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The “Futures” Of Ad Exchanges? (Mediapost 2.29.12) 0

What’s the future of the ad exchange model?  It’s clear that ad exchanges and DMP’s are the future of the media business as media has become more and more of a commodity and data has become a requirement to add value, but where are things headed?

Many people refer to the commodities exchanges as the future of the ad exchange model, but to do so requires there be a marketplace for the buy and hold of media assets.  At first I was skeptical of that version of the future because there are not too many media buying shops willing to take the liability of those media assets on their books, but then I realized that market already exists and thrives and its called the Upfront.  In the television Upfronts, marketers and agencies buy and hold the media until a later time of the year, in some cases they put them all to use and in some cases they put them back into the market as scatter, taking the financial hit in the form of a cancellation clause.  If marketers had the chance to buy, hold and resell that media at either a profit or at least a break-even, wouldn’t they consider that?

The “futures” market is a tenuous one, especially in a volatile stock market and one where economic indicators are so across the board chaotic, but the advertising marketplace continues to grow.  More money is flowing into TV advertising every year, and the Internet continues to expand regardless of the almost infinite supply of impressions.  OOH and print may not be growing, but they are still finite assets that retain value, and marketers still want to take advantage of them.  A futures marketplace could indeed be valuable if the marketers and agencies were set up to take advantage of it.

The agency category is the one I find the most interesting here, because it’s the model that has been most in flux over the last 10 years.  The Internet and digital, more than anything, pushed margin’s down on agency commissions and as a result the agencies have been innovating to find new revenue streams.  Creative continues to be uncommoditizable, and strategy continues to be only semi-monetizable, so the agencies have focused on media buying – specifically by creating trading desks and analytics groups.  The agencies are focusing on the data and they are driving the media landscape into a commodities market.  If you agree this is the case, then it makes sense that the agency category may shift to a buy and hold strategy for media.  Some agencies do it already and have done it for years by entering into upfront agreements with the portals and larger publishers.  If you have money in the bank, and you know you’re going to be buying media for your clients, why not try to buy it at the low and sell it at a profit, which is still probably a discount to your clients?

Of course there’s the argument that the large marketers and public companies might be the ones to take advantage of this model because ultimately they are the ones who buy the media, and are ultimately responsible for its use.  I can foresee a model where the marketers buy the media on the market, hold and pay their agencies to put it to good use, rather than paying them a commission for it.  There could even become a secondary market for marketers who want to trade and barter media for their benefit.  The opportunity is endless if you commit to the idea that media can be bought, held and sold on a futures platform rather than the way most agencies buy now, which is last minute and through manual insertion orders.

For this model to truly succeed, the media buying agencies need to mature.  Currently they are full of young, undeveloped, and in too many cases poorly trained, buyers.  These new buyers would be analysts and traders.  They would be evaluating trends and matching those market trends against the needs of the clients.  I don’t see these buyers being compensated to the same scale as Wall Street bankers, but I see them commanding stronger salaries than the current media buyers.  It’s a skill and one that could not be easily replaced by some smart person off the street.

What do you think?  Can a future’s model succeed in this business?  Would it have to be cross-platform, encompassing online and offline, or could a stand-alone online marketplace exist and survive?  Let me know what you think by posting a comment on the Spin Board!

Posted on: 03-4-2012
Posted in: treffiletti.com

Are You A Mature Marketer? (Mediapost 11.2.11) 0

Are you a mature marketer? 

I ask the question because over the last few weeks I‘ve come into contact with two different kinds of marketers; the mature marketers and the immature marketers.  These two marketers are dramatically different and their approach can have an effect on the culture of a company, as well as the results of the marketing for that company.

The mature marketers are the marketers who have a plan.  They are the ones that sit down at the beginning of an engagement, they write out a marketing strategy, and they use that strategy as a filter or a guideline for the coming months ahead.  These folks create a culture of efficiency, effectiveness and calm.  These are who most of us aspire to be.

The immature marketers react to everything that comes their way, and they are unable to prioritize the initiatives that come across their desk.  These folks are sometimes frantic, they are commonly very high anxiety, and they are effective only to a point, sacrificing the longer-term effectiveness of their strategy for the short-term benefits of their tactics.  These are the kinds of people who have an 18 month tenure with an organization, and these are the kinds of people who many of us would hate to work for.

A mature marketer is what we all want to be, but it can be difficult in our quarterly-driven world where Wall Street and Venture Capitalists are constantly applying the pressure to succeed now.  It’s the “what have you done for me lately” school of marketing, and its killing business today.

To be a smart marketer, there are some things you can do, and I want to help you to achieve this aspirational goal, because I know just how difficult it can be!  If you follow these little nuggets of advice you can truly become a mature marketer:

§  Make A Plan: Before you begin an engagement, or before you begin a new year, sit down and write out your goals for the coming 12 months.  Write a list of marketing objectives, a marketing strategy, a set of business goals and a basic plan for how to get there. 

§  Establish A Filter: Understand that your plan of attack is a filter that allows you to review and refine any new opportunities that come your way.  When someone asks you to take a meeting, immediately evaluate them in terms of your filter and see if the meeting makes sense.  If it doesn’t, politely decline.  If it does, then make sure you are setting expectations for the goals of that meeting.

§  Prioritize Your Day: You cannot be everything to everyone, so prioritize what you can and can’t do in any single day.  Without priorities, your day can get away from you and you won’t accomplish anything that you really need to have done.

§  Share Your Plan: Your team is an extension of you, and you need to have them all running in lock-step with you.  They need to know the plan, they need to know the priorities and they need to know the end goal. 

§  Make Time For Your Team: Your job, as a marketing lead, is to educate your team, delegate the work, and make sure it all levels up to the same set of goals.  You can’t close your day and avoid your team.  They need you to lead them, not do their work for them.

If you ignore this simple advice, you will feel unorganized, chaotic and out of control.  Your email will run your day and you won’t achieve your potential on the job.  That is the outcome of the immature marketer. 

When you enter into a room, you can just sense the mature marketer.  They have a peace and intelligence and an organizational quality about them.  That is what you should strive for.  Don’t you agree?

Posted on: 11-6-2011
Posted in: treffiletti.com

Start-Up Watch COD: financialjoe Gives Real Power to the Individual Investor 0

In my life there have been about six times when a decision left me full of angst and uncertainty. Car buying. House closing. Choosing a health plan. A couple of others. And determining what to invest in, and which advisor to work with.

I am not alone on that last one. You only need read the WSJ for about 20 minutes to realize that there are thousands of options and very little in the way of truly reputable advice on which to base your investment advisor decision.

You uncle tells you about his financial advisor, and you go with her just because. You stick with the guy you’ve got, because, well, you don’t know WHO to switch to.

Oh yes, there are ratings services and all that. But I’ve been in marketing long enough to know that you can cut ANY data in such a way as to have an upward pointing graph. And there’s probably a ratings organization that will give a AAA to anything.

Thanks to , a new community for individual investors, you can get a lot of new information on what to do and who to do it with. The idea behind the site is to let a community of involved investors collaborate to find the best investments and advisors for their particular investment style and risk profiles.

Wouldn’t you rather SEE how a particular advisor is doing for people that think like you do? Wouldn’t you rather share thoughts about what you are doing? And in so doing begin, perhaps, to level the playing field versus the major Wall Street institutional investors?

To fully participate in the site, you first take an Online Asset Questionnaire that analyzes your goals and risk profile. This 15 question tool was developed in close aprtnership with a core team of advisors and investors who helped identify the characteristics of their relationships that resulted in long-term satisfaction. Apparently many advisors who use the tool find themselves changing the way they work with investors — for the better.

financialjoe finds like minded investors for you by comparing your answers to those of other members. From there, you can observe what they have revealed about their investments, share opinions on advisors, and track the specific performance of advisors through information they make available on the site. You can also rate advisors that are not yet participating in the community. financialjoe isn’t in the business of advising you – rather, you and your peers share with one another, and consider the ideas and track records of investment advisors that participate in the community.

The import of this site is that it is a great example of how digital and democratization of information are eliminating the friction in the market in many categories. Why have dissonance and angst when you can participate in a community and get the answers and information you desire?

Years ago when I was in business school, I had a prof that said that the individual investor is probably best off buying S&P 500 index funds until they are 50 or so, because the best you are going to be able to do is to meet the market. Beating the market, in his view, was an unrealistic expectation because of the huge disparity in the information YOU HAVE versus what institutional investors have. Now all this was before the Internet got its start, but I expect that the disparity of available information is even more pronounced today.

financialjoe can’t get you all that information. But what it CAN do is help you make more informed decisions in who you invest with and how you invest. And that, my friends, sounds like progress to me.

Posted on: 08-2-2011
Posted in: Oldest Living Digital Marketer

When Did AOR Become a 4-Letter Word? (Mediapost 2.2.11) 0

Have you noticed the average tenure for an ad agency relationship is not much longer than the average tenure of a CMO?  The average CMO seems to last about 18-24 months in their role, and the average agency relationship seems to be about 24-36 months.   Somewhere along the way the term “AOR” became a dirty word!

Obviously, but in case you might have forgotten the meaning of the term because of its lack of use, AOR refers to Agency of Record.  In the old days, AOR was a statement of trust and commitment between agency and client.  AOR’s were long-lasting and they meant your client trusted you, empowered you for success and were willing to let you work on their business for the long run.  In those “old days” some AOR relationships lasted as many as 40 years!  Before the birth of the Internet, an AOR relationship meant you could count on that business for at least 5-7 years, and probably for closer to 10, assuming that nothing detrimental to the business happened.   It meant you would staff a solid team against the business, you could count on the work to keep them busy, and you could plan a strategy that saw further out than 6 or 12 months.  

The AOR status has quickly become a relic of the past.  An anachronism of a bygone era. 

These days the relationship between client and agency rarely lasts longer than the tenure of the CMO, or the key decision makers on the team.  From one side of the business, Wall Street manages the future and Wall Street doesn’t like a long-term commitment to expenses.  Too many businesses manage their P&L on a 3-6 month cycle, and marketing budgets bounce more than a 4-year-old on a backyard trampoline.   On the other side, client teams don’t last that long, either being promoted into new positions or changing companies to look for new opportunities.  As teams change, new executives come in and they rarely respect the previous decisions and are known for “bringing in their own”.  This is a fact of corporate America and not one that can be readily refined.

Of course, agencies are to blame here as well.  Agencies focus much of their time on the tactical execution and have lost the art of account management, but in their defense its difficult to manage an account and build a personal relationship with the key decision makers when budgets are thin and its all they can do to maintain their slim margins.  

Regardless of where the blame lies, or who has the most input on the factors that shape the environment, the fact is that fewer and fewer agencies are getting an AOR stamp on their relationships and more are doing project work.  Project work can be profitable for the agency, but its difficult for the clients to have a long-term strategy when their partners aren’t locked in as well.  Managing multiple partners, or vendors as the relationship may state, means less time focusing on the execution of the strategy and the achievement of the business metrics.  AOR serves a great purpose in that it creates continuity and establishes a team with accountable roles.  It also means that you’re team is empowered to try things that may not work, but are calculated risks in favor the brand.  When you don’t have a long-term commitment from your partners, you play to not lose rather than play to win.  Playing to win sometimes mean you take a big swing, and miss.  Playing not to lose means you play it safe and just try to put the ball in play. 

From my point of view, I like to play to win.

Don’t you agree? 

 

Posted on: 02-4-2011
Posted in: treffiletti.com