The Convoluted Advertising Ecosystem

Yesterday I wrote about the Media/Entertainment world. Today I wish to discuss the world we operate in…Advertising. I am new to Advertising. Only 2 years in and I have an outsiders view. My background in B2B Sales, Business Development to Major Industrial Businesses like Lockheed Martin, Chevron-Texaco, Exxon-Mobile, Raytheon, Ford Motor Company etc really is completely foreign to Advertising to consumers. I have a Finance Degree but my social life is mostly around creative types in music, art, performers etc. Since I have always championed my customer, always sought to add value, and refused to take money just because I could unless I helped my client, I am actually the type of person the staid and entrenched entities in the Advertising-Media World love and loathe. I can help a Brand focus better to maximize their Ad Spending. I can help an Agency prove their worth to Brands to help them increase their value which always seems to be fuzzy.

The biggest issue with marketing is two fold. First is how do you connect marketing with sales. How do you value the different areas to prove you spent the Brands money well. Secondly is how complicated media plans are, especially today and now they are getting even more complex. To top this all off Agency’s tend to specialize in certain niches like Mobile, Digital, TV etc, as well as for the actual Media Buying. And when you operate on a national scale combined with the fickle and chaotic decisions people make when they buy, I truly feel this is just as complex a task as when I worked on Missile Defense Programs for the Department of Defense.

Plus there is competing interests all over the place. I might tell Pepsi they can cut their advertising budget by 15% and they won’t lose a penny in sales. Pepsi’s Agencies will hate me for this reduction in revenue…even if it is true. It is not in an Agency’s best short term interest to be honest if it means reduced billings and profits to be honest. But not being honest leaves you open to being exposed and have your business put out for review, which for long term is not in your best interest. This is why the review process sucks and hurts incumbents. Is the reason for the review a problem with creative or a problem with costs in the view of the Brand’s CFO. As much as all you Creative types hate us Finance types, we control the purse strings. And while you may feel we aren’t willing to spend money to make money, you should go see the expense reports for the sales team. It is the inability to measure the return on investment that creates all this chaos. And Brands and Agencies feel helpless.

Think of a nationwide media blitz for an upcoming Blockbuster Movie. You can spend all you want and force feed the information to the consumers but if the movie sucks it will bomb. How many times do I need to see a trailer? If I see it 25 times isn’t 20+ of those times wasted money? And billboards and poster work across the nation? How do I know the placement is good? No one can do that on a massive scale. No one not even a media buyer/planner. They trust the local folks and take their word for it. And what about digital? My trailer had 1 million hits on You Tube. That was free yet I was told 20 million saw the TV trailer but that can’t be proven because we are not in people’s living room.

So a CFO who see’s that his star salesperson spent $25,000 in entertainment expense brought in $30 million in sales. But the Ad Agencies can’t truly prove their value which creates friction, distrust, and animosity…even if the Agency is kicking ass on behalf of their client. and sadly a product that sells itself, like an IPod often the Agency takes credit. And when the Agency kicks ass, but the product fails because it sucks, they get blamed.

At least with Missile Defense I can see if the interceptor hit the target, and how often.

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About chiefalien

Howie Goldfarb with 20 years of Sales and Marketing experience founded Blue Star Strategic Marketing in central Vermont to serve as the objective and strategic adviser of brands to help them grow and thrive. His Degree in Finance and 14 years of B2B sales to Fortune 500 companies gives him a CFO’s view of marketing. Thus bringing a dose of reality to the confusing world of jargon, spin, and hype. Also playfully known as the Chief Alien of Blue Star Strategic, Howie relishes his role as an industry outsider. A native New Yorker and former Angelino, he currently lives in the Green Mountains of Vermont and is still seeking his first moose sighting. His passions are living life, art, music, the outdoors, he tries to cook and loves the Vermont Fresh Network – local sustainability initiatives like farm to table and buying local.
This entry was posted in advertising, agencies, creative, digital, media buying, media planning, Mobile, out of home, roi, TV. Bookmark the permalink.

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