TV Commercials - The Cost Keeps Getting Higher

First, if you haven’t gotten ahold of the “Marketing Fact Pack 2016” produced by Advertising Age, it’s worth your time and money to get one.  The piece is one of the better information resources to help make decisions and comparisons.

Second, in reviewing the information specific to the cost of a 30 second TV spot, I nearly feel out of my chair — wait, I actually did fall out of my chair.  The lowest cost of a :30 second weekly network spot was $14,309 for the CW’s Crazy Ex-Girlfriend, running Friday at 9:00 p.m.  Now sit down because the high end weekly network spot was Sunday Night Football at $673,664.

And as usual football was priced at a high premium across the entire week:

NBC Sunday Night Football — $673,664

CBS Thursday Night Football — $522,910

NBC Thursday Night Football — $485,695

Running a single :30 second spot to reach the male demo in each of the above football programs would cost you a mere $1,682,269 per week.  Naturally, that cost is un-negotiated.  If you’re one of the big boys you could easily spend $2,500,000 a week on TV advertising.

Even bulking up a TV schedule with lower rated and lower cost TV while utilizing remnant TV with the goal to get the CPP down would be tough to do.  

Now taking into account all of the other media channels $3,300,000 a week for a medium GRP media schedule would not be out of the ballpark.

My preference is to run an 80/8 schedule (hit 80% of the target audience at least 8 times).  And while I’d love to see if that is still doable with the increased pricing I’m not even sure reaching 50% of the target 5 times is achievable.

How the times have changed.

Scott

Leadership vs. Management

An old business acquaintance caught up with me this past month and had an interesting question for me. What’s the difference between leadership and management. It’s a question which I’ve heard before. Here’s my definition at the simplest level… 

Leadership is setting a goal and getting others to believe they can achieve it.  

Management is identifying how to reach the goal and helping everyone successfully reach it.

Some food for thought.

Scott

CMO Dashboards

Having a marketing dashboard is an absolute must in today’s ultra competitive marketplace.  Everyone has their favorite areas to track.  Some of the areas I’m keen on include:

1. Lead Funnel
2. Lead Conversion 
3. Sales Velocity
4. Marketing Revenue Contribution
5. eCommerce Platform Revenue and Performance
6. Channel Performance
7. Campaign Summary
8. Web Property Performance Social Property Performance
9. Marketing Costs vs. Budget
10. Financials — Fixed vs. Variable Marketing Costs, Future Run Rate Budget, Category Budgets
11. Media
12. PR
13. Segment and Customer Value Performance
14. New Customers Acquisition
15. Cross Sell and Up Sales Ratio 
16. Staff Performance Against Yearly Goals

There are many more which could be added, but the above tend to be the areas which allow me to quickly understand what’s going on.

Scott

India's Powerhouse Economy

India now has the 5th largest economy in the world having surpassed Britain.  If you're not focused on the India marketplace, you might want to see what this unique country has to offer.

It's the Little Things That Matter — My Experience in Dry Cleaning

It's the Little Things…My Experience in Dry Cleaning Hell

My wife and I are high users of dry cleaning.  Having two professional jobs you tend to need your clothing cleaned on a frequent basis.  And given that, we probably have a higher than normal customer lifetime value.

And we’ll pay for service.  Unfortunately, we’re also very forgiving of mistakes and give people more chances to correct situations than we should.  Which leads me to my latest experience AND solution blog post.

We’ve had the same dry cleaner for probably 5 years or more.  We’ve suffered through damaged clothing, lost shirts, not having the dry cleaning picked up and delivered for 6+ weeks.  The last straw was an incorrect billing of $700.  This incorrect billing forced me to reconcile 6 months of billing — a 4 hour job.  End result, we owed them $100 for the last couple weeks of cleaning.  Having to actually “manage” my relationship with a dry cleaner is completely unacceptable

Enter the solution - Men’s Warehouse Cleaning Services (www.mwcleaners.com). .  I was amazed at how the dry cleaning service has changed for the better.  And although some of you might already be experiencing such service it was completely new to my wife and I.  Here’s what I found:

1. Drive through lanes (3 wide) where an attendant will greet you and take your dry cleaning from your car and deliver it back to your car when you return.
2. Professional attendants — who are courtesy, helpful and attentive.
3. Frequent purchase programs — I can get a free shirt for every 20 cleanings of a shirt.  A great cross sell to get customers into Men’s Warehouse stores.
4. Free plastic collar inserts — holy crap!  I loose those things all the time, so having these is fantastic.
5. On-time pick up and drop off of dry cleaning.
6. Quick service — 1 day max for anything.  In fact, the attendant asked me if I needed something even faster as they would get it done immediately.
7. A summary of the billing and a quick review by the attendant of the invoice —ensuring it’s correct and that the number of items I brought in were what I was leaving with.
8. The assurance that if anything was not perfect, I need to contact them and they’ll make it right.
9. Altering service — yes you pay for this, but the attendant always mentions they’ll check for any buttons, etc. and alter those if required.  That saves me time and keeps me from having frustrations when I slip on a shirt.
10. A clean retail environment.
11. And higher prices.  Yes it costs more.  But, the price of the above services is worth it.  Service continues to matter folks.  And I continue to believe that the key differentiators with business is service and authenticity.  
12. Online Account — holy crap I can actually get access to the status of my laundry, etc.  

Men’s Warehouse get’s it.  Provide great service, keep customers happy and do an above normal job of the core offering leads to a higher household lifetime value.

Scott

@MWCleaners

The Death of a True Pioneer

The serious part of this post — We should recognize public service personnel (police, fire, etc.) and our armed forces who give the ultimate sacrifice.  These are the unsung heroes.  So please take time to think of them this holiday season.

Now for the humor part of this post — 2016 saw the death of many celebs.  And those deaths should be mourned as their talents and contributions will be missed.

However, all of us need to pay homage to a man, no… I mean a pioneer of invention.  Yes, I’m talking about the inventor of the Red Solo Cup — Robert Hulseman.  Mr. Hulseman passed away last week at the age of 84.  And his contributions to the world are incredible:

• The ability to personalize or write your name on a Red Solo Cup
• Always looking for the Red Solo Cup over any other color available… by the way, who invented the Blue Solo Cup?  The Yellow Solo Cup?
• A container which could be used to carry water, ice tea, milk, mixed drink or my personal favorite beer from an icy cold keg.
• Exactly the right size — just enough liquid to keep you from having to make multiple trips back to the drink line.
• And durable - you had to make a real effort to get those bad boys to crack.
• Fit perfectly in a car cup holder.

And I know there are many more, but I’m getting a tear in my eye so I’ll stop here.  For those of us who are true lovers of the Red Solo Cup I invite you to listen to the tribute song and video made popular by country artist Toby Keith.  I’ll never be able to listen to that song again without a tear in my eye and a cup in my hand.

And as you celebrate New Years, lift your cup and toast Mr. Hulseman.

Scott

CMO's Take Back Marketing?

I’m catching up on my reading this holiday week… unfortunately, I’ve let it pile up, shame on me!

The October 31 issue of Advertising Age has an interesting article in the Opinion Column summarizing a recent speech given by Bob Liodice, President-CEO of the Association of National Advertising.  With an article titled “ANA Chief Calls on CMO’s to Take Back Marketing, but Do They Really Want to?” got my attention.

A top line on the article:

1.  Company sales performance is growing at 2% annually

2.  9 of 10 big brands are losing share

3.  Overworked and under trained marketers

4. CMO’s need to lead – drive business results, etc.

5.  Brand building is waning

6.  Competing financial decisions

A few thoughts…

1.  Big brands might be losing share – competition from overseas competitors, outsourcing to lower costs and lack of innovation are surely some of the specific reasons.  Building the brand is critical but there are other factors which are probably impacting growth.

2.  Medium and smaller brand growth – looking at the big boys is great, however I wonder if the same sales performance issues are impacting those further down the size scale.

3.  Training – yes it’s a huge issue.  Everyone talks about it, but it seems no one actually does it.  It’s not just sending people to courses.  It’s giving them projects beyond their skill sets and mentoring/teaching them to do it.  It’s allowing for failure.

4.  Skill Sets – what use to be the norm is for Marketers to be skilled in all aspects of the marketing trade – PR, brand, media, direct, social, mobile, search, web, advertising, production, creative, strategy, planning, database, writing, etc.  However, today there is so much specialization most Marketers don’t know how the pieces fit together.

5.  Financial Management – this isn’t anything new, so I wonder why it’s all of sudden considered a big issue.  Where to spend or invest marketing dollars varies by each business… but where most get it wrong is that they invest in areas which don’t drive sales, pay for things which really aren’t true marketing expenses and a whole bunch of other areas which I won’t go further into.

6.  Never Outsource Strategy – if you’re not smart enough to develop the foundation of your company’s marketing strategy,  then you shouldn’t have the job.  I’m not saying you shouldn’t work with others to develop the strategy, but outsourcing it to a 3^rd party isn’t wise in any situation.  

7.  If leadership is showing where we need to go then management is about actually getting it done.  And some Marketers don’t have a great track record of late on not only leadership but management as well.  The media rebate scandal, allowing procurement to own agency selection/management, outsourcing strategy to agencies – these are all symptoms of not focusing on block and tackling marketing. 

The ANA’s call for CMO’s to take back marketing?  CMO’s should have never let it go in the first place.

Scott

2017 Marketing Predictions

It's that time of year to begin predicting what's ahead for the Marketing industry in the new year. Here's my attempt....

1.  More scandals regarding the way agencies, suppliers and clients work together will continue – see Department of Justice investigation of agencies.

2.  Marketing and media budgets will increase based on business friendly optimism of a Republican controlled White House and Congress.

3.  More clients will hire media audit companies with many finding they are due rebates.

4.  There will be an increase year over year in agency reviews – the media audit scandal, the public discussions on agency executive compensation, etc. will add more gas to the ever raging fire.

5.  Media rates will fall.  The 2016 scarcity of television and digital from the Olympics and election cycle will put more inventory in the 2017 market.  But the Super Bowl will still be over priced.

6.  TV talk shows, political news programming and comedy shows will see rating increases based on a Trump White House – lots of humorous material, questions and concerns will draw viewers.

7.  Yahoo! will go into fire sale mode.

8.  Content will become interactive – helping to keep consumers engaged.

9.   More live streaming of events, conferences, presentations, etc.

10.  Marketing automation will continue to grow across all sectors.

11.  Social will transform with a higher focus on direct ecommerce purchases.

12.  B2B marketing will start to take the lead on best practices. 

Scott

The rumble in the jungle -- ANA vs. 4A’s

“In this corner… the Association of National Advertisers (ANA) a heavy-weight known for its pummeling attack.  And in the opposite corner the American Association of Advertising Agencies (4A’s) known for quick moves and ability to dodge an opponents attack.”

Media transparency… the issue which has shaken the advertising/media industry this year continues to be a discussion vs. a solution.  But where to go from here?  Is it the 4A’s of ANA’s responsibility to solve the issue?  Or is it the client?  What about the agency?  And how about the media property?

Yes to all of the above.

-       Associations. 

o    The ANA and 4A’s should “attempt” to come up with guidelines for both associations members. 

o    However, I don’t believe it’s possible that they could ever come together with a single guideline document. 

o    Does this take the teeth out of each organization?  Not sure, but time will tell.

-       Clients.           

o    Need to clearly define any financial compensation that the agency receives. This needs to include, but limited to, any cash rebates, discounts, bonus inventory, barter rebate, agency fees, media fees, etc.  

o    Next, clients need to clearly state what happens with those rebates, fees, etc. 

o    Who has to approve all of these compensation opportunities? 

o    It needs to be put in contract language in the Master Services Agreement and applicable across any/all units within a holding company.

o    Get tighter control over tracking of media spend and fees in general.

o    Take a hard look at the compensation model you have setup with your agency – perhaps you need to call off the Procurement Dept. and actually put a bit more money in the agencies pockets. 

o    Consider putting specific contractual language with your main media partners describing your expectations in regards to media rebates, etc.

o    Continuosly audit the agency.

-       Agencies.   

o    Get over it.  You and the clients agreed that a 3^rd party audit was needed.  Now you didn’t agree to agree with the results, but come on, the results are pretty clear.  Just move forward and fix the issues.

o    Speak to your client about your compensation challenges… if the rebates were providing the revenue you needed to meet your financial targets then there’s a bigger issue.  Look most clients actually want you to make money.  But if a client’s procurement department has wacked away all your profit… it’s time to have a serious conversation with the client.

o    Don’t try to get squirm out of the issue with interpretive analysis of legal documents put forth by clients.

o    Be transparent – this is a chance to hit the “reset” button on your client relationships if you work it correctly.

-       Media Properties.  Ahhhh, I didn’t forget about you!  You’re part of the issue as well.

o    Stop playing the victim in these conversations… “I had to do it to get the business.”

o    You need to be transparent with clients on the full compensation picture – rebates, payments, discounts, etc.

o    Make your rate card and prices more transparent.  Break down the costs so clients can understand what they’re paying for. 

o    Stop playing both sides of the fence with the agency and clients.  Stop telling clients how the agency isn’t fair and stop telling the agency the client loved the idea.  You’re feeding the issue.

The Dalai Lama had it right when he said “A lack of transparency results in distrust and a deep sense of insecurity”

See my previous posts on this subject on my Linked page or on my blog.

Scott

Brexit – What Should Marketer’s Do Now

It’s been a few weeks since the British people voted on leaving the EU.  As we know the outcome of this stunning decision has had dramatic response in the economic, social and political realms.  And those repercussions are not just being felt by the UK but across the globe.  There have been some areas which I’ve been focusing on since the voting results were announced…here’s a few thoughts.

-          1.  Keep a close eye on your sales not just in the UK but ALL countries you’re doing business in.  If the UK or countries within the EU begin to flirt with recession your marketing or budgets will be impacted.  Get those metrics in place to show the positive results your investments are making.

-          2.  UK Media On Sale – as the pound has dropped, you can probably pick up your media for a 15% decrease against the dollar just on the currency drop.  And if other advertisers begin pulling media schedules, there could be an excess of inventory which could lead to additional price reductions.

-          If you’re a UK based company with sales in the Americas, the decreased in the pound actually makes every dollar in US sales that much more valuable.  A potential shift in media/marketing investment to the US might help drive those more valuable US greenbacks to the bottom line. 

-          3.  Contracts – depending upon how media and agency contracts have been drafted you might have to revise your contracts.  This would be the opportunity to drive more favorable terms with suppliers.   Get your procurement and legal teams reviewing opportunities.

-          4.  Get aggressive – change creates opportunity.  Look to grab share now, while your competition is trying to figure out what to do next or if they’ve given up on the marketplace altogether,

-          5.  Pick up talent – look for outstanding talent who might be displaced in the potential economic crisis. 

-          6.  Keep Your Service Up – create further differentiation with your competition by driving your service level to a new high.   Being there to help your customers/prospects in times of turbulence will pay off.

-          7.  Don’t choose sides… this one is tough.   This is the time to remember not to discuss politics.  You’ve got the potential of pissing off 50% of the people.

-          8.  Don’t Tread Water – sitting around the water cooler discussing the vote isn’t going to help your marketing – stay focused.  You need to keep your marketers focused on the work not the vote.

-          9.  Start getting your plans prepared – work now and take a proactive step with your management to bring up thoughts, options and recommendations.  Don’t wait for someone in Finance to send you an email with the dreaded “budget cut” in the subject line. 

Remember, potential exists if you look hard enough.

Scott