Posted by Gordon Plutsky on Wed, Jul 14, 2010
This is an article I wrote that first appeared in Direct Magazine
At the end of July, the AMC show Mad Men returns to television for its fourth season. The world of media and marketing has changed since the early 1960s advertising heyday. Aside from the obvious cultural changes (drinking, smoking and sexually harassing women in the office were completely acceptable, along with being racist, homophobic and anti-Semitic), the biggest difference is the introduction of an essential measurement that clients now expect their agencies to show: the marketing return on investment.
The Mad Men days were golden ones for media companies and agencies because there was little to no accountability. Marketers spent millions on TV, radio, billboards and magazines, but there was scant actual proof any of it worked. Yes, companies could look at brand sales during the same period of time as a campaign and make some judgments, but it was hardly an exact science. Media decisions were often made based on the personal—and subjective—logic and taste of the executive who carried the most weight.
Think how much money has been spent—and likely wasted—sponsoring golf tournaments and advertising on Sunday morning news shows. These are purely ego-driven buys with little defined value. Several generations of ad sales people got wealthy selling promises they knew they’d never be called on to prove.
I was one of those making the promises back in the glory days of trade publishing. We had stacks of research and presentations to back us up, and when that failed, we took the client out for an expensive dinner, spa day or ball game.
There were ad readership studies and some companies did try to attach sales measures to their ad campaigns. Direct marketers could track 800 number calls, but even that definitive measurement was of no help to companies selling through retail or distributors/resellers.
Because so much of advertising was dependent on data extrapolation and blind faith, the media business, more than any other business, was—and continues to be—transformed by the Internet and advances in technology. In fact, the ability to track and measure may be the single biggest factor driving media companies and marketers today.
The advent of cost-per-click from Google changed the equation forever. Suddenly, marketers only paid for consumer action and the “branding” was free. Where did that leave the media empires that were selling the branding opportunities for a king’s ransom? More than a little compromised. No matter what the medium or the outlet, this fundamental change in the way businesses can connect their products and services with consumers continues to reverberate through the industry.
The newfound demand and desire for media measurability among companies that were formerly beholden to traditional advertising is driving the media itself. The explosion of digital magazines, mobile/tablet apps, and similar media that allow consumers to connect directly with brand content is indicative of the need to measure clickthroughs and conversions.
Even television is not immune: That medium is now merging with innovative online sites such as Hulu and ESPN3.com to remove the barriers between broadcast television and the Internet in order to tap into consumer-behavior metrics. More and more video will move online as consumers spend their time there and companies tap into new, actionable marketing opportunities.
Even as marketers embrace the technologies behind online advertising that give them precise measurement of the effects of their ads, they are already looking toward the next wave of development. Those are the ones which will capitalize on behavioral targeting in order to give marketers a leg up in generating and measuring ROI.
Despite these advances currently being challenged by consumer privacy advocates, shifts in privacy expectations—and a rising generation increasingly willing to compromise privacy for convenience—are clearing the way for this kind of targeting to become the standard for online advertising. Not only because it cuts waste, but because it allows marketers to advertise using relevant content that speaks to the interest and behavior of a given target audience.
As a result of these changes, established media companies are now sometimes being left out of the equation. Marketers no longer need these middlemen as they are able to engage customers directly. Whether in the form of email marketing, social media, behavioral targeting, virtual events or direct mail, there are abundant tools and techniques to measure tactics and to gauge if sales objectives are being met.
The true benefit of new technology is the ability of brands and companies to create and foster meaningful relationships directly with their customers, without the filter of a media company. After decades of renting media space from all-controlling media powerhouses, any marketer in the world–from the local CPA or chiropractor to IBM and Coca-Cola—can create media platforms to host original content that attracts customers and facilitates long-term relationships.
It’s not just the sexism and the homophobia that make Mad Men seem archaic; it’s the business model itself. If marketers can create and own their media channels rather than run ads with traditional media companies, and they can measure the success of those same channels themselves, they certainly don’t need to people who created those ads in the same way either.
This presents a new challenge to media companies, which must now provide marketers with access to consumers along with measurable advertising opportunities. Media companies must additionally provide content that will capture the imagination of consumers and hold their attention in order to compete with increasingly good branded content. Only media companies that innovate and provide measurable value for both the consumer and marketer will survive.