At the American Association of Advertising Agencies’ (AAAA’s) Annual Media Conference, attendance was strong, the mood upbeat, and online prominent in virtually every session and speech. No longer on the margins, online is prime time.
For those not familiar with the event, it’s the yearly opportunity for the media side of the AAAA to strut its stuff. It brings together top media buyers and sellers and is widely regarded as an industry bellwether for the coming year.
There was good news for our industry. Attendance was at an all-time high of 1,100. Optimism, while cautious, buoyed the event. Virtually every participant and speaker spoke of tangible signs the advertising recession is finally slipping away. For online folks, there were plenty of Internet success stories countered with problems with traditional media.
One message rang loud and clear: Clients aren’t happy with the status quo.
Jim Stengel, Procter & Gamble’s CMO, took an audience of primarily traditional agencies and media folks to task. He accused them of moving too slowly to abandon “broken” media models such as broadcast TV and panel-based measurement. Stengel preached the gospel of new permission marketing vehicles and the ability to measure return on investment (ROI) across various media channels.
Bob DeSena, director of relationship marketing for Masterfoods USA (the folks behind Mars candies, Pedigree dog food, and Uncle Ben’s rice) found the event tagline, “Staying in touch with the consumer,” presumptuous to the point of ironic. He observed traditional media and marketers are anything but in touch with today’s consumers. Those consumers moved on “long ago.”
To help marketers recapture those relationships, DeSena called for agencies and media companies to deliver new media products that contain the elements they need to build valuable consumer relationships: precise targeting, consumer engagement or involvement, and accurate measurement.
For the online advertising folks (there were a lot of them: First Lady of online advertising, Yahoo’s Wenda Harris Millard; Forbes.com’s Jim Spanfeller) and major trade associations leaders such as the Interactive Advertising Bureau’s (IAB’s) Greg Stuart and Michael Zimbalist of the Online Publishers Association, the pronouncements were just what they’ve been waiting for. Clients want more online advertising. They want full addressability, interactivity, and measurability, something no other media can deliver. All the years of preaching, persistence, and patience are starting to pay off.
There was another story at the event, a bubbling undercurrent of change not widely reported and not so conspicuously linked to the future of online advertising or digital marketing. It may turn out to be more important to our future than any of the pronouncements from the deans of the consumer packaged goods industry.
It’s the growing prominence of procurement officers.
Procurement officers, for those not familiar, oversee how their companies buy things. I have a special familiarity with them. My grandfather ran purchasing at the Dixie Cup Company in the ’50s and early ’60s (before consultant-speak co-opted the term “procurement”). In those days, purchasing supplies was about relationships and Rolodexes (in reality, little black books).
Today, procurement involves spreadsheets, multidimensional analysis, just-in-time inventory, enterprise resource planning software, and, above all, price. The aim is simple and straightforward. Procurement officers get promoted when they buy more stuff cheaper. That’s what drives them and their departments.
Procurement officers aren’t new to advertising. They’ve been around for decades and always had some advertising and marketing expenditure oversight to ensure their companies’ ad dollars were spent wisely.
Of course, as advertising has historically been viewed as more art than science, their ability to get “inside the numbers” of marketing budgets has been limited. Advertising departments could insulate themselves from close scrutiny by claiming what they do is too “emotional” to be accurately quantified. Brand-building is not for spreadsheets, they claimed.
Over the past two years, virtually every publicly traded consumer marketing company dramatically intensified the role corporate oversight plays in the purchase of advertising and marketing services. They’ve tasked procurement officers (the ones who usually spend their time buying trucks, computer systems, and paper clips) with making sense of the billions spent on advertising. After the fact, these companies bring in auditors to ensure everything that was promised actually happened.
Of course, this isn’t really new. Auditors have always been around. But in the pre-Enron days, they didn’t get too involved and didn’t ask too many questions.
Those days are over.
Today, everything is accountability. Media that can’t deliver and back it up with numbers are dead.
The AAAA event was littered with conversations about newly powerful procurement officers and auditors, and concern about what’s in store.
Given the economic model behind the $50 billion TV business is almost entirely based on sampling only 5,000 homes, they ought to be concerned. They should be downright terrified. That’s not the kind of accountability that gets by with today’s new corporate oversight.
Such scrutiny terrifies traditional agencies and media companies. It’s one reason clients put their accounts in review every other year and agencies have to drop prices and value-add more services to hold on to business. They always survived on relationships and emotion. These days, relationships may get you in the door. But performance and measurability are what win contracts and renewals. And the only thing that matters to procurement officers are the numbers.
It’s a boon to online media. We work in a world of full measurability and full transparency. Every ad to every person can not only be targeted but tracked as well. In many cases, it can be tracked to actual sales, online or off-.
This is a unique opportunity. Procurement officers and auditors will love our story. We actually sell numbers and measurements for those spreadsheets. Quantitative research, such as the IAB’s XMOS series, speaks their language.
Find the procurement officers at your target clients. Call them. Take them to lunch. Give them your research. Speak their language. Win their support. They should be your new best friends. Win them, and you’ll win your share of their employer’s marketing dollars.
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