Media Buying and Selling

According to Adage, Discover Financial is putting its $85 million media buying account into review.  This is a great opportunity to touch on a huge difference between brands and their local entities.  Brands buy media through a media buying company while local businesses are sold media by local media outlets.

Why does this make a difference?

Because when a brand wants to change media buyers, it “launches a review” of its media buying account.  Local businesses do not have the luxury of a media buyer, they deal with dozens of salespeople from local radio, television, newspaper, printshops and more.  Moreover, they don’t “launch a review” they know these salespeople and have relationships with them; they are members of the Chamber of Commerce and do business with each other regularly.

Understanding this relationship is critical when helping brands to understand how their local businesses interact in their local communities and why, in many cases, programs aimed at helping local businesses end up failing.  A huge stumbling block brands and agencies fail to realize are that these relationships cannot be easily changed.  In many cases, local initiatives have strict rules requiring utilization of specific media types or fulfillment partners.  These rules ignore the long-lasting relationships that local businesses have.

Understanding the relationships that local businesses have are critical when evaluating local marketing strategies.  A local marketing strategy that understands this concept and supports it will ultimately be  successful rather than a solution that is tied to specific media partners or restircts media partners.

Advertising is Local

DirecTV CMO, Paul Guyardo was quoted in Adage as saying:

“Three years ago, the marketing strategy was pretty much to have this one national marketing strategy. The reality of it is that the competition is local. The competition is not national competition. The competition is Comcast. It’s Time Warner. It’s Cox. It’s Charter. It’s Fios. And you’ve got to be able to really understand what’s going on and understand where things are heating up geographically, where they’re dialing off, and read and react and adjust your plans accordingly.”

This isn’t just try for satellite vs. cable, it’s every business!  85% of all sales are still made in stores within 15 miles of the customer’s home.  Every business needs a local strategy because the battle for a customer’s sale is ultimately waged near to the site of purchase.  This means using multiple forms of media and versioning ads to effectively reach local markets.

As Greg Sterling noted in his blog post about Yahoo and Publicis serving mobile ads the holy grail is “one to one marketing.”  Why shouldn’t this same standard apply to all marketing?  What marketer wouldn’t want to have a personalized ad in any medium for any customer?

The production technology is already here!  LiveAdMaker can produce unlimited versions of the same pieces, customized down to every detail, the only limitation is on the delivery medium.  Read the Adage and Greg Sterling articles at:

http://adage.com/cmostrategy/article?article_id=127842

http://gesterling.wordpress.com/2008/06/30/local-and-the-future-of-ad-serving/

Cross-Medium Ads Drive Sales

In a recent survey by Clark, Martire & Bartolomeo, one of the conclusions reached is “Seeing products and services advertised in multiple channels increased both consumer turst in them and likelihood to buy.”  Half of respondents said they were more likely to buy a product featured in a newspaper advertisement after seeing it online.

This is encouraging news for newspaper advertisers, and reinforces the idea that multiple medium advertising drives sales.  After viewing a newspaper advertisement, 31% who search online, go to a search engine.  Surprisingly, of the adults who use search engines, 70% purchased at a store or dealer following additional research online.

What does this mean for marketers?  First, marketers need to ensure they have a unified message across all forms of media.  Because most purchases are made in local stores, this means having consistent messaged from the local dealer or store is critical.

Second, markters need to USE multiple forms of media.  With increasing media fragmentation, using multiple forms of media is critical to effectively reach customers and drive them into the sales process.

Third, it’s essential that the web presence of a brand at the corporate and local level reflect the approved messages of the brand.  Customers who use a search engine and go to a local store or dealer website should have the same brand experience as if they were at the brand’s website.

It’s clear that all business is local – most sales still happen in a store, but the process of getting to the final transaction is dramatically changing.  Marketers must stay ahead of these changes to build brand equity while driving sales.

View the report at Marketing Charts.

The New ROI: Brand Networking

With advertisers struggling with ways to deal with Web 2.0, many marketers question the return on investment of Web 2.0 strategies.  After all, while companies like Facebook and MySpace are themselves worth millions, the number of advertisers that have seen success from using these platforms as advertising tools is small (perhaps nonexistent).  While apps that create “viral buzz” for brands may be the rage of Web 2.0 right now, advertisements that are untargeted and rely on the user to give feedback(read more here) are ignored by users, or may even drive high-profile users from a service.

What’s the solution to this problem? Marketers need to change the way they understand online advertising to look for “Return on Involvement”.  Involvement is the time that customers spend with the brand during their time online.  For usual display or search advertising, the involvement is very low.  Involvement is the greatest when a brand can interact seamlessly with a user while refraining from intrusion.

The optimal solution for this is Brand Networking.  Brand Networking is simply a brand controlled social network that is built around the core relationship between the brand and the customer.  The “core relationship” is the interaction where a customer and brand meet and conduct business.  For example, a social network for parents might be sponsored by a brand that is associated with baby products, or a social network for IT specialists might be sponsored by an infrastructure vendor.  What’s the difference between the brand network and placing an ad at Parents.com (online home of American Baby, Parents and Family Circle)?  Placing an ad has no involvement with the user – branding a social network builds a relationship with the user.

Brand Networks are effective at building long-lasting relationships with users, locking customers in to the brand, becuase they provide value to the community they serve and are relevant to the actions of the user.  Because of the core relationship, users have a high percentage of finding the message and branding to be relevant.  Presently, relevance is the top criticism users have about the advertisements on social networks.

Additionally, brand networks offer brands the opportunity to reward positive actions users take.  Imagine a social network around youth soccer that was owned by a sports drink manufacturer.  Now, what would happen if the social network rewarded users with points to spend (on prizes and rewards) when they bought the sports drink?  Clearly, the sports drink would become top of mind for the parents and players of the youth soccer network.  Would you purchse the sports drink if it could help your child’s team get rewards or tickets to professional sporting events?

In addition to involvement, it’s clear how the scenario above would provide measurable results – a model that builds brand loyalty and provides clear measurements of ROI! Today’s increasing media fragmentation makes getting messages across to customers difficult; now imagine reaching customers without distraction and building a relationship with them – what other form of media offers this?

Tomorrow’s high-income consumers are spending an average of 20 hours each month online and 74% of them are using social networks – brand networking targets not only these younger, internet savvy customers, but older customers who using social networks at increasing rates (presently 53% of adults use the internet for social networks).

Brand Networking guru, AJ “Brand Geek” Loiacono (visit his blog here) has recently started a blog about the topic; stay tuned to it as he and his company are on the cutting edge of this emerging market.