Soft media rates in 2009...I'm not so sure

Over the last few weeks I have heard numerous clients talk about an expectation of softening of the media rates into next year as the economy gets squeezed. But is this a reasonable assumption?

I would argue that it's not and that unlike many previous recessionary periods which have seen media owners slash rates, we may not necessarily see the same trends this time, especially in our two prime media platforms -print and online...why you ask?

We lets start with print media.

In a previous life I used to be a magazine publisher, constantly watching the magazine balance sheet. It was generally tied to one key metric - page yields. High page yields invariably meant higher profit margins but also drove advertisers away when their perception of the magazine's value was not matched by the rates they were offered. As a publisher you could chose to lower yields to chase higher page volumes, knowing that adding pages was relatively cheap and easy and could ultimately drive higher income and total profits even if margin was lowered. It also was critical when in a competitive market to gain market share as a show of strength.

Well in 2008 I think most publishers have established page yields that they feel they must maintain typically calculated to deliver a certain basic issue size. We all know it's no longer about having a big issue size and they are happy to publish the minimum pages needed each week or month to service readers and a core of advertisers. Volume pressures have gone.

Also since publishers now see significantly less income generated from print media compared to other services like events, online and lead gen, magazines are much more easily closed without damaging the overall income model they have established. I know of even profitable magazines that have been closed because they no longer fitted a long term strategy, so advertisers should not expect any loyalty from publishers to their magazines if they themselves do not spend dollars on the ads.

So bottom line is I don't think publishers will feel any inclination to give pages away just to stay afloat. Cutting issue size and closing magazines is more likely in most cases this time around especially where online extensions have been fully established.

Now online.

Well like many I expect rates to hold up. Demand is rising as dollars shift out of traditional media and a recession will only accelerate the trend to spending more on measurable media. It's the safest option for marketing manager. Sites can still sell primary inventory at a decent margin knowing the spare inventory will be snapped up by ad networks desperate for a competitive edge especially in the B2B space. Sure consumer, high volume buys may see a squeeze with networks especially pushing to get onto more media buys, but it's also the case that those media buys are much more 'spray and prey' than most in our space could ever be. Frankly for B2B most networks fall sadly flat.

So while there are certain to be a few deals out there it's unlikely to be the shark frenzy we have seen in years gone by. Expect more consolidation and media closures than a rash of cheap ads. Expect your preferred online sites to be telling you they have sold out of all the good inventory rather than bucket shop deals. And expect your media agency to measure your expectations so that they can still buy the media they feel is effective rather than chase cheap deals.

As always it's just my humble opinion.

Lead fatigue

Last week I had one of those great media lunch meetings where a publishing representative lets rip about the market and offers up insights and views that confirm some of my long held suspicions. Obviously I'll not divulge names but needless to say it was a significant player in the IT space and the discussion was centred around lead generation programs.

The bottom line is lead gen programs are getting harder to fulfill. Good assets from big brands will always do well, but older assets and those items which are badly thought out or simply way too product centric (a client favourite especially from product marketing and therefore an obvious attempt to sell and not educate) are not getting picked up like they used to. It's putting pressure on publishers and creating distrust in the market from users. Opt outs are increasing and more "mickey mouses" are appearing in lead lists. Quality is suffering.

As I have long suspected IT professionals are becoming increasingly jaded at vendor and publisher practices. Traditionally they were subject to online advertising campaigns well before any other B2B segment in the market. This is now being replicated with lead generation programs where users are offered up all manner of enticing white papers, articles, web events and podcasts and simply have to leave a few tit bits of personal information. Bang - next thing they know a random sales person is calling chasing them for meeting and hard selling them a product. This is fine if they are in late stage buying cycle but in so many cases this is simply not the case and the user is left confused and abused. Bad brand experience or what.

However they are not the only ones. Internal vendor sales staff are now biting back. Sales people hate chasing cold or low quality leads. The answer "er I don't remember downloading anything from you" is scarily typical.

So who's to blame. Marketing? Well no. Marketing has simply been instructed to make sure that all investment efforts now deliver leads. In many cases performance bonuses are based on driving ever lower cpl (cost per lead) metrics. This is crazy.

Frankly the system is reaching breaking point and until vendor executives go back to marketing 101 and recall exactly what marketing's entire role should be then it's not going to get better. Just in case anyone is listening lets review:

Firstly marketing should be the brand stewards. That is: to ensure the brand awareness is maintained or improved and most importantly developed in line with current and future business growth plans. It should always be ahead of where the company wants to go not reacting to it.

Secondly marketing needs to provide a range of messages and collateral to help move prospects down the sales cycle. Someone doing high level investigation into a particular subject probably won't react too favourably to a hard sales call. They will likely respond well to a follow up email that offers some more information related to the original download they made.

Thirdly marketing should support sales efforts by facilitating the dialogue with customers and yes creating high value sales leads.

It should not be hard for a vendor to create an asset map with different items available to support both different job functions and buying stage requirements. CIO's need very different information than IT project managers or even technology experts - yet all are vital to the sales process. Vendors should offer up a maximum amount of generic literature for free. They should think about who their sales teams typically engage with most successfully. They should also think about the functions that create barriers to the sale.

Example - a CEO in a major company is unlikely to get involved in the vendor review process but may stop a sale if he's unfamiliar with a vendor. Getting information to him is key but do you really think he's going to register to get it? Same can often be said with more senior IT functions.

Bottom line is this - vendors need to remember that assets should be considered very much part of the brand communication strategy. If the vendor makes a big brand promise, the assets are the proof that the claim is substantiated. They should be provided in a way that reflects the vendors business practice. More subtle communications is what customers expect from vendors offering sophisticated business solutions. Offering a suite of assets reflects an understanding of the customers needs throughout the buying process. Campaigns need to be planned accordingly and in many cases success should not be judged by cpl metrics but by just how many assets got distributed out there into the market.

With economic constraints likely to push more vendors into lead generation obsession, I fear this is only going to get worse before it gets better.

LinkedIn grows up.

Had a great meeting with the folks from LinkedIn today and for the first time I'm actually excited by the prospect of discussing social media with a client with some actual real solutions that are both realistic to execute upon but leverage the social aspect of the network.

For those not familiar, LinkedIn ,unlike the consumer social networks Facebook and MySpace, is a white collar, B2B social network which allows people to establish contacts and a network with business associates. The key aspect is that users almost entirely avoid out of work contacts (family and friends) and therefor the usage is almost entirely devoted to ones business life with profiles devoid of pictures of kids, partners and strange animals. How refreshing!

From the advertisers perspective this audience is a goldmine. The information is constantly updated by the individuals in question and targeting is possible by all manner of demographics - job, company, industry, etc. The problem has always been how to use this appropriately.

Like most agencies our early clumsy attempts of using traditional ads produced results comparable to running ads on content sites - proving context and general functional targeting are about even in efficiency. However now LinkedIn is providing solutions that really enable to advertiser to get up close and personal and frankly I can't wait to start playing with this.

New items include polls, question and answer programs and highly targeted personalized edm. New group capabilities will be added soon and the site also announced plans to open itself to some very carefully vetted apps (hopefully applying lessons learnt by Facebook).

Finally we may see B2B social networking growing into a youthful child - still innocent and unspoilt but open to fresh ideas and inspiring those around it. Lets hope it remains this way for a while before old advertising hacks like me turn it into a troubled teenage - all frustration, anger and bitterness.

Social media and linear metrics

I read with interest this article on the problems marketers are struggling with in relation to the use of social media at the recent DMA conference.

This highlights well the existing problem faced by social media and indeed online media in general as we move into 2008. The "Google effect" means that marketers are now expected to provide clear performance reports showing that dollars invested can track directly to specific actions - ultimately sales - for every online campaign.

But as we all know, advertising and marketing does not always line up in this way. Social media especially is not set up to work in this way. Even a strong interest from users may not result in any direct measurable sales and in many cases the campaigns are about users enjoying some kind of brand experience rather than a straight 'click, review, buy' model.

So finally online marketers are being asked the same questions that traditional media has suffered from for years...prove this is working !!

It's interesting the article makes reference to seeking out the help of academics. I have no doubt the future for social media campaigns, online brand campaigns and traditional media in general will be measured by clever statistical analytics of: Y% change in brand preference = x% increase in sales. Until this is done no CEO/CFO is going to get the answers they now want. They are also unlikely to back 'brand campaigns' the way they used to without a second thought.

Hey online media community...this problem is only going to get worse before it gets better. As you start pulling higher percentages of media dollars away from traditional media you better start getting ready to answer these types of questions more frequently. Online can no longer hide behind click rates and cpc's. The questions will now get more demanding and we as an industry have set ourselves up to fail by relying on linear numbers to set expectations.

Thanks goes to Google for helping educate executives just enough to become a right royal pain in the backside!!

"linear ROI" - defined (by me) as the directly measurable link between ad and action, typically through a click on an advertisement and subsequent activity on the client website.

"Non linear ROI" - defined (by me again) as the indirect action or responding to an advert - such as hear radio ad...go to store and buy product or engage in online social media activity and three weeks later buy product via online store.

"Google effect" - defined (by guess who) as the expectation by executives that all online media activities will be able to demonstrate a tangible linear ROI metric or clearly defined performance based metric. This effect has resulted from the original pay per click search model, so strongly championed by Google, which has set unrealistic expectations as to what web based marketing campaigns should always be delivering.