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The Negative Value of "Added Value"

  |  March 2, 2005   |  Comments

Look out, media buyer. Your free lunch just got a whole lot more expensive.

We all know the saying, "There's no such thing as a free lunch." That's precisely the adage I have in my mind as I think about the great added-value myth permeating the advertising industry. At no time in my professional career has the concept of "added value" has been more misleading, misconstrued, and mislabeled. It's important we open our eyes and acknowledge added value for what it is: a gross misnomer.

Historically, the phrase "added value" has been most widely used in traditional media to describe bonus media weight or services offered to marketers in addition to the regular "paid" schedule. In the interactive space, we adopted this wonderful concept by using it to describe similar items: "free" placements and impressions, a piece of "free" research (a pre- or post-brand awareness study), and the like.

Before examining why the concept is so comical, we must note added value's growing complexity. Working at the digital specialist unit of a large, integrated communications agency, I have the luxury of seeing many different variations on the added-value theme. The most egregious media partners are typically large conglomerates, followed by many of the broadcast-centric properties that may have a modest offering in the print or digital arena as well.

For those of you who truly believe added value is free, here's a revelation: it's not. First, media vendors already factor in the cost of so-called added-value when quoting a media schedule price. If the concept of media value were eradicated entirely, we could assume overall media efficiency (across channels) would increase a minimum of 15 percent (a guesstimate). So even if there's a zero dollar amount on the invoice, rest assured you're paying for it.

This misleading financial accounting is just a minor part of the problem. The real issue is the cost of labor required to manage added-value elements.

An up-and-coming interactive media planner has just put together his first media plan. As he presents the program to his supervisor, he beams with excitement as he reports he managed to negotiate three free Dynamic Logic studies as a part of the overall plan. Measuring increases in brand preference and awareness wasn't a primary focus of the plan, but no matter... it's free!

Fast-forward two weeks after the plan was presented to the client and approved. Now, the agency is managing the "free" studies. It's likely the media planner will need to pull in people from his research or account planning teams to help craft the questionnaire. Then, he'll have to work with the complementary team on the client's side to make sure he's learning things that are in line with overall company research.

After the study has been implemented in the field (flawlessly, I'm sure), time must be taken to ensure relevant insights are uncovered and presented to the client. These three free studies will undoubtedly require a minimum 15 conference calls and countless hours of work to maximize their value.

There's no such thing as a free lunch.

Large media conglomerates' added value only gets more complicated. Deals that originate as relatively straight-forward media buys quickly morph into sweepstakes, promotions, events, vignettes, point-of-sale activations, bumpers, promos, or, my favorite "free," VOD (define)/wireless/interactive/gaming tests.

Before you know it, the poor traditional or interactive media buyer must rally a team of lawyers, events specialists, relationship marketing experts, interactive strategists, and more to pull off the overall program. Who ends up paying for all this time? Do you even have staff with the requisite skill sets at your agency? Is this type of deal included in the 2 percent commission the agency has for media buying?

I think not.

I like to get something for free as much as the next person. But, we should stop collectively kidding ourselves that added value really is added value. We definitely pay for it. Period. We pay either through increased costs on the paid items on the schedule or via people costs needed to properly negotiate, execute, and steward such programs.

Lunch just got a whole lot more expensive.

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David Cohen Before joining Universal McCann Interactive, David Cohen was North America media director at Zentropy Partners. At UM Interactive, he plays a pivotal role in integrating interactive media into clients' overall marketing and media plans. David oversees all interactive media strategy, including planning, buying and analysis operations in the New York office. Current client responsibilities include: Wendy's International, Johnson & Johnson, Sony Electronics, Marriott International and Bacardi. David is active in many industry organizations and speaks frequently at seminars and lectures for the Advertising Club of New York and the American Association of Advertising Agencies (4A's).

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