Media Models and the End of Broadcast Spend

In a comment to my last post, Barry Martin of communications design company Hypenotic, outlined a couple of issues that publications like AdAge are facing as members of the advertising establishment. In Barry's words:

1. You just gave strategic advice away for free.

2. You're basically suggesting they join the conversation, and thereby become part of what's going on. That's not their model, and the establishment doesn't want to admit the old model is crumbling until they have a clear strategy to monetize the next one.

3. One also gets the sense from your comprehensive post that anyone and everyone can do this new stuff. Where's the caché in that?

Agencies have believed themselves the keepers of the strategic communications grail since the beginning of advertising. Media companies their meal ticket. And big business has been locked into a large broadcast spending dance with them that all three have grown comfortable with.

Corollaries like AdAge are hanging on like a parasite with a demented host.

Though for a series of reasons push marketing is working less and less, it's hard for an industry that has consolidated to a few colossal dinosaurs to suddenly shift to a value model. 

By value model I mean that social media enables modern marketing in 2 ways that offer value to consumers:

1. People will only share/evangelize/discuss/etc actually useful products/services -- so agencies will be in the uncomfortable position of having to tell their clients when their products suck.

When your bread and butter clients are multi-nationals who sell over-packaged, low nutrition non-essentials shipped all over the world, you're talking about getting some of the biggest companies in the world to change how they do business.

2. The second way to offer value is to engage us. 

Good agencies have always know there are two ways to sell parity products–negative tactics like irritating repetition or fear, and entertaining us. The former is working less than ever because there's no way to keep up with our media consumption patterns or the proliferation of credible media options.

Barry's company uses an experience design approach. To me social media allows companies to design conversations that could pave the path to engagement with customers and partners. But before they can do that, they might have to redesign their business - create products and services that are worth talking about in the first place. This is valid for media companies as well.

New media potentially enables companies to reach the right people in ways that traditional media could not offer. I can hear Steve Rubel scold me here about making this difference between new and traditional. I'm talking about media models, bear with me.

What happens to media companies in the modern marketing scenario Barry outlines? What happens when syndicated programming wins the favor of consumers over broadcast models? This is valid for TV as it is for online publications.

Consumer preferences on pay-per-view programming and TiVO have affected TV spend - the justification is less strong. The trend towards local and cable is already there. With online ad spend gaining in marketing budgets to $24.9 billion in 2008, a figure revised down by one billion after the grim economic news, there's opportunity to spread ad buys over more sites and media. 

Is this the end of broadcast spends in favor of niche spends? What do you think?

Comments

[Simon]

Hi Valeria

Concentrating on your last point, broadcast still has a function so long as its definition remains true. I.e broadcast, rather than narrowcast.

Social media and marketing enables microtargeting, which is incredibly enticing. But not all products require microtargeting. Broadcast and traditional media give that mass reach - in one environment at one point in time with synchronous consumption and feedback.

Niche spends can act as a complement - engaging the advocates, mavens, connectors etc over a longer period of time for greater reward. But to my mind, for most products at this point in time, broadcast should remain the core.

Best
Simon

[Gavin Heaton]

Brands are figuring this out for themselves. Take a look at what P&G are doing. Look at the way that Scott Monty is working with Ford. In some ways it is not even about models -- it is about where the people are. It is about audience.

For some industries and product categories, the only place to reach your audience is online. And the reverse is also too -- there are some audiences that never touch a computer (but this is changing and will continue to evolve). But now, with audience fragmentation (across media and channels), the focus should be on developing and activating a strong multi-touch strategy, using the media that work best for your customers (and not strategy that just suits your pattern of buying).

[Lynnelle]

Interesting and insightful. Eventually, traditional broadcast advertising will be the new/old niche marketing; narrowly focused on those who don't fast forward or silence the commercials.

Off topic, the point you made:

"1. People will only share/evangelize/discuss/etc actually useful products/services -- so agencies will be in the uncomfortable position of having to tell their clients when their products suck."

Would be nice if the legal system could have such a revolution. Defense lawyers having the job of ensuring fair treatment but also having the responsibility, foremost, to the public and what is 'right'; telling their clients & the world the truth, i.e. their products suck.

[Valeria Maltoni]

@Simon - glad this post caught your attention, given the focus of your work. Your note on definition makes me think about casting the net and catching as much fish as possible... I do wonder about the meaning of mass reach today. My content consumption shifted radically in the last several years, as has that of many colleagues and friends. Something's gotta give - we have only so much time and attention to spend. Which brings me to the comment Gavin adds to this conversation:

@Gavin - indeed as audiences, we are in slightly or radically different places than we used to be. I am a believer of multichannel and multi-touch strategies, especially in light of the scarce time + attention. Historical buys are dangerous, as they do not recognize changes in preference and the broader market conversation.

@Lynnelle - "traditional broadcast advertising will be the new/old niche marketing; narrowly focused on those who don't fast forward or silence the commercials." That may very well become the case. I do not think agencies are anywhere near telling their clients the truth about their products. They are not even in the running for telling clients their strategies need help.

[Len Kendall]

Your first number 2 couldn't be more right. It's an interesting cycle because brands are absolutely not ready to invest themselves in the conversation before a clear form of monetization is present. But in many ways the current form of advertising, ESPECIALLY offline is no more trackable than social media. Sure we can look at TRPs, CPMs, and in SOME cases direct response, but you can create all sorts of metrics for social media that will make you just as comfortable. It comes down to switching dollars a new playing field that may be just, if not more (I hope) effective.

[Valeria Maltoni]

Len:

Monetization is important (bear with me here). We have an obligation to the businesses we serve to generate revenue. I am working on two projects that will put some flesh on ROI of social media, as I've written about it a little here.

Comfort levels and vested interest have a lot to do with slow adoption, as does the fact that the current model is feeding too many mouths. Change is uncomfortable, but irrelevancy is even worse. This is the perfect environment for something great to happen and shift a whole industry.