FOLIO: BLOGS Joseph Guerriero

The Drop in Online Advertising, And What It Means … to a Recent College Grad

Wed, 10 Jun 2009 10:28:40 -0400

Last week, the Interactive Advertising Bureau and PricewaterhouseCoopers reported that online advertising dropped 5 percent during the first quarter of 2009. This marks the first time Web advertising has posted a year-over-year decline since the fourth quarter of 2002.

Given the recession’s impact on advertising in general, this news is not at all remarkable, but, as Steve Smith, editor at the Media Industry Newsletter, notes: “The deeper question is where online ad spending will be when there is an inevitable upswing. Is online branding and the display economy being hurt in a permanent way by the rush to performance-based campaigns? CPMs continue to plunge. Ad inventory continues to gush online from social media. Search advertising continues to attract the overwhelming majority of marketing dollars. The fundamentals of a long-term digital media economy that can support substantial content creation continue to be unclear.”

By placing a lesser premium on the value of brand advertising, Web publishers and the networks and technologies that serve them will have to deal with the resulting challenges. After all, those that live by the sword die by the sword.

My recent posts on the problems with online display advertising and media altruism articulate my belief that future success depends upon the ability of sales teams to sell the benefits of aligning with quality content. This skill when combined with true sales altruism—caring for customers—is a formula that transcends generations and technology. This is by no means an earth-shattering revelation, but I question how much attention the digerati are giving to what were once the basics of media sales.

Smith’s comments, when inverted, give credence to the importance of quality content as the driving force behind revenue generation. A conversation I had this past weekend with a recent college grad—my nephew—was all I needed to hear to substantiate it.

A May 2008 graduate, he has had found this job market quite challenging. Armed with a degree in communications, he has been busy helping market his dad’s automotive repair business, interning at a Web/TV enterprise and trying to launch a social network with a college buddy. About three weeks ago, he got a call from an online ad network regarding a position in sales. After a couple of phone interviews, he was granted a face-to-face with the network’s VP of sales.

On its face, the job seemed pretty cool. The money was decent and the idea of getting paid to work in a startup environment was very appealing. What he heard from the hiring manager on the other hand left much to be desired. He was told that it was expected that he would need to run through a brick wall for a sale. No problem with that from where I sit. As my nephew probed for how customers felt about his potential new company, the VP said “who cares about what customers feel, as long as we get their money and they pay on time?” Can you imagine? My nephew said he shut down the minute he heard that comment. At 23, he innately understood this was no way to conduct business.

“I want to make money, but there is no way I can work for a company that treats customers so poorly. I don’t see how a business can succeed with that type of attitude.” After picking up what he termed a similar vibe from a handful of sales “leaders” over the past 12 months, he has decided to pursue his social network dream full-time. He hopes to build the type of company he can be proud of. Whether or not he succeeds in his first venture is less important than the fact that he really understands the importance of true customer-centric behavior.

The experience underscores the problem with online display. Selling brands on the benefits of associating with quality content in an altruistic manner is the key to long-term success. Technology and metrics will propel forward organically, but they no longer need to be front and center. Media companies will come to realize that the Internet is nothing more than a huge power grid. OMMA, IAB and the rest can have all the conferences and meetings they want about whether to “ad network or not” but such get-togethers will have little impact.

The decline reported by IAB was just the first shot across the bow in terms of whether digital advertising lives up to its great potential. Analysts of course say it is just a “blip” along the way to great heights the same way analysts said that sub-prime mortgages were the way to go. Take the so-called analysts with a grain of salt. They back horses upon which they’ve placed bets. New media is declaring itself king of the hill, but great content and great sellers will win when the economy rebounds regardless of the medium.

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A 48-Year-Old Looks for New Publishing Industry Job, Finds Age Discrimination

Wed, 03 Jun 2009 11:59:37 -0400

Last week I met a former colleague at Starbucks—or, as one Facebook “friend” put it recently, the 2009 version of a Depression-era breadline—for a cup of coffee.

The colleague, who I will refer to as “Jill,” was recently caught in the undertow of one of her publishing company’s (sorry, “media” company’s) recent downsizings. “Jill” is an outstanding seller and sales leader. A divorced mother of two beautiful girls—ages 11 and 14—she has produced great top-line results everywhere she has been employed. The love her customers and staff members have for her is exceeded only by the degree to which they respect her. She is, of course, very concerned for her future and that of her daughters.

“Jill” has been hunting for a new gig for the better part of six months now. Her CV and phone demeanor have earned her a number of face-to-face interviews. Because we have known each other for close to 20 years, she was quite open about her job hunting experience.

She has interviewed with Web publishers, ad networks and magazine publishers, but she is not close to landing. She had been well-compensated, but given the present state of media and the economy, she has articulated her flexibility in this regard. I believe her. This woman is a straight-shooter. About half-way through our meeting, she said something that sort of took me by surprise. This vital, smart, attractive woman felt she was encountering ageism. She is all of 48.

Now, I know that age discrimination exists, but if a person with the ability to sell jets to airline companies—she was offered such a position a couple of years back—is being denied employment due to her age, then our industry has truly gone off the deep end.

One hiring manager at an ad network told her that the position for which she was interviewing—director of advertising—was perhaps a bit too complicated for her. Come on dude, you guys are not splitting the atom over there! Anyone with an average IQ, degree of creativity and some desire can succeed in the world of digital ad sales. Great leadership, on the other hand, requires much more.

In tough times, leadership is everything. As a bit of a sports geek, I can site numerous instances of championship teams that won the Big One precisely because they had experienced veterans guiding less experienced players during crucial moments. Rarely does one see a team of rookies and early-career players win a championship. If I need someone to lay down a crucial bunt in the bottom of the eighth or drive a team downfield during the game’s final two minutes, I would prefer to rely on a veteran that has done it numerous times.
Take heed of the analogy, media world, some of you are in the bottom of the eighth or the final two minutes. Simple logic dictates that if someone has done the job many times, they have done so successfully or they would not have had the opportunity to do the job so many times in the first place.

Advertising is often perceived as a young person’s game, but skills such as steadiness in the midst of a storm, true customer-centric behavior, asking the right questions of prospects, motivating staff, forecasting and managing up, down and laterally only get better over time. George Bernard Shaw once said that youth is wasted on the young. He was so right.

So, hiring managers, the next time Jill shows up on the other side of your desk, throw all your preconceived notions away and take the blinders off. Look at her accomplishments. Monitor her passion and intellectual curiosity. We all saw Susan Boyle at age 48 set the world on fire and become the next big thing. Did you know that Ray Kroc didn’t begin to build the McDonald’s brand until he was 52? Did you know that Handel didn’t write the Messiah until he was 68? How about Roget publishing his first Thesaurus when he was 73 or Grandma Moses picking up her first paint brush at 76?

You get the point—48, 49 or 60 for that matter are truly meaningless numbers.
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B-to-B One of the Most Active Groups in Social Media

Thu, 28 May 2009 11:54:19 -0400

According to a recently released Forrester Research report—dubbed “The Social Technographics of Business Buyers”—buyers and decision makers in the business-to-business sector are one of the most active groups of people when it comes to social media participation. This can be evidenced by the dramatic growth of LinkedIn.

Forrester surveyed 1200 buyers throughout America and Europe. Because this was a b-to-b survey, buyers were not only asked how they participate in social networks but whether they used them for buying decisions. Some highlights from the study:

• 91 percent of these decision makers were “spectators.” This means you can count on the fact that b-to-b executives are reading blogs, watching user-generated video and participating in other social media.
• Only 5 percent of survey participants were “inactives.”
• 55 percent were “joiners.” These are not college students. These are mature business decision makers. The percentage, according to Forrester, was surprisingly high.
• 43 percent are creating media (blogs, uploading videos, etc.) while 58 percent are “critics” reacting to content viewed in social formats. Again, Forrester says these percentages were quite high when compared to the norm.

If b-to-b publishers are not already taking advantage of social technologies, they may be late to the game. Forrester’s research cautions that social network participants do not feel that information gleaned from such networks is a factor in purchasing decisions—yet. This is bound to change as users get increasingly comfortable with relying on social networks for content, and applications improve. Product recommendations from peers in b-to-b environments should never be underestimated. The go-forward implications for suppliers of goods and services to industry (advertisers) are quite compelling.

As self-proclaimed providers of mission-critical information, b-to-b media organizations need to build out their respective social media components by more aggressively tapping into the intellectual property of their extensive user bases. IP and editorial content is no longer the sole province of employees working within the confines of today’s b-to-b media companies. IP is held by “many.” In the case of the typical b-to-b audience, “many” consist of the executives and employees running their respective industries. Industry executives and their associates offer solutions that media companies could not possibly offer. These decision makers are in the trenches.

My experience dealing with constituencies as diverse as healthcare executives, entertainment industry executives and entrepreneurs has been nothing but positive whenever they are asked to share their expertise with peers. The potential that the proper exploitation of the social-graph holds for b-to-b media companies is enormous. Facilitating industry leader information-share will enable business media to strengthen and secure its position as the prime source of crucial business information.

The challenges monetizing social media have been well-documented in both the consumer and trade press. Though general consumer social media sites have struggled to discover a working revenue model, b-to-b social media sites should not be viewed in the same light. The role of the b-to-b publisher is to serve highly specialized audiences with very specific needs. In the universe of b-to-b media, decision makers have self-identified through long-standing qualification efforts. Once media companies demonstrate buyer engagement with this medium, vendor dollars will follow.

Savvy b-to-b media organizations will use social media to meet their customers in a genre where that customer’s general information consumption habits are taking them—Facebook, MySpace and Twitter to name a few. Given the behaviors of executives worldwide—as documented by Forrester—business media organizations that pursue a comprehensive social media strategy should find themselves well-positioned for a profitable future.
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The Growing Problem with Online Display Advertising

Wed, 13 May 2009 11:28:34 -0400

In a recent discussion of online display advertising, Erin Hunter, EVP at comScore, said the following:

“While the click can continue to be a relevant metric for direct response advertising campaigns, certain studies demonstrate that click performance is the wrong measure for the effectiveness of brand-building campaigns. For many, the branding effect of the ads is what’s really important and generating clicks is more of an ancillary benefit. Ultimately judging a campaign’s effectiveness by clicks can be detrimental because it overlooks the importance of branding while simultaneously drawing conclusions from a subset of people who may not be representative of the target audience.”

Since recent digital industry reports have questioned the efficacy and future of online display advertising, Ms. Hunter’s comments are interesting on a number of levels. If, as she asserts, the subset of people who click on an ad is not representative of the target audience, then I have three questions: Who is clicking? Why are they clicking? And what value, if any, do they hold?

We’d always been told that buying online advertising was the future because the medium offered advertisers better targeting and better results. Now we are being told this may not be the case. The comment that clicks are an “ancillary benefit” sounds an awful lot like something out of the print ad seller’s handbook (circa 1999) when clients would chastise the rep’s property for not delivering enough leads. As Yogi Berra once said “It’s déjà vu all over again.”

The age-old debate pitting direct response marketing against brand marketing is now occurring in the online world. Legacy publishers have been dealing with this issue in a relatively successful manner for generations. Technology aside, the discussion basics are very much the same. Measuring direct response via clicks, etc., is pretty straightforward. Brand marketing, however, is murkier, and online display is taking it on the chin as a result. The IAB and OPA are doing everything within their respective powers to ward-off naysayers. Randall Rothenberg’s “A Bigger Idea” and OPA’s new ad units proposal may be steps in the right direction, but both groups need to better address two very important questions:

1. Do Web publishers do as good a job as legacy publishers selling the halo benefits of quality content environments?

2. Have halo benefits even been considered or have Web publishers thrown the proverbial baby out with the bath water in pursuit of their new media evangelism?

Since technology and analytics have driven Internet ad sales to date, one would have to conclude that new media leaders have fallen short when selling environment and seem to have paid it little mind. Web publishers may be ahead of the game in terms of breakthrough technologies and evolutionary consumption habits, but it appears they lag far behind when it comes to articulating the non-measurable impact of their offerings to brand advertisers.

Perhaps the reality is that many have nothing to offer. With the barrier to entry online being so low, just about anyone can play. Publishers that lack capital cannot make the necessary investments that make content a true win for advertisers. With all due respect to IAB and OPA, all the manifestos and new ad units in the world won’t change this reality.

To amplify the quality content issue, various digital media blogs indicate there is a struggle within the community over which is more important—content, eyeballs or interactivity. If you don’t have content, I guess you have a debate. It’s ludicrous. Content wins and it always will. Great content will find its audience.

I am a huge believer in the concepts James Surowiecki posited in “The Wisdom of Crowds.” The crowd holds many solutions and its voice must and will be heard. As a result, I cannot predict what the media ecosystem will ultimately look like, but I do know one thing for sure—the beating online display is taking will continue until Web publishers learn to sell the brand-building benefits of great content environments, and find the investment to deliver on what they evangelize.
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Who in Media Will Survive? Not Necessarily the Brightest

Wed, 06 May 2009 11:42:56 -0400

Some 20 years after applying for an ad sales position with a now-defunct medical and scientific publisher, I find myself obsessed with media and the challenges facing the industry today. Every day I hear or read about pay cuts, layoffs, the death of print, challenges around monetizing video or disappointing online ad revenue growth. I tell myself that the media industry is made up of many bright people and that we will collectively get our house in order.

Last night I came to the realization that I have been having the wrong conversation with myself. It is not about being bright. If it were, MySpace and Facebook would be highly profitable at this point. It is also not about the oft-used terms like "integration," "alignment," "aggregation," etc. It really is about one word and one word only: altruism.

According to Merriam-Webster, altruism is the “unselfish regard for or devotion to the welfare of others.” In other words, it is not about “me/I” as my two-year-old would say, but “you/them.” The “you/them” in our business are the people we serve—serve being the key word. The best content and sales leaders I know are without question the most altruistic. They have an undying devotion to serve—there’s that word again—their readers, users and advertisers. The best are truly devoted to the welfare of others and adjust their offerings accordingly. Individuals can be taught just about anything, but true altruism is particularly difficult to teach. It comes from within.

The very top salespeople are truly altruistic. They make their living by understanding and addressing customer concerns. Though driven by numbers, superstar sellers have a true devotion to the welfare of their respective customers and prospects. By working doggedly to satisfy, great sellers hit their numbers. Altruism leads, money follows. It works the same way for great content leaders. True concern for the end users leads to eyeballs, traffic, readership and engagement. Properties that serve win. Properties that self-serve lose. It’s that simple!

Smart brands are extremely altruistic. Brands that fully understand and serve their customers outperform those that don’t. Business books are littered with stories about failed companies that forgot they were in the customer business. As it relates to those of us in media, brands spend money where their customers go for information and entertainment. Advertisers know via data, intuition and their own personal consumption habits that consumers today feed their needs a number of different ways. This, of course, creates an interesting conundrum for those of us in media. The question we seem to be asking is “how can I be everywhere and make money?”

Perhaps the question we should ask is this: “How can I best serve you?”
As great sellers will tell you, the money will follow.
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