Tough Times Make Tough Buyers

Most every conversation with an industry colleague of late begins the same way: How is the economy affecting your business? Your clients? Your media buys? Everybody has a story to tell about layoffs and budget cuts, many of them downright frightening.

And then, a ray of light. An agency VP tells you that his bottom line hasn’t received a blow — in fact, spending in some places is actually going up. It’s a rare case, but it isn’t surprising. That’s the beauty of online media: for as much as we lament still receiving a pittance in comparison with offline mediums, this has saved many agencies from across-the-board budget cuts. Smaller advertisers might be reeling back their ad dollars. But how much of a difference can such a move make to a major brand that spends but a fraction of its overall budget on the Web? More than a few brands are looking to our medium to bail them out from their television and print commitments. A strong argument can be made for reallocating funds from costly mediums to one where a positive ROI (define) is both tangible and manageable.

Under Pressure, Publishers Relax

Armed with these precious ad budgets and a mandate to deliver effective campaigns we approach our publisher contact, only to find that they, too, are taking stock and reassessing their approach. A recent article in “The Wall Street Journal” found some publishers are relaxing their standards and accepting more pre-roll video and expanding banners in order to please their clients. Bloggers, so the story goes, are further blurring the line between editorial content and advertising, all in the name of offering something unique in which advertisers are willing to invest.

Our own buying team has found their site reps to be far more willing to lower their CPMs (define) of late, and even drop their minimum spends entirely. They can do so without compromising their own livelihood because, to them, it’s all about the big picture. Fifty thousand is fifty thousand, one rep said, whether it comes in as a CPM of $20 or $16. With so much inventory to work with, the only difference is how many house ads are needed to fill the space.

Buyers Get Bold

On the flip side, we marketers — accountable to our clients and required to negotiate the best possible rates to improve their return on investment — are forced to push the boundaries of previous buying conventions. It isn’t uncommon to find buyers requesting deep discounts and bonus inventory that go well beyond what we’d normally propose. Certainly, it’s no longer taboo to ask for CPC (define) or CPA (define) pricing where it doesn’t usually apply. After all if site sponsorships that typically fill up quickly are going unsold, publishers are very likely to consider whatever offer comes to them and weigh the pros and cons of going outside their comfort zone.

The current landscape seems to define the phrase “survival of the fittest.” The same rule applies to which advertisers will come out on top. This competition for declining consumer dollars is part of the reason we’re likely to see “splashy” ads to which WSJ.com refers, even though their presence might initially seem impudent and inappropriate.

Last month Yankee Group advised marketers to focus on Internet media this year, particularly online video. According to the survey results, consumers are spending 11 percent more time online than with TV, and viewing plenty of Internet video content while there. It’s another good reason for advertisers to shift spending to the Web, and for media buyers to employ video as their ad delivery format.

One has to hope this situation will turn itself around and things will return to normal, where survival of the fittest isn’t an industry mantra so much as a war cry at the gym. In the meantime, buyers should know every possible way to deliver value to client budgets while they last.