Recession Recasts Traditional Marketing Answers

Great story from Advertising Age for radio sales folks as well as for digital media.  For those of us in both, bring it on!

Garry Leigh

How Media Would Weather Recession

Buyers and Sellers Say Marketers Likely to Rely on Mobile, E-mail, Search

By Ad Age Staff

Published: February 18, 2008

NEW YORK (AdAge.com) — With recession talk in the air, marketers are scrutinizing their spending. But old, reliable tricks such as counting on coupons to goose sales might not work this time around. Luckily, cheaper options abound in emerging media such as mobile, e-mail and search.

Sarah Fay, CEO of Aegis’s Carat

Below, Ad Age spoke with those in the trenches of the buying and selling of media about what they expect marketers to do as consumers tighten their belts.

Network TV In years past, it would have been unthinkable to suggest that spending on network TV would be anything but healthy. But the medium is at an inflection point, with prime-time ratings steadily eroding and the recently ended writers strike keeping scripted comedies and dramas off the air. Analysts and media buyers expect a choppy period ahead and suggest the growth of network-TV ad spending, even as networks seek to put in place cost increases for ad time.

To date, the networks have been able to stay on track. “People are paying the market and are going to keep on paying in the near term,” said Michael Nathanson, media analyst at Sanford C. Bernstein. That’s because ratings shortfalls mean advertisers have to buy more time — known as “scatter” — to reach the same amount of people. “The question is: Can the ratings weakness be offset by the tough scatter? So far it has.”

But clouds are hanging over the retail and automotive sectors — two big supporters of the medium. While spending on network TV will grow, that growth could slow noticeably, said Bruce Goerlich, exec VP-director of strategic resources at Publicis Groupe’s ZenithOptimedia. The firm sees overall “down” spending in the automotive, telecommunications, financial-services and personal-computer categories, while consumer package goods and pharmaceutical advertisers could spend more in the months ahead.

The recent writers strike has made media buyers and planners reconsider their commitments to network TV. Cable has started to gain share in prime-time ratings, said Mr. Nathanson, while Charlie Rutman, CEO of Havas’ MPG North America, noted that “media like digital, outdoor and cinema are getting a seat at the adult table, as is mobile, in the last 18 to 24 months and going forward.” Media buyers said syndication also is gaining more notice from advertisers. Sarah Fay, CEO of Aegis’s Carat, said when there is a recession, marketers often feel the pressure to work with efficient forms of TV buying, so they are “really starting to look hard at the Long Tail of TV or having cable play a bigger role.”

Cable Cable TV already has seen an increase in ad spending and ratings as a result of the writers strike. It could see an even larger share of dollars pour in as the broadcast market tightens and the playing field for smaller, targeted networks becomes wider. “People definitely still want to be in national TV and may play around with their broadcast and cable mix so they can drive their CPMs down,” said Steve Kalb, senior VP-director of broadcast at Interpublic Group of Cos.’ Mullen. While cable is a cheaper alternative to broadcast, marketers are just as apt to turn to digital marketing to have the same targeted conversation with consumers. Jon Stimmel, director-media buying for Unilever, is one major marketer turning to other tools to supplement his TV buys this time around.

Digital Digital, said Bryan Wiener, CEO of digital agency 360i, is the least vulnerable media spend in times of economic downturn because it is inherently more measurable than other media. “Digital, in general, does not feel the effects initially because in tough economic times, there is a flight to measurable media,” he said, adding that the categories that tend to drive the best return on investment are e-mail and search — so marketers are likely to continue investing in those categories regardless of the economy.

Search marketing, because it’s so closely tied to sales, more often is thought of as a cost of goods sold rather than a marketing and administration expense. Therefore, it is assumed to be the most recession-proof of all marketing channels. David Kidder, CEO of search-technology firm Clickable, calls search “a unique insight into a consumer’s wallet.”

But don’t forget that its success is tied to people’s ability to purchase products and services. “E-retailers have been successful in search marketing because they can capture a specific moment of intent and convert it into real dollars,” he said. “If the people who are searching aren’t spending money, the value of that moment of intent goes down. The effectiveness of search marketing is tied to the economic value of the searchers.”

Charlie Rutman, CEO of Havas’ MPG North America

Carat’s Ms. Fay notes that economic strife may give marketers the license to experiment with new forms of media — such as mobile — because it doesn’t cost that much to add to their marketing mix. “There are elements you can add to a media buy where it is not a huge media investment, but it has the potential to really increase the involvement of the community,” she said.

Radio When it comes to driving business locally, marketers are seriously considering radio. Laurie M. Clark, regional VP, Coca-Cola, Atlanta, has found radio effective when she’d rather not spend a big budget nationally, an approach used for the launch of Coke Zero. As recently as five years ago, the majority of Coke’s media buys were executed on TV and radio. Now those are used to more efficiently drive reach and support plans that use more in-store media and other new platforms.

Rex Conklin, media director of Wal-Mart Stores, said Wal-Mart already has started using radio for more efficient media spending in the wake of economic recession. “Particularly in a down economy, the advantages of radio are significant in that it’s very local and very flexible, which is incredibly important, especially when you’re talking about pricing.” “

Magazines Consumer magazines’ fortunes are at the mercy of the marketer categories on which they rely. “If we see the consumer-buying behavior changes to spend less, ultimately that could reflect changes in our advertising budgets,” said Robin Steinberg, senior VP-director of print investment and activation at MediaVest. “But there are many cases when advertisers continue to spend regardless to keep awareness and top of mind for when it ends. … Unfortunately when budgets get cut they seem to cut print first.”

One hope for magazine publishers: web sites that can attract ad revenue even in tough times, partly because of low rates and partly because digital remains sexy to advertisers. “You have to look at it as a brand,” Ms. Steinberg said. “What may fall out in one area, they may gain in another.”

NewspapersNewspapers face some pretty grim business trends, but the outlook will darken further in recession. “It will cut both ways,” said Jason Klein, president-CEO of the Newspaper National Network, a partnership of 24 newspaper companies that helps marketers place national buys. “It clearly is bad news for classified, which is not a good story in any economy for newspapers.” Help-wanted and real-estate listings in particular, which are already bruising papers by migrating to the web, will become scarcer in an economic downturn.

Bryan Wiener, CEO of digital agency 360i

“On the other hand,” Mr. Klein added, “for certain categories that need to promote sales in the short term, some of the retail categories may be picking up spending.” Soft TV ratings lingering from the writers strike may even collude with retailers’ more pressing need to push up newspaper ad sales a bit, he said. But media buyers aren’t that optimistic. “I don’t know, necessarily, if someone’s budget is cut, that their choice will be to go to newspaper, because newspaper is very expensive to buy,” said Paula Hambrick, president of Hambrick & Associates, a media-buying service. “When you start looking at how many people you’re reaching and how much it’s costing, it’s an expensive medium to use.”

Out-of-homeOut-of-home — thanks to new digital and video technologies — has started to take a larger percentage of media budgets, beyond just a portion of what marketers set aside for nontraditional media. However, the potential economic downturn could leave the fate of some of those budgets in limbo. “I hope this recession doesn’t cause clients to exercise cancellation clauses,” said Jack Sullivan, senior VP-out-of-home-media director for Starcom.

In-store, coupons, circulars Coupons and in-store marketing traditionally thrive in downturns, but it’s not clear that will be true this time around. So-called shopper marketing already was booming, with Deloitte Consulting and the Grocery Manufacturers of Association projecting growth of 20% or more this year, but the downturn may not bring any extra boost.

Coupon distribution has grown steadily since the last recession ended in 2002, notes Charles Brown, VP-marketing for NCH Marketing Services, a coupon clearinghouse owned by Valassis Communications, one of the two leading distributors of newspaper freestanding coupon inserts. But while distribution has steadily risen, redemption has fallen in recent years, as marketers have moved to shorter expiration periods and looked to use coupons more as advertising than promotion. While both coupon distribution and redemption rates rose in the recession of the early 1990s, they rose less so in the last recession in 2001 and 2002, he said.

Robin Steinberg, senior VP-director of print investment and activation at MediaVest

Despite recent projections by industry executives that they’ll spend more on advertising in the months ahead, Sunil Garga, global president-business and consumer insights for Information Resources Inc., says he’s already hearing of plans by major package-goods marketers to cut, or at least tighten, media budgets. Nevertheless, he expects shopper and online marketing to see continued strong double-digit growth for package-goods players despite, or even because of, recession, because they’re more accountable than other media and better at conveying promotional messages.

“As consumers get more frugal, CPGs will shift their media to things that have a more immediate return on investment,” Mr. Garga said. “Shopper marketing is a captive audience in the store with an immediate effect. … Online is a medium, too, that supports more value-oriented messages.”

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Reported by Andrew Hampp, Nat Ives, Abbey Klaassen, Megan McIlroy, Jack Neff, Brian Steinberg

Audio Enhances Vision

In radio, we’ve long preached the power of audio and it’s ability to create visual imagery in every individual as well as aid recall of previous experiences and emotions. These audio signatures are fundamental to a successful broadcast brand and are the foundation to many feature programs and flow from one sound type to another (jingles, stagers, beds, etc.). Almost all of us have tested these sound types as well as other musical types and, in fact, the melodies themselves in focus group or other forums to produce metrics for programming them in appropriate frequency and relative strength. When do certain sound types not only flow with another, but produce a stronger impact as a pod than when in another sound type grouping. I was very gratified to see this article in MediaPost today giving some depth to the more well rounded advertising campaigns and their understanding of the targeted use of sound as fundamental to achieving long term brand recognition. Maybe this will help remind ad agencies that radio needs to be integral in the growth and reinforcement of their brand messages. Garry Leigh

Commentary

Use Audio Strategically To Build Brand Identity

by Martin Pazzani, Tuesday, Feb 19, 2008 5:00 AM ET

AS A SPECIES, HUMANS TEND to be visual beings, and as a group within that species, advertising and marketing people are even more focused on the visual sense than normal humans. What else could be expected when the profession is populated with art directors, copywriters and graphic designers? And especially when all the big awards, accolades, and promotions are given for excelling in the visual arts. But a growing number of marketers are beginning to see the benefits of using audio, the sense of hearing, at a much higher level than ever before. They use music and sound as an integrated, planned, strategic communication tool rather than a lowly production afterthought. These marketers are creating the new discipline of audio brand identity and realizing a new area of competitive advantage. Consider this: consumers are exposed to your brand across a wide range of touchpoints that accumulate over time into the brand experience. These touchpoints include advertising in every medium and every execution, various Web sites, retail stores and displays, showrooms, toll-free phone numbers and on-hold messages, ringtones, and obviously, the products themselves. Each one of these touchpoints has music and sound that convey information, meaning, and emotion about your brand to consumers, yet each usually has music and sound selected, created and purchased by a different person with a different idea in mind–and often those people have no musical training or ability. Not only is this an expensive and inefficient use of time and money, but the effect on your overall brand experience is detrimental. By not carefully planning and orchestrating all of your brand’s music and sound, you are diluting brand clarity, sending mixed messages and adding to the chaos and clutter in the marketplace. As a former CMO, I have seen brand recognition and awareness, ad recall, Web visits and consumer information calls all increase by double digits by using the same carefully selected brand-based music in all TV and radio ads for a year. This level of consistency was not boring or creatively limiting, but rather, it followed the basic principals of branding that have long been used in the visual world: consistency and differentiation. Rather than changing the music frequently or using music that sounded like everyone else’s, we made the decision to create a cohesive and unique musical identity. The upside in all these metrics and the impact on the overall consumer brand experience–and the long-term budget savings by not constantly changing music scores–was significant and measurable. To be sure, some big advertisers have long used music far better than others–Nike, McDonald’s, and Infiniti come to mind–but the new profession of audio brand identity and its use of music and sound as a full-fledged branding tool on par with graphic design, art direction and copywriting, has so much more to offer than creating powerful scores for television advertising (and we should know, having won more awards for ad music than any other company in history). Ask yourself these questions: 1. Do consumers know what your brand sounds like as well as they know what your logo looks like? If your brand did have a “voice” and a soundtrack, what would it be? 2. Have you ever done an audit of your audio assets? How much do we spend on music and sound, and how many different audio messages are we sending out? 3. Are musical decisions being made subjectively based on personal preferences of varying people for each execution, or are they made strategically and consistently for the benefit of the brand? And exactly who is making these decisions anyway? 4. Are there strategic guidelines in your creative briefs that give music and sound direction to all who manage your brand? Even better, do you have a carefully created and selected library of “brand music” that they can use to guide their choices? 5. Why do we insist on graphic consistency–logo shape and color–across every medium, yet change the music and sound of every communications touchpoint without a second thought? 6. Why do we invest millions to design and protect our brand’s visual logo and graphics, yet have not even thought about the previous issues? These are some very expensive questions that need to be addressed. Most brands use only one sense and are far too reliant on the sense of sight. This limits the brand’s chances to connect and communicate on a deeper and much less superficial level. Without music and sound, your brand identity is incomplete, it’s superficial, it’s flat, and it doesn’t make as powerful an emotional connection as it could make if you tapped into the powers of music and sound. If you do it right, music and sound become your own unforgettable “audio assets,” which can have great value–and if you do indeed create these assets, your brand will be much better off. And if your brand is much better off, you’ll probably be much better off, too. Martin Pazzani, CEO of Elias Arts, is a seasoned global executive expert in brand building, integrated marketing, and strategic development spanning the ad agency, corporate and music worlds. He has held senior roles at Foote Cone & Belding, the Interpublic Group, DDB Needham, Bally Total Fitness and Heublein (now Diageo). You can e-mail him at mpazzani@eliasarts.com.

Media Battle?

Traditional vs. Emerging?

(as published this week in Consultant Tips on AllAccess.com)

In digesting some new research from Sapient on social networks, mobile, search and other forms of emerging (or non-traditional) media, and building marketing plans to utilize them, I was reminded of my first days in broadcasting back in the 1970s. Questions I never got adequate answers to then remain today, 30-odd years later. What measurements best sum up our interaction or relationship with our audience … and are they remotely accurate? Arbitron, Pulse, callout, Predictor, focus groups, results at remotes … come on, my compensation is tied to a metric and I need one that works. Of course, none of these have really been able to gauge the special bond that occurs between core listeners and all that makes up their favorite radio stations. The most successful and memorable stations go beyond anything measurable and into simply sharing in, and of, the day-to-day life of a listener.

There are no metrics for trusting Kidd Kraddick’s opinion on whether I should volunteer my precious time this weekend to help a cause benefiting people I’ve never met in a town I may never visit, but he communicates the need for a Habitat Home in New Orleans so strongly that I do change my schedule and thereby change my life for the better forever. Time Spent Listening, P1, core listener, cume, cost per point, reach and frequency, number of clicks, time spent per page, unique visitors, number of hits … none have any relevance in this equation. Explain to a buyer or help them explain to the client what this bond is, and why it blows research out of the water.

Now, add the ability to build out the personality of a station with other forms of entertainment via our site or other social networking sites. In fact, let the listeners build a mash-up or two relating to their experience with the station — it’s music, our town, the personalities — and then let them save it to virally spread to their friends, thus giving it a personal endorsement, and you have the strongest marketing campaign possible, but one impossible to measure.

It started with a relationship developed through traditional media, moved to social networks, mobile and probably e-mail, plus was downloaded to at least one, if not several devices for continued interaction in the future. That’s spectacular by any measure. Let’s not think of this as Traditional vs. Emerging but rather Traditional + Emerging = more and deeper engagement with our medium via other media. We are the common thread in the fabric of the daily life of a connected listener — and if that’s not the goal, the form of measurement is irrelevant and so are we. It’s time to get engaged. Your listeners already are.

Garry Leigh