Friday, November 15, 2013

The memo the print media didn't get: increase ad rates with every decrease in readership

As many of you are aware, I have recently become a published author, in collaboration with my good friend Joseph Jaffe (@jaffejuice).

Our book “Z.E.R.O.; zero paid media as the new marketing model” has been out for a few weeks and we are beginning to have truly interesting conversations with readers all over the whole world.

One of our contentions in the book (and one where, according to Joseph, I am more bullish – in a bad way for the industry – than he is), is that “the big one is coming.” Big what?

This: If you look at the sum of current trends, traditional media is incrementalizing itself out of the marketing mix. Permanently. And if you, as an advertiser, are not prepared to evolve into a different mix, you/your brands will likely go the way of Blackberry, Kodak, Pets.Com, print media, the Dodo and the Dinosaur.

So let’s look at the facts.

In today’s world, TV still gobbles up the majority of marketing dollars. Too many advertisers rely on 1990’s mix modeling and other, inertia incentivizing practices to determine where to spend their dollars. The answer is still that the majority will go to TV.

Don’t get me wrong, marketers are not stupid (well, most marketers anyway…). They know for instance that print media have become less and less relevant in a tablet, mobile, digital, always on world. And they are voting print out of the mix, largely. A shocking loss of readership and with it income from subscriptions and newsstand sales, and as a result a shocking loss of advertising revenue that no programmatic or native advertising budget ever will make up for, is ringing the death bell for many publications.

But TV has largely escaped unscathed. How is this possible?
  • It can’t be the increases in viewers – because there aren’t increases.
  • It can’t be the low costs – because prices have only increased.

  • It can’t be TV Tweets to the rescue – because the digital water cooler, although important, delivers marginal incremental viewing.
  • It can’t be the inclusion of +3 or +7 day viewing – because we can’t even agree on which one it is. Regardless, the increases don't seem that substantial.

  • And it can’t be new services such as Aero or FilmOn – because they “threaten the existence of the American broadcast industry as the nation has come to know it” (says The Media Institute).

Meanwhile the TV industry is laughing their heads off. I would too. In what other industry can you consistently deliver less and less (in ratings and – more importantly – in relevancy) and charge more and more. The TV holding companies are doing just fine, thank you very much. In order below: CBS, News Corp. (the house that Rupert built) and Walt Disney, parent to ABC, ESPN and all that other stuff your kids like.

No need to feel the same kind of compassion for them as you should for, say, the New York Times, Newsweek or any of the 17 print titles publisher Sanoma just announced to shed/close in my native The Netherlands. The print media clearly didn’t get the memo: you should have increased your print advertising rates with every decrease in readership. Dummies!

So what makes advertisers so TV dependent, other than inertia or self-destructive tendencies? Well, for that I humbly steer you towards our book.

For good measure, we throw in 10 whole chapters on what you can do to correct the course of your ship. All ten lessons are steps on a journey to become consumer centric and connections neutral in your plans, instead of brand or campaign centric. They are pragmatic but not easy. And they will save you money while increasing brand relevance. OK, enough with the sales pitch!

But I will promise you this: as someone who has personally been part of the implementation of many of these change strategies, they do lead to a better world. One where TV could be part of your mix. But where it doesn't form the starting point or the backbone of your whole marketing strategy.

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