skills of publishing we’re actually looking to do and what can we learn from that existing channel that was actually out there that was helping all those days? Are there things we can actually bring across to help you?

One of the things we’re seeing is the pressure on costs. Production is always seen as an easy target by procurement, I’ve been looking at this. I’ve just been looking at a bit of research that came through and where generally people around the world believe that will actually add value.

Now printing was an area where there was always a focus because it was a commodity good to be bought. But the biggest one where they believe they can add value is around the concept and creative area. It’s a very difficult one but if they’re going to come for it, then we actually need to get prepared as we move forward to see how we can manage that because it’s about value, it’s not about price so the metrics are very different to buying a commodity like printing.

One of the other challenges is managing negotiation rights and releases across multi-channels. You’ll get your agency partner to do this but it needs to be clear that everything you do needs to be managed so it shouldn’t really be a conversation that’s taking place, it’s obviously fairly specialist, there’s some legal issues around this but it is a challenge for you because this content that’s of value to you has no value unless you can actually put it where you wish to.

So also, the question is, when to decouple and what parts of decoupling in that production line as I’ve mentioned. Creative is a very tricky one to try and decouple and I don’t suggest we do that straight away, but other areas especially in post-production in print, media or in a TV video production, do these have to go through what was a traditional agency model? Can they actually be done elsewhere at a more cost-effective price and still get the value you’re after?

The final challenge is, as everyone feels the pressure to go away from commercial printing, how do you do that in an organised fashion?  We don’t want to throw the baby out with the bath water here, we want to make sure it’s done in an organised fashion so I’ll give you some pointers when we get to the printing detail around how you’d like to approach that.

TV production in the 21st Century

So firstly let’s look at an overview of TV production.  Now there’s still a place today in the 21st century for high value TV commercials. They will still generate return on investment if done properly, even the highly expensive ones. But it’s not the same landscape.

Those costs now have to look at where else they’re going; so you have your paid media where you get this content, again, let’s use that term, is going to. Then you have your owned media, which is your own customers coming to you where you can share what you’ve generated in the video, TV space.  Then you have the earned and that’s when you’ve shared your owned customers that you’ve sent this out to and then shared it with everyone else and it’s earned.

So the multiples that are used to look at production costs versus the reach have been thrown a bit on their head, it’s actually about forecasting how many people see it as well as looking just at paid so there’s more work to be done in that space. In TV, digital is the only game in town. No film, it’s all about digital. It’s about the right level of digital as well to actually use around production values. Creating the video content itself can be achieved by multiple suppliers. It doesn’t have to be a one-stop shop anymore.

Let’s talk about the past and past is the recent past and we’ll look at the future around TV. I’ll go through these one at a time and look at what I believe is actually going to happen in the future. Fees being charged by each channel. With the internet and the actual delivery through it, that can’t actually keep going. It needs to be multi-channel buyers every single time to be organised so you can deploy that content that you’re actually paying to create.

The ownership of rights held by the originator, you need these transferred across as much as you can and these conversations shouldn’t be had just before you’re about to actually engage on the production of video or TV content, it needs to be done at a higher level with your providers so that they know that when you are actually doing something, or when they’re producing something for you, that’s a given as opposed to having long conversations about where it should be.

There’s always been and there still should be to a certain extent, high production values required in all cases but as we actually go onto computer and mobile, questions have to be asked around what level you need to do, so therefore, what costs are you willing to incur to get the top level of values on everything you do?

All production stages are specialised so end to end production is tightly held. Now, there’s fear around how a major production commercial would be made because there’s a lack of knowledge and it was a lot of labour involved, a lot of intelligence and experience involved.

Software has come in especially in the back, in the post-production area to assist but still, it’s actually trying to be held for vested interest because an agency would want to control the end to end process. There’s an opportunity there to couple and use the software that’s now available to give you more options. The last point there is the concept and creative ideas area also being outsourced as well as some of the back-end parts of post-production.

What’s happening in print production?

Let’s take a look at print production. As I said before, print production, we’ll call that magazine, outdoors and newspapers, anything in that traditional channel. Now, I believe it is a shrinking market, we’re generating content for digital and we might choose to place it there. But we still need to actually manage it.

A lot of things you can control around production I think are cost related.  These are things around the re-purposing costs that are not very transparent. You’ll be charged for all the channels separately when really you’re creating one piece of content and actually deploying it across these channels. So the size does matter when you’re actually doing this, but it needs to be transparent when you do it.

Old world cost centres are still being used to maintain agency revenue streams. We still see some very strange things going on, a lot are charged for and it’s normally double charging head hours for generating a PDF which is the touch of a button – this is not particularly good.

I understand the agency’s point of view but it doesn’t actually help marketers. Photography and retouching costs are misaligned, I’ll touch on how that is, what I think’s happened there and I think that needs to be watched very closely. So charging for artwork items in the past that are not used anymore. So these are again legacy terms that will appear on estimates that you need to look out for.

There are many and it depends on who you’re dealing with, but it should be a much simpler process nowadays, software is replacing a lot of the labour. When we’re talking about photography, it’s changed. Photographers are still doing it fairly badly, there’s lots of photographers around scrambling for the work and most of those are still trying to capture as much as they can in the camera.

But what we’re seeing is that then we have various other parties, bigger agencies or a third party, or the photographer himself, then charging for retouching. They haven’t captured the final shot in camera which used to happen before we had the wonders of digital retouching, so it’s actually now an extra cost.

So while photography costs have remained static, we see retouching costs are actually spiraling and allowances for retouching are always very, very high where there should be more focus on trying to actually plan and organize the shoot to actually minimise that. Especially in the print production world, especially if it’s out to your shrinking market, we need to actually be careful of the way that’s done.

Obviously we’re going to be re-purposing that content in other mediums so it needs to look good, but we need to get that balance in there a bit more. We need to stop the charge for resizing, again, the way things are actually captured now are using modern software, just because it’s A3 going, A4 going to A3, it doesn’t actually need to be regenerated again, it’s just your output settings that need to be changed, so be careful of that.

Hourly rates for simple tasks, again, that’s what’s being charged at the moment. Anything that’s touched in the current arrangements with your agency partners is around charging an hourly rate for something that is really software driven. So in the future, in this shrinking channel, you might be charged for software or labour, not both.

So if it’s highly specialist work you’re doing and you do need the expertise which is something thinking about work, you’ll need to pay for the labour. But when it becomes more simple, cookie-cutter stuff, software can actually come in and help you. In the photography side, a simple charge for the image capture, not to make it again, trying to make it more complicated, you’re looking to actually have a great outcome from what visually this looked like, that’s the bit you’re paying for, don’t let them break it down.

Software as I said is to replace labour costs, especially in the more simple things but that’s becoming more sophisticated so you’ll be able to take advantage of that as we move forward. More decoupling, do things yourself and then not just locally, you can actually do those at a lower risk now especially in the print field, you can even offshore some of that if you’re doing multiple work. You just need to find the right partner to actually do that, they can help you in this space. It’s more complex in the video space but it still can be done.

Poor old commercial printing

Let’s look at poor old commercial printing.  I believe high quality printing will survive but not in the way it’s set up at the moment. So spending good money, creating fantastic content and delivering that in a hard copy format, there’s always going to be a place for that but it needs to be done at the premium level.

Un-targeted printing is definitely declining quickly. Any research that has come out to defend that position is normally very clouded by the vested interest who want to actually print this stuff so be very careful on presentations, people talking about the quality and reach etc of an un-measurable, un-targeted medium.

So in the past with our commercial printing, we had long print runs and after you did a long print run, it was actually put in the store and distributed or it was used in direct mail. Most people would work directly with the printer themselves via the agency or obviously buy it themselves. So that was the way it was done.

But moving forward, I strongly believe if you can’t target it, you shouldn’t be doing it, use other mediums, digital is where this should be. Don’t store, print and demand as much as you can. To actually help you organise both of those things, you need someone’s help to manage this which is not necessarily your agency or the printer, but someone who’s agnostic to where that content goes.

So content is created, it still needs to go to the printing, print format, use someone who’s doesn’t have vested interest in this, someone who’s not a printer, someone who will still get rewarded if they help you transition away from normal printing into other areas.

Digital – the big one

Let’s look at digital next which is the big one. Beware of the jargon. Ask for conversations in plain English. I think we’re all afraid to quote the emperor’s new clothes to actually say anything but we need to actually challenge, there’s a lot of language used which is deliberately used to confuse us.

It is a channel. It is actually people preparing things. There are costs around doing that, please explain very clearly what it is. So all communication is going to end up digital so it’s not a specialist service, therefore, digital in front of or within an agency name or a partner name is superfluous. Everything is digital.

What we’re seeing again, this is not necessarily production, but a production issue moving forward, is with the movement from paid to owned media, you’re still creating content and the issue is where your costs and the way you actually produce your production is going to come into play.

But you own it so therefore it’s actually back to the storage of it. In the past we used to design, produce, use and discard but moving forward, we need to design, produce or re-purpose, find that asset, use it and reuse it, recycle it and restore it. There can be a lot more uses for it so back to making sure you control those assets.

The agencies are producing most of this workload but there’s a few exceptions to that set up. But outsourcing and offshoring the backend production is something that can now be done with far more safety and this, especially through the lower coding areas, you can actually do.

The front-end, you still need design done here but there’s a lot of other things you can actually get done offshore and at much better costs and time also comes in depending on what part of the world you come from. In the retail area, you need to do things quickly, again, this is another area where you can actually be publishing this work, therefore there’s other options, not just locally.

A big challenge is; we have lots and lots of places where we can currently put paid media or owned media and we need to create content that will actually match up with the customer’s requirements. So we need to test that as well, the opportunity is to test, that’s not building them one by one, there’s definitely program generated testing strategies that need to be employed so again, use the software to deploy that.

That has been around for many, many years, but it needs to be embraced more strongly to enable you to meet all these channels.

Traps to be aware of

Let’s talk about some traps that I see out there which you need to be aware of.  The first one is we talk about asset management, we talk brand management, we see a lot of proprietary systems being introduced by agencies to control and centralise those assets under their roof.

It is your core business now, those assets and that content you’ve created, you need to actually own it, you need to understand where you can use it, when you can use it, what it looks like, and you should be then sharing it with all your communication partners. That is the number one thing that you need to do so be very careful that one of your partners isn’t putting on the table something that will lock themselves in your business and make it harder to move on if circumstances change.

Technology changes and you need to move on and if they actually own all your assets, that’s not a good negotiation tool for you. As I said before, digital in a name does not define an agency’s abilities. Digital content is modern day publishing. Obviously there’s various other areas that you need to engage specialists in the digital world in when you’re out to communicate but just again, I would encourage you to just step back and look at it.

You’re going to publish, you’re going to create this content with that production again. Who’s the best partner to actually help you with that? It’s not necessarily someone who’s a really good coder or a really good UV developer.

One of the things that’s still occurring is agreeing hourly rates. That does not help you control the actual cost of the job. There’s various other mechanisms you can use, again, you can standardise a lot of things that we do every day so to put a fixed rate card in place, which is becoming more and more popular, having a very, very cheap hourly rate, but it won’t keep your costs down.  It’s actually how much too produce each of the items you need to do, that’s what you need to be looking at.

Back to the one that is about budgets. Now that we actually look at the various ways of getting the content that’s being produced for you to market be it by paid, which is like traditional TV channels and social media and other areas, then owned, your owned customer base you’re sending out through your social or other channels, then you have your earned when that’s actually redistributed by your customers to other people.

So looking at what that budget would be, it’s not as easy as saying I’ve got many types therefore I can afford to spend so much money on the production of this commercial or this content.

You need to actually set it based on where it’s going to go to look on the return on that investment and the amount of people looking at it. Obviously, you still see too many people not setting that at the creative briefing. When you look at the ideas, there’s no point in falling in love with a great idea that you’re going to go to market with if you can’t afford it.

Set it at the beginning to make sure that everyone understands the expectations around what you can actually take to market.

Tools for the future

Let’s look at a few tools for the future. We can’t look again, at the way production was done for the traditional disciplines which was print, broadcast and digital. I know I’ve just spent half an hour breaking them down in that manner, but you need to think forward.

You advertise by media channel but you generate digital content in all cases, regardless of where it’s going, that is used across all the channels; video, podcast, blogs, social, newsletters, etc, commercial print. You’re still generating digital content. You need to actually think about that all the time and actually look at producing one that goes everywhere as opposed to various ones for each channel.

Investing, you have to invest in a tool that you own as assets. Again, there’s quite a lot out there. It’s getting better every day. Either do that yourself or ask someone to actually give you a hand with that, but think about the value of all the content that you can actually reuse.

You’ll need to actually own that, have it come inside, and this is not just about buying software. You’ll need someone dedicated, depending on the size of your organisation, dedicated to looking after that so it comes in the right manner and that it’s entered correctly. It’s actually controlled and managed like a librarian would do around that system that you choose to put in. But if there’s one thing you do, I’d actually be looking at that today. So you can actually deploy this content with all these great opportunities out there.

Then you need to examine the value it keeps after the idea is generated and you decouple where there is no value being added. If it’s just being carried along and passed along with a bit of project management all the way through and there’s third parties being used, what value is your company that’s actually project managing it for you bring to the table? More and more, we’re talking to marketers who are looking to decouple. This is especially in the video, TV generation stage.

The last one, back to poor old printing; a printer will not help you move away from printing. They won’t help you cannibalise their own business. You need to find someone who will be rewarded regardless of where you actually put that content and they will work with you today if you have a printing requirement, but help you transition away into the future when you don’t need that anymore. So it’s someone who’s agnostic to help you move away from that.

Summing up where we are at

So in summary, 21st century production is about digital. Digital and only digital. Think of it all the time. All you’re producing is digital content to put somewhere.

You need to get ahead of procurement and plan what you can decouple to reduce costs be it offshore and be it locally. Many companies are doing this. If you’re not doing it, you need to actually be looking at it today.

The most important one I still believe is to collect and manage your own content, put it in a good system, therefore you can actually deploy it. Obviously it’s extremely, extremely complex trying to put that against sales. We actually have some metrics at TrinityP3 that we use against spend, we actually do deploy it so you talk about the percentage that you should spend and let the people have the opportunity to view it.

But it’s far more complex with marketing, a challenge as it always has been is how much of our spend is actually returning dollars to the company from the sale of that product and service – it’s far more complicated.

There are some more TrinityP3 webinars coming up which I encourage you to go to the website and look at in more detail. I thank you for your attention and look forward to speaking to you again, thank you.

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