Through the looking glass, both ways

The Wanamaker half

Years ago, John Wanamaker said, “Half of my advertising is wasted, the problem is I don’t know which half.” If he were alive today, he might say, “Half of this business is ignored and I know exactly which half”. Sometimes I think we ignore more than 90% of our business. We focus on mega agencies, consolidated advertisers and merged media empires, but that’s only half the action, half of all advertising spending. We rarely flip the scope around to inspect that part of our business that is comprised of middle and smaller advertisers and agencies who represent half of all billing, but 99% of all enterprises. When we do look closely here, we minimize their importance by distorting the picture through the tunnel end of a telescope, because the biggest players occupy our attention.

The halves and halve nots

A rule of half reigns: current estimates have it that $231 billion will be spent on advertising in the US this year, half the worlds spending. Roughly half of that $231 billion will be invested in major national media and nearly half of that will be placed by the big three mega-agencies; IPG, WPP and Omnicon.

Eighty billion is spent by the top 100 companies, $25 billion by the top 100 brands, an average of $250 million per brand per year. But, what about the other 99% of companies that advertise? It is important to look at this landscape on a brand basis. Advertisers still make agency assignments by brand most of the time, agencies still create ads, plan and buy media and consumers receive messages, all on a brand basis.

Much ado about something

Commercial Monitoring Reports claims to measure the advertising activity of over 900,000 brands, spending over $100 billion in 15 measured media. In round figures, that’s $100,000 for the average brand a year. Because they sometimes list a brand repeatedly when it is partnered with another product or is line-extended or even changes creative expression, this is probably an exaggeration of the number of advertised brands in the marketplace. However, the point is there are a lot of brands out there.

For convenience, we divide companies into seven approximate groups. The remainder of this report will concern itself with mid-sized advertisers.

A $10 million shadow

If you market a brand with $10 million, what do you do and where do you go to do it? It is a challenge to even cast a shadow, no less get serious daily attention, at the largest agencies. A $10 million brand would represent 1% of the business at the 25th largest agency. To represent 10% of your agency’s billing, you would have to place your business with an agency ranked over #125. For 25% of the attention, search among agencies ranked over #300.

Matters are more extreme at the top media agencies, because there are fewer of them. Initiative, number 1, bills $10 billion (a thousand times your brand’s billing), number 10, Carat, bills over $3.7 billion, number 20, over $400 million, number 30 $100 million. This is still a young and growing field, so at least some of these services are talking about servicing smaller and mid-sized advertisers.

How far will $10 million go? The conventional wisdom today is that to advertise effectively, you must schedule ads continuously and be seen by the consumer when they are ready to buy. It’s called “recency,” but continuous advertising costs a lot of money. Newsweekies cost over $200,000 a page, the highest rated TV shows over $300,000 a 30, there is a CPM premium for buying either locally, newspapers are expensive out of pocket and the Internet still provides a limited reach for advertisers. It is difficult to construct and sustain a campaign of any consequence with $10 million. Naively, you could afford less than one spot on Friends and one page in Time magazine a week, for a few moths – that’s all. Devising a winning strategy must be the work of a real pro. Seemingly there are few places to go and few professional agents to take you there.

The unconsolidated consumer

Everyone has consolidated: agencies, companies, the Media. The only player who hasn’t become more homogeneous is the public. People just don’t sit down together as a family, as they used to, to watch TV. Modern measurement techniques have us calibrating the consumer by definitions much more finite than broad demographics. We are beyond zip codes and psychographics into a world of behavior sets and brain wave research. So with $5-50 million to invest in advertising, a smaller or less attentive agent, disinterested media and fractionated public, how do you go about advertising?

The first decision is not how to advertise, but should you and if so, how much of your precious resources should you invest? After assessing a brand’s strengths and weaknesses and identifying what needs to be communicated to the consumer, the marketer has to evaluate which tools are going to solve the problem. What combination of advertising, PR, promotion, event or cause marketing will do the trick? Expensive tracking and modeling tools are available to figure all this out, but they are probably too expensive for the modest marketer. Oftentimes, he has to get along by “reading” available research and information, consulting independent views and then making the call.

Magic and measured moments

That in a nutshell is the game today, the playing field, the players and rules. Everyone wants to market wisely and get the best advice possible to accomplish that. In today’s bipolar market of the haves and have nots, this is a challenging enterprise. Mid-sized advertisers might have less money to work with, but their problems are at least as big as market leaders. The number of alternative ways to spend money is the same. They are tempted by what a very select few marketers (the other 1%) can afford to do and they cannot. It is a confusing and frustrating position to be in.

The solution lies in simplifying and methodically managing the task. Using the best available information and reasonably affordable techniques to evaluate and interpret their worth, marketers must figure out what they want to say to the consumer and then work on the best, most affordable way to say it to as many consumers as possible. They need to reference their approach against the best practices in the industry or at least get the measure of what has worked or failed in the marketplace. Good counsel is essential and having a smaller budget is not a good enough reason to get by with lesser talent working to solve your problem. It’s just a matter of getting the information and talent that fits.

The good news is consumers are coming from a different place, they take in one message at a time and in that magic moment a message from a small or mid-sized marketer has the potential to be as powerful as one from a billion dollar advertiser. It can move a consumer to buy and if it is a great spot, build equity as well as its better-supported sibling ads. So chose the moments and the people who help make them wisely and make sure that they understand your problem in this context.

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© Media Directors Ink: Nov. 2002