What a week: Laura and I closed on our new home and hired a nanny for our newborn Julian. Next week we’ll move in. Now, here’s my latest column focusing on the need for media ad-sales departments to gravitate to a model of selling ROI, versus impressions. Because of my excessive tinkering in new and alternative media, my role at my day job, and my participation in the engagement discussion, I get approached by ad sales people all the time, primarily from new types of media companies trying to crack the code and get on media planners’ default checklist of spending allocation. These companies often include cable upstarts, online and offline social networks and even many of the top video-sharing sites — typically companies beneath the radar of cruise-control media planners. Therefore, they need to work extra hard by defining and selling ROI. But the traditional, legacy media should as well, for that will soon become what is expected of them. There are comments arriving in the MediaPost blog comment area.
Brand Ad Salesmen Must Sell More ROI, Not Impressions
By Max Kalehoff, January 19, 2007
Fellow Spinner Dave Morgan recently argued that automated auction exchanges will not replace brand advertising sales. He said these algorithmic models are not good at helping marketers talk to consumers. Nor are they able to keep up with evolving dynamic and customizable brand vehicles. Nor are they good at consultative or solution selling. And he’s right.
But going further up the value chain, there’s an even bigger reason automated auction exchanges will not replace brand advertising sales anytime soon: branded advertising increasingly will need to differentiate and justify itself less by impressions, and more by return on investment. Yes, it’s that simple. ROI.
What will drive this trend?
First, advertisers still are getting hooked on search marketing because of a clear, demonstrable ROI. Brand advertising will never demonstrate immediate cause and effect like search or other direct-response methods–and that’s usually not the point. But the expectations for ROI, which search has fueled in a major way, are spreading elsewhere, including brand advertising. Now marketers are demanding: Show me the cause and effect. Show me the brand predisposition and changed behavior. Show me the sales! Algorithms will influence expectations and contribute to tighter measurements, but won’t solve this problem outright for the fuzzy category of brand advertising.
Second, media are proliferating and splintering into complex and highly unique assets, all of which perform differently from one channel, category or title to the next. Morgan correctly emphasized that the greatest brand advertising opportunities often are customized solutions that seek to solve client problems. But those opportunities are often the unproven ones, or involve new platforms that may be completely foreign, risky or incompatible with traditional planning, measurement or performance-benchmarking conventions. They’re simply not standardized and baked into efficient or existing buy-sell processes.
How will marketers pick and choose among a growing, diverse menu of non-standardized media solutions for brand promotion? With standalone impressions losing relevance and mass-reach buys becoming scarcer across all channels, marketers will partner with those media that instill confidence by supporting the quest to define and achieve ROI with each individual engagement. To the benefit of those human ad salesmen, this is far from a purely algorithmic process. Defining and determining ROI in more unique situations will require customized solutions themselves, and will be required as part of the upfront brand advertising sell and throughout the engagement.
Third, as the more talented brand advertising salesmen realize and pursue the value of consulting, the same sorts of rules for brand accountability and performance that have largely been deferred to agencies will be placed more directly on media organizations. I’m not talking accountability to deliver CPMs, or readers, households or demographics. I’m talking accountability to brand and business objectives. There will always be a need for media-agnostic agency creatives, strategists, planners and buyers. But we’ll see more and more agency-like thinking and execution played out directly by media themselves on behalf of marketer clients, sometimes competing directly with agency partners. Media-side execs will be rewarded and punished accordingly, tied to ROI.
To be sure, the biggest online publishers are probably less worried right now about a shift to ROI, for they are enjoying a flood of investment as the share of dollars continues to shift away from more traditional channels, like print and television. However, let’s not forget that overall ad spending is relatively stagnant, and the rapid reallocation of brand advertising dollars will eventually level out. For media companies to continue growing and adding value, regardless of title or platform, the competitive differentiator increasingly will be the ability to move to business results as currency, as well as expand opportunities to connect with consumers in new and deeper ways. Evolution will be more tied to ROI.
Ad sales departments have an incredible opportunity to step up to the plate and redefine what they’re selling. It is less about mere impressions, and very much about ROI.
What do you think?